Foresight of shipbuilding until 2030(science and technology forecast)

National Research University – Higher School of EconomicsInstitute of Statistical Studies and Economics of Knowledge

Oleg Karasevokarasev@hse.ru

Natalia Velikanovanvelikanova@hse.ru

Anastasia Edelkinaaedelkina@hse.ru

2006 2007 2008 2009 2010 2011 2012 2013

Priority areas and critical technologies 2006

Priority areas and critical technologies 2011

Methodologies, results, and expert panels need

to be coordinated

Ministry of Education and Science of the Russian Federation: Russian S&T foresight (three cycles)

A network of foresight centres

Innovation-based development programmes for state-owned companies

Roadmaps

Development institutes: RVC, Rusnano, Skolkovo

Technological platforms

Socio-economic development forecast (Ministry of Economic Development of the Russian Federation), industry-specific strategies

Regional foresight studies/Clusters

Industrial foresight studies: aircraft construction, shipbuilding

Last years in Russia there is a rapid development of forecast and Foresight studies

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Development of technology foresight system: “Approve… long-term forecast of socio-economic development in the Russian Federation until 2030 to ensure meeting relevant targets”

Presidential Decree of 7 May, 2012 #596 “On long-term national

economic policy”

Presidential Decree of 7 May, 2012 #596 “On long-term national

economic policy”

Establishment of the Inter-Departmental Commission on Technology Foresight, comprising representatives of relevant ministries and agencies, major companies and leading expert organisations

“Russian S&T Foresight study covering the period until 2030 is nearing the end. Specific areas have been identified to promote development of traditional sectors, and to achieve breakthroughs on high technology markets…”

Presidential Address to the Federal Assembly of 12 December, 2012

Presidential Address to the Federal Assembly of 12 December, 2012

Meeting of the Presidium of the Presidential Council for Economic

Modernisation and Innovative Development of 17 May, 2013

Meeting of the Presidium of the Presidential Council for Economic

Modernisation and Innovative Development of 17 May, 2013

The need for Foresight is declared by official documents

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* In accordance with Methodological guidance on development and implementation of national programmes in the Russian Federation, approved by the RF Ministry for Economic Development Order #817 of 26 December, 2012

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• General description of the implementation of the national programme, including major problems encountered and a forecast of future developments

• Priorities for national policy, goals, objectives, and progress indicators, description of major expected end results, timeframes and implementation stages.

• Data on measurements and indicators• General description of major measures to be taken under the programme, and

departmental targeted programmes.• A forecast of integrated indicators for government targets• General description of major measures implemented by Russian regions• Data on participation of state-owned corporations, joint-stock companies with

public participation, public, research, and other organisations, and government non-budgetary foundations in implementation of the programme

• Justification for individual sub-programmes, and for inclusion federal targeted programmes currently being implemented into the national programme

• Estimates of required funding• Estimates of additional resource allocations’ effect on the results of the national

programme (sub-programmes)• Risk analysis• Methodology for evaluation of the national programme

Role of Foresight in rationale of state programs provisions

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• UK Marine Industries Roadmap & Capability Study• Alternative Future Scenarios for Marine Ecosystems • Industry Transformation Report: Shipbuilding Industry• Factors Affecting the Structure of the World Shipbuilding Industry• Marine Industries Global Market Analysis • Study on Competitiveness of the European Shipbuilding Industry• Shipbuilding in Europe• Global Shipbuilding Competition: Trends and Challenges for Europe• Green Growth Opportunities in the EU Shipbuilding Sector• Community of European Shipyards Associations (CESA). Annual report

2010-2011• LeaderShip 2015• The Shipbuilding Industry in China• Competition in the Shipbuilding Industry• Study of the Vietnamese Shipbuilding/Maritime Sector• The Shipbuilding Industry in Vietnam• Report on Indian Maritime Industry• The Shipbuilding Industry in Turkey• Sea Change. A Marine Knowledge, Research & Innovation Strategy for

Ireland • Climate change Implications for Ireland’s Marine Environment and

Resources• Maritime Transport and the Climate Change Challenge• Climate Change and the Maritime Industry• Shipping and Climate Change: Scope for Unilateral Action• Foresight of the South Baltic Maritime Labour Market 2017

More than 90 sources

• European Commission Research Programmes (FP6, FP7, Horizon 2020)

• Chinese National Technology Foresight

• Korea 2030

• Japanese Technology Foresight

• French Technology Foresight

• Global Technological Revolution 2020 (USA)

• Russian S&T Foresight Study 2030

• RF Critical Technologies

• National RF Programme “Development of shipbuilding in 2013-2030”

• Federal Targeted Programme “Development of civilian marine technology in 2009-2016”

• Development strategy for the shipbuilding industry until 2020 and for the subsequent period

• The RF Transport Strategy until 2030. Russian Energy Strategy until 2030

• Passport of the OSK, Inc. Innovation-Based Development Programme.

Countries: EU, UK, China, Korea, USA, Finland, Ireland, Vietnam, Turkey, India, etc.

National-level technology foresight studies

Official programmes and forecasts for the Russian shipbuilding industry

Major international forecasts and foresight studies

The Foresight is based on a study of best international practices

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EnergyEnergy TransportTransport FoodFood

EnvironmentalTechnological Demographic

• Depleted reserves of non-renewable energy resources

• Increased energy consumption outpacing its production

• Development and utilisation of alternative energy sources (including wind, solar, geothermal, tide, bioenergetics, etc.)

• Increased intensity and volume of cargo shipment and passenger traffic

• Increased demand for special cargos shipment

• Terrorist threats to transport

• New standards and requirements to manufacturing and exploitation of vehicles and vessels, etc.

• Shortage of food and drinking

water

• Decreased food safety

• Threat of certain species’

extinction, etc.

• Global climate change (including warming, melting of Arctic glaciers, etc.)

• Environmental pollution• Reduced biodiversity• Anthropogenic disasters• The world’s oceans turning into an

area of industrial interests, etc.

• Depreciation of capital assets

• Increased research intensity of production

• Increasingly complex design solutions

• Increased demand for automated production processes, etc.

• Ageing population

• Shortage of skilled labour

• Global population growth

• Increased mobility of population

• Growing middle class, etc.

Grand Challenges affecting the shipbuilding industry

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EnergyEnergy TransportTransport FoodFood

• Depleted reserves of non-renewable energy resources

• Increased energy consumption outpacing its production

• Development and utilisation of alternative energy sources (including wind, solar, geothermal, tide, bioenergetics, etc.).

• Increased intensity and volume of cargo shipping and passenger traffic

• Increased demand for special cargos shipment

• Terrorist threats to transport• New standards and requirements to

manufacturing and exploitation of vehicles and vessels, etc..

• Shortage of food and drinking water• Decreased food safety• Threat of certain species’ extinction,

etc.

• Development of Russian continental shelf

• Development of new types of power plants generating demand for new vessel types

• Development of wind-, bio-, etc. power generation technologies

• Development of navigation along the Northern Sea Route

• Increasing the scale and changing the structure of shipping services

• Upgrading internal and mixed (river-sea) water transport

• Upgrading fishing fleet

• Development of new ship types to harvest algae and other marine products

The shipbuilding industry development as a response to Grand Challenges

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Analysis of scenario factors:• economic development and trade• climate change and sustainable development• geopolitics and world leadership• limited supply of resources• control over energy resources3 development scenarios:1. “Rough Seas” 2. “Yellow River”3. “Open Oceans”

Analysis of key factors affecting development of marine ecosystems:

• Hydrography• Fisheries and aquaculture• Water-based tourism and recreation• Sea ports and navigation• Oil and gas production• Offshore power generation and construction• Coastal geomorphology• Defence 4 development strategies :1. “World Markets”2. “Fortress Britain”3. “Local Stewardship”4. “Global Commons)”

6 сценариев развития:

«Emissions from international shipping over the last 50 years and future scenarios until 2050» (EU)

3 development scenarios :

1. Clean scenario• Low sulphur oxide content in emissions • Significantly reduced nitrogen oxide emissions 2. Moderate scenario • Relatively low sulphur oxide content.• Moderately reduced nitrogen oxide emissions3. No change scenario • Sufficiently high sulphur oxide content in emissions• Nitrogen oxide emissions are reduced to meet requirements

of the International Maritime Organisation

«Industry Transformation Report: Shipbuilding Industry» (ЕU)

«Global Scenarios of Shipping in 2030» (Finland)

«Alternative Future Scenarios for Marine Ecosystems» (Ireland)ExamplesExamples

The future of shipbuilding is considered within the context of socio-economic system as a whole

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Strengths Weaknesses qualified workforce economies of scale development of extractive industries high confidence of customers advanced shipbuilding technology high labor productivity short production cycle

inland waterways underdeveloped financial market increase in labor costs low business diversification lack of basic technologies in

cruise ships and offshore installations

Opportunities Threats low prices for raw materials depreciation of the Korean currency

growth of China's economy Instability of the global

shipbuilding market low demand for the products of

the shipbuilding industry overcapacity

Strengths Weaknesses low labor costs large supply of steel powerful government support

insufficient development of design and technology

lack of production of key components within the country

Opportunities Threats high demand for

transportation of iron ore, coal, grain, construction materials and other bulk

lack of qualified workforce fluctuation in exchange rates overcapacity low productivity

ЯпонияStrengths Weaknesses

qualified workforce high level of technology in

shipbuilding government support and

protectionism

high production costs large number of domestic

orders

Opportunities Threats development of competitive

advantages loss of market share collapse of world prices

Strengths Weaknesses high level of innovation stable relations between shipyards

and manufacturers of marine equipment

stable employment environment specialization in niche markets

high production costs diversified structure of shipbuilding

operation, inefficiency on the operation of shipyards

problems in knowledge protection lack of qualified workforce

Opportunities Threats continuous innovation environmentally safe development

of the shipbuilding industry development of transport policy increase the requirements for

standards in the transportation

strengthening of maritime clusters loss of market share ageing workforce collapse of world prices

South KoreaSouth Korea

JapanJapan

ChinaChina

European UnionEuropean Union

The success factors of the shipbuilding market key players

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Russia Korea Japan China

Accent on production technologies

Accent on ship design

Accent on power generation and energy

saving, engines and mechanisms

Increased attention to environment

National technology priorities (based on the materials of world Foresights)

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USA China Japan UK South Korea

Publication activity in shipbuilding sector

Publication indexed by Web of Science,

categories «Engineering, Marine» and «Engineering

Ocean»

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Government defence orders

Military technology cooperation

Civilian products for domestic market

Export of civilian products

Changes in Russian shipbuilding production

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Share of Russian-registered merchant ships’ deadweight in the global fleet (%)

Source: Transport and communications in Russia // Rosstat 2012 (in Russian)

Source: UNCTADstat.

Source: UNCTADstat.

Source: UNCTADstat.

Growth of Russian-registered merchant ships’ deadweight (% of the previous year)

Dynamics of the Russian merchant fleet (number of ships)

Russian-registered merchant ships’ deadweight dynamics (thousand deadweight tons)

Potential to increase efficiency must be found, and long-term development

priorities set

Total fleet

Tankers

Bulkers

All-purpose dry cargo ships

Container ships

Other

Shipbuilding market development in Russia: negative trends

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• Low shipping costs of internal water transport.• Partially preserved from the USSR period technological

potential.• National industry development programmes.• Availability of technologies to develop continental shelf

resources

• Insufficient funding• Insufficiently advanced civil shipbuilding technologies• Low production efficiency, productivity, and products’

competitiveness• Slow upgrading of capital assets.• Shortage of skilled personnel• Low profitability of the Arctic deposits.• Work conditions can’t compete with other industries• Deteriorated infrastructure of internal waterways• Inability to meet current international requirements to certain

environment-related ships’ characteristics• High shipbuilding costs, lack of motivation for investors.• Long periods of time required for ship repair and maintenance.• Lack of domestic technological basis, insufficiently developed

component base, low quality of Russian construction materials and expendables.

• High prototyping costs in the course of ship design. • Insufficient production capacities to build ships with dead

weight in excess of 70-80 thousand tons (total displacement in excess of 100 thousand tons).

• Insufficient financial and tax incentives for shipbuilding companies.

• Growth of shipping by water transport. • Prolonged navigation in autumn and spring. • Solving low transport accessibility problems existing in certain

Russian regions with the help of high-speed passenger fleet. • Emergence of new market segments for shipbuilding products. • Development of international transport corridors. • Development of recreational areas in coastal cities. • Development of tourism, increased demand for river cruises. • Advancement of shelf deposits development technologies. • Development of high-speed water transport. • Growth of private investments in marine research and development

of marine biotechnologies. • Development of new resource-saving technologies, and technologies

for processing water-based bio-resources. • Development of new business areas and production objects. • National and international targeted programmes and strategies to

promote the industry development (including marine biotechnologies).

• Projects to improve production and processing of marine bio-resources.

• Expected financial crises and economic instability• Sharp decrease of defence R&D in recent years• Obsolete standards and rules for ship design• Strengthening of the competitors’ market positions

Weaknesses

Opportunities

Threats

The main potential for market development is connected with design and manufacturing of ships and maritime equipment for operation in the Arctic

region

The main potential for market development is connected with design and manufacturing of ships and maritime equipment for operation in the Arctic

region

Strengths

The reserves for increasing the Russian shipbuilding efficiency

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Output (billion roubles)

Global market share (%)

Construction of internal waterways transport (% of the demand)

Share of total national exports shipped by national transport (for seagoing ships)

Construction of complex civilian vessels (% of the demand)

Construction of large offshore platforms (% of the demand)

By 2030 the industry’s output may reach 700

billion roubles

By 2030 Russia can control 3-5% of the global

civilian shipbuilding products market

Anticipatory development of internal waterways

transport

2012 2015 2020 2030

Active construction of offshore platforms

equipped with cutting-edge processing and drilling

technologies

Significant growth of production of advanced

civilian seagoing vessels

50% of total national exports shipped by national

transport

2012 2015 2020 2030

Pessimistic Optimistic

Key indicators of shipbuilding industry development (innovative scenario)

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• Nuclear-power icebreakers

• Diesel icebreakers

• Nuclear-power icebreakers

• Diesel icebreakers

• Tugs• Tugs

• Hydrofoil• Ice class gas carriers

• Hydrofoil• Ice class gas carriers

• Hydroskimmers• Research vessels

• Hydroskimmers• Research vessels

• River and mixed (river-sea) navigation tankers

• Dredgers, haulers• Oil skimmers

• River and mixed (river-sea) navigation tankers

• Dredgers, haulers• Oil skimmers

• Ships and technical facilities of special purpose

• Ships and technical facilities of special purpose

• Floating drilling rigs and jack-up platforms and ships

• Floating drilling rigs and jack-up platforms and ships

• Dry cargo ships of river and mixed (river-sea) navigation

• Dry cargo ships of river and mixed (river-sea) navigation

• Ice class tankers• Ice class tankers

• Sealing vessel • Crane-erecting vessels

• Sealing vessel • Crane-erecting vessels

• Service ship for underwater engineering work

• Service ship for underwater engineering work

• Special vessels• Ice-class container ships• Universal ice-class dry

cargo ships• Ice class bulk carriers• River sealers• Floating systems of

extraction, storage and roll-out of hydrocarbon

• Special vessels• Ice-class container ships• Universal ice-class dry

cargo ships• Ice class bulk carriers• River sealers• Floating systems of

extraction, storage and roll-out of hydrocarbon

• Passenger ships• Non ice-class tankers• Non ice-class gas carriers• Chemical carriers• Non ice-class container ships • Refrigerated vessels• Non ice-class bulk carriers• Dry cargo sea roll-on vessels• Ice class combination carriers• Non ice-class combination

carriers• Freight-passenger ship

• Passenger ships• Non ice-class tankers• Non ice-class gas carriers• Chemical carriers• Non ice-class container ships • Refrigerated vessels• Non ice-class bulk carriers• Dry cargo sea roll-on vessels• Ice class combination carriers• Non ice-class combination

carriers• Freight-passenger ship

• Universal non ice-class dry cargo ships

• Universal non ice-class dry cargo ships

• Floating LNG terminal

• Floating LNG terminal

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Level of manufacturing (expert assessment)

Priorities of Russian shipbuilding sector

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• Lists of high-priority (critical) technologies• Linking strategic R&D programmes with technological

upgrading and modernisation programmes, and general economic objectives

• Organising specialised academic events• Development of joint R&D programmes and strategies

• Environmental policies• Financial regulation, government guaranties• Legal regulation (including protection of

intellectual property)• Economic regulation (foreign trade, etc.)• Provision of government services• Harmonising policies

• Innovation clusters• Technological platforms• Promoting cooperation between the industry’s

companies• Division of risks between the market participants• Development of communication rules• Promoting trans-border cooperation• Joint utilisation of specialised maritime

infrastructure

• Businesses’ orientation towards making efficient technological decisions

• Establishing new enterprises

• Recommendations on investment projects (including infrastructure)

• Retaining and developing human capital

• Attracting direct investments in maritime R&D

• Measuring technological level, benchmarking

• Recommendations on making use of competitive advantages

• Identifying new market niches

• Recommendations on technological upgrading programmes

• Recommendations on promoting foreign economic activities and establishing joint ventures

Government decision-making

Network cooperation

Development of the real sector of the economy

Future R&D

Recommendations on industrial policy development

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Thank you for your attention!

Oleg Karasev, Natalia Velikanova, Anastasia Edelkina

National Research University - Higher School of Economics

Institute of Statistical Studies and Economics of Knowledge

Russian Federation 101000, Moscow, Myasnitskaya St.,9-11

E-mail: okarasev@hse.ru, nvelikanova@hse.ru, aedelkina@hse.ru