Dr. Max Lemke

Head of Unit DG CONNECT – A3

European Commission

Platforms for Connected Factories of the Future

CONNECT A3 / EFFRA Workshop

Brussels

5 October 2015

1

Value creation from digitisation: Products, Processes and Business models

2

"Digital inside": Innovations in all types of products

• Smart connected objects powered by e.g.

Sensors, wearables, embedded software, Connectivity, Big data, Cloud …

• Large opportunities in all sectors (Non-tech, high-tech, SMEs, etc)

Digital transformations of processes

• From logistics and product design to automations

Increasing resource efficiency, productivity, ..

Built on CPS, IoT, digital design, robotics, laser technologies, big data,..

Radical/disruptive changes in business models

• Blurring the boundaries (products-services), reshuffling value chains

XaaS, 3D Printing & customisation, CRMs, maintenance

added value services

Built on real time information, data analytics, etc.

Products Services

ICT sector

Products Services

ICT sector

The trend

Digital process innovation: e.g. manufacturing

Robotics and automation

Modelling, Simulation, Analytics and big data Cyber-physical systems and IoT for

process (chain) optimisation

"from cradle to grave"

Laser-based manufacturing

incl. 3D printing

Where does Europe stand?

Strengths

• Professional and vertical markets (products and services)

─ E.g. manufacturing: machinery, machine tools, auto, aero, energy, …

• World class R&D hubs

• Good infrastructure

• Size of EU market (~27% of world ICT market)

Weaknesses

• Consumer markets, Internet and web products and services, data platforms' ownership

• Structural weaknesses

No DSM yet (substantial impact on attractiveness to investment)

Lagging in investment in R&D&I

Opportunities

• High growth "Smart X" and IoT markets

• High growth of vertical markets!!

• Next digital champions may come from "non-digital" industries 4

Digital transformation of industry: What is the situation?

Strong digitisation in high tech industries and in some MSs.

But:

• Slowness and disparities in adopting digital solutions across industries and regions

Mainly SMEs and non tech sectors lagging behind

• New competition from non-EU digital platform owners

• Lack of standards and interoperable solutions

• Fragmentation of effort in Europe

• Skills and re-skilling of work force

• Legislative and regulatory gaps

5

Digitising European Industry: Proposal for four key lines of action

Speech of Commissioner Oettinger

at Hannover Fair on 14 April 2015

• Europe's future is digital: Digitising European Industry: Proposal of four key lines of action

• Focus actions on digital transformation of ALL industry

• complementing our efforts on a Digital Single Market and on broadband investment

High-level Roundtables with Commissioner Oettinger

• Member States and industrial representatives welcomed EU plans and confirmed the need for action on EU scale

Next steps/plans:

• EU policy/strategy announcements in Spring 2016

6

Topic of the Day

Action Line 2: Leadership in digital platforms for industry

Appropriate Instruments: • ECSEL Pilot Projects (yearly calls) • PPP Work Programmes

e.g. FoF: FoF11, 51M€, deadline Jan 2016 • I4MS and alike

Estimated EU-level investment (5yrs): - At least 1 B€ through H2020 - Leveraging up to 3B€ in total

Blahblahcar

eBay

Convergence of Platforms: Automotive sector example

8

Amazon

Google (search, youtube,

gmail, drive, android, …)

Apple

Facebook

Criteo

Embedded Platforms EU with significant WW market share

Online Platforms dominated by non-EU

AUTOSAR

Autonomous Fully electric

Another try of a map

9

pre-commercial

commercial

Ebay

sectorial horizontal

airBnB Google Play Appstore/iTunes

Google Brillo

Autosar ISOBUS

FI-WARE AIOTI IIRA

RAMI 4.0

ROS

Uber MyMuesli

"365 farmnet" (Claas)

Vie

w t

o v

alu

e o

f th

e

ecosyste

m /

direct

pro

fit

to p

rovid

er

General purpose or for a specific sector Range of users (suppliers/demanders)

Amazon

Android/IOS

Virtual Fort Knox

IDS

Platform: What are we talking about? • No: Stakeholder groups: Industrie 4.0, European

Technology Platforms

• No: Technological platforms (Middleware, reference architectures, …)

• Instead: Economical multi-sided market platforms creating value by enabling interactions between two or more customer groups (often including the above)

• Google: People who search - advertisers

• Apple/Android: People who buy a phone - developers of apps

• Amazon Marketplace: People who search a product - companies selling products

•

Characteristics of platforms

• Product or platform?

• A product is largely proprietary and under one company’s control

• An industry platform is a foundation technology or service that enables an interdependent ecosystem of businesses (Gemini 4.0: development space for business models)

• The platform requires complementary innovations (created by the "complementors")

• Open or closed?

• Some level of openness is necessary to enable complementors (developers) to interact with the platform, e.g.

• API's (Application Programming Interface)

• SDK (Software Development Kit)

• Necessary to go through standardisation?

• Some platforms are based on standards, others are not

• Alternative: "quasi"-standardisation

• by strong market actors or groups of actors

• model of the successful on-line platform actors

• Standardisation limited to interoperability with other platforms – if at all

11

Examples: Apple App Store

No: • standards • interoperability • reference architecture

Yes: • Software development kit, • Quality control • Clear revenue model for

Apple and Complementors

Is FIWARE a two-sided platform?

• Open source repository is not a platform, only addresses one side of the market (software developers)

• Smart city platform run by Telefonica in Santander is a platform: It brings complementors into contact with citizens of Santander

• SmartAgriFood is a platform: It brings complementors into contact with farmers

15

Standardized architecture for automotive software •Eases cooperation of automobile manufacturers, suppliers and tool developers •Facilitates innovation through open standards •"Cooperate on standards, compete on implementation"

Similar platform in agricultural machinery: ISOBUS • emerging ecosystem of agricultural OEMs, suppliers, seed companies, IT/big data • standardise communication/data exchange between tractors, land machines, mobility and control SW • compete on components and their functionality.

Steps in creating 2-sided platforms

Define the (two) sides, and scope of the technical basis Decide on how to open parts of the infrastructure to

attract complementors Solve tech issues and create testbeds to accelerate the

innovation process and help maturing the platform

Complementors can start building applications

Users can try out the system and the applications build by the complementors

Consortium can learn what complementors and users need

Create the ecosystem Manage the quality of the contribution of complementors

Concrete Steps - Action Line 2: Leadership in digital platforms for industry

• Work with national initiatives to avoid inefficient/inappropriate national silos & to complement efforts to reach appropriate scale

• lift up promising national/ regional efforts to EU scale

• Increase weight of EU actors in international alliances

• Workshop "Platforms for the Connected Factories of the Future" on 5-6 Oct in Brussels

• ECSEL stakeholder meetings 17-18 September in Graz

• Define the 5 key strategic areas and their needs cross value chain collaboration needs for the next years

17

Today's Workshop: "Platforms for the Connected Factories of the Future"

• Bring key actors around the table:

• Industry: Siemens, Dassault, ATOS, Bosch, SAP, IBM, …

• Platform initiatives: VFK, BEINCPPS, IDS, RAMI, ROS, ARROWHEAD, …

• Some key national initiatives (DE, UK, FR, NL, …)

• Questions:

1. What platforms are needed on EU scale?

2. How to build the ecosystem around platforms?

3. On what does industry want to work together vs to compete on?

4. What activities are needed for the development of platforms?

5. How can EU R&I Progr. support, e.g. ICT-FoF11 (51M€, Jan'16)

• Format:

• Short presentation of initiatives: focus on platform building

• Networking dinner

• Discussion of 5 questions in in 3 groups

• Feedback to plenary and conclusions

• Public report including an overview of on-going initiatives (with your help!!!)

THANK YOU Digitising European Industry: https://ec.europa.eu/digital-agenda/en/digitising-european-industry Digital Agenda for Europe – Components and Systems: https://ec.europa.eu/digital-agenda/en/science-and-technology/components-systems DG CONNECT (Communications Networks, Content and Technology): http://ec.europa.eu/dgs/connect/index_en.htm Horizon 2020 on the web: http://ec.europa.eu/research/horizon2020/index_en.cfm ICT Innovation for Manufacturing SMEs: i4ms.eu Structural Funds 2014-2020 and Smart Specialisation: http://ec.europa.eu/regional_policy/index_en.cfm

19