Final Report v12 - Europaforesight.jrc.ec.europa.eu/documents/Final_Report_final.pdf · Myriam Garcia-Berro (ASCAMM) Jan Sjögren (IVF) ... Final Report The present report presents

ManVis Report No. 3

Manufacturing Visions – Integrating Diverse Per-spectives into Pan-European Foresight (ManVis) Delphi Interpretation Report Deliverable D15 Contract No. NMP2-CT-2003-507139-MANVIS

Authors

Cristina Arilla (ASCAMM) Isabel Narvaez (OPTI) Heidi Armbruster (Fraunhofer ISI) Krsto Pandza (University of Maribor) Maurits Butter (TNO) Bogdan Piasecki (University of Lodz) Carsten Dreher (Fraunhofer ISI) Anna Rogut (University of Lodz) Gerald Jan Ellen (TNO) Fabiana Scapolo (JRC-IPTS) Myriam Garcia-Berro (ASCAMM) Jan Sjögren (IVF) Björn Johansson (Fraunhofer ISI) Rebecca Stanworth (Fraunhofer ISI) Petra Jung-Erceg (Fraunhofer ISI) Philine Warnke (JRC-IPTS) Per Kilbo (IVF) Stefanie Schmitt (Fraunhofer ISI) Ana Murillo Morato (OPTI)

Fraunhofer Institute for System and Innovation Research Breslauer Strasse 48 76139 Karlsruhe, Germany

November 2005

Contents 1 Introduction............................................................................................................ 1

1.1 Aim of the ManVis Project ..................................................................... 1

1.2 ManVis Report No. 3 – Final Report ..................................................... 3

2 Dynamics and Foresight of Technological Developments in Manufacturing ........................................................................................................ 5

2.1 Dynamics of Technologies in Manufacturing and Foresight.................. 5

2.2 Prospects of Product Technologies ...................................................... 8

2.3 Prospects of Process Technologies.................................................... 12

2.4 Prospects of Flexible Automation........................................................ 18

2.5 Summarising Messages on Technology Development ....................... 24

3 Sectoral Analysis................................................................................................. 28

3.1 Introduction ......................................................................................... 28

3.2 Machinery............................................................................................ 29

3.2.1 About the Sector ................................................................................. 29

3.2.2 The Delphi Statements........................................................................ 29

3.2.3 Delphi Results ..................................................................................... 30

3.2.4 Conclusions......................................................................................... 40

3.3 Fabricated Metal Products .................................................................. 40

3.3.1 About the Sector ................................................................................. 40


3.3.3 Delphi Results ..................................................................................... 42

3.3.4 Conclusions......................................................................................... 48

3.4 Electronics, Electrical Equipment and Instruments ............................. 50

3.4.1 About the Sector ................................................................................. 50


3.4.3 Delphi Results ..................................................................................... 55

3.4.4 Conclusions......................................................................................... 65

3.5 Rubber and Plastics ............................................................................ 67

3.5.1 About the Sector ................................................................................. 67


3.5.3 Delphi Results ..................................................................................... 73

3.5.4 Conclusions......................................................................................... 77

3.6 Traditional Products ............................................................................ 79

3.6.1 About the Sector ................................................................................. 79


3.6.3 Delphi Results ..................................................................................... 81

3.6.4 Conclusions......................................................................................... 89

3.7 Transport Sector ................................................................................. 91

3.7.1 About the Sector ................................................................................. 91


3.7.3 Delphi Results ..................................................................................... 92

3.7.4 Conclusions....................................................................................... 101

4 European Manufacturing in a Global Environment ........................................ 102

4.1 European Conditions for International Competition........................... 102

4.1.1 Lisbon Agreement as a Baseline ...................................................... 102

4.1.2 Demographics and Current Working Hours ...................................... 103

4.1.3 Different Types of Relocation – A Definition...................................... 104

4.2 Competition on Cost.......................................................................... 106

4.2.1 Impact of Working Methods on Offshoring........................................ 106

4.2.2 Preventing Offshoring by Automation ............................................... 107

4.2.3 Environmental Legislation as a Potential Driver for Offshoring ......... 108

4.2.4 Subsidising to Prevent Offshoring..................................................... 109

4.3 Competition on Lead-Time and Knowledge Utilization...................... 110

4.3.1 Outsourcing....................................................................................... 110

4.3.2 Local Production ............................................................................... 112

4.3.3 Lead Markets and Industry Structure ................................................ 113

4.4 Competing with Innovation................................................................ 114

4.4.1 Innovation in the firms ....................................................................... 114

4.4.2 Comparing Europe Globally on Innovation Systems......................... 117

4.5 Conclusions and Recommendations................................................. 119

5 Manufacturing and its Contribution to Environmental Sustainability .......... 124

5.1 Introduction and Outline of the Chapter ............................................ 124

5.2 Relevance of Sustainability for the Future of European Manufacturing ................................................................................... 125

5.3 Overview of Delphi Results ............................................................... 127

5.3.1 Demand Side Issues ......................................................................... 127

5.3.2 Relevant Statements......................................................................... 128

5.4 Conclusions....................................................................................... 140

6 Managing Knowledge in European Manufacturing ........................................ 142

6.1 Introduction ....................................................................................... 142

6.1.1 Knowledge Management and Competitiveness................................ 143

6.1.2 Knowledge Management Activities ................................................... 144

6.2 Managing Knowledge in Manufacturing across Europe.................... 147

6.2.1 Knowledge Management Activities ................................................... 147

6.2.2 Working Conditions for Knowledge Management Activities .............. 160

6.3 Summary and Conclusions ............................................................... 165

7 Future Innovations in the Manufacturing Industry – Cross-Checking ManVis Results against other Foresight Databases ...................................... 170

7.1 Introduction ....................................................................................... 170

7.2 Analysis............................................................................................. 172

7.2.1 Introduction ....................................................................................... 172

7.2.2 Important Emerging Social Issues .................................................... 173

7.2.3 Key Enabling Technologies and Research Areas............................. 180

7.2.4 Main Innovation Themes for Industries ............................................. 184

7.3 Reflection on ManVis Statements ..................................................... 191

7.3.1 Science and Technology Developments and ManVis ....................... 191

7.3.2 Global Socio-Economic Challenges and ManVis .............................. 193

7.3.3 Innovation Trends and ManVis ......................................................... 195

7.4 Final Conclusions.............................................................................. 197

7.4.1 Global Socio-Economic Challenges for Manufacturing ..................... 197

7.4.2 Basic Research Paradigms for the Manufacturing Industry .............. 197

7.4.3 Main Innovation Themes for Manufacturing...................................... 198

7.4.4 Reflection on ManVis Statements ..................................................... 198

7.4.5 Final Conclusions.............................................................................. 200

8 Demand Perspectives on Manufacturing Visions. Insights from the Stakeholder Strand............................................................................................ 201

8.1 Introduction ....................................................................................... 201

8.2 Relevance of the Demand Perspective for the Future of Manufacturing – Insights from the Academic Debate........................ 203

8.3 The Demand Side Aspects Shaping the Future of Manufacturing – Results from the Stakeholder Workshop................ 204

8.3.1 Challenges to manufacturing arising from new demands on products ............................................................................................ 205

8.3.2 Challenges to Manufacturing Arising from Emerging Demands on Working, Learning and Living Patterns ........................................ 217

9 Differences in the Future of Manufacturing between EU Member States .................................................................................................................. 228

9.1 The Challenge of Enlargement ......................................................... 228

9.2 On the Road from Resource-Based to Knowledge-Based Manufacture ...................................................................................... 230

9.2.1 Emerging Product Technologies ....................................................... 232

9.2.2 New Manufacturing Technologies..................................................... 239

9.2.3 Prospects of Flexible Automation...................................................... 242

9.2.4 Final Remarks ................................................................................... 243

9.3 Intensity of Cooperation – From Individual to System Competition ....................................................................................... 246

9.3.1 Clusters, Networks, Cooperation ...................................................... 248

9.3.2 Supporting Trends............................................................................. 256

9.3.3 Conclusions....................................................................................... 260

9.4 Threat of Relocation of Manufacturing .............................................. 263

9.4.1 The Threat of Relocation................................................................... 263

9.4.2 Opposite Trends................................................................................ 267

9.4.3 Final Remarks ................................................................................... 268

Figures............................................................................................................................ I

References ..................................................................................................................VII

Annex 1: Methodological Annex....................................................................XIII

The ManVis Approach .................................................................................................XIII

1 Strand S – Stakeholders and Demand Side ....................................................XV

2 Strand O – Overseas Manufacturing Experts ................................................XVII

3 Strand D – Delphi (European Manufacturing Experts)..................................XVIII

3.1. The Delphi Methodology ...............................................................................XVIII

3.2. The ManVis Delphi Approach .........................................................................XIX

3.2.1. Sectors XX

3.2.2. Categories........................................................................................................XX

3.2.3. Statement Generation .....................................................................................XXI

3.2.4. Expert Selection .............................................................................................XXII

3.3. Conduction of the Survey.............................................................................. XXV

3.4. Analysis....................................................................................................... XXVII

Annex 2: Statements – 1st Round ManVis Delphi Survey (Autumn 2004) .......... XXX

Annex 3: Statements – 2nd Round ManVis Delphi Survey (Spring 2005) .......XXXIV

Annex 4: The ManVis Questionnaire 2nd Round – Examples.........................XXXVII

Annex 5: The ManVis Consortium ...................................................................... XLVIII

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1 Introduction

1.1 Aim of the ManVis Project The specific support action "Manufacturing Visions – Integrating Diverse Perspectives into Pan-European Foresight (ManVis)" (Contract No NMP2-CT-2003-507139) started early 2004. Its aim was to accompany the ongoing policy process of enhancing Euro-pean competitiveness in manufacturing industries and to include views of European manufacturing experts.

The project was launched in response to the following factors:

• Results from previous foresight activities and empirical survey indicated that manufacturing in Europe needs to strengthen its innovation capacity and to get into a more proactive position in the face of the increasing pace of product in-novation

• Increasing debate on relocation of manufacturing outside Europe

• Commission activities in support of manufacturing (Manufacturing Action Plan – MATAP)

• Need to define research priorities for NMP in FP7.

Powerful visions do neither appear all of a sudden nor can they be declared by state authorities. They cannot be based on single perspectives or specialised approaches. However, industry, government, and other stakeholders need a strong vision on the future of the European economy based on an assessment of possible alternatives in order to develop their strategies. For this reason, a new knowledge community had to be created which is concerned with the future of manufacturing and includes as many actors and stakeholders as possible from Europe and all over the world.

As a tool for initiating future-oriented thinking and to promote the involvement of di-verse perspectives, a pan-European Delphi survey dealing with manufacturing issues was launched. The Delphi methodology is a long-established tool for forecasting future technological (and other) developments. Foresight activities are a systematic effort of supporting policy by setting priorities in science and technology policy thereby stimulat-ing the communication between actors in innovation systems. Delphi studies have of-ten been used as a tool to collect a wide range of opinions as a base for further panel debates (e.g. in the U.K. Foresight programme or the German Delphi Survey 1998). The advantage of the approach is its ability to collect a large amount of information in a structured form.

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In several workshops, manufacturing experts from all over Europe and overseas con-tributed to the shaping of the survey. In order to avoid an isolated view of Europe’s manufacturing issues, experts from overseas were also involved in the development of the statements of the Delphi questionnaire and commented on the results of the survey (cf. ManVis Report No. 4 – International Strand). Emphasising and elaborating the de-mand side perspective on manufacturing was an important aim of this project. Because of this, consumers and other societal groups concerned with manufacturing discussed the findings of the Delphi survey. In parallel to the Delphi activities, scenarios on the development of the demand side of manufacturing were being elaborated (cf. ManVis Report No. 5 – Stakeholder Strand, Scenario Report). A detailed description of the methodology and database is presented in the Annex.

The ManVis Delphi survey was launched in 22 European countries. A core team of researchers from eight European institutes had conceptualised and conducted the Del-phi survey. All these institutes possess a solid background in research on manufactur-ing foresight issues, each of them focussing on particular aspects needed for a holistic view on manufacturing. National partners from 22 European nations supported the sur-vey in their countries. With their participation in several workshops, approximately 280 manufacturing experts from Europe and overseas with backgrounds of the research community or the industry contributed to the shaping of the survey. In addition, a num-ber of policy actors participated in the discussions (cf. ManVis Report No 1 – The Status of the Project).

As a result, the Delphi survey covered developments in all relevant aspects of manu-facturing from technologies via organisational concerns to questions of the working environment. Further, enabling technologies for developments in all these areas were examined. New demands for skills and competencies were deduced from the results, while sustainability issues were a special focus throughout the whole project. Some statements in the Delphi questionnaire dealt with sector specific developments such as Transport, Machinery, or Traditional Products (the questionnaire is available in ManVis Report No. 1).

The results of the ManVis Delphi survey should be

• integrated into the long-term planning of the European research funding for manufacturing,

• included in the debate on the Manufuture Technology Platform which is cur-rently being developed (www.manufuture.org), and

• published and dispersed among potential users in government, industry and the general public.

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1.2 ManVis Report No. 3 – Final Report The present report presents the elaborated analysis of the ManVis Delphi survey re-sults, thus, providing a broad basis for public discussion on the future of manufacturing in Europe. It constitutes strategic decisions and an improved self-understanding for the European Manufacturing Industry, European policy, and stakeholders from Europe and beyond.

In all of the addressed fields of interest, experts were asked to assess up to 101 state-ments regarding their individual importance for the European Manufacturing Industry of the future. Additionally, they provided a time frame for the realisation of each of these statements and the potential effects the statement might have as well as barriers it might be confronted with. The analysis also covers characteristics of the experts them-selves, like their self-assessment of expertise on each statement or differences in as-sessment by gender, age or occupation. Moreover, differences in assessment by country and by organisation (i.e. type of organisation, size) are examined systemati-cally, in order to provide a solid foundation for informed decision-making on actions towards sustainable and competitive manufacturing in Europe, and for European manufacturing industries to learn about and face the long-term challenges of changing markets and frameworks of the future.

The following Chapter (authors: Christina Arilla, Carsten Dreher and Björn Johansson) of this Final Report deals with Dynamics and Foresight of Technical Developments. It starts off explaining the dynamics of technologies in manufacturing and foresight in general and introduces a new perspective on the timing of innovation. After that it pro-vides detailed views on the prospects of product technologies, process technologies, and flexible automation, based on the actual results of the Delphi Survey.

Chapter 3 (authors: Carsten Dreher, Heidi Armbruster, Björn Johansson, Myriam Gar-cia-Berro, Cristina Arilla, Isabel Narvaez and Rebecca Stanworth) is dedicated to analyses of the specific sectors: Machinery, Fabricated Metals, Electronics and Electri-cal Equipment/Instruments, Rubber and Plastics, Traditional Products – such as textile, textile products, leather and footwear, furniture, and non-metallic minerals (ceramics) – , and Transport Equipment (on the selection of sectors please see the annex of this report).

European Manufacturing in a Global Environment is the focus of the next chapter (au-thors: Jan Sjögren and Per Kilbo). It covers the much discussed relocation issues, like relocation to lead markets, offshoring, and outsourcing as well as costs aspects e.g. for logistics and supply chain and the possibilities of local production.

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Chapter 5 (authors: Gerald Jan Ellen and Maurits Butter) provides an insight into eco-logical side of manufacturing. Under the title of "Manufacturing and its contribution to environmental sustainability", it not only analyses the experts' opinions but also illumi-nates the demand perspective on sustainability.

Knowledge Management – as a key point in the information society of the 21st century – is the focus of Chapter 6 (authors: Heidi Armbruster, Petra Jung-Erceg and Krsto Pandza). It points out the overall impacts of Knowledge Management on competitive-ness and possible Knowledge Management activities before going into a thorough analysis of Knowledge Management in Europe as result of the Delphi survey.

In Chapter 7 (author: Maurits Butter) on future innovations in the manufacturing indus-try, the Dynamo Database is introduced. The chapter puts the Delphi statements on innovation in a broader context, using the expert system Dynamo as the central tool and source for analysis. The system contains over 3000 developments, based on fore-sight studies, expert workshops, and research portfolios.

Chapter 8 (authors: Philine Warnke and Fabiana Scapolo) brings a closer look on the demand perspective on Manufacturing Visions by not only evaluating the Delphi survey but also results from a “demand perspectives workshop” which had the objective to ensure a broad perspective on the future of manufacturing by including thoughts and opinions of stakeholders – especially from the demand side – into the research.

The final chapter of the present report (authors: Anna Rogut, Bogdan Piasecki) ad-dresses the issue of significant differences of the ManVis results from individual coun-tries and/or groups of countries within the European Union and highlights differences or similarities in actual developments and future trends.

The Appendix includes background information such as methodological specifications, project team lists, as well as material and illustrations from ManVis.

The overall conclusions and policy recommendations of this report and the inter-national views (ManVis Report No. 4) as well as the scenario analysis (ManVis Re-port No. 5) are considered in a special policy paper (ManVis Report No. 6). This report was the background document of the conference "European Manufacturing – Quo Vadis?" which took place in Bled, Slovenia, on October 24th and 25th, 2005.

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2 Dynamics and Foresight of Technological Develop-ments in Manufacturing

Authors: Christina Arilla (Ascamm) and Carsten Dreher, Björn Johansson (Fraunhofer ISI)

2.1 Dynamics of Technologies in Manufacturing and Foresight Technologies are driving forces for the competitiveness of manufacturing industries. Therefore, innovation and technological development are the outcome of interplay be-tween actors, their subjective expectations, and market requirements. ManVis provides the expectations of various actors and puts them into time horizons. Basically, four main groups of technologies affecting manufacturing have been discussed during the last decades (cf. e.g. IMS International 2000, NRC 1998, NAM 2000, NACFAM 2005):

(1) advanced materials

(2) microsystems technologies

(3) information and communication technologies

These three well known driving technologies are complemented by

(4) nano- and biotechnologies allowing for a bottom-up approach for manufacturing (FutMan 2003, ManuFuture 2004).

In addition, the areas in which different technology strands converge, merge, or inspire each other – e.g. mechatronics using biotechnology or intelligent materials in microsys-tems – were of special interest in various earlier foresight projects.

Interestingly, the technologies are consigned to different approaches. They act as en-abler because of the functionality they offer (e.g. nano-/biotechnology, materials). Other basic technologies are considered to have a customisation potential, allowing for better fulfilment of customer needs, e.g. information and communication technologies. The approach and use in manufacturing industries depends on the method of integration linked to organisation of the companies and their operations as well as to the state of diffusion and maturity of the individual technology. Hence, the impacts of the technol-ogy depend heavily on its development over time and its potential for use (as high-lighted in the remarks on technology dynamics). The assessment in the following sections will examine the results of the Delphi survey for the following technologies in manufacturing:

• New technologies and materials are incorporated into new products

• New technologies also shape production technologies

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• New technologies offer integration opportunities to manufacturing firms' existing processes and operations through i.e. flexible automation.

The technologies are shaped, hindered, or promoted by the demand of users and by socio-technological paradigms (Dosi 1988), leading to the development of a basic technology in certain trajectories. At the company level, technology management has to consider the right timing of changing the technology or staying within the current path (Christensen 1997) or whether the diffusion potential makes it worthwhile to stick with a certain technology (Gold 1981). At a policy level, the promotion as well as the promotion instruments and arrangements within the innovation system have to be con-sidered and adjusted (Edquist 1997, c.f. e.g. policy instruments timing based on diffu-sion metrics, Dreher 1997).

Figure 2-1: New technologies for manufacturing

In order to visualise and condense different approaches of technology dynamics, Meyer-Krahmer and Dreher (2004) presented a descriptive model for a basic technol-ogy cycle combining the science base cycle with the diffusion model. This shall be used for discussion of the main findings in the concluding Chapter 2.5.

After the first stage of discovery and exploration, transdisciplinary research investigates the opportunities for the new technological principals. This leads to euphoria about the new technological possibilities among the growing community of scientists and re-

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searchers (stage 2). Over time however, several options turn out to be either scientifi-cally or economically unfeasible. Therefore, research activity in these areas is being reduced or stops altogether (stage 3). Because of the resulting alienation, only those actors with the highest endurance or radical new approaches contribute to the reorien-tation of the technology’s development (stage 4). They achieve critical industrial break-throughs. The fastest of which to achieve market acceptance, shape the future handling of the technology (dominant designs) (stage 5). In the phase of diffusion (stage 6), applications expand again because economies of scale result in a price-reduction and allow the coverage of new application areas.

scope of research activities/ possible applications

level of activity

time

1

discovery and exploration

euphoria disillusion reorien-tation

rise diffusion

2 3

4

6

5

sciencepush

demandpull

Figure 2-2: Basic Science-Technology Cycle for macro-innovations (Meyer-Krahmer; Dreher 2004)

In each of these phases, typical actors, different companies as well as technology management and policy strategies can be identified. I.e. patent data analysis, citation analysis, diffusion and market penetration data could be used as indicators for analysis after the ManVis project. Considering the socio-economic dimension of shaping tech-nologies, the expectations of the actors in the innovation system are equally important. At this point, the ManVis survey results are relevant to complete the picture of technol-ogy dynamics in manufacturing technologies and to pinpoint the development stage.

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2.2 Prospects of Product Technologies Advancements within the field of product technologies strive to enable the manufactur-ing industry to meet the increasing external and internal demands of today and the fu-ture. Customers seek higher (and preferably customised) service content and greater functionality, whereas manufacturers praise developments toward fewer suppliers and more transparent supply chains where decisions can be made and executed instanta-neously. In addition, environment-friendly and recyclable products are no longer pushed by legislation alone but also by aware and conscientious customers.

The ongoing transition of today's manufacturing world has led to the beginning of a new era of manufacturing, where manufacturing will be "operating as a service provider industry" facing "an increasingly educated consumer population" and is encouraged (forced) to deliver products that "will increasingly demonstrate qualities of ease of con-struction, reliability and recyclability" (IMS International 2000, p iii).

Where many of the demand paths seem contradictory to one another, product tech-nologies could possibly ease the challenges ahead. Increased and improved function-ality can be reached through new smarter materials, which may also reduce supply chain complexity by making some of today's materials and suppliers obsolete. With todays global sourcing and manufacturing, it is crucial to not only be leading in deliver-ing today's technologies but to research and develop those of tomorrow.

In the ManVis survey, the experts were asked to assess four statements covering emerging product technologies identified as influential on future manufacturing during the statement generation process.

The selected statements were:

S028 Smart Materials Smart materials that adapt to different conditions by changing properties (e.g. dynamics, size, shape, thermal behaviour) are in widespread use.

S029 Reduced Number of Materials The number of different materials in each product is reduced by half.

S030 Nanomaterials for Coatings Nanomaterials are in widespread use to apply coatings with special features (e.g. self-cleaning, anti-reflexive, antifouling) to a variety of products.

S034 Electronic Labels Electronic labels (e.g. RFID-tags) containing relevant product and process infor-mation are embedded in most manufactured products.

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There were two rounds of the survey within the ManVis project with a selected set of statements recurring in the second round. Only statements S028 and S034 were part of the second round. With regard to statements "Smart Materials" (S028) and "Elec-tronic Labels" (S034), the 2nd round polarised the views of the 1st round – i.e. there were no diversions from the 1st round. Furthermore there were no major diversions over the experts' characteristics (age, gender, occupation, etc.) for any of the state-ments.

Together the four statements of this section bring forward the idea that future products will contain fewer materials (S029), have new and better properties (S028 and S030) as well as becoming the prime carriers of information (S034) with regard to their own individual manufacturing history and characteristics.

It is notable that S030 "Nanomaterials for Coatings" addresses a more specific issue than S028, S029, and S034. Furthermore, the technologies and trends beyond each statement are in different stages of their development and employment. For example the technology supporting electronic labels has been researched since the seventies and is in widespread use in other areas – it can be said that the technology has already reached the "diffusion" stage described in Chapter 2.1. These background circum-stances must be considered when evaluating the experts' assessments and when at-tempting to draw relative conclusions between the statements.

S028

S029

S030S034

2005 2010 2015 2020

Low

Hig

h S028: Smart materials(1%, 7%)

S029: Number of materials reduced(13%, 20%)

S030: Nanomaterials for coatings(1%, 14%)

S034: Electronic labels(0%, 3%)

( "Never"; "Don't know") as percent of all expertsanswering the statement

S028

S029

S030S034

2005 2010 2015 2020

Low

Hig

h S028: Smart materials(1%, 7%)


S030: Nanomaterials for coatings(1%, 14%)

S034: Electronic labels(0%, 3%)


Figure 2-3: Importance and (weighted) time of realisation for selected statements – assessment by all experts (n=1104)

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The four statements all share a commonality in that a majority of the experts regard their realisation to be of above average importance – ranging from 73% for "Reduced Number of Materials" (S029) to 90% (2nd round) for "Smart Materials" (S028).

With regard to "time of realisation", the experts' assessments differ more over the statements. "Electronic Labels" (S034) is the only statement with a majority of the ex-perts believing in a realisation before 2015 (77%, 2nd round). For "Nanomaterials for Coatings" (S030) and "Reduced Number of Materials" (S029), 66% and 65% of the experts respectively foresee a realisation between 2010 and 2020. The statement "Smart Materials" has the longest time to realisation, with 38% (2nd round) of the ex-perts' foreseeing its realisation after year 2020 (see Figure 2-3).

0%

50%

100%Education/Qualification

Technical feasibility

Social acceptability

EU legislation

Economic viability

Lack R&D Funding

Smart materials (S028 - 2)

Number of materials reduced (S029 - 1)

Nanomaterials for coatings (S030 - 1)

Electronic labels (S034 - 2)

Figure 2-4: Main barriers for selected emerging product technologies – assessment by all experts (average n= 1065)

It might be suspected that for some statements there is a correlation between the re-maining time to realisation of the statements and the barriers technical feasibility (di-rect), social acceptability, and EU legislation (inverse).

All statements' realisations are predicted to have positive (increasing) effects on Europe's competitiveness with the statements "Nanomaterials for Coatings" (S030) and "Smart Materials" (S028) being put forward by 88% and 94% of the experts respec-

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tively. 67% and 75% respectively of the experts also think that the implementation of these two statements will have a positive impact on the employees' living and working conditions in Europe.

For the areas "employment" and "regional differences", the expected effects are seen as less certain with a majority (of the experts with an opinion) claiming that there will be no effect over all four statements. However, manufacturing companies remaining com-petitive in Europe will indirectly create employment and give support to the service in-dustry.

Effects

40%

20%

0%

20%

40%

60%

80%

100%

Dec

reas

eIn

crea

se





EnvironmentQuality

Living andworking

conditions Employment CompetitivenessRegional

Differences

Effects

40%

20%

0%

20%

40%

60%

80%

100%

Dec

reas

eIn

crea

se





EnvironmentQuality

Living andworking


Differences

Figure 2-5: Expected increasing and decreasing effects for selected emerging product technologies – assessment by all experts (n=1068)

For the three statements where the level of R&D was questioned (S029, S030, and S034), the US is seen as the leader with roughly a third of the experts' votes for S029 and increasing up to 64% for S034. Europe and Japan are equally positioned over these three statements, and are both best positioned for statement S029 (which is also given the latest time of realisation of these three statements).

To conclude, it can be said that all statements in this category are seen to be of above average importance and all statements' realisation will clearly increase Europe's com-petitiveness, but they are all hindered by technical feasibility. The US is the leader within R&D and its position improves as the realisations of the statements come closer. The realisations of these four statements have not only got high to very high positive

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effects with regard to Europe's competitiveness but the environmental quality and living and working conditions will improve a lot as well. The realisation of the statement "Elec-tronic Labels" is closest in time but here, EU-legislation is a barrier as well as concerns regarding privacy and information security. However, all experts believe in its realisa-tion and a majority think it will happen in the next 10 years (77% of experts).

Key results

• R&D Level: Japan and Europe are on a shared 2nd position to the US over the four statements covering product technologies. The US' position strength-ens as the realisation of a statement is getting closer.

• The statement "Smart Materials" is given very high importance and is seen as having very positive effects with regard to living and working conditions, com-petitiveness, and environmental quality.

Key challenges

• To gain research leadership in the areas of product technologies. Technolo-gies with a time of realisation beyond 2015 (such as smart materials) still offer an opportunity to catch up.

Recommended policy action

• A measure, helpful in tackling the social acceptability barrier for e.g. the intro-duction of electronic labels, is integration into initiatives working with the col-lection and assessment of critics from the public with regard to disruptive technologies integrated in the ordinary person’s life.

• Maintain a long-term foundation for excellence within the fields of smart mate-rials.

2.3 Prospects of Process Technologies Many of the technologies that would make Europe more competitive and could contrib-ute to sustainable production are as yet only used by a limited share of all companies. Today "big companies are typically the forerunners in the use of new technologies and

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thus they very much determine the shaping of the technology" (FutMan 2003). How-ever, these new process technologies (some very disruptive in nature) are spreading and will change the way manufacturing is done and looked upon (NACFAM 2005).

It has been stated (NACFAM 2005) that micro-fabrication and nano-fabrication "have the potential to dramatically disrupt the entire production enterprise and make it far more agile across every industrial sector". At the moment, cost is the predominant bar-rier for a widespread adoption of these technologies but they are already in use in some areas. A large amount of research funding is being dedicated towards research in the fields of micro- and nanoscience (e.g. US federal funding of $4 billion to the Nanotechnology Initiative), so it can be assumed that advances will be made.

Further developments among process technologies aim not only at working on a smaller level but also at exploiting new methods of doing so; thus shaping new ways of determining how a product can be manufactured. Bio-manufacturing is for instance a technique where "functions of micro-organisms or other living organisms are put into practical use", hence improving a manufacturing process. The "IMS 2020 Forum" pin-pointed bio-manufacturing to be "most important for meeting the grand challenges of future manufacturing" (IMS International 2000, p. 7).

However, rapid technologies (technologies based on processes that add materials and can replace today’s cutting and forming technologies) are possibly one of the new process technologies that will most greatly redefine people's view on manufacturing. Rapid technologies are believed to have the ability to enable manufacture of products "right first time", which would lead to a reduction of waste, decreased time to market, and a re-shaping supply chains.

In the ManVis survey, the experts were asked to assess four statements covering the emerging process technologies mentioned above and identified as influential on future manufacturing during the statement generation process as well as in the studies men-tioned. They were:

S003 Nano-Manufacturing Products can be manufactured bottom-up through the self-assembly of atoms or molecules.

S004 Manufacturing with Living Organisms Manufacturing processes for inorganic (non organic) products that utilise the functions of micro-organisms or other living organisms are put into practical use.

S005 Micro-Electromechanical Systems Micro-electromechanical systems such as actuators with integrated sensors and

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microprocessors are used all over the factory as active components (e.g. active workpiece fixtures).

S012 Rapid Technologies Technologies based on processes that add materials have replaced a substantial share of today’s cutting and forming technologies.

There were two rounds of the survey, with a selected set of statements reoccurring in the second round. All of the four statements discussed under process technologies were part of the second round. The 2nd round polarised the views of the 1st round and, unless otherwise stated, 2nd round results are used in discussing these statements. Furthermore there were no major diversions over the experts' characteristics (age, gender, occupation, etc.)

1359 Experts participated in the second round and for each of these four statements they stated a collective degree of expertise being below average (S004, S003), slightly below average (S012) to slightly above average (S005).

It is also the use of micro-electromechanical systems (MEMS, S005) which is seen as the most important of the four statements. A total of 95% of the experts believe MEMS are of above average importance. For "Nano-Manufacturing" (S003), "Manufacturing with Living Organisms" (S004) and "Rapid Technologies" (S012), the equivalent figures were 77%, 75%, and 77% respectively (see Figure 2-6).

With regard to time of realisation, the experts' assessments differ more over the state-ments. "Micro-Electromechanical Systems" (S005) is the only statement with a majority of the experts believing in a realisation before 2015 (68%). "Rapid Technologies" (S012) follows thereafter with 74% expecting it to be realised in 2010-2020.

Further away in time are the realisations of "Manufacturing with Living Organisms" (S004) and "Nano-Manufacturing" (S003). Nano-manufacturing, meaning that products can be manufactured bottom-up through the self-assembly of atoms or molecules, is indeed the technology for which the foreseen wait will be the longest – 67% of the re-spondents positive to its realisation think it will first take place after 2020. 8% of all ex-perts believe it will never be realised. The equivalent "never" rates for the other three statements lay between 0% and 2% (0% for "Micro-Electromechanical Systems"). See Figure 2-6 for a schematic view of the importance of the statement and its (weighted) time of realisation.

The lowest "don't know" rate (discussing time of realisation) was recorded for state-ment "Micro-Electromechanical Systems", 5%, but this was also the statement with the highest stated level of expertise (The other statements had "don't know" rates ranging from 12% to 15%).

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Importance and Time of Realisation (weighted) for selected statements

S003S004

S005

S012

2005 2010 2015 2020

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S003: Nano Manufacturing(8%, 12%)

S004: Manufacturing with living organisms(1%, 15%)

S005: MEMS(0%, 5%)

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S005: MEMS(0%, 5%)




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S003S004

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Figure 2-6: Importance and time of realisation – process technologies

It has already been mentioned that the experts believe that the substantial replacement of cutting and forming technologies (S012) will not take place before 2015. From Figure 2-7 it can be seen that its main barrier – technical feasibility – is shared with the other statements, but that it diverts (together with "Micro-Electromechanical Systems" (MEMS, S005)) with regard to the barrier of economic viability. For MEMS, it should also be noted that one third of the experts, 34%, believe that the employees' education and qualification is not high enough for a widespread use of MEMS in industry.

A closer look at "Nano-Manufacturing" (S003) and "Manufacturing with Living Organ-isms" (S004) – maybe the two most disruptive process technologies covered here – shows that they have very much the same barrier-profile. Economic viability is not (yet?) a concern, whereas R&D funding and technical feasibility are more frequently stated barriers. Of further note is that these two statements also are the two statements (especially "Manufacturing with Living Organisms") which receive the highest frequen-cies for the barriers "EU-legislation" and "social acceptability".

The realisation of "Nano-Manufacturing" (S003) and "Manufacturing with Living Organ-isms" (S004) is still relatively far away, according to the experts' opinions; but how will these barriers' importance develop as Europe approaches their realisation? Although it

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is not seen as one of the most significant barriers now, it is interesting that so far away from its expected time of realisation, manufacturing with living organisms is already raising questions about possible social acceptability.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Nano Manufacturing (S003 - 2)

Manufacturing with living organisms (S004 - 2)

MEMS (S005 - 2)

Rapid technologies (S012 - 2)

Figure 2-7: Barriers for statements – process technologies (2nd round)

In terms of R&D level, the US is the leading region, with the exception of MEMS (S005) for which 58% of the experts think that Japan has the highest R&D level. Europe is seen to be best positioned in the field of rapid technologies (S012). However, Europe (with 28%) is still second to the US (ranked by 60% of the experts as number one).

The R&D positions of both Japan and Europe are especially low in the research areas covering nano-manufacturing (S003), and manufacturing with living organisms (S004). The only comfort to the situation, with the US seemingly far ahead, is that these state-ments are the two with the furthest away expected time of realisation. With their ex-pected effects on competitiveness and environmental quality they are certainly areas where Europe (nor Japan) can afford to lag behind further and action must be taken.

To conclude, it can be said that the process technologies could be ordered as a func-tion of the importance expressed by the experts in the following way: MEMS (S005), "Nano-Manufacturing" (S003), "Manufacturing with Living Organisms" (S004), and "Rapid Technologies" (S012). The statement "Micro-Electromechanical Systems"

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(S005) is seen as the most important area and has the closest expected time of reali-sation. The other three statements are also rated high in terms of importance and fur-ther show a positive effect over all areas apart from "employment" where opinions are mixed.

Effects

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Rapid technologies (S012 - 1)

MEMS (S005 - 1)

Manufacturing with livingorganisms (S004 - 1)

Nano Manufacturing (S003 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 2-8: Effects – process technologies (2nd round)

In terms of barriers, the four statements face the same main challenges: Technical fea-sibility, lack of R&D funding, and economical viability. It is also interesting that manu-facturing already shows signs of facing social acceptability as a barrier, even though its foreseen realisation lies far in the future. Manufacturing with micro-electromechanical systems (MEMS S005) also divert from the rest in having "education and qualification" as a barrier – this might be linked to the earlier time of realisation for the statement (i.e. education and qualification are not considered yet in the statements where the realisa-tion time is further ahead in the future).

Overall, Europe's research position is recognised as very weak, being best positioned for the realisation of "Micro-Electromechanical Systems" (S005).

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Key results

• Europe is currently not very well positioned with respect to leadership in R&D for any of the statements, lagging significantly behind US leadership.

• Manufacturing with micro-electromechanical systems (S005) is the most ma-ture area of technology covered by the statements, and have especially high positive effects on living and working conditions and competitiveness. The statement rapid technologies (S012) follows suit 5-10 years later.

• Technical issues and lack of R&D funding are regarded as the main barriers, with secondary barriers perceived as Education /Qualification levels and eco-nomical viability.

Key challenges

• This is reflected in the challenges detected, with an increase in the Educa-tion/Qualification level of the European citizens for actual techniques, and a boost in R&D funding in order to attain new developments both being neces-sary.

• Nano-manufacturing: Its long term evolution and its high relevance makes im-portant that a high amount of spending should be dedicated to this technol-ogy, and also some efforts in educational/qualification level must be placed, in order to improve European level.


• Attacking the technical barriers with joint research efforts

• Exploit the relative advantage seen in MEMS in the nearer future by applied engineering research

2.4 Prospects of Flexible Automation The major technologies driving automation and linking different machines and handling systems are information and communication technologies. In most European countries, flexible automation has been the focus of debates on productivity and job creation or destruction since the seventies. Numerical controls, computer aided planning and de-

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sign, and computer integrated manufacturing as well as flexible manufacturing systems and industrial robots were the catchwords of these debates. Nowadays, more sophisti-cated IT use in the human-machine interfaces, such as augmented reality or using miniaturised sensors and actors for more flexible and integrated machine tools, are discussed – both integrated into the concept of reconfigurable manufacturing systems which avoid the disadvantages of the physical connection of tools by material flow technologies in the old FMS. Because of the long-lasting debates, the experts in the statement selection process in the participating countries, decided to examine some of these technologies again, in order to asses the prospects or decline of this approach.

In order to provoke the survey participants, the statements were extremely challenging in their wording. The following statements are discussed in this section:

S001 Intelligent Control Most manufacturing operations are controlled by self-learning intelligent control-lers.

S002 Talk to Machines Communication between humans and machines is as easy as communication between humans.

S006 Cobots Robots move freely in factories, flexibly assisting workers in various tasks, in-stead of being confined to a fixed working space (Co-bots).

S007 Manless Factory Fully automated production in the manless factory is as flexible as production with humans.

S009 Reconfigurable Manufacturing Systems A reconfigurable manufacturing system achieved by coupling simple machine modules to create complex systems (plug and produce) is in widespread use.

S010 Process Integration The integration of several processes into one machine makes the production of complete products from single machines standard ("Factory in a Machine").

S045 High Automation The benefits of high automation outweigh the advantages of lower labour costs outside EU.

Since all these statements were similarly challenging, it is possible to compare them with each other.

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The experts considered statement S045, indicating that the benefits of higher automa-tion outweigh the advantages of lower labour costs outside the European Union, the most important statement for manufacturing industries. However, 12% of the experts doubt that this positive outcome of automation will ever occur. This doubt goes down to only 5% after the second round of the survey. Furthermore, most of the experts esti-mate a realisation of this statement in approximately 2015.

After the second round, significant changes in the assessment of the main barriers oc-curred. The barriers “technical feasibility”, “education and qualification”, and “economic viability” doubled! 66% of the experts doubt the economic viability of this approach. For this statement, the first round revealed significant differences linked to experts’ nation-alities: Germany, Scandinavia, Austria, and other high wage countries contributed the highest "never" rates compared to experts from other states. These differences dimin-ished after the second round. In general, the "never" rates sunk but the main barriers on economic reasoning and technical feasibility doubled, thus expressing the experts scepticism. One possible interpretation of these results is that on the one hand, the experts see automation as an important instrument for price competition but on the other hand, experts are unsure whether high automation will be a successful strategy for all companies. The most severe impact is seen in decreasing employment as an outcome of the realisation of this statement.

S001

S002

S006S007

S009

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S045

2005 2010 2015 2020

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S001: Intelligent Control(4%, 15%)

S002: Talk to machines(9%, 10%)

S006: Cobots(4%, 11%)

S007: Man-less factory(20%, 11%)

S009: Reconfigurable ManufacturingSystems(2%, 13%)S010: Process Integration(10%, 16%)

S045: High automation vs. Low labour costs(6%, 7%)


S001

S002

S006S007

S009

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S045

2005 2010 2015 2020

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S001: Intelligent Control(4%, 15%)

S002: Talk to machines(9%, 10%)

S006: Cobots(4%, 11%)

S007: Man-less factory(20%, 11%)

S009: Reconfigurable ManufacturingSystems(2%, 13%)S010: Process Integration(10%, 16%)

S045: High automation vs. Low labour costs(6%, 7%)


Figure 2-9: Importance and time of realisation for selected statements of flexible auto-mation – assessment by all experts

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This interpretation is supported by the experts' assessment of the fully automated pro-duction in the manless factory (S007) which is considered only of medium importance. Furthermore, the share of experts thinking that this vision will never be realised is al-most 25%, reaching even one third in the high wage countries.

Therefore, the trade-off between more automation and maintaining flexibility for many sizes and numbers of product variants will remain the challenge of the future. With re-gard to this trade-off, the experts assess statements on reconfigurable manufacturing systems (S009), "Intelligent Control" (S001), "Cobots" (S006), and "Talk to Machines" (S002) as approximately equally important, yet differing concerning the time horizon. Reconfigurable manufacturing systems (plug and produce) of single machines are con-sidered to be realised by 2015 (S009), self-learning intelligent control systems by 2020 (S001), free moving robots working jointly with workers by 2020 (S006), and communi-cation between machines and humans as easily as among humans themselves after 2020 (S002).

The alternative way of integrating different processes into one machine in order to make complete products (S010) is considered less important than the flexible automa-tion developments mentioned above. E.g. local production concepts close to the mar-kets are not supported by the related technological vision yet.

Overall, with regard to flexible automation, the majority of experts estimate that the main barriers for all statements will be their technical feasibility and their economic vi-ability (see Figure 2-10). Except for self-learning intelligent control systems (S001) and communication between machines and humans (S002), more than 50% of the experts think that all technologies concerning flexible automation might be endangered by their technical complexity.

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0%

50%




EU legislation

Economic viability

Lack R&D Funding

Intelligent Control (S001 - 1)

Talk to machines (S002 - 1)

Cobots (S006 - 1)

Man-less factory (S007 - 1)

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Reconfigurable Manufacturing Systems (S009 -1)

Process Integration (S010 - 1)

High automation vs. Low labour costs (S045 - 2)

Figure 2-10: Main barriers for selected statements of flexible automation – assessment by all experts

The main effects a realisation of the statements concerning automation might have are an increasing competitiveness and improved working and living conditions. On the other hand, a decrease in employment is seen as the major negative impact (see Figure 2-11). Particularly, regarding communication between humans and machines

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(S002) and the cooperation between humans and robots ("Cobots") (S006), most ex-perts assume that these automation technologies will improve the living and working conditions.

Except for the intelligent controlled manufacturing operations (S001), the highest R&D level for automation was expected to be in Japan. For statement S001, the USA was supposed to have the highest R&D level. It is noteworthy that at least 3% of the experts think that China has the highest R&D level with respect to intelligent control (S001). This was the highest score for a country with rather low R&D levels for all other state-ments. The experts rated Europe's R&D level in terms of automation relatively low.

Overall, the assessments of the experts differed only slightly. In general, the experts from the industry are marginally more sceptical concerning realisation time and de-creasing employment. In the statements where the second round was conducted, these minor differences vanished towards the more cautious view of the company ex-perts.

Effects

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High automation vs. Low labourcosts (S045 - 2)

Process Integration (S010 - 1)

Reconfigurable ManufacturingSystems (S009 - 1)

Man-less factory (S007 - 1)

Cobots (S006 - 1)

Talk to machines (S002 - 1)

Intelligent Control (S001 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 2-11: Expected increasing and decreasing effects for selected statements of flexible automation – assessment by all experts

In conclusion, experts still consider both high and flexible automation very important for the future of European manufacturing. The main barrier for the development of automa-tion is seen predominantly in the technical feasibility and economic viability. High and flexible automation are expected to increase Europe's competitiveness but lead to a

24

decrease in employment rates. Japan has by far the highest R&D level as far as further developments in automation are concerned.

Regarding the time horizon, the majority of statements are supposed to be realised between 2015 and 2020, mainly needing the time for solving the technical problems in a profitable and not over-engineered way. Hence, flexible automation is seen as one but not immediate possibility to work on and increase European competition. The ex-perts' scepticism concerning the economic viability of these concepts and the employ-ment effects must be kept in mind.

Key results

Flexible automation is still considered an important trajectory and the debates are far from over. Some of the assessed statements may be realised in 2015-2020 offering some increase of competitiveness.

Key challenges

The main barriers are economic viability and technical feasibility. This implies a very careful assessment of the trade-off between the degree of automation in respect to the flexibility the individual firm’s market may require. Hence, flexible automation will and can be a profitable way in specific circumstances of an individual company.


Flexible automation may lower employment. The search for alternative solutions or the search for optimal solutions for flexible automation needs to be accompanied by careful social and economic research.

2.5 Summarising Messages on Technology Development From the presented findings on technology dynamics in manufacturing, some mes-sages can be derived:

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• Micro-electromechanical devices, smart materials, products using nano-coatings – in this timing order – are representing long-term developments in a new type of products with a disruptive character for markets. These product challenges offer an opportunity for strengthening competitiveness which can only be exploited if appropriate manufacturing equipment is available and is in-corporated into these technologies. Hence, generic technology development needs complementary manufacturing technology research involvement.

• Such new manufacturing technology principles as bottom-up manufacturing technologies are only expected in the long-run. Manufacturing technologies us-ing biotechnologies for creating and manipulating inorganic material and prod-ucts such as nano-manufacturing should also be on the long-term “radar” of RTD-policy.

• Micro-electromechanical systems (here a European advantage in R&D is seen by the experts) as well as flexible organisation and automation strategies com-bined e.g. in reconfigurable manufacturing systems supporting flexible business strategies are important for the short-term research agenda. However, the manless factory still receives a sceptical assessment by the experts. The hu-mans working with flexible automation solutions in the near future will play an important role in creating the flexibility. However, the experts expect people working with flexible automation technologies instead of a manless factory.

• Only long-term automation visions comprise human-machine interfaces such as man-machine speech recognition, self-learning systems and co-bots.

These issues underline the need for research on industrial adoption and innovation management practices in manufacturing industries and intensive communication and further debate of the ManVis results.

The development of new generic technologies and knowledge challenges manufactur-ing research in two ways. First, it creates a need for manufacturing processes in order to produce the new products and provide the new services. Secondly, these new tech-nologies and knowledge have to be integrated into the production processes them-selves. Basic manufacturing research has to foresee and prepare for the new challenges, and applied manufacturing research has to adapt and transform existing technologies and organisational processes. Furthermore, manufacturing research plays a decisive role in combining the long-term horizon in technology trajectories with the short-term need of firms to innovate successfully. This requires a good "timing" of re-search activities to have solutions and tools ready for industrial adoption.

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Considering these functions of manufacturing research, the ManVis messages on technology can be discussed using the presented concept of the combined science-technology cycle on innovation. Basically, four groups of technologies were discussed in several ManVis statements:

• bottom-up manufacturing technologies (bio- or nanoprocesses e. g. statements S003, S004)

• advanced materials (e. g. statements S012, S028)

• microsystems technologies (e. g. statements S005, S009)

• information and communication technologies (e.g. statements S002, S034).

For these technologies, the experts expressed different time horizons for realisation. Activities for basic and applied research have to be performed in advance (approxi-mately 10-15 years basic research, 5-10 years applied research).

level of activity

timediscoveryand exploration

euphoria disillusion reorien-tation

rise diffusion

sciencepush

demandpull

1

2 3

4

6

5

Nano-/bio-manufacturing

Advancedmaterials

Rapid technologies

MEMS

ICT in manufacturingoperations

scope of activities

Figure 2-12: Manufacturing related technologies on the Science-Technology Cycle for macro-innovations

ICT will still play the decisive role in the short-term perspective but only if the man-machine interaction is considered properly because the manless factory is not realisti-cally foreseen in the future. Using the assessment and referring to existing diffusion studies, ICT use in manufacturing is basically in phase 6 where application oriented industrial research is predominant. As said before, accompanying research on social

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and business inputs and standards (development and enforcement) are important sup-porting elements.

Microsystems (together with intelligent controls) are key enablers for plug-and-produce systems aiming at more flexible manufacturing systems as well as for process integra-tion into multifunctional machinery. For this second technology, the necessary link from developing new machinery to creating new business models (although not emphasised by the experts) could be crucial as well as research bringing together equipment sup-pliers and users. This represents phase 4/5 as the most important stage of setting dominant designs. The ManVis experts see Europe in an advantageous position (i.e. some lead user industries as automotive and medical equipment) and at the forefront. Industrial research is the main driver now. To be very precise: MEMS are not a basic research topic (and maybe because of that a little bit out of focus of public attention) but are on the verge of a take-off in industrial use. It is important to maintain the exist-ing advantage and exploit the commercialisation for the benefit of European manufac-turing (cf. Bierhals et al. 2000).

For advanced materials, the problem of making the processing and manipulation of these materials feasible and (more importantly) competitive has already been identified as an important research topic by the FutMan study. I.e. smart materials and rapid technologies are in phases 3 to 4 representing a selection process and the search for killer applications. It is a sobering phase of applied research in the concerned sciences and in engineering. Here, collective research efforts combining the related sciences, engineering and lead industries are helpful in bridging this period. The ManVis experts give a time horizon which leaves enough space for catching up in the R&D position.

The new catchwords representing bottom-up manufacturing are in the middle of the first boom in the science cycle close to euphoria (phase 2). The ManVis experts see the development as important for manufacturing but only on a very long-term horizon. Hence, basic research on nano- or biotechnology has to be carefully monitored for emerging manufacturing research fields. In addition, cross cutting manufacturing re-search issues like measurement, workplace safety of nano- or bio-based processes, etc. may facilitate the basic research activities in this field. A screening or roadmapping activity on nano-manufacturing connected to product roadmaps using nanotechnology is useful in order to prevent an overlooking of possibilities. An additional source is the analysis of linking MEMS to nano-based technology using existing advantages to facili-tate faster diffusion of nanotechnologies.

This analysis is based on the ManVis experts’ views and on secondary material. It could be useful to validate certain areas by using specialised innovation indicators (publications, patents, diffusion data) in targeted foresight and forecast studies.

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3 Sectoral Analysis Authors: Carsten Dreher (Machinery, Fraunhofer-ISI), Heidi Armbruster (Machinery, Fraunhofer-ISI), Björn Johansson (Fabricated Metal Products, Fraunhofer-ISI), and Myriam Garcia-Berro (Electronics, Electrical Equipment and Instruments, ASCAMM), Cristina Arilla (Rubber and Plastics, ASCAMM), and Isabel Narvaez (Traditional Prod-ucts, OPTI) and Rebecca Stanworth (Transport, Fraunhofer-ISI)

3.1 Introduction In addition to the general questionnaire, specific sections for certain sectors of the in-dustry were drafted. The aim was to deepen certain aspects on technology and busi-ness concepts by expertise concerning the individual sectors.

The answering of the only one-round exercise was voluntary. So, different and smaller groups answered the questionnaires on the sectors.

Sector Number of experts

Machinery 444

Fabricated Metal Products 359

Electronics, Electrical Equipment and Instruments 366

Rubber and Plastics 164

Traditional Products 351

Transport 279

It is worth remembering that the results from this sector have not been given a weight-ing to represent the relative size of the countries' manufacturing industry, and therefore the results should be viewed as the opinions of a group of experts, rather than neces-sarily being truly representative of European opinion as a whole. As such, no further reference to or comparison of individual countries will be made.

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3.2 Machinery

3.2.1 About the Sector

The machinery sector is one of the largest manufacturing sectors in Europe, contribut-ing about 10% of the EU production value. It includes a heterogeneous group of manu-facturers: e.g. machine tools, machinery for textile, apparel, and leather production, machinery for iron and steel production, and agricultural machinery. Approximately 2.7 million people are employed in the machinery industry across Europe. The sector is of significant importance for the European economy and for employment. The major pro-ducers of machinery are Germany, Italy, France, and the UK. Within these countries, the performance of the machinery sector has a major relevance for employment and economic growth (European Commission, DG Enterprise and Industry 2005).

However, in the beginning of the 1990s, the machinery sector in Europe experienced a strong recession. Employment significantly declined between 1990 and 1995 by over 3% a year. During the second half of the 1990s, there has been an increase of growth and employment in the machinery industry. However, this growth was mainly due to job losses in Germany and the UK. In the rest of the European Union and particularly in Greece and Spain, employment in machinery increased by approximately 2% a year.

3.2.2 The Delphi Statements

This sector questionnaire consisted of eight statements, as listed below:

S064 Automatic CNC Programming CNC programmes are processed automatically by an off-line calculation system (e.g. CAD) in such a way that testing of the programme on the shop floor is un-necessary (implicit programming).

S065 Virtual Machine Simulation Nearly all manufacturing machines will come with a “virtual-machine-simulation” capability for all kinds of optimisation.

S066 Adaptronic (Materials) 30% of machine tools use components based on intelligent materials that im-prove machinery performance autonomously according to the external environ-ment.

S067 Near Net Shape (Multifunctional Tools) Because of the wide spread use of near net shape technology, finishing opera-tions per product have been reduced and are carried out within one machine.

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S068 NC Software Nearly all NC software is based on open source code.

S069 Wireless Communication Factory communication is largely wireless.

S070 One Purpose Machines To a large extent, product specific machines have replaced more complex and flexible multipurpose machines.

S071 Product-Related Services At least one third of companies´ turnover is provided by machine-related services (pre-sales & after-sales services).

The statements roughly fall into three groups: General machinery concepts (S066, S067, and S070), machinery programming and communication (S064, S068, and S069), and virtual simulation and business concepts (S071 and S065)

3.2.3 Delphi Results

For ease of analysis, the results from the Delphi survey are discussed in the groups described above.

Respondents Profile

As can be seen from the following Figure 3-1, except for S068 "NC Software", at least 50% of the respondents considered themselves to have above average expertise in each of the statements. In addition, the majority of respondents were male (roughly a ratio of 9:1, male to female), and a significant majority of the respondents considered their occupation to be R&D (industry and university). Most of the participants classified their organisation as university or company, with very few coming from government or public authorities. The country with the most respondents in this sector was Germany, perhaps reflecting the country's large machinery industry.

Machinery Concepts

S066 Adaptronic (Materials) 30% of machine tools use components based on intelligent materials that im-prove machinery performance autonomously according to the external environ-ment.

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S067 Near Net Shape (Multifunctional Tools) Because of the wide spread use of near net shape technology, finishing opera-tions per product have been reduced and are carried out within one machine.

S070 One Purpose Machines To a large extent, product specific machines have replaced more complex and flexible multipurpose machines.

0%

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Automatic CNC

programming(S064)

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(S066)

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(multifunctio-nal tools) (S067)

NC software(S068)

WirelessCommuni-

cation(S069)

onepurpose

machines(S070)

Product-related

services(S071)

Expertise per statement - Machinery

Low

High

Figure 3-1: Expertise – Machinery

More than 75% of the experts consider both the statement concerning "Adaptronic (Ma-terials)" (S066) and "Near Net Shape" (S067) to be of high importance to the European manufacturing industry. Concerning the assessment of "One Purpose Machines", two thirds of the European experts believe these machines are of high importance to the European manufacturing industry.

Of the experts who believe the statements will be realised, the majority think that "Near Net Shape" (S067) and "One Purpose Machines" (S070) will be realised in 2015. How-ever, 30% of the experts are very sceptical concerning "One Purpose Machines"

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(S070) and think that a wide spread replacement of complex and flexible multipurpose machines by product specific machines will never be realised. Concerning the realisa-tion of "Adaptronic Components" (S066), most of the experts believe that this technol-ogy will be realised later than the two other statements, namely between 2015 and 2020.

0%10%20%30%40%50%60%70%80%90%

100%

Ada

ptro

nic

(mat

eria

ls)

(S06

6)

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r net

sha

pe(m

ultif

unct

iona

lto

ols)

(S06

7)

one

purp

ose

mac

hine

s(S

070)

Low

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Figure 3-2: Importance – Machinery – machinery concepts (S066, S067, S070)

0%

10%

20%

30%

40%

50%

60%

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100%

Ada

ptro

nic

(mat

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(S06

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pe(m

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unct

iona

lto

ols)

(S06

7)

one

purp

ose

mac

hine

s(S

070)

>20202015-20202010-2015<2010

Figure 3-3: Time of realisation – Machinery – machinery concepts (S066, S067, S070)

33

The most significant barrier for all machinery concepts "Net Shape" (S067), "Adaptronic Components" (S066) and "One Purpose Machines" (S070) is their technical feasibility. Approximately 75% of the European experts believe that a realisation of a wide spread use of near net shape technology (S067), the use of adaptronic and intelligent compo-nents that improve machinery performance (S066), and product specific machines re-placing more complex and flexible multipurpose machines might not be technically feasible. In addition, 77% of the experts think that one purpose machines" (S70) are not even economically viable.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Adaptronic (materials) (S066 - 1)

Near net shape (multifunctional tools) (S067 - 1)

one purpose machines (S070 - 1)

Figure 3-4: Barriers – Machinery – machinery concepts (S066, S067, S070)

Approximately 90% of European experts believe that "Near Net Shape" (S067) and Adaptronic components (S066) will increase Europe's competitiveness, the living and working conditions, as well as the environmental quality. Far less experts but still the majority (61%) think that product specific machines that replace more complex and flexible multipurpose machines (S070) will have a positive impact on Europe's competi-tiveness. However, in terms of employment most of the European experts do not think that these general machinery concepts will have an effect on Europe's employment situation. Thus, there are almost no positive employment effects expected for a wide spread use of multifunctional tools (S067), one purpose machines (S070), or adap-tronic components (S066).

34

In sum, according to the experts, the fact that to a large extent product specific ma-chines have replaced more complex and flexible multipurpose machines (S070) is seen very critical. "One Purpose Machines" (S070) are considered to be less important than all other statements that were asked for the machinery sector. Experts think that there are two main barriers for the realisation of "One Purpose Machines" (S070): technical feasibility and economic viability. In addition, the effects of having replaced more com-plex and flexible multipurpose machines by product specific machines are considered to be not clear. On the other hand, "Near Net Shape" (S067) and "Adaptronic Compo-nents" (S066) are considered to be more important and to have positive effects on Europe's competitiveness. However, experts think that one main problem is the techni-cal feasibility of both of the statements.

Effects

60%

40%

20%

0%

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40%

60%

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100%

Dec

reas

e

In

crea

se

one purpose machines (S070 -1)

Near net shape (multifunctionaltools) (S067 - 1)

Adaptronic (materials) (S066 -1)

EnvironmentQuality

Living andworking


Differences

Figure 3-5: Effects – Machinery – machinery concepts (S066, S067, S070)

Machinery Programming and Communication

S064 Automatic CNC Programming CNC programmes are processed automatically by an off-line calculation system (e.g. CAD) in such a way that testing of the programme on the shop floor is un-necessary (implicit programming).

S068 NC Software Nearly all NC software is based on open source code.

35

S069 Wireless Communication Factory communication is largely wireless.

0%10%20%30%40%50%60%70%80%90%

100%Au

tom

atic

CN

Cpr

ogra

mm

ing

(S06

4)

NC

sof

twar

e(S

068)

Wire

less

Com

mun

icat

ion

(S06

9)

Low

High

Figure 3-6: Importance – Machinery – machinery programming and communication (S064, S068, S069)

0%

20%

40%

60%

80%

100%

Aut

omat

icC

NC

prog

ram

min

g(S

064)

NC

sof

twar

e(S

068)

one

purp

ose

mac

hine

s(S

070)

>20202015-20202010-2015<2010

Figure 3-7: Time of realisation – Machinery – machinery programming and communica-tion (S064, S068, S069)

All three of these statements are considered to have above average importance by more than half of the experts (88% for statement S064, 69% for statement S068, and

36

67% for statement S069). It is noteworthy that almost all European experts consider the automatic CNC programming without shop-floor testing (S064) to be important for the machinery sector.

Of the experts who believe that statements S064, S068, and S069 will be realised, feel that it would happen between 2010 and 2015. However, 13% of the experts believe that "nearly all NC software is based on open source code" will never be realised at all.

With regard to effects of automatic CNC programming where testing of the programme on the shop-floor is unnecessary (S064), the vast majority (91%) think that this tech-nology would strengthen Europe's competitiveness, however, rather decreasing than increasing the employment situation. Less experts but still the majority (67% for S068 and 62% for S069) think that "Wireless Communication" in the factory (S069) as well as "NC Software" (S068) would also lead to an increased competitiveness. The major-ity of experts also believe that automatic CNC programming and wireless communica-tion will increase Europe's living and working conditions.

Effects

60%

40%

20%

0%

20%

40%

60%

80%

100%

Dec

reas

e

In

crea

se

Wireless Communication (S069- 1)

NC software (S068 - 1)

Automatic CNC programming(S064 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 3-8: Effects – Machinery – machinery programming and communication (S064, S068, S069)

Technical feasibility is supposed to be a significant barrier for all three statements con-cerning machinery programming and communication. In addition, 61% of the experts think that "Wireless Communication" would not be economically viable. Education and

37

qualification of Europe's employees is also supposed to be a barrier for "Automatic CNC Programming without testing on the shop-floor" (S064).

In sum, statements of machinery programming and communication such as "Wireless Communication" (S069), "NC Software" (S068), as well as "Automatic CNC Program-ming" (S064) are supposed to be important and to be realised between 2010 and 2015. The main positive effect is expected for Europe's competitiveness, however, the main barriers are supposed to be the technical feasibility as well as economic viability.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Automatic CNC programming (S064 - 1)

NC software (S068 - 1)

Wireless Communication (S069 - 1)

Figure 3-9: Barriers – Machinery – machinery programming and communication (S064, S068, S069)

Simulation and Business Concepts

S065 Virtual Machine Simulation Nearly all manufacturing machines will come with a “virtual-machine-simulation” capability for all kinds of optimisation.

S071 Product-Related Services At least one third of companies´ turnover is provided by machine-related services (pre-sales & after-sales services).

The vast majority of experts think that "Virtual Machine Simulation" (S065) and "Prod-uct-Related Services" (S071) are important for Europe's machinery industry and will be

38

realised approximately in 2015 with no significant percentage of experts suggesting that the statements will never be realised.

0%10%20%30%40%50%60%70%80%90%

100%Vi

rtual

mac

hine

sim

ulat

ion

(S06

5)

Prod

uct-

rela

ted

serv

ices

(S07

1)

Low

High

Figure 3-10: Importance – Machinery – simulation and business concepts (S065, S071)

0%

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30%

40%

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Virt

ual

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sim

ulat

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(S06

5)

Pro

duct

-re

late

dse

rvic

es(S

071)

>20202015-20202010-2015<2010

Figure 3-11: Time of realisation – Machinery – simulation and business concepts (S065, S071)

More than 80% of the experts think that product-related services (S071) as well as the capability of virtual machine simulation of nearly all manufacturing machines (S065) will

39

have a positive impact on Europe's competitiveness. However, all other expected ef-fects are considered to be different for both statements. On the one hand, experts es-timate that an increased offering of product-related services will increase employment. Experts do not think that this is the case for "Virtual Machine Simulation" (S065). On the other hand, "Virtual Machine Simulation" is supposed to increase the living and working conditions in Europe while only a minority of experts thinks that this is true for "Product-Related Services" (S071).

The two most significant barriers are for "Virtual Machine Simulation" (S065) the tech-nical feasibility and for "Product-Related Services" (S071) the economic viability.

Effects

40%

20%

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40%

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80%

100%

Dec

reas

e

In

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se

Virtual machine simulation(S065 - 1)

Product-related services (S071- 1)

EnvironmentQuality

Living andworking


Differences

Figure 3-12: Effects – Machinery – simulation and business concepts (S065, S071)

In sum, European experts think that "Virtual Machine Simulation" (S065) and "Product-Related Services" (S071) are important and will strengthen Europe's competitiveness but might be hindered by the technical feasibility and the economic viability. Interest-ingly, product-related services" are considered the only aspect with a possible positive employment effects.

40

3.2.4 Conclusions

Key results

• Product-related services (pre-sales and after-sales services) are considered to achieve high potential for the machinery sector in the early future. Experts expect "Product-Related Services" to increase Europe's competitiveness and employment. It is the only statement for the machinery sector where increas-ing employment effects are expected.

• For all other statements, only a minority of experts believe that these tech-nologies might have a positive impact on employment.

• For "Adaptronic Components", "Near Net Shape" processing, "Virtual Ma-chine Simulation", and "Automatic CNC Programming" without shop-floor test-ing, the majority of experts believe that these technologies would increase Europe's competitiveness.

• However, the technical feasibility of these technologies is the most severe concern of the experts.

Key challenges

• To develop, support, and provide the technical requirements for those tech-nologies for which an increase of Europe's competitiveness is expected by a vast majority of experts ("Adaptronic Components", "Near Net Shape", "Virtual Machine Simulation", "Automatic CNC Programming").

• To estimate whether to invest in one purpose machines and wireless commu-nication as experts see the economic viability of these concepts as well as their technical feasibility critically.

• To re-question "Automated CNC Programming" as an old engineers' dream thoroughly by re-assessing the newly arisen technical possibilities

3.3 Fabricated Metal Products


The fabricated metal products sector (NACE group 28) contributes 3.7 million work-places, equivalent to 10.9% of the total employment in the European manufacturing

41

industries, and has a share in value-added of about 9% (€ 138 billion) (own calcula-tions, Sneijers 2004, pp. 1-2). The sector gives room for approximately 367 thousand enterprises (own calculations, EC EDG, p 4) and is "characterised by the predomi-nance of smaller enterprises" (Sneijers 2004, p. 10).

The most important sub-sectors within the NACE fabricated metal products sector (within the EU in 2001) in terms of percentage share of employment and added-value are (employment; added-value): 28.1 structural metal products (25.6%; 22.9%), 28.5 treatment and coating of metals (26.6%; 25,6%), and 28.7 other fabricated metal prod-ucts (19.5%; 20,1%) (Sneijers 2004, p. 2).

The four largest producers of fabricated metal products in terms of percentage share of European employment and added-value are (employment; added-value): Germany (22.0%; 27.5%), Italy (18.5%; 18.5%), France (12.3%; 14.0%), UK (10.3%; 13.5%), and Spain (9.3%; 7.8%). Together they represent approximately 72% and 81% of total em-ployment and added-value of the sector respectively.

With regard to employment, productivity, and labour cost figures, all countries share the same features. Indicators for productivity and labour costs are lower in the fabricated metal products sector than the average of total manufacturing (in 2000) (EC EDG, pp. 9-10). It is also notable that "almost without exception all companies that show high levels of performance have made product innovation a major focus". (EC EDG, p. 12)


This sector consisted of eight statements, as shown in the table below:

S072 Nanotechnology The production of metals by manipulating atomic structures reaches industrial level.

S073 Laser for Joining Laser technology replaces up to 25% of today's joining operations in order to shorten production time and to meet production requirements for customised products.

S074 Rapid-Tooling Rapid-tooling technology is used extensively for moulds, dies, casts, etc. in order to shorten product development time and to meet production requirements of customised products.

S075 Multi Functional Laser Machines Single laser machining systems integrating cutting, bending, welding and surface processing will be widely used.

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S076 Aluminium Foams Aluminium foams are in widespread use.

S077 Non-Metallic Materials Non-metallic materials replace 30% of today's metal in products.

S078 Industry Structure Changes The number of SMEs in this sector has been reduced by half.

The statements fall into the three sub-categories – product materials (statements S072, S076, S077), production technologies (statements S073, S074 and S075), and sector structure (statement S078).


For the purpose of analysis, the results from the Delphi survey are discussed in the groups mentioned above. However, it is perhaps pertinent to first asses the profile of the respondents for this sector (Fabricated Metal Products).

Respondents Profile

As can be seen from the following Figure 3-13 (“Expertise per statement – fabricated metal products”), there is a split between the statements in this sector. For statements S073-S075 and S077, at least 58% of the respondents considered themselves to have above average expertise. For statements S072, S076 and S078, there is a clear major-ity with below average expertise.

On average over the seven statements, the following expert profile was observed. The majority of respondents were male (93%) and a significant portion of the respondents considered their occupation to be in R&D (51% in industry and university). 83% of the experts were between 30 and 60 years old. Most of the participants classified their or-ganisation as university (40%) or company (53%), with less coming from government or public authorities (7%). Within the company group, there was a fifty/fifty split be-tween companies with less or more than 250 employees.

The country with the most respondents in this sector was Sweden (12% of total). The five countries (Germany, Italy, France, UK, and Spain) that were referred to earlier in the sector background are represented by 31% of the respondents.

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Expertise per statement - Fabricated Metal Products

0%

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40%

50%

60%

70%

80%

90%

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Rapid tooling(S074)

Laser for joining(S073)

Non-metallicmaterials (S077)

Multi functionallaser machines

(S075)

Industry structurechanges (S078)

Nanotechnology(S072)

Aluminium foams(S076)

Low expertise

High expertise

Figure 3-13: Expertise per statement – Fabricated Metal Products

Product Materials

S072 Nanotechnology The production of metals by manipulating atomic structures reaches industrial level.

S076 Aluminium Foams Aluminium foams are in widespread use.

S077 Non-Metallic Materials Non-metallic materials replace 30% of today's metal in products.

Nearly 80% of the experts consider both the statement concerning nanotechnology (S072, 79%) and the statement concerning non-metallic materials" (S077, 81%) to be of above average importance to the European manufacturing industry. Indeed, almost 25% of the experts consider the two statements to be of high importance to the Euro-pean manufacturing industry. For the statement concerning aluminium foams (S076), the experts are not as convinced about its importance. A majority (61%) consider its realisation to be of below average importance to Europe.

Of the experts who believe the statements will be realised, the majority believe that the two statements S076 and S077 (“Aluminium Foams” and “Non-Metallic Materials”) will be realised in the time span 2010-2020. It is notable, however, that a high portion of experts stated "don’t know" regarding the time frame of the realisation of statement

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S076, 40% (only 9% for statement S077). Statement S072, "Nanotechnology", is con-sidered to be realised after 2015 by a majority of the respondents (81%). For all three statements, only 4% of the respondents believe that the statements will never be real-ised.

The most significant barriers (see Figure 3-14) for these statements ("Nanotechnol-ogy"; "Aluminium Foams", and "Non-Metallic Materials") were their technical feasibility (78%, 80%, and 74% respectively), economic viability (36%, 54%, and 55%), and a lack of R&D funding (55%, 38%, and 40%).

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Nanotechnology (S072 - 1)

Aluminium foams (S076 - 1)

Non-metallic materials (S077 - 1)

Figure 3-14: Barriers – Fabricated Metal Products – product materials (S072, S076 and S077)

The highest R&D level was only inquired for statement S072, "Nanotechnology". The USA was picked by 51% of the experts, followed by Japan (29%) and Europe (19%). With claimed importance for Europe (79% of respondents rank it above average) and its realisation's (very) positive effects on competitiveness (88% believe in an increase) as well as environmental quality (69%), this could certainly be an area of consideration for future policy measures. The statements "Aluminium Foams" and "Non-Metallic Ma-terials" both have the same patterns as statement S072 "Nanotechnology" with regard to perceived effects. Competitiveness is ranked number one (S076: 77%, S077: 78%) and is followed by environmental quality (S076: 51%, S077: 54%), though over 20% of the experts believe that statement S077 could also have negative effects on the envi-

45

ronmental quality. It should also be mentioned that the frequencies of "don't know" an-swers for S076 "Aluminium Foams" was high for all effects (approximately 30%).

Effects

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Non-metallic materials (S077 - 1)

Aluminium foams (S076 - 1)

Nanotechnology (S072 - 1)

EnvironmentQuality

Living andworking

conditionsEmployment Competitiveness

RegionalDifferences

Figure 3-15: Effects – Fabricated Metal Products – product materials (S072, S076 and S077)

Production Technologies

S073 Laser for Joining Laser technology replaces up to 25% of today's joining operations in order to shorten production time and to meet production requirements for customised products.

S074 Rapid-Tooling Rapid-tooling technology is used extensively for moulds, dies, casts, etc. in order to shorten product development time and to meet production requirements of customised products.

S075 Multi Functional Laser Machines Single laser machining systems integrating cutting, bending, welding and surface processing will be widely used.

All three statements are considered to be of above average importance for European manufacturing: 85% of experts for S073, 87% of experts for S074, and 82% of experts for S075. Both the statement S073 "Laser for Joining" and statement S075 "Multifunc-

46

tional Laser Machine" are likely to be realised between 2010 and 2020 (68% for both statements), with only 4-5% of experts suggesting that the statements will never be realised. Statement "Rapid Tooling" (S074) has its expected realisation (by 71% of the experts) before 2015. Only 1% of the experts state that the statement will never be realised.

The two most significant barriers (see Figure 3-16) for the three statements (S073, S074, and S075) are technical feasibility (76%, 72%, and 82% of experts) and eco-nomic viability (59%, 56%, and 60% of experts), followed by a lack of R&D funding (36%, 37%, and 32% of experts) and education/qualification (22%, 26%, and 17%). EU legislation and social acceptability are not seen as barriers (1-3% of experts over all statements).

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Laser for joining (S073 - 1)

Rapid tooling (S074 - 1)

Multi functional laser machines (S075 - 1)

Figure 3-16: Barriers – Fabricated Metal Products – production technologies (S073-075)

The highest R&D level was inquired for all statements (S073, S074, and S075) and Europe (37%, 43%, and 38%) is in the lead followed by the USA (33%, 34%, and 29%) and Japan (30%, 23%, and 32%). This is naturally very pleasing considering the high importance all statements are given, and with the proposed effects, the situation is yet more interesting (see Figure 3-17).

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Effects

40%

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Dec

reas

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In

crea

se

Multi functional laser machines(S075 - 1)

Rapid tooling (S074 - 1)

Laser for joining (S073 - 1)

EnvironmentQuality

Living andworking


RegionalDifferences

Figure 3-17: Effects – Fabricated Metal Products – production technologies (S073-075)

All statements – "Laser for Joining", "Rapid-Tooling", and "Multifunctional Laser Ma-chine" – have the same pattern with regard to the proposed effects. Competitiveness is most frequently chosen (S073: 92%, S074: 95%, and S75: 93%), followed by the envi-ronmental quality (71%, 49%, and 67%) and the living and working conditions (65%, 47%, 62%). It should also be pointed out that very few experts (0%-3%) think that the realisation of these statements will have a negative effect on the three factors men-tioned above.

In summary, Europe's strong R&D position as well as the high importance and per-ceived positive effects of these technologies must surely be taken into account by pol-icy makers.

Sector Structure

S078 Industry Structure Changes The number of SMEs in this sector has been reduced by half.

Statement S078 "Industry Structure Changes" was the only statement concerning changes in the structure of the sector. For this statement, only the degree of expertise, the importance to Europe, the time of realisation, and the effects were asked.

With regard to the realisation of this statement and its importance for Europe, there is no clear opinion among the experts, with 63% opting for an answer between "low" and

48

"high" importance. Nor do the experts give a very clear picture of when the statement will be realised. Only 55% believe in a realisation at all, 20% believe it is never going to be realised (which is the clearest message with regard to "time of realisation"), and 25% state that they do not know. Of the experts with a positive opinion, 66% believe in a realisation between 2010 and 2020.

Investigating the results concerning possible effects of realisation, only two clear out-comes are observed: employment is going to decrease (80% of experts) and regional differences are going to increase (59%). For the other factors, the experts voted for "no effect", or were more or less equally distributed over the answer alternatives (see Figure 3-18).

Effects

100%

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100%

Dec

reas

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Industry structure changes(S078 - 1)

EnvironmentQuality

Living andworking

conditionsEmployment Competitiveness Regional

Differences

Figure 3-18: Effects – Fabricated Metal Products – sector structure (S078)

3.3.4 Conclusions

Key results

• High importance is given to all statements, apart from “Aluminium Foams” (S076) and “Industry Structure Changes” (S078), and especially to the three statements of the fabricated metal products production technologies section with figures over 80% for all three.

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• For all statements with high importance the “never” rates for time of realisa-tion, are low (1-4%).

• Technological feasibility, economical feasibility, and R&D funding are the three dominant barriers for the statements S072, S077, S073, S074, and S075. Competitiveness and environmental quality are the two main benefits from the realisation of these statements.

• Europe is behind with regard to the statement S072 "Nanotechnology", but with a foreseen realisation after 2015, there is still time to close the research gap. This should be of interest with the many predicted positive effects of its realisation.

• Production technology’s statements are ranked as very important (S073-S075), with very positive expected effects (extremely high figures for competi-tiveness) and low “never” rates with respect to when they will be realised. There are no societal or legislative barriers and Europe has a leading R&D position.

• “Laser for Joining” and “Multifunctional Laser” have predicted realisations be-tween 2010 and 2020. “Rapid-Tooling” will already be realised by 2015 (ac-cording to 76% of the experts).

Key challenges

• To close the research gap with respect to the production of metals by manipu-lating atomic structures for industrial applications.

• To capture the advantageous position of Europe with respect to the state-ments S073-S075.

• Since social acceptability and EU-legislation are not seen as barriers, re-search and funding of activities promoting these statements’ realisation should be supported.


• Research funding towards the realisation of statement S072, S077, and (es-pecially) S073-S075. These statements are all of great importance for domi-nating economies in the fabricated metals products area: Germany, Italy, France, UK and Spain. A realisation would help increase poor productivity in this manufacturing sector and bring this area of manufacturing towards more knowledge intense jobs/tasks.

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3.4 Electronics, Electrical Equipment and Instruments


Electronics and electrical equipment and instruments are different but originally related sectors, both of them having a fundamental role in the historical and future develop-ment of modern industry. In fact, electronics were raised half a century ago on the grounds of basic developments performed in the electrical equipment and instruments sector.

Electrical equipment and instruments (NACE 31) can be divided into different sub-sectors such as: electric motors, generators, and transformers, electrical distribution and control apparatus, electrical equipment for engines and vehicles, accumulators and batteries, lighting equipment and lamps, and wire and cables. The rest of applications fall under the “other electrical equipment” category (ifo 1998, pp. 142-158).

In Europe, this sector’s output during 2003 amounted to a 32% share of total engineer-ing production (€167.8 million), directly employing 1.1 million people. This sector has seen continued growth till 2000 when a stagnation and recession period started. Only the first considered sub-sector and the “other electrical equipment” class show contin-ued increases and offer solid expansion opportunities in the long-run for the European industry. The rest are, in different degrees, mature technologies suffering from a pro-gressive delocalisation to Asia (EU Engineering Competitive Update).

Nowadays, electronics have a huge effect on the manufacturing sector worldwide in two different but related ways:

• One, directly creating a manufacturing industry of its own, namely electronic manufacturing

• and the other, changing traditional manufacturing methods in a broad range of ways through its newly-developed components and devices.

To give a global view of electronics' importance in the modern manufacturing sector, both on Europe and worldwide, some data could be helpful:

(1) Electronics market worldwide is estimated to be worth more than $1.25 trillion; with more than 22% located in Western Europe (Kirstein 2003).

(2) In Europe, electronic components manufacturing market alone stands for €44.5 billion, a good fifth part of global market; with 226.000 direct jobs.

The sub-sectors that can be considered in this field are so broad and span into such a myriad of applications that making a proper analysis which reports generalised trends or characteristics that can be easily applied to all of them is quite a difficult task to per-

51

form. Electronic subdivisions could be grouped into the following categories: semi-conductors, personal computers, networking, consumer, automotive and handset ap-plications. Different trends are perceived for these sub-sectors in Europe, some in clear rise and others lagging; but globally, a two-yearly periodic cycle of growth and down-turn have been historically observed in the electronic sector (see Kirstein 2003, Euro-pean Electronic Component Manufacturers Association 2004, Wiest 2004).

Generally speaking, European electronics manufacturing of high-volume consumer products will continue to migrate to lower cost countries, such as Asian producers. Thus, Europe's electronics industry will keep its importance in lower volume manufac-turing and continue in its excellence in research and design. Future main growth in this European sector will be achieved through handset cellular communications manufac-turing where Europe is world leader, broadband networking development which will become generalized in households in a near future, and a strong introduction of elec-tronics systems in the key automotive sector (Wiest 2004).

Most of these highly relevant trends for the European manufacturing industry involving technological development in electronics have been considered in the following sec-toral analysis through some key statements that a large number of experts had to give their opinion on. These statements are referring to relevant future technologies with the potential to drastically affect the future of manufacturing. For instance micro technolo-gies regarding MEMS and their production, assembly, packaging, metrology, and mar-kets, semi-conductors production and materials, data and power transmission, or in-machine testing.


S086 Machines with Test, Measurement and Maintenance Procedures The majority of production machines have built-in test, measurement and main-tenance procedures.

S087 Micro-Assembly Flexible automated micro-assembly for small lot-sizes are in widespread use.

S088 Wireless Electronic Recharging For small hand-held and wearable devices, wireless electronic recharging is in widespread use.

S089 Packaging in Electronics and Microsystems In electronics and microsystems, production packaging of modules and products is common practice.

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S090 Non-Optical Semi-Conductors Manufacturing of semi-conductors is mainly non-optical.

S091 Organic Semi-Conductors Organic semi-conductors have a significant market share.

S092 Metrology for Micro- and Nano-Systems Metrology for micro- and nano-systems is in practical use even in SMEs.

S093 MEMS in Health and Medicine The 'health and medical' market is the biggest area of application for microsys-tems/MEMS.

S094 High Speed Optical Communication High speed optical communication (over 40 GHz) is generally used.

With the aim of facilitating the analysis, the statements have been classified into four sub-groups:

• Microtechnologies (S087, S089, S092, S093)

• Semi-conductors (S090, S091)

• Data and power transmission (S088, S094)

• In-machine testing (S086)

In order to make this analysis more comprehensive, following there are some short descriptions regarding each statement.

Micro technologies


Due to the marked nature of mass production in electronics, coupled with the demand for “mass customisation” and the unstoppable trend towards downsizing technologies (micro and nano), emerging techniques based on micro-assembly will become as im-portant as production and designing in manufacturing. Increased functionality and modular forms of electronic components will simplify the assembly process but ex-tended use of micro- and nanosystems will drive this process to effective downscaling.


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Nowadays, as downscaling techniques in electronics and electrical industries are under unavoidable development and quickly reaching the nanometer range on features, packaging is a critical competitive factor since it affects all the processes and proper-ties of the final device. The boundaries between semi-conductor, microsystems and packaging technologies are blurring as package design can no longer be developed separately from the chip and system. Packaging must be concurrently designed as a relevant part on microsystems, finding a trade-off in the final parameters on the device.

S092 Metrology for Micro- and Nano-Systems Metrology for micro- and nano-systems is in practical use even in SMEs.

The rapid shrinking of feature size and the introduction of new materials continue to challenge metrology in manufacturing. With the expansion of micro-machining and mi-cro- and nanosystems in electronics, generalized use of metrology down to these sizes will become a reality sooner or later even in SMEs.


Micro-electromechanical devices are increasingly applied for health and medical pur-poses. According to the Network of Excellence in Multifunctional Microsystems (NEXUS) Task Force, “revenue for MEMS in medical applications will grow at a com-pounded annual growth rate of 11.4% over the next few years, from $2.8 billion in 1996 to a prediction of more than $18 billion in revenue in 2005” (WTEC 2004, NEXUS Task Force 2004).

The strongest commercial medical MEMS technologies to date are pressure sensors and accelerometers, which sell over $17 million a year (Seeley 1996). This fast growing field comprises applications such as pressure sensors (used in blood pressure and respiration monitors, kidney dialysis machines, medical drilling equipment, smart pills and other drug delivery systems, inhalers, hearing aids, retinal surgeries, etc.) and ac-celerometers (used in pacemakers, patient activity monitors, etc.) (Elalam 2004).

Semi-Conductors


Traditionally, photolithographic technologies have been progressively developed in order to meet the historic trend of transistor dimensions reduction that follows Moore’s law (doubling the transistors’ capacity on the same chip each 2 or 3 years). At the actual path, photolithography techniques are rapidly approaching their physical limits,

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as node dimensions are moving beyond the 100 nm barrier in minimum features size, down to 90, 65, 45, or even 32 nm. Following these trends, semi-conductor manufacturing will quickly move towards non-optical techniques, such as EUV technology (making use of extreme ultraviolet wavelengths) or other types of technologies under the broad NGL acronym (Next Generation Litography).


Fast development in the organic semi-conductor sector will display a huge range of brand new future applications, namely: computerized clothing, foldable displays, etc. Silicon is today a basic material on electronics but when it comes to some tiny electromechanical or bio-microfluidic devices or to particular applications where flexibility is a must, silicon is not necessarily the best choice; and then, organic semi-conductors show their vast potential. Electronic paper is one of the three most promising future applications for organic electronics together with RFID-tags and chemical sensing.

Data and Power Transmission


The widespread use of handset devices that are becoming unthinkable not to have in easy reach in a day-to-day use: cell phones, PDAs, MP3 players… even portables, makes their power recharging an important and complex issue. Each gadget pos-sesses its own connector which does not work for the rest and, moreover, could not be appropriate when travelling between different countries. There is an attempt to override this limitation through a unique solution: the wireless power recharging. This technique will enable the recharging of each future handset electronic device through the same procedure: magnetic inductive power transfer, in a simple and coherent way worldwide.


With the rapid growth of worldwide net and the end consumer generalisation of broad-band connections, very high optical information transfer rates, beyond 40 GHz, are needed to keep the path of an internet connected economy, industry, and world.

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In-Machine Testing


In a just-in-time driven economy, the process cycle time in manufacturing is essential to remain competitive. On-machine testing and measurement, and automatic maintenance procedures are the natural evolution to avoid part scraping, time consumed in bad productions, machine failure and costly shutdown periods. This trend regarding the incorporation of controls, measurement devices, and auto checking systems on manufacturing machines allows for an increasingly controlled and predictable production and so will affect all manufacturing technologies.


For the purpose of analysis, the results from the Delphi survey are discussed in the groups mentioned above (micro technologies, semi-conductors, data and power trans-mission, in-machine testing)

Responders Profile

The majority of responders were male (89%) and in the 30 to 60 years old range (81%). A significant portion of the responders (49%) considered their occupation to be R&D, working in the industry (55%) and in organisations with less than 100 employees (37%) or more than 250 (45%).

There is an evident difference in the expertise levels of the professionals consulted from topic to topic. On the one hand, regarding the statements S086 "Machines with Test, Measurement and Maintenance Procedures", S087 "Micro-Assembly", S088 "Wireless Electronic Recharging", and S089 "Packaging in Electronics and Microsys-tems", most of the respondents are confident on their proficiency, assuming an above average level. However, on the other hand, the experts admitted a low or below aver-age knowledge on the rest of subjects included in this analysis.

Micro technologies



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S092 Metrology for Micro- and Nano-Systems Metrology for micro- and nanosystems is in practical use even in SMEs.


Expertise per statement – electronics, electrical equipment and instruments

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Machines withTest,

Measurementand

MaintenanceProcedures

(S086)

Micro-Assembly

(S087)

WirelessElectronic

Recharging(S088)

Packaging in Electronics and Micro-systems(S089)

Non-OpticalSemi-

Conductors(S090)

OrganicSemi-

Conductors(S091)

Metrologyfor Micro-and Nano-Systems(S092)

MEMS in Health and Medicine(S093)

High SpeedOptical

Communication(S094)

Low

High

Figure 3-19: Expertise per statement – Electronics, Electrical Equipment and Instru-ments

As a whole, the experts rank their expertise levels as: below average in the statements S089 and S093, low in S092, and above average in S087.

The degree of relevance of these topics is considered high (S087 and S093) or above average (S089 and S092). Materialisation scenarios are also set in different time-scales, some subjects becoming a reality sooner – S087 and S089 in the 2010-2015 period – than others – S093 2015-2020 and S092 beyond 2020.

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Experts agree in considering their countries' situation concerning these technologies is below average; except on issue S092 “Metrology for Micro- and Nano-Systems” where half of them perceive a completely lagging situation.

The main barrier limiting the realisation of statements related to micro technologies is their technical feasibility. Second in relevance is the economic viability, save for S093 in which the lack of R&D funding is believed to be more significant.

Competitiveness is expected to increase in all cases; and the accomplishment of statements S087 and S093 will result in improved living and working conditions. There is no effect deriving from these technologies regarding the environmental quality, re-gional differences, or employment, excluding again S093 where percentages are lev-elled between “positive” and “no effect”.

With respect to world regions with a higher R&D level in micro technologies, Japan is at the forefront in “Micro-Assembly" and "Packaging” (S087 and S089), whereas this place is taken by the US regarding “Metrology for Micro- and Nano-Systems” and “MEMS in Health and Medicine” (S092 and S093). Europe is always lagging behind in these technologies.


S087

S089 S092

S093

2005 2010 2015 2020

Low

Hig

h

S087: Micro-Assembly(2%, 13%)

S089: Packaging in Electronicsand Microsystems(1%, 23%)

S092: Metrology for Micro- and Nano-Systems(5%, 19%)

S093: MEMS in Health and Medicine(5%, 18%)

( "Never"; "Don't know") as percent of all experts answering the statement

Figure 3-20: Importance and time of realisation – Electronics – micro technologies (S087, S089, S092, S093)

58

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Micro-Assembly (S087 - 1)

Packaging in Electronics and Microsystems(S089 - 1)Metrology for Micro- and Nano-Systems(S092 - 1)MEMS in Health and Medicine(S093 - 1)

Figure 3-21: Barriers – Electronics – micro technologies (S087, S089, S092, S093)

Highest Level of R&D

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Metrology forMicro- and

Nano-Systems(S092)

MEMS in Healthand Medicine

(S093)

Packaging in Electronics and Microsystems

(S089)

Micro-Assembly

S087

All othersChinaJapanUSAEurope

Figure 3-22: Highest level of R&D – Electronics – micro technologies (S087, S089, S092, S093)

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Semi-conductors



The expertise level shown by the respondents in both statements is below average, with 62% and 64% respectively. The level of importance is set in the above average level in both cases by the experts, who place their countries as lagging in relation to these technologies.

In view of these facts, it is not surprising that forecasted achievements were set in the long-term, 2015-2020 and beyond 2020 for S090 and S091 respectively.

“Non-Optical Manufacturing” development is blocked by technical and economical limi-tations, whereas the main barriers for the achievement of a significant market share for "Organic Semi-Conductors” are technical feasibility and a lack of R&D funding.


S090

S091

2005 2010 2015 2020

Low

Hig

h

S090: Manufacturing of semi-conductors is mainly non-optical. (3%, 42%)

S091: Organic semi-conductorshave a significant market share. (2%, 26%)


Figure 3-23: Importance and time of realisation – Electronics – semi-conductors (S090, S091)

60

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Manufacturing of semi-conductors is mainly non-optical. (S090 - 1)

Organic semi-conductors have a significantmarket share. (S091 - 1)

Figure 3-24: Barriers – Electronics – semi-conductors (S090, S091)


0%10%

20%30%40%50%

60%70%80%

90%100%

Non-OpticalSemi-Conductors

(S090)

OrganicSemi-Conductors

(S091)

All othersChina

JapanUSA

Europe

Figure 3-25: Highest level of R&D – Electronics – semi-conductors (S090, S091)

The expected effects coming from the materialisation of these technologies are only relevant on European industry competitiveness, which will be surely improved. More

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than 65% of the experts affirm that the competitiveness of the European industry will increase.

For the rest of the considered fields, environmental quality, living and working condi-tions, employment, and regional differences, most of the experts expect no effects.

Considering regions with highest R&D level in the semi-conductors field, the US is no-tably the leader, followed by Japan and Europe.

Data and Power Transmission




S088

S094

2005 2010 2015 2020

Low

Hig

h

S088: Small hand held andwearable devices - wireless(4%, 13%)

S094: High speed opticalcommunication (over 40 GHz)is generally used. (2%, 16%)


Figure 3-26: Importance and time of realisation – Electronics – data and power trans-mission (S088, S094)

62

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Small hand held and wearable devices - wireless(S088 - 1)

High speed optical communication (over 40 GHz)is generally used. (S094 - 1)

Figure 3-27: Barriers – Electronics – data and power transmission (S088, S094)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Wireless ElectronicRecharging

(S088)

High SpeedOptical Communication

(S094)

All others

China

Japan

USA

Europe

Figure 3-28: Highest level of R&D – Electronics – data and power transmission (S088, S094)

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Even though considerable differences between these statements are evident, they are somehow related. The admitted level of expertise was quite levelled for both state-ments. Their relevance for the European manufacturing industry has been considered above average in both cases. Expected materialisation times overlap in the 2010-2015 period.

Reasons hindering their full development are also shared between these topics, namely technical feasibility and economic viability. The predicted effects arising from these technologies' achievement are also common: improving competitiveness and living and working conditions.

Once again, Europe does not lead any of these future technologies. Japan and the US, respectively take the leadership in “Wireless Electronic Recharging” and “High Speed Optical Communication”.

In-Machine Testing



S086

2005 2010 2015 2020

Low

Hig

h

S086: Majority of prod machinehave built in testing functions(1%, 4%)


Figure 3-29: Importance and time of realisation – Electronics – in-machine testing (S086)

64

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Majority of prod machine have built in testingfunctions (S086 - 1)

Figure 3-30: Barriers – Electronics – in-machine testing (S086)


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

In-Machine Testing(S086)

All others

China

Japan

USA

Europe

Figure 3-31: Highest level of R&D – Electronics – in-machine testing (S086)

This statement has been the one with the highest amount of answers in this sectoral analysis (Electronics, Electrical Equipment and Instruments). Moreover, this technology

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also presents the top level of experts' proficiency with 71% of them with above average expertise. Its importance has been considered above average by 92% of the profes-sionals contacted. Its relevance for the European manufacturing industry has been placed as high by a 56% of the professionals contacted.

Its full development is considered to take place in the 2010-2015 period. As it happens with other analysed technologies, two main barriers are detected in this order of impor-tance: technical and economical issues.

Some collateral improvements are predicted when this technology is spread enough, increasing the environmental quality, living and working conditions and competitive-ness.

In this case, the region with the highest R&D level is Japan, followed by Europe and the US.

3.4.4 Conclusions

Key results

The most relevant future technology development which links manufacturing and electronics, is considered to be “In-machine testing”, where most of the consulted experts show proficiency. This technology presents quite close perspectives and is expected to reach its full potential achievement between 2010 and 2015, considering initial applications are already observed. Its main barriers, differently from other top-ics, include education/qualification issues as relevant among the typical technical and economical complexities. This fact implies a more mature evolution of this technol-ogy. Moreover, European R&D ranking in this field is quite good, more in line with the uppermost international competitive regions, and above average compared to the rest of technologies analysed. This demonstrates a quite competitive mindset for this field in the European manufacturing industry.

Regarding micro technologies, the relevance evaluated is always above average, above all in two topics: “Micro-Assembly” and “MEMS in Health and Medicine”. The influence of micro technologies in a day-to-day scale is expected to become a reality during the next decade (2010-2020), their most relevant effects being observed to-wards its end and linked with medical uses. As a whole, the main barriers are thought to be connected with technical and economic issues. However, it is noteworthy to point out a lack of R&D funding in future MEMS medical applications. Europe is lag-ging behind with respect to MEMS technologies, but to less extent when considering the most relevant technologies.

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Data and Power transmission technologies evolve quickly, and so the future mile-stones considered in this study will be seen as fully-developed in a near future (2010-2015). The significance of these topics is regarded as above-average, with data transmission speed being highly relevant. Main barriers do not change, being also in this case the technical and economical limitations. Once again, Europe does not rank well compared to the US and Japan in terms of R&D.

Semi-conductors related topics have an above-average importance but are thought to reach full materialisation beyond 2015. Technical feasibility, economic viability, and lack of R&D funding are considered to be the main restrictions in the growth of new semi-conductor technology. Europe's position in this area is well below the US which stands out as the most prominent R&D region in the world regarding semi-conductor innovations.

Key challenges

The key challenges detected regarding electrical and electronics future technologies are comparably pinpointing the necessity of the European manufacturing industry to overcome the actual technical and economical barriers in order to reach an important position in R&D leadership internationally, fostering the competitiveness and produc-tivity.

Some noteworthy challenges should be detailed briefly due to their specific interest. First, Europe should stress the efforts in funding and education to be able to surpass the US second position in R&D, attaining a specific leadership in “In-machine test-ing”.

Then, the major effects for European industry and society accomplished by develop-ing “MEMS medical applications”: enhancing competitiveness and improving the liv-ing conditions; make this technology stand out from the rest and worth an explicit effort.

Finally, the urgent need to make a decided attempt in catching the path of transmis-sion data technologies has to be remarked, due to their fast and ever-increasing de-velopment and high relevance.

Recommended Policy Action

• An increased funding towards University and Industry is of paramount impor-tance for all the statements included in this sectoral analysis. Though, it is in “In-machine Testing” where sooner fruits could be achieved due to the good R&D European position.

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• European Governments should promote among the whole society the benefits arising from the applications of MEMS in medicine to set an appropriate ground where Industry could develop.

• Fast development of new transmission data technologies makes a regulation effort from European Governments necessary in order to accomplish a stan-dardised field-ground from which both consumers and industry can benefit.

3.5 Rubber and Plastics


The European plastics industry, including plastics converters and machinery manufac-turers, employs well over one and a half million people and is a major contributor to Europe’s economic strength. Manufacture of polymer resins is an important part of Europe’s second largest industry, chemical manufacture. The wider plastics industry in Europe accounts for a turnover of €160,000 million (Association of Plastics Manufac-turers 2004).

The Years 2002 and 2003 were two of the most difficult the European plastics industry has ever faced. The global economic downturn in 2003, exacerbated by ongoing ten-sions in the Middle East, has brought relative stagnation to industry whilst highly vola-tile crude oil and petrochemical feedstock prices also negatively impacted profitability across all market sectors.

Despite these challenges, the plastics industry remains relatively robust with a plastic consumption in Western Europe rising steadily to 39.706.000 tonnes in 2003, an in-crease of 5.6% compared to 2001 figures. Per capita consumption in Western Europe (EU 15 + Norway and Switzerland), was approximately 98.1 kg of virgin plastics in 2003, up from 96.6 kg in 2002. All signs indicate that the outlook for the next years is more positive, with the global economy showing signs of recovery and the demand for plastics enhanced by high demands from Asia.

By industry sub-sector, the packaging sector is the major consumer of plastics. Second place is for other household and domestic appliances (rather than electric and elec-tronic) and the third largest user of plastics is the building and construction sector (see Figure 3-32) (Plasticseurope 2004).

Regarding the rubber industry, the production of synthetic rubber in Europe has in-creased over the last three years (from 2,723,000 tonnes in 2002 to 2,848,000 tonnes in 2004). However, consumption has suffered some stagnation after fluctuations in the

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2002-2004 period, both for natural rubber (1,182,000 tonnes in 2002, 1,332,000 tonnes in 2003 and 1,255,000 tonnes in 2004), as well as synthetic rubber (2,616,000 tonnes in 2002, 2,654,000 tonnes in 2003 and 2,598,000 tonnes in 2004) (International Rubber Study Group).

More than half of the global rubber production (natural and synthetic) is consumed in tyre production for the automotive industry. The rest is employed in a broad range of applications, the most relevant ones being: latex products, engineering, footwear, and adhesives (Asocolcauchos et al. 2004).

Figure 3-32: Plastics consumption by industry sector, Western Europe 2003 (Plas-ticseurope 2004)

Nevertheless, the border between plastics and rubber is not clear. The appearance of the thermoplastic elastomers (TPE) narrowed this frontier even more. The use of TPE is continuously growing (more than 7% combined annual growth rate over the past ten years). The ease of processability and their greater design flexibility have made of them a desirable choice for many different applications: toothbrushes, mobile phone keypads, screwdrivers or in automotive applications e.g. instrument panel skins. More-over, some TPEs are favoured over conventional thermosets due to their ease of recy-clability.

The huge relevance of recyclability, as well as other main trends affecting manufactur-ing development, i.e. downsizing, increased control and process automation, and re-search and development of new materials with improved properties, is also importantly affecting the rubber and plastics sector. These issues are thoroughly analysed in the study and are shortly commented in the next paragraphs.

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The statements included in this sector are listed below:

S095 Injection Moulding Control Intelligent systems and sensored tools control and adjust injection-moulding pa-rameters automatically.

S096 Moulding of Micro Products Moulding technology is in wide spread use for the production of precision micro-parts for large-scale production.

S097 Electricity Conducting Plastics Electricity-conducting plastics (polymer electronics) are easy to process and in-expensive and therefore they are used in many products.

S098 Biodegradable Plastics There is a 15% market share for biodegradable plastics due to inexpensive pro-duction and improved properties.

S099 Composite Materials Processing Processability of high performance composite materials (such as long fibre ther-moplastics) has been substantially improved and are easy to recycle.

S100 Plastic Recycling 50% of all plastic is recycled.

S101 Functional Materials Plastics that have been tailored to fulfil special functions through manipulation on the atomic level are used in the majority of plastic products (example: antibacte-rial plastics).

Note: It is worth noting that, as the border between plastics and rubber is not well de-fined, and in spite of the fact that some statements only use the term “plastic”, it can be assumed most of these statements are applicable to rubber as well.

In order to facilitate the analysis, the statements have been classified into two sub-groups:

• Materials (S097, S098, S099, S100, S101)

• Processes (S095, S096)

An explanation about each statement is provided beneath:

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Materials


Since their first discovery in the seventies, conducting polymers have diversified rapidly and already made it into few small-scale commercial applications such as antistatic coatings or light emitting diodes. This is only the small visible part of a huge iceberg of almost infinite future applications.

New developments in conductive plastics have found uses as diverse as paper-thin TVs or chemical sensors but their paramount field is undoubtedly “plastic electronics” with organic semi-conductors, where conducting plastics' success is awaited with greater expectation. In order to make all these future dreams economically feasible, the processes employed in their manufacture have to become cost-competitive and inex-pensive.

Plastics present some important advantages considering their flexibility in available manufacturing techniques when compared to traditional conductor or semi-conductor materials. Their main barrier though, is the difficulty in attaining high conductive charac-teristics by cheap productive methods. To overcome these drawbacks, important re-search is currently under development both in materials with enhanced processing properties and in new manufacturing techniques. Some examples are: soluble photo-sensitive conductive polymers or polymer template assembling.


Although biodegradable polymers were developed several decades ago, they have been slow to reach commercial maturity because of their higher costs and less robust physical properties than conventional plastics. However, nowadays, new large-scale production systems are bringing down the costs of biodegradable polymers and new polymerisation and blending techniques are making such materials stronger and more durable. In addition, food and beverage producers, seeking good will from an increas-ingly environmentally conscious public, have begun to employ biodegradable plastics for a variety of packaging applications (Omnexus 2005). Standards have been devel-oped to assess the propensity of a material to degrade biologically (Environment and Plastics Industry Council 2000).

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Fibre Reinforced Polymers that are formed by a polymer-based resin as a matrix and variety of fibres as a reinforcement, are the most common type of composites. In spite of this, there are barriers that limit the more widespread use of composites and one of these barriers is recycling. Mechanical recycling and destruction by incineration are methods that have been extensively studied, and research should now focus on the implementation of these techniques within today’s waste management systems. Issues such as identification, collection, transportation, dismantling and cleaning are important technical matters that need to be resolved in an economical way.

Some of these problems could be solved if they were considered at the outset in the product design phase ("design for recycling"). Dismantling, identification, and collection would be easier if such issues were taken into account when designing a new compo-nent. This would also involve the preparation of revised guidelines and standards for recycling.

One way to produce a more environmentally friendly composite is the use of natural products instead of synthetic components. Natural fibre composites have been exten-sively investigated recently and their recyclability is an advantage over glass fibre rein-forcements. However, natural fibre composites still need a lot of development work, especially in composite applications where long fibre reinforcements are required. The benefit of natural fibre composites is the possibility for incineration without forming any residues (Composit 2002).


Ensuring the increasingly efficient use of resources and minimising impact on the envi-ronment through the prevention and recovery of waste is essential if the European Un-ion is to meet the goals laid out in the EU Landfill Directive (1999) which obliges member states to progressively reduce the amount of waste. The European plastics industry is committed to promoting recovery and minimising waste lost to landfill through a combination of waste management options. The principle challenge is for waste recovery to keep up with year-on-year growth in consumption. Post-user plastics waste generation increased by 5.9% between 2001 and 2003 to 21,150,000 tonnes. However, improved collection and separation infrastructures mean good progress was made in the amount of plastics recovered. As a result, the amount of plastics waste going to landfill in 2003 was 61% of total collectable plastics waste – down from 63% in

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2001 (Association of Plastics Manufacturers 2004). This trend is expected continue at the same path, reaching the 50% level in a near future.


Nanotechnology, as one of the most ubiquitous and breakthrough mixings of future and up to date sciences, will have a big impact on most materials, applications, and indus-tries related; including primarily the pre-eminent material of this last century: plastics.

The modification of the material's internal structure at an atomic level by means of nanotechnologies, will allow the emergence of traditional materials with new properties or, otherwise, completely brand-new materials. Polymers, nowadays being the most common material worldwide, will undergo major transformations through nanotechnol-ogy, enhancing them with increased functionalities. Some major examples are inher-ently conductive plastics or sensitive layers and smart materials, able to react in front of chemical substances or specific physical phenomena, and to face them by means of corrective measures.

Once nanoprocessing methods became improved to viable standards, they will be ex-tended from these first applications to most of the plastics products, due to the undis-puted tendency of incorporating increased functions into the existent products.

Processes


Injection moulding is a manufacturing technique capable of producing high value added products at high production rates. The capability of this process has increased mark-edly over last years, with an increasing demand for an improved product quality. For the control of product quality, it is necessary to have a good control of the injection moulding process itself.

The common use of these systems, will involve the optimisation of manufacturing proc-esses, with programs using current manufacturing data in the search of the best injec-tion moulding parameters. This advance will allow the reduction of cycle time, reaching the best quality and stability in production thanks to a control system integrated in the machine that builds an ideal model of process in real time. This control over the proc-

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ess makes the control over the final part unnecessary, achieving a flexible manufactur-ing and also a reduction of time, material, work force, and waste.


The possibility to produce precision micro parts for large-scale production, through the adaptation of conventional manufacturing technologies to micro technologies (like microinjection), will lead to cost reductions. This reduction is compulsory to achieve the desired massive implantation of microsystems in huge applications of multiple sectors.

The adaptation of conventional manufacturing technologies to micro technologies cov-ers different issues. For example, in certain cases an evacuation of the core area of the moulding tool is needed to avoid burning of the melt organic material when pressed into the cavity retaining compressed and heated air; or the “variotherm temperature control”, where the moulding tool is heated to temperatures near the melting point of the polymer prior to the injection step (Piotter et al. 2004).


For the purpose of analysis, the results from the Delphi survey are discussed in the groups mentioned above. However, it is perhaps pertinent to first assess the profile of the responders for this sector.

Responders profile

The majority of responders were male (83%) and in the 30 to 60 years old range (81%). A significant portion of the responders (49%) considered their occupation to be R&D, 61% work in the industry and in organisations with less than 100 employees (42%) or more than 250 (41%).

Materials



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All the statements included in this section are considered to be of above average im-portance for the European manufacturing industry by more than 70% of the experts.

The time of realisation of all them is set around 2010-2015, except for S100 "Plastic Recycling" and S101 "Functional Materials" whose time of realisation is foreseen for 2015-2020 and beyond 2020, respectively. Despite the importance of all the topics and the relatively close date of achievement (with the exception of S101), the experts mostly consider the situation of their countries regarding these issues lagging or me-dium-lagging.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Electricity conducting plastics (S097 - 1)

Biodegradable plastics (S098 - 1)

Composite materials processing (S099 - 1)

Plastic recycling (S100 - 1)

Functional Materials (S101 - 1)

Figure 3-33: Barriers – Rubber and Plastics – materials (S097, S098, S099, S100 and S101)

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The technical feasibility is the main barrier restricting the realisation of these topics, followed by a lack of R&D funding in statements S097 "Electricity Conducting Plastics", S099 "Composite Materials Processing" and S101 "Functional Materials"; being also significant in S098 "Biodegradable Plastics". Third position has been given to economic viability, in topics S098 "Biodegradable Plastics" and S100 "Plastic Recycling" where EU legislation is also noteworthy.

All the statements are considered to favourably influence the environmental quality, just as competitiveness, not having any influence at all on employment and regional differ-ences issues. As for the impact on the living and working conditions that their attain-ment would involve, statements S097 "Electricity Conducting Plastics" and S099 "Composite Material Processing" will not represent any change. On the other hand, the accomplishment of the other topics (S095, S096, S098, S100, and S101) will mean an improvement of these conditions. It is very significant that none of these statements present a relevant percentage of experts considering a negative influence on the fields studied.

Effects

40%

20%

0%

20%

40%

60%

80%

100%

Dec

reas

e

In

crea

se

Functional Materials(S101 - 1)

Plastic recycling (S100- 1)

Composite materialsprocessing (S099 - 1)

Biodegradable plastics(S098 - 1)

Electricity conductingplastics (S097 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 3-34: Effects – Rubber and Plastics – materials (S097, S098, S099, S100 and S101)

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Regarding the region with the highest R&D level, the USA has received highest rank in topics related with electricity conducting plastics and functional materials. With respect to biodegradable plastics and plastics recycling, Europe shows the best position.

Concerning S099 "Composite Material Processing", both Europe and USA possess the highest R&D level.

Processes



Both topics discussed in this section are considered highly important for the European manufacturing industry. Their time of achievement is expected between 2010 and 2015. Despite these two considerations, most of the polled experts consider that the present situation of their countries with regard to these issues is below average; the main barriers limiting their accomplishment being (in order of importance) the technical feasibility, the economic viability and the lack of R&D funding.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Injection moulding control (S095 - 1)

Moulding of micro products (S096 - 1)

Figure 3-35: Barriers – Rubber and Plastics – processes (S095, S096)

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Concerning the expected effects as a consequence of their materialisation, a big influ-ence will be observed on competitiveness which will be increased.

In both cases, Europe is considered the region with the highest R&D level, above the USA and Japan.

Effects

60%

40%

20%

0%

20%

40%

60%

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Dec

reas

e

In

crea

se

Moulding of microproducts (S096 - 1)

Injection mouldingcontrol (S095 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 3-36: Effects – Rubber and Plastics – processes (S095, S096)

3.5.4 Conclusions

Key results

Regarding both materials and process related technologies discussed in this study, their relevance is considered crucial for the manufacturing future in Europe as in all cases most of the opinions are placed in high and, following, above-average rele-vance.

Even though, there are significant differences when analysing each topic in detail. For example, the statements included in processes group have a short-term realisa-tion forecast (2010-2015) and their main barriers are technical and economical with some significant degree of lack of R&D funding.

Meanwhile, the analysed material improvements have some amount of disparity in time of achievement predictions, as well as main barriers. In this case, time of mate-rialisation is usually around 2015, with the exception of “Plastic Recycling” and “Func-

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tional Materials” which show dates somewhat delayed to the 2015-2020 period and beyond 2020, respectively.

With regard to relevant barriers detected by the experts, technical issues are para-mount and economic aspects are also important, but the greatest differences are observed in R&D funding and European legislation. Hence, whereas for “Biodegrad-able Plastics” and “Plastics Recycling” the legislative issues are detected as signifi-cant, in the case of “Electricity Conducting Plastics”, “Composite Materials Processing”, and “Functional Materials” it is the lack of R&D funding which also causes some limitation to their development.

Europe's outstanding leadership is detected for the developing process technologies in the Rubber and Plastic sector and this is also the case regarding the analysed en-vironmental issues. As regards the development of new materials, Europe's position is not bad, following US innovations. In all these topics, Japan is lagging well behind the EU and the US.

Key challenges

As easily extracted from the previous conclusions, the main challenge for Europe's manufacturing sector regarding rubber and plastics is to maintain and increase the level of R&D funding in order to keep its leadership or surpass the US position. It is also worth noting that, in the experts' opinion, Europe should emphasise its legisla-tive efforts regarding environmental issues to improve living quality and to differenti-ate regarding the rest of the world.


• An increase in funding to promote science, engineering, and industry collec-tive research efforts is necessary to catch up for R&D in advanced materials and improved processes.

• Europe should emphasise its legislative efforts regarding environmental is-sues in the manufacturing of plastic and rubber products, even affecting the imported items, in order to reduce the legally induced lack of competitivity of European products when compared with low-cost countries goods.

• Promoting appropriate “sustainability labelling” (regarding both environmental and social issues) for plastic and rubber products will spread the consumers knowledge on products manufacturing on a broad basis and enable their ca-pacity to make a proper and conscience-driven choice.

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3.6 Traditional Products


The traditional products sector is a diverse and heterogeneous industry including a variety of sub-sectors: furniture, textiles and clothing, footwear, toys and jewellery. This industry produces an extremely wide range of goods, from raw materials to more so-phisticated products, which corresponds to a multitude of industrial processes, enter-prises, and market structures. Even when it gets difficult to analyse such a heterogeneous industry, all sub-sectors share some common characteristics.

Within the EU’s borders, the traditional products industry is clearly dominated by SMEs, most of them of about 20 employees, which are concentrated in regional clusters: It is one of the most fragmented, yet one of the most global sectors.

In terms of employment, the latest data show that in 2002, the textiles and clothing in-dustry was the largest employer throughout the EU, accounting for more than 2 mill employees in about 177,000 enterprises (Source: Eurostat). Second in this rank was the furniture industry, with more than 137,000 companies and almost 1,266,000 work-ers (Source: Eurostat). Footwear, Jewellery, and Toys industries had a considerably smaller size in terms of the number of companies and employees:

Enterprises Employees Source (year 2002)

Textiles & clothing 177,000 2,072,000 Eurostat

Furniture 137,000 1,266,000 Eurostat

Footwear 27,371 361,662 Eurostat

Jewellery 17,012 75.,304 EU Market survey 2004 – Jewellery (CBI)

Toys 2,000 100,000 Eurostat

In general terms, data on external trade in the EU show a trend towards the reduction of exports and the increase of imports of traditional products whilst in most cases con-sumption remains the same. External suppliers such as China, Vietnam, and Turkey are registering a significant rise in their exports to the EU, mainly due to their competi-tive prices. On the other hand, the integration of the enlargement countries within the EU presents an opportunity for these labour-intensive industries to regain part of its lost price competitiveness.

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Not surprisingly, traditional sectors in Europe are going through difficult times mainly because of the competition of these low-wage countries playing doubtful commercial and economic practises. Besides, European companies have to deal with a high level of uncertainty related to consumer trends and preferences. This environment is induc-ing most enterprises to go through complicated reorganisation processes, as they are pushed to reduce production capacities in a great extent as well as to modernise and restructure their processes to cope with international competition and the advent of new technologies.


In the sector of traditional products, the ManVis questionnaire addressed the following issues:

S079 Customisation ICT Tools for End-Users A large part of traditional product design and customisation is done by end-users directly using newly developed ICT and marketing tools.

S080 Virtual Reality Tools Most designers of traditional products use virtual reality tools for design and pro-totyping that allow to sense features of the final product and its environment to better satisfy the customer requirements.

S081 Digitise Existing Products Integrated design and manufacturing systems are used to digitise existing prod-ucts and establish a manufacturing process for them (reverse engineering).

S082 Embedded Sensors Traditional products with “smart” functions enabled by embedded sensors are in-troduced in the market.

S083 Automation Half of today’s manual labour is replaced by the growing use of automation in the traditional sector.

S084 Internet Sales Internet sales methods direct to customer are mandatory for all traditional indus-tries.

S085 Location 80% of traditional production is relocated to low-wages world regions outside Europe.

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These statements roughly fall into automation and relocation activities (statements S083 and S085), design and customisation issues (statements S079, S080, S081), and two more statements dealing with internet sales and smart products (statements S084 and S082, respectively).


Prior to further discussion, it is worth showing a general view of the experts’ profile an-swering these statements.

Respondents Profile and General Findings

Statements on the traditional products sector have been answered by over 300 special-ists. On average, around 78% of all respondents were male, most of them working in R&D activities (over 50% of the total) either at a technological centre or at a company manufacturing traditional products. Only 12% of the experts were working in public au-thorities. As it can be seen from the following chart, most experts give high importance rates to all statements in the traditional products sector.

Importance to European Manufacturing

0%

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CustomisationICT tools for end-

users. (S079)

Virtual Realitytools (S080)

Digitise existingproducts (S081)

Embeddedsensors (S082)

Automation(S083)

Internet sales(S084)

Location (S085)

Low

High

Figure 3-37: Importance to European manufacturing industry – Traditional Products (S079, S080, S081, S082, S083, S084, S085)

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It is worth noticing that even when most of the companies in this sector are SMEs, there is a balance in responses between experts working for big companies (over 250 employees) and those working for smaller ones.

More than 50% of all respondents consider themselves to have a high expertise on the issues covered in the statements, except for statement number S081 in which over 25% seem to have a lower level of knowledge. As can be seen from the following chart, the probable timescale for the realisation of statements S080 to S082 and S084 to S085 is placed in the short to medium-term, for more than 50% of experts. Neverthe-less, respondents believe that statements number S083 and S079 most likely will be put into practise in the long run.

Time of RealisationGeog. area: tot European Total, Experts: ALL - (s1-55, weighted), Data set: 1st Round (stat. 56-101)

0%

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Customisation ICTtools for end-users. (S079)

Virtual Realitytools (S080)

Digitise existingproducts (S081)**

Embeddedsensors (S082)

Automation(S083)

Internet sales(S084)

Location (S085)

>2020

2015-2020

2010-2015

<2010

Figure 3-38: Time of realisation – Traditional Products (S079, S080, S081, S082, S083, S084, S085)

In general terms, economic viability is seen as one of the main barriers to achieve most of the statements within this sector. Furthermore, the majority of the experts believe that the extensive use of the addressed specific technologies will be hindered by their technical feasibility. In particular, the realisation of statements S079, S080, and S081 could be also hindered by the lack of a qualified workforce able to operate these new tools without any difficulty. Finally, it is remarkable that the social acceptability of inter-net sales of traditional products as well as the relocation of the manufacturing sites is considered to be very low.

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0%

50%




EU legislation

Economic viability

Lack R&D Funding

Customisation ICT tools for end-users. (S079 -1)Virtual Reality tools (S080 - 1)

Digitise existing products (S081 - 1)

Embedded sensors (S082 - 1)

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Automation (S083 - 1)

Internet sales (S084 - 1)

Location (S085 - 1)

Figure 3-39: Barriers – Traditional Products (S079, S080, S081, S082, S083, S084, S085)

Automation and relocation activities

Out of all subjects that have been studied in the area of traditional products, questions about automation and relocation of the manufacturing sites have are given highest im-portance by all experts answering this area of the ManVis questionnaire.

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The substitution of at least half of today’s manual labour by the growing use of automa-tion is considered to be the most important subject for the European industry in the traditional sector (S083). Even though approximately one third of all experts place this statement between 2010 and 2015, the timescale for its realisation does not seem to be very clear (26% of them place it between 2015 and 2020 and another 20% after 2020). Nevertheless, it is important to notice that only 3% of all experts state that such growth of automation within factories will never happen.

The experts’ opinion on the possible effects of automation is not surprising; over 80% of them believe that this increase will imply higher unemployment rates in Europe. On the other hand, the positive impacts of this statement will be a considerable improve-ment of the working and living conditions of employees, as well as a stimulating effect on Europe’s competitiveness. Responses about all these effects show a low level of uncertainty compared to the probable effect which automation will have on regional differences among member states. In terms of R&D level, Japan is considered to have the highest potential in this field, followed by the USA and Europe.

Relocation of up to 80% of traditional production sites to low-wages world regions out-side Europe is considered to be a highly important issue for the future of the European manufacturing industry (S085).

In general terms, the percentage of uncertainty about the effects of relocation on the manufacturing industry is rather high compared to other statements of this sector. In any case, the vision of relocating most manufacturing companies is believed to have a deep impact on employment in Europe. Over 85% of all experts deem that unemploy-ment will increase if relocation finally occurs but despite it being obvious that this will also have an effect on the working and living conditions of employees, experts do not seem to agree on how it will evolve (38% of all respondents believe it will decrease working and living conditions whereas 36% of them think in an opposite way). Finally, over 50% of all experts point out that the regional differences among Member States may increase if 80% of the European companies relocate their manufacturing activities. It is worth noticing that EU legislation is seen as an impediment for the relocation of companies. It may seem like experts expect European authorities to develop legisla-tions on relocation issues.

Despite being considered as a highly important issue by most experts, there is no agreement about the timescale in which relocation will take place to such extent. Around 25% of all experts place this statement between 2010 and 2015, yet over 40% of them believe it will be in 2015-2020 or even later. It is worth noticing that a consider-able number of experts (18%) believe that relocation of manufacturing sites to such extent will never happen.

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Experts coming from different countries have different opinions about the importance of relocation. It is noticeable that experts from Spain and the United Kingdom seem to be highly aware of the challenges which relocation in a big percentage will imply. In con-trast Danish, Swedish, and Dutch experts do not think that the relocation of manufac-turing sites is of very high importance for the future of the European industry.

Relocation is seen as one of the major problems which traditional industries have to face nowadays. It is common knowledge that the majority of the companies producing traditional goods in Europe have remained competitive in the market because of the low labour costs to be covered. Now that the situation has significantly changed and new countries are offering even lower labour costs, there is an urgent need for the in-dustry to move towards higher productivity levels.

In the light of the results, it seems that a number of strategies at a European level are required in order to promote industrial conversion in a way that employment levels in the EU are guaranteed. In this way, European companies should take advantage of the integration of the enlargement countries with lower labour costs, to regain part of their lost price competitiveness.

In addition, an eye should be kept on the need for restructuring and modernising the industry. This way, suitable tools should be developed and implemented with the inten-tion of increasing the companies’ efficiency in a growing competitive global economy. More flexible and faster production procedures should be implemented, in an attempt to reduce time to market of new products. In this field, automation takes a predominant role as a way to increase productivity. Besides it is worth mentioning that special efforts should be made in training activities in order to develop a high qualified labour force.

To summarise, future European companies should…

• have modern production patterns able to cope with new organizational struc-tures and to respond to a global demand.

• develop new methodologies to move from the traditional production system based on resources to a new scheme based on knowledge.

• radically transform the production basis, in order to move towards adaptive, digital and networking processes.

Design and Customisation

Within the traditional sector statements, experts were also asked to assess develop-ments in different technologies directly linked to specific design and manufacturing stages of traditional products.

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Out of the technologies that have been investigated, the one which is given highest importance by the experts is related to the widespread use of virtual reality tools for the design and prototyping of products, as a way to better fulfil customers’ satisfaction (S080). Results show that the feasible time horizon for this technology to be used by most designers is between 2010 and 2020. Despite this being a broad timescale, there is a low level of scepticism about the final implementation of such technologies (only 2% of experts believe that virtual reality tools will never be put into practice within European factories).

The implementation of virtual reality tools is also expected to boost Europe’s competi-tiveness. Additionally, over 60% of all respondents believe that the realisation of this statement will have a positive impact on the living and working conditions of employees working in the sector in Europe. However it is not expected to have any impact on the European employment rate. Finally, the majority of experts deem that USA has a higher level of R&D activities than Japan and Europe which are considered to have a similar level of R&D in the field.

It is worth to mention that there are some significant differences among experts coming from different countries. Specialists from Eastern European Countries together with those from Spain, Germany, France and Sweden give a high level of importance to this subject. On the other hand, specialists from Norway and Denmark do not believe that the use of virtual reality tools will have significant effects on the manufacturing industry of traditional products.

Customisation of products by end users and reverse engineering (S079 and S081, re-spectively) are considered to be of a bit lower importance, compared to the develop-ment and implementation of virtual reality tools. Nevertheless, over 75% of all experts rank these issues high in importance for the European manufacturing industry.

Results show a high level of uncertainty as to whether (if ever) end users will utilize new ICT and marketing tools to directly participate in the design and customisation of traditional products. Answers on the subject are equally divided in percentage (around 20%) between three time horizons: 2010-2015, 2015-2020, and after 2020.

An overwhelming majority of all respondents (almost 75% of them) expect the realisa-tion of this statement to boost the competitiveness of the European industry, but at the same time there is no consensus on how regional differences will evolve. Experts esti-mate that there are three main barriers to achieve this subject: a) technical feasibility, b) economic viability, and c) education/qualification of the workforce and the consum-ers. But despite difficulties, it is strongly believed that the idea of getting customers involved in the design process will rapidly gain acceptance in social circles.

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As would be expected, those countries deeply involved in the production of traditional products, together with Sweden that it is committed to innovative designs, are consid-ered to be more affected by the implementation of these tools.

Regarding the highest level of R&D, the USA is considered to have the major potential to develop this type of technology and to put it into extensive practice. As with the "Vir-tual Reality Tools" statement, Europe and Japan fall behind the USA in R&D level.

To conclude with the set of statements dealing with design and prototyping issues, it is essential to talk about the development of integrated design and manufacturing sys-tems to digitise products and at the same time, establish a manufacturing process for them. Although reverse engineering is believed to be of importance for the future of the European manufacturing industry, most expert do not agree on when this technology will be in widespread use in Europe.

About 60% of experts believe the possible timescale for its implementation is between 2010 and 2020, however, more than one fifth of them do not know when this technol-ogy will be used by most companies. Experts’ estimations also reveal that this technol-ogy will stimulate European industries’ competitiveness, but once again the uncertainty of expected effects of the implementation of reverse engineering technologies is sig-nificantly high. In this case, R&D level is not so clearly inclined toward the USA, as Ja-pan appears to have a high potential as well. Europe is lagging behind both countries in the level of R&D.

In the view of the results, and taking into consideration that the majority of the Euro-pean enterprises in the traditional sector will find it difficult to compete in price, design and prototyping technologies (and any innovative technology in general) should be seen as key enabling technologies to regain competitive advantage throughout the EU. Not only should the use of these innovative technologies be made to outweigh low la-bour costs but also to be able to cope with more and more demanding customers in specialised and hi-tech market niches. In this way, it is advisable to develop and im-plement new technologies that allow the diversification of products in terms of:

• Customisation of goods: Specific tools for satisfying consumers needs quicker and better.

• Innovation on smart and environmentally-friendly materials.

• Enhancement of the technological leadership in key areas of the value chain of the sector.

In order to achieve such goals, R&D activities, together with Technology transfer and industrial implementation of these technologies should be encouraged. Furthermore, fiscal and funding policies should encourage the incorporation of specific design and

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production technologies leading to more flexible manufacturing procedures (rapid pro-totyping technologies, specific design software, 3D modelling technologies, etc.).

Smart Products and Internet Sales

The introduction into the market of traditional products with embedded sensors provid-ing them with smart functions (S082) is also considered a highly important subject for the future of the manufacturing industry of traditional products. Even when it is envis-aged that this technology will be put into practise between 2010 and 2020, there is still a significant percentage of experts (19%) stating that it may occur even before 2010. In addition, the rate of scepticism about the implementation of the technology reaches the lowest level of all statements in this sector (only 1% of all respondents believe tradi-tional products will never have smart functions), strongly suggesting that this develop-ment should already be in process.

In the experts’ view, the main possible barrier for the realisation of this statement is the technological complexity of developing such sensors and setting them into the final product as well as its economic viability. Nevertheless, an overwhelming majority of experts state that embedded sensors will have a positive effect on the competitiveness of the European industry (87% of them) whereas they do not expect any effects on employment levels in the EU. Finally, 66% of all respondents believe that living and working conditions of employees in the sector will be improved.

In this case, Japan is by far the best positioned country in relation to R&D level. The USA and Europe are second and third in this rank.

Even now, that more and more industries are going into the e-business area, the statement about internet sales of traditional products directly to customers has surpris-ingly been given the lowest level of importance by most experts answering the ques-tionnaire on traditional products.

There is a significant percentage of experts who do not believe these selling methods will become mandatory in the traditional products industry (14% of them), mainly be-cause of social acceptability barriers. Nevertheless, over 60% of those who believe in the widespread use of internet sales to the customers, place the realisation of this statement in the short and medium term (between 2005 and 2015).

The positive effects of "Internet Sales" are believed to be in the direction of both, in-creasing European competitiveness in the global market and improving the living and working conditions of employees in the traditional industry (almost 70% and 50%, re-spectively). Nevertheless, there is a considerable rate of uncertainty in relation to the

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effect that the widespread use of these selling methods will have on employment rates and regional differences.

Finally, it is worth noticing that countries like Germany, France, Italy, Norway, Sweden, and Spain place this statement in a shorter time horizon than other countries in which the use of the internet may be developed in a lower scale, such as Slovakia, Turkey, Poland, and Romania. In addition, only the UK and Sweden consider themselves to be in a good position in relation to this statement.

From these results it can be seen that "Internet Sales" in the traditional industries is still very low. Moreover, and according to the latest data published by e-business w@atch in 2004 (Electronic business in the Textile, Clothing and Footwear Industries), the level of e-business in the sector is below average compared to other manufacturing sectors, such as the food, chemical, and even machinery industries. As stated in the study, the main reason for the companies to stay away from these retail practises is linked to their size and their lack of infrastructures to face the challenges that internet sales may im-ply if one wants to provide outstanding product services. If internet sales are to be of common use within the traditional products sector, much more stable networks linking all agents involved in the supply chain of every industry of the sector should be devel-oped.

3.6.4 Conclusions

Key results

• The modernisation and reorganisation of the traditional product industries in Europe is a must.

o Higher levels of automation are required within the factories (but con-sidering the general concernes on automation, see chapter 2.4)

o The implementation of design and prototyping technologies is con-sidered crucial to remain competitive in a global environment.

• There are big concerns about relocation of the manufacturing sites outside Europe. Even when it appears to be an unstoppable move; there is a certain amount of scepticism among experts with regards to the high levels of relo-cation settled in the statement S085 (up to 80% of traditional production)

• The launch of traditional products with smart functions is on its way.

• European R&D levels are falling behind those in the USA and Japan.

• Internet sales are not considered to become predominant in the sector, mainly because of social acceptability.

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Key challenges

• To move from the traditional resource-based production system to knowl-edge-based structures.

• To modernise the industry. To implement new technologies, such as concur-rent manufacturing technologies, CIM (Computer Integrated Manufacturing) technologies, virtual prototyping technologies, etc., in order to increase the efficiency at all levels: product development, production, customer service, etc.

• Of special interest is to take advantage of ICTs in order to improve the sup-ply chain management. To implement specific SCM tools in all companies.

• To move to more specialised and hi-tech market niches.

• To develop a more qualified workforce and to educate and inform consumers on new products and retail practises.


• To establish a robust knowledge community within the industry.

• To increase and support the involvement of SMEs in R&D projects. To im-prove the effectiveness of the technology transfer system at all levels. To enhance the coordination of R&D activities.

• To promote the utilisation of ICTs at all levels with special interest in those tools related to the supply chain management.

• To strengthen networks linking all agents within the supply chain.

• To increase the awareness of the importance of e-business practises in the sector.

• To establish specific technology platforms in Europe for the different sub-sectors in the traditional industry.

• To promote campaigns and to develop specific policies throughout the EU to reinforce the European brand image.

• To establish effective information programmes on external markets, alliance opportunities, etc.

• To establish training organisations in order to cover specific training needs of employees in the traditional industry. To complete dissemination activities to the customers.

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3.7 Transport Sector


The transport equipment sector is the largest sector in the manufacturing industry, and within this sector, the manufacture of motor vehicles including their parts, components and equipment is by far the largest, resulting in over 10% of the EU total manufacturing value alone (Wengel et al. 2003). An upturn in the demand for new commercial vehi-cles was observed in Europe in 2004, following a subdued demand for a number of years (PricewaterhouseCoopers 2004). However, the industry is characterised by structural problems, and exists in an operating environment in which there is: "little margin for error" (PricewaterhouseCoopers 2004b). There is reportedly a mismatch between supply and demand within the industry globally, with too many manufacturers and component suppliers, often offering overlapping products in the market place. The vehicle manufacturers rely on a highly complex and fragile global supply chain. With this in mind, it is essential that European automotive manufacturers find strategies to maintain and increase competitiveness.

It is also necessary that a balance is achieved between environmental compatibility, safety, economic efficiency, and customer benefit. Hence one of the most important challenges facing the industry is the optimal resolution of the conflicts which emerge between these objectives (VDA 2004). It is in this arena (optimising the trade offs be-tween economy, environment, and society, through sustainable development) that R&D, and the development, exploitation, and promotion of new technologies and is essential.


This sector consisted of eight statements, as listed below:

S056 System Integrators Many of today's first tier suppliers are system-integrators, producing and deliver-ing complete cars.

S057 Electronic Management: Master and Slave Electronic car management is based on a master and slave principle (one central computer and a backup system).

S058 Hybrid Cars Hybrid (combined electric and internal combustion engine) cars have a 30 % share of the European Union car market.

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S059 Fuel Cell Cars 10% of new cars produced in Europe are fuel cell cars with hydrogen stored on board.

S060 Mobility Services The majority of companies in the transport sector offer mobility services integrat-ing different means of transport instead of selling vehicles.

S061 Re-Manufacturing 80% of car parts are re-manufactured or reused to reduce waste and increase re-source efficiency.

S062 High Speed Trains Trains are fast enough to compete effectively with air transport across the EU.

S063 Product Development Time Time from product design to full volume production is reduced to 6 months for cars.

The statements roughly fall (although not exclusively) into three groups: automotive technologies (S057, S058, and S059), future production trends (S061 and S063), and new sector trends or new business models (S056, S060, and S062).


For ease of analysis, the results from the Delphi survey are discussed in the groups described above.

Respondents Profile

As can be seen from the following Figure 3-40, in general at least 50% of the respon-dents considered themselves to have above average expertise in each of the state-ments. There exists no concrete view as to how this should be interpreted or how it might affect the results of the survey. However, it is possible that respondents who consider they have high expertise in a given field are more likely to give a positive view or inflate the importance of their specialisation. On the other hand it might be supposed that those with high expertise are more likely to give an accurate picture than those with less knowledge in the field.

In addition, the majority of respondents were male (roughly a ratio of 6:1, male to fe-male), and a significant majority of the respondents considered their occupation to be R&D (industry and university). Most of the participants classified their organisation as university or company, with very few coming from government or public authorities.

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The country with the most respondents in this sector was Germany, perhaps reflecting the country's large automotive industry. It is worth remembering that the results from this sector have not been given a weighting to represent the relative size of the coun-tries' manufacturing industry, and therefore the results in should be viewed as the opin-ions of a group of experts, rather than necessarily being truly representative of European opinion as a whole. As such, no further reference to or comparison of indi-vidual countries will be made.

0%

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Systemintegrators

(S056)

Electronicmanagement:master andslave (S057)

Hybrid cars(S058)

Fuel cell cars(S059)

Mobilityservices(S060)

Re-manufacturing

(S061)

High speedtrains (S062)

ProductDevelopmentTime (S063)

Low

High

Expertise per statement - Transport

Figure 3-40: Expertise – Transport

Automotive Technologies

S057 Electronic Management: Master and Slave Electronic car management is based on a master and slave principle (one central computer and a backup system).

S058 Hybrid Cars Hybrid (combined electric and internal combustion engine) cars have a 30 % share of the European Union car market.

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S059 Fuel Cell Cars 10% of new cars produced in Europe are fuel cell cars with hydrogen stored on board.

Nearly 80% of the experts consider both the statement concerning hybrid cars (S058) and the statement concerning fuel cell cars (S059) to be of above average importance to the European manufacturing industry. Indeed, almost 40% of the experts consider the two statements to be of high importance.

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Electronic

managem

ent:m

aster andslave (S

057)

Hybrid cars(S058)

Fuel cell cars(S

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> 20202015 - 20202010 - 2015< 2010

Time of Realisation (those experts that believe statement will be realised)

Importance to European Manufacturing industry

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Hybrid cars (S058) Fuel cell cars(S059)

Electronicmanagement:

master and slave(S057)

Low

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Figure 3-41: Time of realisation and importance to European manufacturing industry – automotive technologies (S057-S059)

Of the experts who believe the statements will be realised, the majority believe that these two statements ("Hybrid Cars and "Fuel Cell Cars") will be realised after 2015, and a significant proportion believe they will not be realised until after 2020.

The most significant barriers for these statements are technical feasibility and eco-nomic viability. Interestingly, Europe's level of R&D in the "Hybrid Cars" statement was rather low, with less than 20% of the experts selecting Europe rather than the USA or Japan. There appears to be a fundamental dichotomy concerning hybrid cars having a 30% share of the European car market, with experts considering it to be of above aver-age importance for European manufacturing as well as having an increasing effect on environmental quality and competitiveness, but not technically or economically viable.

Other significant barriers for the realisation of this statement are a lack of R&D funding, and EU legislation. One might conclude that an aggressive policy which removed these barriers (lack of funding, and legislation) would increase Europe’s R&D position, ena-bling it to overcome the technical and economic barriers, thus increasing the benefits

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for European manufacturing as well as the positive effects on the environmental quality and competitiveness.

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Figure 3-42: Barriers – Transport – automotive technologies (S057-S059)

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Figure 3-43: Effects – Transport – automotive technologies (S057-S059)

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Concerning the "Fuel Cell Cars" statement (S059), nearly 80% of the experts consider the realisation of the statement to be of above average importance to the European manufacturing industry. Aside from the technical and economic barriers, the third larg-est barrier is seen to be the lack of R&D funding in the field, followed by EU legislation. However, if the statement were realised, experts consider an increase in environmental quality, living and working conditions, and competitiveness would be observed. Fuel cell vehicles need to compare favourably with current vehicle types which will not hap-pen until their cost is reduced to encourage commercialisation. In order to expedite the return on investment, it is necessary that economies of scale are rapidly achieved. It has also been proposed (Frost and Sullivan 2002) that government tax rebates will be necessary to facilitate market development.

In contrast, statement S057 "Electronic Car Management" is foreseen to be realised earlier than the other two statements (roughly half the experts expected to see it real-ised before 2015), but is also perceived to have a lower importance for the European manufacturing industry. Over 60% of experts think the realisation of the statement will increase competitiveness but nearly 20% of experts think that employment will de-crease.

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Figure 3-44: Time of realisation and importance to European manufacturing industry – future production trends (S061, S063)

The two most significant barriers for both the statements are technical feasibility and economic viability, however, EU legislation is also seen as a significant barrier for statement S061 "Re-Manufacturing" (30% of experts consider it to be a barrier), whereas this is not the case for statement S063 (only 5% of experts consider it to be a barrier).

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Figure 3-45: Barriers – Transport – future production trends (S061, S063)

A closer look at statement S061 "Re-Manufacturing" reveals that education/ qualifica-tion is not considered a significant barrier which perhaps accounts for Europe's per-ceived high level of R&D (64% of experts feel that Europe has the highest R&D level in this area, compared to 24% for Japan and 10% for the USA). This is despite the fact that 21% of experts consider a lack of R&D funding to be a barrier to the realisation of the statement.

Considering that the realisation of this statement S061 "Re-Manufacturing" would likely increase the environmental quality, competitiveness, living and working conditions, and employment, it is recommended that future policy takes these results into account.

• Europe already has the highest R&D level, suggesting a competitive advantage.

• Europe already has the necessary skills and qualifications.

• Many experts feel that the statement ("80% of car parts are re-manufactured or reused to reduce waste and increase resource efficiency") will be realised by 2020, and almost all experts are in agreement that the statement will be real-ised.

• A policy which supports (and even demands) this by removing legislative barri-ers and promoting R&D funding in the field, will have significant positive impact on future European manufacturing.

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Effects

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Figure 3-46: Effects – Transport – future production trends (S061, S063)

New Transport Trends/Business Models

S056 System Integrators Many of today's first tier suppliers are system-integrators, producing and deliver-ing complete cars.

S060 Mobility Services The majority of companies in the transport sector offer mobility services integrat-ing different means of transport instead of selling vehicles.

S062 High Speed Trains Trains are fast enough to compete effectively with air transport across the EU.

All three of these statements are considered to have above average importance by more than half of the experts (75% for statement S056, 62% for statement S060, and 71% for statement S062).

62% of the experts who believe that statement S062 will be realised feel that it will happen before 2015. For statements S056 and S060, more than half of the experts feel they will be realised between 2010 and 2020 (65% for statement S060, 66% for state-ment S056). However, between 12% and 15% of the experts feel that the statements will never be realised at all.

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Figure 3-47: Time of realisation – Transport – new transport trends (S056, S060, and S062)

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Figure 3-48: Barriers – Transport – new transport trends (S060, S062)

Barriers were only available for statements S060 and S062. Economic viability is most frequently stated with 68% for statement S062 and 70% for statement S063. In second place, the statements have different barriers: technical feasibility 64% (S062) and so-

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cial acceptability 39% (S060, with technical feasibility in third place with 35%). For both statements, EU-legislation is chosen as a barrier by approximately 20% of the experts.

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Figure 3-49: Effects – Transport – new transport trends (S056, S060, S062)

Effects of the realisation of the statements were asked for all statements. For state-ments S060 and S062 the picture looks very much the same, with a clear majority of the experts believing in a positive effect on: environmental quality (83% for statement S062, and 64% for statement S060), living and working conditions (63% for statement S062, and 52% for statement S060), and competitiveness (63% for statement S062, and 65% for statement S060).

With regard to effects on employment, both statements are expected to have slightly positive effects. 29% and 33% of the experts believe in a positive effect for statements S062 and S060 respectively, while the majority do not think there will be a change at all (66% for statement S062 and 55% for statement S060).

Statement S056 differs from statements S062 and S060 by showing the strongest posi-tive effect within competitiveness (72%) followed by employment (42%), living and working conditions (41%), and regional differences (39%) grouped on a shared 2nd place.

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The highest R&D level was only enquired for statement S062. The experts rank Japan as the leader with 56% of the votes, followed by Europe (39%) and a lagging USA (4%).

3.7.4 Conclusions

Key results

• There is a dichotomy surrounding "Hybrid Cars", with realisation of the statement being considered the most important of the automotive technolo-gies to the European manufacturing industry, but technical feasibility, eco-nomic feasibility, lack of R&D funding and EU legislation all seen as significant barriers.

• "Electronic Car Management" will be realised earlier than the other automo-tive technologies but is not considered to have such a high importance for the European manufacturing industry.

• In terms of future production trends, "Re-Manufacturing" of car parts is an area in which Europe has a high level of R&D, and a very high number of experts agree that it would increase environmental quality. However, the statement will not be realised until 2020, perhaps due to the EU legislation and a lack of R&D funding.

Key challenges

• To change the economical and technological preconditions for the realisation of “Hybrid Cars” (S058) and to review the EU-legislation for this statement.

• To harness the competitive advantage Europe has in the field of re-manufacturing research, and translate this into re-manufacturing reality, thus benefiting from the extreme positive effects for the environment, enabling a more sustainable Europe.


• A policy which supports (and even demands) the realisation of statement S061 by removing legislative barriers and promoting R&D funding in the field, leading to significant positive impact on future European manufactur-ing.

• Introduction of R&D schemes supporting statements S058 "Hybrid cars" and S059 "Fuel Cells".

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4 European Manufacturing in a Global Environment Authors: Jan Sjögren, Per Kilbo (IVF)

4.1 European Conditions for International Competition

4.1.1 Lisbon Agreement as a Baseline

The agreement in Lisbon has established common European industrial goals for the coming years. It is therefore natural to mirror the results on international issues from the ManVis survey against the ambitions expressed in the agreement. The main fea-ture of the Lisbon Agreement is that by 2010, Europe shall be the most competitive region in the world. Five years later, we are not yet near the goal, according to an analysis presented by the Ministry of Finance Sweden 2004.

The global industry and economy are changing rapidly as a result of the technical de-velopment, political changes, and the entry of low cost nations like China and India into the industrial competition. A study of the future must be focussed on how to achieve the wanted position in the future. The Lisbon Agreement is the most obvious expres-sion of the political expectations for the future of the European industry.

Europe has through the Lisbon Agreement defined targets for growth, well-being, and environment while the competing regions seem to have focussed, more unambigu-ously, on growth and economical expansion. Europe must be more efficient than the rest of the world to achieve the Lisbon goals.

Considerable differences in labour costs, such as those Europe currently has relative to some of the major trade partners (China and India), can hardly be compensated only by a better performance in large scale, low variant production. The difference in labour costs − currently 5 to 20 times − is too large for such a solution, as exemplified by the Swedish manufacturer of safety equipment Autolivs' recent move of the safety belt as-sembly from Sweden to Estonia since the direct labour part of cost were as big as 16 % of the product costs and the Estonian wages just 16 % of the Swedish ones (Interview with Olsson, J. 2005). It is therefore necessary to create more efficient structures in business as well as in the rest of the society. Europe needs a unique industrial mix, compensating for the relative competitive disadvantage in labour costs and reflecting a wage level we definitely want to maintain, in order to become the leading industrial re-gion of the world.

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In our view, the consequence of Lisbon Agreement is that Europe has committed itself to be continuously ahead of the competing regions in renewal and development of the industrial structure and the rest of the society, in order to cover for the higher ambitions and for competitive disadvantages built into the European society such as demograph-ics. In the following sections, we will discuss several issues of Europe's position in a more competitive manufacturing.

4.1.2 Demographics and Current Working Hours

The demographic situation in Europe seems not be in our favour in comparison to re-gions like the USA and India. The European percentage of elderly is higher than in the USA and is expected to grow faster than in the USA for the coming decades, in an re-cent study, “The 2003 Aging Vulnerability Index", European countries are the only of the analysed countries in the most vulnerable category.

In Europe taken as a whole, the socially and politically accepted yearly working hours, according to Robert J Gordons findings (2004), are 25% lower than in the USA. About one third of the difference is due to deliberate choices of reduced working hours while the rest is due to higher unemployment and lower participation in working life. How-ever, when the positive effects of the welfare society are taken into account, the net difference in living standards is just slightly below 10%.

In the ManVis survey, these issues were covered in two statements where the potential for deliberately tuning the industrial job opportunities for elderly people and on adapting industrial jobs to fit into the social life patterns were tested.

The first relevant ManVis statement deals with the question if it is the work itself that makes the elderly leaves the workforce early:

S008 Barrier-free manufacturing Manufacturing systems, where people aged 60 and above can work without diffi-culty, are in widespread use.

Relatively few of the experts consider themselves of high expertise (35%) while 60% see this as an important issue which doesn’t rank the statement especially high in im-portance in relation to the other statements in the survey. An interpretation could be that the impacts from the demographic change have not influenced the economy yet. Furthermore, the main barrier for the ManVis statement is the social acceptability, which must be interpreted as an expression for a belief that elderly people in general have no great wish to prolong their working life, or that the elderly are not wanted by the industry.

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The second ManVis statement in connection with the demographic situation deals with elderly people's incentives for remaining in the workforce:

S0054 Work-Life Balance Tailored configurations of working conditions and benefits reflecting age and fam-ily situation are the norm in manufacturing companies.

This could be seen as a potential measure to compensate for the demographic short-comings, by making family life and working life easier to combine, and by that giving an opportunity to decrease the deficiency in working hours.

The answers from the experts do not rank this statement especially high in importance (59%), but there is a slight overweight of higher importance for younger experts (70%), which could have been expected. Among those who believe that the statement will come true, very few think it will happen before 2010.

The main effects, as indicated by the experts would be improved living and working conditions and a slight tendency to a higher employment level.

The demographics seem not yet to be of major concern for the experts in the study. The effects of the aging population in comparison to the competing regions have probably not yet become visible enough in the industrial life.

The problem of being able to combine family life with jobs seems to be more urgent than opening up the job market for the growing elderly part of the population. If this feeling is common among the population, the relative disadvantage in demographics will probably be even more accentuated in the long run. Birth rates could be affected by the increasing complexity of combining working life and family life.

4.1.3 Different Types of Relocation – A Definition

Relocation of industry to other regions is probably the currently most debated interna-tional aspect of industry policy and a question on everybody’s mind. During the last decades, upswings in the economy have not, as previously was the rule, been rapidly followed by expansions of employment in the industry. Improved productivity seems to give the ability to maintain or even expand production without any increase of staff, in many companies, staff even decreases as production volume increases. In the USA, the productivity is growing partly due to offshoring (Liu 2002), partly because of the new tools coming from the ICT-revolution but mostly because of new developments in the retail business sector (Johnsson 2002) and due to an upswing in the labour inten-sive construction industry. The increase in productivity combined with the accessibility of very cheap labour in the expanding economies in Asia puts industrial jobs in Europe

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under pressure. In most people's minds, offshoring is making Europe loose lots of in-dustrial jobs thereby threatening our living standards.

Relocation of industry, usually discussed as outsourcing, really means that several structural changes coincide in time, both inside and across the borders of EU. Since the reasons and logic behind are quite different between the different types of reloca-tion, it is necessary to make distinctions between them, to make the discussion mean-ingful.

(1) Offshoring: Movement of industry (production) to “low wage regions”, in order to reduce the pure labour cost per unit produced. Especially for commodities.

(2) Outsourcing: Buying parts or services from suppliers, mainly to improve the economies of scale for the intellectual part of a value chain. Outsourcing is com-mon within a country or a region, and is basically a normal way to achieve indus-trial improvement. When Europe starts to outsource to other regions, the movement is a bigger threat than offshoring, because the creation of the intellec-tual capital is moved, and by that the more advanced and highly paid jobs are lost and with them often the control over the value chain. Europe must be attrac-tive enough to be able to keep the intellectual industrial jobs even when the out-sourcing process continues.

(3) Relocation of production to locations near the consumers: With a rapid expansion of the product variation and with more simultaneous models, it is more and more efficient to locate production closer to the market in order to avoid long delivery times and a growing stock of finished goods in the market chain. This is a mechanism and a positive spiral which moves jobs to regions with high buying power.

(4) Relocation of innovative production and development close to lead markets, often regions with high buying power: This is a way to get the signals from the most demanding customers. This change of industry structure ought to be favourable for Europe, since the high living standard is creating demanding customers. Some of the Asian car manufacturers have recently announced openings of new production plants in Europe.

From the definitions above, we can se that offshoring is driven by pure cost reductions, while the other forms of relocation emphasise the need to improve the speed of innova-tion.

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4.2 Competition on Cost Currently, Europe competes for cost against China and India and for innovation against the USA and Japan which is also verified by the ManVis experts when studying the appreciation of relative research positions. According to the ManVis experts, there are few fields of innovation where anyone can match the results of the USA, Japan, and Europe. With the ambitions shown by China and India and many more to expand re-search and education, the situation can change and in a foreseeable time, we might meet competition for innovation also from those countries.

4.2.1 Impact of Working Methods on Offshoring

One strong enabler for the relocation of jobs is the ability of the industry to transfer knowledge and established procedures that were developed at one location to “off-shored” production sites. The issue has several faces, from the better documentation of the processes gained in the quality movements of the nineties, over the introduction of “platform technology” in design to minimise the adaptation of the production process for the different products, to the installation of ICT systems to communicate, store, and retrieve the information necessary for production. One of the major truck manufacturers recently identified creating commonality between the different development and pro-duction sites as the currently most central issues for their development of production. This central question was covered in ManVis by statement S016.

S016 Work Specifications and Producers Closely defined procedures and specifications of work methods are common in most companies to maximise the efficiency.

71% of the experts rank the statement as important and very few say it will never hap-pen. 51% believe it will be true before 2010 already. The interpretation is that a majority of the experts is of the opinion that one of the strong enablers for offshoring is already true or will become true in the near future. The difference in local competence between low cost regions and high wage countries will be less and less important for repetitive production sequences if the development indicated in the statement comes true.

The current difference in labour costs against primarily Asia is certainly a strong driver for “offshoring”, especially for production of commodities. The first question to ask is if this is a positive or negative development since jobs in production are lost but we can take the benefit of low prices on imported goods. It can also be argued that it would be very difficult to maintain the European standard and way of living, if the lowest paid jobs are maintained – offshoring does not have to result in unemployment if the econ-omy grows fast enough to create new jobs covering for those offshored. Offshoring is a test for our economy's ability to grow.

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4.2.2 Preventing Offshoring by Automation

In the ManVis study, one of the core statements with a clear international angle was statement S045.


By the ManVis experts, this statement is ranked number one in importance. Almost 90% consider the statement very important and only 10% do not believe it will ever come true. In other words, a massive majority of the experts see automation as the saviour of production in Europe.

As barriers for this to happen, 60% of the ManVis experts identify economic viability and 55% technical feasibility. As will be shown later in this chapter, it is worth serious considering that very few of the experts are of the opinion that Europe’s position in re-search on automation is favourable. Japan is almost unanimously seen as the leader in research on automation. If Europe is putting so much hope on automation, the field should maybe be one of the more central European research areas.

The ManVis experts were also asked to give an evaluation of the effects on society if the statement should come true. More than 70% are of the opinion that automation will improve living and working conditions and 85% expect the competitiveness to be im-proved. Concerning the effects on employment, the views are more split: 50% think automation will increase unemployment while almost 40% are of the opposite opinion. With no European expansion of volumes, it could be argued that automation will lead to fewer people on the local factory floor.

The other ManVis statement on automation and the influence on location of industry, S083, could be found in the section on traditional industry in the ManVis questionnaire.

S083 Automation Half of today's manual labour is replaced by the growing use of automation in the traditional sector.

Of the answers, which are fewer than for the more general sections of the survey, 86% rank the statement as important, which is quite high and only 3% expect the statement never to come true. A majority judge the automation in traditional industry to have re-placed half of the manual labour in the time-frame 2010-2020. Taking into account the relatively low level of automation currently implemented in this industry segment, this also sends a message on the expected level of automation in other sectors.

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As in other automation areas Japan is judged to be leader in research by 53% of the experts while only 19% believe Europe to be.

"Automation" is valid for all industry sectors, the time-frame given by the ManVis ex-perts for the radical impact as indicated in the statement on cutting the number of jobs by half is 10 to 15 years. With such a dramatic change, salaries for uneducated per-sonnel will be less and less important for manufacturing, even in production of com-modities, since most of the manual jobs will be automated anyhow.

A reasonable analysis concludes that the relative advantage for the low cost regions, like China, based on large segments of the population suited for industry jobs with low qualifications, will probably decline because their living standard and labour costs will go up and the need for people in production will decrease due to automation. Both China and India have aggressive plans for higher education in large volumes.

Japan is clearly seen as leading the development of automation equipment and the research in this field.

4.2.3 Environmental Legislation as a Potential Driver for Offshoring

As shown above, a vast majority of the experts are of the opinion that independence of local knowledge, as one of the prime enablers for offshoring, is almost already fulfilled. More than 50% of the experts think such procedures and technologies will be true be-fore 2010 and another 30% before 2015.

The European legislation on environmental hazards might be a driver for more offshor-ing since Europe currently pursues the most advanced view on the environment among the industrialised regions. Despite of that, by setting high standards early, Europe can create an advantage for a changing market in being ready before the competitors.

The potential negative effect of environmental legislation was examined in statement S042.

S042 Relocation because of Environmental Legislation European companies almost completely relocate production (except final assem-bly) because of environmental standards set by the EU.

In the answers from the ManVis experts, almost 80% consider the statement important but 31% are of the opinion it will never happen while 43% expect the statement to come true before 2020. Compared to the average level of “never" rates over the whole range of statements, 31% is very high and the conclusion should be that the European experts do not see environmental legislation as a big threat to offshoring. The 80% importance could of course be interpreted as a general concern that future legislation could be a problem, if it shows too much difference compared to our competitors.

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4.2.4 Subsidising to Prevent Offshoring

Among the potential restrictions of offshoring, the study also covered the need for sub-sidies to make the industry keep production in Europe.

S039 Relocation outside EU Production is subsidised or almost completely relocated outside Europe.

36% of the experts are convinced this will never be the case and only 10% think it will happen before 2010. Of these answers, the conclusion can be drawn that direct subsi-dies are not seen as a real option to avoid offshoring.

Cost for transportation

In general, it can be argued that cost for transportation from an environmental view-point is currently low or even too low. With rapidly increasing oil and fuel prices, trans-portation can be expected to become more expensive. The expected effect on relocation from cost for transportation was analysed in statement S041.

S041 Transport Costs High transport costs outweigh the advantages of lower production costs outside the EU.

In their answers, 79% consider the issue important with a clear difference in the opin-ions between government representatives (23% very important) and industry (45% very important). Only 36% think transportation costs will offer any protection against reloca-tion before 2015.

From the answers it can be concluded that the experts in general do not think that cost for transport can offer any higher level of protection against the offshoring of produc-tion. From the experts’ opinions on the expected effects, 57% indicate that high trans-portation costs will increase the regional differences within Europe, too.

The effects on employment are considered to be positive by 57% of the experts. On competitiveness the views differ slightly more: 47% think Europe will be more competi-tive with high transport costs while 32% are of the opinion that our ability to compete will decline. This split view might be a result of the thinking that if the transportation costs should go up it would be more of a threat to the premium products from Europe than to the commodity products from low wage countries since commodities can be stored and transported in larger batches than premium products, the latter having a much faster product renewal and a richer variety of models.

Production is more and more becoming a global business. The industry has many fac-tors on location to take into account: labour costs, time and cost for transportation, local

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skill levels, the need for location close to lead markets, infrastructure, political stability, and many other factors. From the answers in ManVis, it can be concluded that there is no room for any kind of artificial protection; it is also an observation from lots of other sources that the global industry is becoming less and less sentimental concerning choices of locations. The industry is increasingly searching for the optimal strategy, irrespective of historic establishment of factories.

It can also be noted that production of commodities is optimised on costs, while pre-mium production seems to be drawn closer to the market, due to lead times and the cost for obsolete stock under the pressure of very fast product renewals.

The conclusions are amplified by the answers on ManVis statement S085.

S085 Location 80% of traditional production is relocated to low wage world regions outside Europe.

81% judge the statement to be important and 63% of the experts believe this will hap-pen between 2010 and 2020. It is remarkable that as many as 63% of the experts ex-pect Europe to loose 80% of traditional production in the coming 10 years; this is a signal for an expected transformation of the industry structure which should attract at-tention.

4.3 Competition on Lead-Time and Knowledge Utilization

4.3.1 Outsourcing

As indicated in the beginning of the section on relocation, outsourcing is not the same type of restructuring and relocation as offshoring. Increased competition with more and more advanced products and production establishments and a faster renewal pace, has caused a reduction in the number of surviving actors on many markets. For exam-ple the Volvo Car Corporation decreased the number of suppliers to their final assem-bly from 375 to 175 between 1980 and 2000 (Olsson, H. Press Conference 2004). According to AT Kerney (1999), each segment of subcontractors to the automotive industry will only have room for 3 to 5 companies.

Outsourcing is basically a way to achieve intellectual economies of scale by changing to an industry composed of more and more specialised organisations. Outsourcing is an effect of the increasing importance of knowledge and dedicated industrial systems. Outsourcing very often takes place within national and regional borders, but with the more global industry it also becomes a truly international issue.

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In the study, we tried to discuss the expected level of outsourcing in production, the level of outsourcing in product development, and whether the customers can be ex-pected to participate in the product development process in totally new business chains.

On outsourcing in production, we used the following statement:

S017 Outsourcing To reduce costs and to focus on core competencies, companies outsource twice the percentage of manufacturing activities and support functions outsourced to-day.

The answers indicate that outsourcing will continue. Only 6% of the experts are of the opinion that it will never happen, while 68% believe that the level of outsourcing will have doubled before 2015.

Outsourcing of production could also be done to the customers. In many developed countries, taxation makes it very expensive for the end customer to buy services. This indicates an expanding market for “do it yourself” solutions. This was analysed by statement S036.

S036 Self-Service Premium industrial products, sold and distributed in a Dell/ IKEA-like fashion, controlled by self-diagnostic functions and assembled and maintained on a do it yourself base, are the norm.

The answers are not giving the statement a high importance. Slightly over 50% give a judgement of importance or high importance, which is relatively low compared to other statements. The barriers are mainly social acceptability and technical feasibility which can be interpreted as a natural scepticism for the development to move into the market for more complicated products. There is probably a limit for what the consumers can do themselves.

Most experts indicate that the effects on employment would be negative while almost 65% see this as a way to a better competitiveness.

Outsourcing of product development was covered in the statement S026.

S026 Innovation together with Stakeholder External stakeholders are incorporated into product development processes by the majority of companies.

The answers are less convincing than on the previous issue. 7% think it will never hap-pen but 50% believe it will happen before 2015 which indicates a slower implementa-tion rate than for the outsourcing of production. The statement has some room for

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different interpretations: external stakeholders could be the customers and societal groups, indicating a new business model.

On the issue of new business models where customers do part of the development, we used the following statement:

S079 Customisation ICT Tools for End-Users A large part of traditional product design and customisation is done by end-users directly using newly developed ICT and marketing tools.

The statement was in the section on traditional products and anyhow, more than 50% of the experts believe it will happen before 2020. No real barriers are indicated apart from technology and the USA is considered to be the leader. If the end-users will be in a position to do the design on their own, we are moving into an era of true “mass cus-tomisation” with new business models and patterns as a result.

4.3.2 Local Production

The movement and relocation of production to more local plants can be seen as the opposite of offshoring. The drivers for more local production are movement to lead markets, a need for local customisation, and a pressure for shorter delivery times.

Enablers for local production are the cost and availability of equipment for automation and better defined procedures within the company which make it possible to run local factories to some extent remotely.

Examples are seen in some industrial sectors, where factories in containers are moved to locations close to the customers, “factory in a box”. The issue also has a very close connection to the estimation of the future core issue for competitiveness: what per-formance factors will constitute the future industrial champions or winners in the global competition?

In the study, two statements on local production were examined:

S044 Local manufacturing Local manufacturing is widely used to minimise the risks of global distribution chains.

S037 Local Small Scale Production The majority of products are almost completely produced in local small scale pro-duction sites using multifunctional equipment.

The first statement is not considered especially important. Most of the experts believe it will happen but as many as 40% are uncertain or convinced it will never happen.

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On the second statement, the answers from the experts are similar: 50% believe in it but many are uncertain and 27% are convinced it will never come true.

Among the experts these issues are not very central, but it might also be an effect of the less specific formulation of the statements, all types of products are covered, while such a development might be more imminent for certain types of less complicated products.

4.3.3 Lead Markets and Industry Structure

The ManVis questionnaire did not include any specific statements on relocation of in-dustry to lead markets. The movement is important for Europe since lead markets are generated by high living standard, by high purchasing power, and by early adoption of emerging consumer patterns.

All those factors ought to put Europe in a favourable position to attract production and development of premium products.

The future structure of the industry is not only a question of the physical location for the different activities. It is also a question of what performance factors the successful in-dustries must develop and of the structure of the total value chain.

S019 Industrial System The improvement-speed for the value chain, the performance of the industrial system, is more important for the competitiveness than the markets success of individual products.

The answers are quite distinct: 70% rank the statement as important or very important and only 11% are convinced on the never side. No real barriers are identified and the expected effect is an improved competitiveness.

Apart from what can be deduced from the study, the importance of this statement can, in our view, not be overestimated; this is the main strategic issue for the industry in the future. Will the “winners” be those with the best products for the moment or those who have the ability to adopt quickly to new situations in the market and in the competition? Should the focus be on product development for the near future or systems develop-ment for a more distant future?

Companies putting enough focus on development of their whole operation will have the ability to participate or lead in a flexible value chain and move closer to mass customi-sation and also have the ability to adopt new and emerging business patterns.

As will be shown in the discussion on product development time, the ManVis experts are in a clear majority convinced that the total time from product design to full volume

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production for cars will be reduced to 6 months within the next 15 years. To achieve this, the industrial system must have a totally new performance compared to today and the products must be designed to fit into the production system, not the other way round.

4.4 Competing with Innovation

4.4.1 Innovation in the firms

The innovation system − research, product development, and cooperation patterns between the actors − is the most important factor for the forming of our future industry. The target for Europe, as expressed in the Manufuture working document (2004), is to develop the manufacturing industry to be the most flexible and agile industry in the world with a very ambitious concern for the environment and for the well being of the staff.

The importance of an excellent innovation system was highlighted by ManVis state-ment S027:

S027 Knowledge Based Activities The share of knowledge based activities (engineering, R&D etc.) reaches 80% of the value of manufacturing product. (The remainder comprises direct labour costs, material and purchased services).

Almost 85% of the experts see this as an important statement, which puts it very high on the list. Only 13% are of the opinion that the level of intellectual content in the prod-ucts will never be as high as 80%, while the answers are more indistinct on the ex-pected time horizon.

The main barriers are seen in a lack of education and a lack of R&D funding, while the positive effects on competitiveness (86%), living and working conditions (64%), and environmental quality (55%) must be seen as massive. The employment is also con-sidered to be affected in a positive way where 42% believe in an increase.

Very few of the experts judge their own country to be in front (5%). Most experts signal that they are concerned

For its ambitions of being a world leading industry, Europe must strive to gain a leading position in R&D. As indicated in the answers, the experts are not too convinced of the current European position.

In the ManVis survey, the innovation structure was analysed in several statements on clustering, location of R&D in relation to manufacturing sites, development around the

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clock (global development organisations), and the composition of the future workforce. We also tried to measure the expected performance in time for the industry.

Upon this, the experts were asked to identify the relative position in research, for the different regions. This was done for all relevant statements.

S018 Joint R&D Competitive production sites in Europe are almost exclusively contained within technology clusters where pre-competitive R&D activities between various neighbouring industrial partners and research organisations are common.

75% of the experts judge the statement to be important which puts it fairly high in the statement order. The government representatives and the SME representatives attrib-ute slightly more importance to the statement than experts from larger companies. The interpretation is that smaller companies and governments put more emphasis on this kind of structure than the rest of industry.

A question related to competence clustering is the ability for SME-clusters to compete on the world market. The issue in itself has many dimensions: the technical dimension on how to arrange support systems to make cooperation feasible, the intellectual di-mension − how to afford a level of skill which makes global competition possible, and the question of how to arrange the business agreements between the partners.

The detailed issues were not discussed in the survey, but a more general statement, was used:

S022 SME Networks Networks of specialised SMEs compete successfully in the global marketplace.

S022 is almost on top in importance with 90% of the experts. On the question when, the phenomena must be seen as imminent, 70% believe it will happen before 2015.

The effects are seen bettering an improved competitiveness (95%), higher employment (83%), and better living and working conditions (58%).

The very high estimations of SME clustering could be interpreted either as a way for existing European SMEs to survive or as a general believe in the concept as the way for the future. Regardless of the interpretation, SME clustering is of very high impor-tance.

S040 R&D near Production R&D within companies is, as a rule, performed close to manufacturing sites.

Statement S040 is one of the most often heard in the discussion about offshoring (at least in Scandinavia), with the meaning "if we loose the production, we will loose the intellectual parts of the industrial operation, too."

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In the survey, surprisingly many of the experts (20%) are of the opinion that the state-ment never will come true, thus indicating that there is less need for a geographical co-location of R&D and production than often argued in the debate.

Academic research has indicated a strong relation between lead markets and the loca-tion of R&D. The quality and size of the local research establishments are probably also of decisive importance for global companies' choices of research sites.

R&D can be organised on different patterns. In some industry sectors, it is getting more and more common to locate high risk, high potential R&D to outside SMEs. The opin-ions of the experts were checked in statement S025.

S025 Innovation Competence – Big Companies vs. SMEs Innovation in big multinational companies is exclusively achieved by corporate venturing activities with spin-offs or by the acquisition of innovative SMEs.

Despite the rather radical formulation of the statement, it is considered one of the most important (83%) while it is seen only in a very distant future (55% after 2015). The ef-fects on competitiveness are considered very high (86%) while the barriers are seen in education and R&D funding.

The experts are very convinced of the ability of the SMEs to be successful in both R&D and general global competition - if the structures are setup in a suitable pattern. This will put pressure on public funding for R&D, since the economic capacity to invest in R&D is probably lower among the SMEs than in the large global companies.

S051 24 Hours Economy

Due to the 24 hours economy, research, engineering and design departments work around the clock.

Statement S051 has a certain international aspect since it is reasonable to expect 24 hour development to be performed in virtual design departments with physical locations around the globe.

27% of the experts don’t believe it will happen, and among those who believe in it the expected timeframe is 2015-2020.

It can also be noted that several global companies have tried the idea of R&D around the clock and around the world, but abandoned the concept. Other measures to im-prove the speed in development are used instead.

On the composition of the future workforce, the following statement was used:

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S053 Reduction of Unskilled Labour Knowledge based manufacturing leads to a share of less than 10% of unskilled labour in the workforce.

The statement is international in the sense that a transformation of the skill level in manufacturing to an engineer level would make it less favourable to do offshoring to low cost regions where the normal workforce can be expected to have a lower educa-tion.

79% of the experts judge the statement to be important but to come true only in the distant future. The main barrier is − as expected − education.

In the survey, the need for performance was tested in the statement:

S063 Product Development Time Time from product design to full volume production is reduced to 6 months for cars.

The car industry is probably the most refined production industry − with a complicated product, produced in large volumes under severe pressure for cost. The car industry is also in accelerating pressure for a continuous product renewal when the market win-dow for each model is shrinking to a few years.

Yet, the statement which indicates a tremendous improvement in agility for the whole industrial system is accepted as becoming a reality by 74% of the experts and judged to be very important by 53% which is very high. The absolutely dominating barrier is technology − as indicated by 71%.

The conclusions are that lead times are seen as very important, that it is most of all a question of technology, and − by the difference in answers on the 24 hour economy − the two statements are not connected in the experts' minds.

By logical reasoning, it can be deduced that the future top industrial performance will be decided by the quality of a limited number of experts, rather than the general educa-tional level for the total workforce.

4.4.2 Comparing Europe Globally on Innovation Systems

The experts were asked to indicate the leading region in research on every relevant statement in the survey. The relative positions can be seen in the graph below.

The opinions expressed in the graph, are worth considering, especially taking the ambi-tions in the Lisbon Agreement, the strategy in Manufuture, and the ManVis experts' faith in automation into account.

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Figure 4-1: R&D leadership, statements where Europe is considered to be in the lead by the ManVis experts

While all those sources indicate the need for a highly automated, very agile industry, able to compete on the leading edge on a global base, acting under more ambitious environmental and working conditions than our competitors, the ManVis experts are of the opinion that Japan is leading in research of all aspects connected to automation, while the USA is ahead in new technologies like nanotechnology and in new business structures. Europe is considered to be ahead in all environmental fields, which is good and in line with the strategies, but is it enough?

Environmentally friendly technologies for production processes with zero waste and zero emission.(S011)

Manufacturing processes are altered to cope with renewable resources.(S013)

50% of all plastic is recycled.(S100)

80% of car parts are re-manufactured or reused to reduce waste and increase resource efficiency. (S061)15% market share for biodegradable plastics due to inex-pensive production and improved properties. (S098)

Manufacturing systems, where people aged 60 and above can work without difficulty, are in widespread use.(S008)

Because of the wide spread use of near net shape technology, finishing operations per product have been reduced and are carried out within one machine.(S067)Intelligent systems and sensored tools control and adjust injection-moulding parameters automatically(S095)

Trains are fast enough to compete effectively with air transport across the EU (S062)

Multi functional laser machines (S075)

Location (S085)

Composite materials processing (S101)

Laser for joining (S073)

Moulding of micro products (S096)

73%

68%

67%

64%

53%

49%

47%

44%

43%

40%

39%

39%

38%

37%

37%

37%

36%

13%

17%

19%

10%

30%

26%

28%

34%

27%

34%

4%

29%

46%

47%

33%

34%

13%

14%

14%

24%

17%

24%

12%

23%

32%

25%

56%

32%

12%

16%

30%

29%

23%

0%10%

20%30%

40%50%

60%70%

80%

44%

Europe USA Japan China All others

All complex products will be treated individually through-out their lifespan by the manufacturing system.(S014)

Processability of high performance composite materials has been substantially improved and are easy to recycle.(S099)

Rapid-tooling technology is used extensively in order to shorten product development time and ease customised products.(S074)

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4.5 Conclusions and Recommendations In the beginning of the chapter, we gave a definition of different kinds of ongoing relo-cations of manufacturing operations. The answers from the ManVis experts are not altogether conclusive on the timeframe for the effects of relocations and we can also trace some contradictions in the answers on related statements, as we have indicated in the text.

The effects on employment from “offshoring”

It is not likely to expect any higher employment rate from manufacturing in Europe, offshoring and higher productivity from increased automation, will cover for all foresee-able expansions in volume.

• The ManVis experts are convinced that the traditional sectors will be subject to a high level of offshoring

• Despite a strong belief in a profitable automation in the traditional sectors, 80% of the industry is still expected to be relocated outside Europe in a foreseeable time.

• The ManVis experts are not consistent in the opinions, but the general impres-sion is that more jobs in manufacturing will be relocated to other regions, as long as the relative differences in cost levels remain – so the big question is: Will Europe remain so competitive that we can maintain our relatively high sala-ries in production?

Given their fast rate of growth it cannot be taken for granted, that India and China will remain low wage regions for qualified work, since both show aggressive ambitions to grow into heavily industrialised regions on a much more sophisticated level than today. The prognosis is that China will become the largest economy of the world by 2015 (Morgan Stanley 2005). The estimates of the timeframe are different considering sources and the expectations of a continuation of growth. Nevertheless, the main mes-sage is: If the economic development in those regions will continue in such a speed, the low wage profile for qualified personnel will come to an end.

• Offshoring will only cease if our high relative level for labour costs in relation to competing regions will change. In the case of India and China, such develop-ment is likely in 10 to 35 years, but it is likely that other low cost regions will emerge on the market to put pressure on costs for Europe as well as India and China.

• Increased productivity is not only the result of automation. The reduced volume of work in final assembly for cars (reduction by a factor of 5 to 10 depending on

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methods of measurement; in some examples from 120 hours to 10 hours) is more due to changes in product design for better utilisation of modules, fewer parts, and simplified assembly procedures than to automation.

• The number of jobs in manufacturing is globally shrinking continuously. Produc-tivity is growing faster than the expansion of demand.

Can low cost labour competition be expected to remain on the current level? We asked for a number of possible reasons which could alter the balance between low cost far away producers and high cost producer close to their market. Most experts believe that the difference will be reduced. The possible conclusion is that in a foreseeable future all these factors in combination will ease off the worst levels of competition. Production will be more automated due to a gradual development of more cost effective automa-tion equipment. Wages will go up in China and India even if they are the most populous regions in the world. Indeed, Morgan Stanley estimates that they will have a per capita income in par with the global average within two decades. Product development will shrink the direct labour content in products even further. Maybe offshoring for cost rea-sons is a temporary phase after in the long run.

Purchasing power and lead markets

The local purchasing power and establishment of “lead markets” seem to be a growing factor for the allocation of global companies.

• The relocation of industry and jobs is not only due to costs. Lead time is a factor of growing importance, especially when the number of product variants is ex-pands. The retail dealers are striving to reduce the level of stock, and there is to our experience a tendency to choose suppliers with the ability to accept short delivery times and “rush orders”, for certain companies’ reduction of delivery times can have a revolutionary impact on sales.

A recent investigation by the Swedish trade unions, SIF, on the relocation of jobs from Sweden, revealed that a not negligible part of the jobs exported from Sweden, had gone to regions which are not known for low production costs but are characterised by a high level of purchasing power and choosy customers.

The favourable position for Europe in design and trademark development is not cov-ered in the ManVis study specifically, but is probably a very strong factor for establish-ing and strengthening Europe as a true lead market for many product segments − a development attracting jobs from other regions and acting as an opposite movement to offshoring.

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A requirement for being a lead market is to have large segments of consumers with spending power. Therefore, a possible slowdown of future growth due to an aging population becomes a threat to our aspirations of acquiring a lead market recognition.

Outsourcing and development of the industrial system

Offshoring and outsourcing are structural changes, which are both high on the impor-tance ranking by the ManVis experts. Due to the far gone development of well defined and documented procedures, it has become easier to relocate industries and manufac-turing plants in particular. Companies which are late in reducing the dependence of local knowledge on the production locations are more likely to outsource major parts of the operation.

Outsourcing is from a nationalistic point of view probably a more problematic structural movement than offshoring, since the control of the intellectual content of the operation is relocated.

The productivity has been more enhanced in production than in product development, due to an increased efficiency and automation. As an effect of this, the relative impor-tance of variable costs is declining and the economies of scale are increased. Many industries accordingly are trying to break the vertical ownership, moving into horizontal ownerships instead. When the value of knowledge is increasing and becoming the most important factor for industrial success, the companies try restructuring to maxi-mise the utilisation of the created knowledge. The restructuring to maximise utilisation of knowledge and reduction of transaction cost due to the ongoing ICT development is an explanation for the current wave of company fusions and outsourcing. The creation of tools and systems for knowledge administration and distribution and for control of the logistics will be a crucial success factor for survival.

Production itself is becoming a less and less of a focal part of the industrial operation, while the interface to the customer and the interoperation with the customer to consti-tute an agile value chain, able to move closer to mass customisation, is growing in im-portance. The agile company must embrace many and frequent product changes as well as numerous models and options, thus leading to a need for very efficient change over procedures.

The ManVis experts expect the development time for cars to be reduced to six months within ten years; Ford has recently reduced the development time to 18 months and is aiming for 10 months. DaimlerChrysler has indicated a successful reduction of design time from 16 to 3.5 months.

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The innovation system is the core of global competition

As an effect of fierce competition and declining margin costs and increasing develop-ment costs, more and more industrial sectors are truly globalised.

A majority of the ManVis experts believe in heavy automation as a way to counteract offshoring. But at the same time the experts identify Japan as the research leader in almost all issues concerning production.

Equipment for automation can be bought on an open market by any region as can be seen in many modern Chinese industries. It is therefore hard to envision how Europe should be able to establish a leading position in the implementation of automation with-out having a leading position in development of automation.

When analysing the answers the ManVis experts have given on regional leadership in different research and development areas, a clear pattern surfaces. The fields that Europe is seen as the leader in are all issues concerning environmental protection and sustainability. Japan leads in most issues on production and the USA in most issues on new technologies. Although the estimated position in research, expressed by a rela-tively small selection of experts, should not be exaggerated in value, the question arises if Europe could do more in order to attract the global industry to locate the core functions for the future to our region.

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Policy recommendations

(1) The experts express a strong believe in automation as a way to keep industrial operations in Europe, but the opinions on Europe’s position in research do not match. Europe ought to consider how to gain a more advanced position in R&D on automation.

(2) The experts also send a clear message that the industry position in the global competition will be based on the performance of the total value chain, the indus-trial system, and its speed of renewal and integration which therefore should also be considered a focussed development area. The emphasised issue, as ex-pressed by the experts, is the speed of change. Europe must try to act strategi-cally in order to ease flexibility on such a change capacity that lies in our favoured path of development.

(3) From the answers on several statements, it can be concluded that the expecta-tions for more jobs on the factory floor are more or less nonexistent, Europe will either have to automate or offshore and in any of the cases the less advanced jobs will disappear. The focus should therefore be on attracting the core opera-tions of the global companies, which often means staying or becoming a lead market.

(4) The ManVis experts are convinced of the importance of SMEs and of networked SMEs but show very limited interest or expectations for an economy based on lo-cal production. The observation is that SMEs must go global and society should act to establish platforms which are supporting SMEs entrance into the global market.

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5 Manufacturing and its Contribution to Environmental Sustainability

Authors: Gerald Jan Ellen and Maurits Butter (TNO)

5.1 Introduction and Outline of the Chapter As was shown in the previous chapters, manufacturing has an impact on a vast num-ber of areas and society in general. The manufacturing industry provides products, creates employment and contributes to technological development and innovation (EC 2001) Next to this economic impact, manufacturing and consumption of the produced products also have an impact on the environment.

Both, the economic impact and the environmental impact, are of importance to the EU. The reason for this is that on EU-level both subjects can contribute to bridging the “Lis-bon” objectives1 (growth, innovation) and the “Gothenburg” priorities (sustainable de-velopment) (COM 2001). In the medium to long-run, it is believed, recognising the need for more environmentally sustainable ways of production, transport and consumption can have the potential to avoid or mitigate trade-offs between economic growth and environmental quality.

This chapter will focus on the contribution of the manufacturing industry towards envi-ronmental sustainability. It will do this by analysing the different statements that can tell us something about the contribution of the manufacturing industry to environmental sustainability. This will be achieved by first defining the concept of environmental sus-tainability. Next the relevance of environmental sustainability for the European manu-facturing industry will be discussed, followed by an elaboration on the future of manufacturing and environmental sustainability, based on existing foresights. The out-come of this discussion will be used to mirror the outcome of the Delphi study. The chapter will finish with a conclusion.

1 Lisbon Summit held on the 23rd-24th of March 2000. The Summit called for a new method of "open co-ordination" to promote sustainable economic growth with more and better jobs and greater social cohesion.

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5.2 Relevance of Sustainability for the Future of European Manufacturing

In 1987 the Brundtland Report, also known as Our Common Future (World Commis-sion on Environment and Development 1987), pointed out the urgency of making pro-gress toward economic development that could be sustained without depleting natural resources or harming the environment. The report provided a statement on sustainable development, defining it as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. The report showed three fundamental components to sustainable development: environmental protection, economic growth and social equity. Since 1987 the concept of sustainable development has become a major point of attention in policy, politics and economics. When applying the concept of sustainable development to the manufacturing industry it is clear that there are economic, social and environmental impacts. In other chapters the economical and societal effects of manufacturing have been discussed. Therefore, in this chapter the attention will be focussed mainly on the environmental impacts of the manufacturing industry. Although manufacturing is often linked to technology, and thus one could expect that this would be the only point of attention, when it comes to the environmental impact we would like to point out that also the transport, consumption and eventual waste of the products can, indirectly, have a large impact on the environ-ment.

As stated in the introduction, production systems have considerable economic, social and environmental significance. For example if we look at the economic and social im-pact, manufacturing represented about 21% of the gross value added in the EU in 1998. In the same period manufacturing output rose 13% in the EU. Manufacturing employs almost 30% of the European workforce (EC 2001). Next to these social and economic effects, the environmental impact is not to be neglected. In the third assess-ment of Europe’s environment the European Environment Agency (EEA) points out that the “manufacturing industry is responsible for a wide range of environmental pollution: emissions to air, emissions to water, contamination of soil and the generation of wastes. Moreover, industrial activities are connected to disturbances to landscapes, and the generation of noise and hazards”2 This may seem to be very negative, but the same report also points out that “around 75% of industrial pollution indicators (air emis-sion, water and energy use) show improvement between 1992 and 1999”. So clearly

2 The same report also points out that the actual environmental impact is very difficult to

connect to the manufacturing industry as the data is not complete. Another issue is that for example in a number of countries energy production is also connected to the manufactur-ing industry.

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policy, society and the manufacturing industry itself are paying attention to the envi-ronmental impact of the manufacturing industry.

In the FutMan report on industrial approaches (Flanagan et al. 2003) a number of trends towards sustainable manufacturing are identified based on the work of Howes, Skea and Whelan (1997). The report states that the following clear trends are distin-guishable:

• The shift in regulatory attention from problems associated with production (the “traditional” problems of pollution control) towards problems related to con-sumption and post-consumption (problems of managing consumer waste);

• The trend that companies do try to point out that the environment is an impor-tant variable in their decision-making process when it comes to activities per-ceived to be under threat by pressure groups and policy-makers. However, most smaller firms are lagging behind (or are “completely untouched”) by the changes taking place in larger companies;

• The commercial possibilities of sustainability are becoming more and more im-portant. For example ‘dematerialisation’ – the progressive reduction in the ma-terial intensity of production – is not only driven by environmental sustainability concerns but also by commercial sustainability concerns;

• Many western European countries are changing from a production to a service economy. The traditional high-impact sectors are no longer necessarily major contributors to economic growth and in some cases are in decline. Environ-mental regulation which adds to the costs of these sectors may hasten this change (and clearly this has social and political impacts);

• Finally, Howes, Skea and Whelan, point out that the sustainability agenda is likely to continue to be driven forward by unpredictable “shocks” and crises. By their nature, shocks are difficult to predict but suggest that companies should at least put in place strategic processes that can be used to accommodate and negotiate “unexpected social demands”.

• A last trend or paradigm shift, which is not identified by Howes, Skea and Whe-lan, is that the emphasis is no longer on the removal of pollutants from an al-ready damaged environment, but on the need to reshape industrial process technologies to prevent pollution at the source (OECD 1998), this also includes subjects as ecodesign and product-service concepts (www.suspronet.org).

Based on these trends, the pressure on and possibilities for the manufacturing industry to produce in an environmentally sustainable way are growing. Governments (regula-tion), non-governmental organisations and worried customers (economic pressure) are

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more and more demanding and expecting that products and services are produced and delivered in a responsible, safe and sustainable way. But also the possibility to add to shareholder value by producing in an environmentally sound way, and thus preventing possible liability claims or protests, could actually help the manufacturing industry to grow in the future. The recognition of the importance of sustainability is also shown by a continued and significant rise of sustainability reporting to approximately half of the multinationals in the Fortune Global 250 (Kolk, 2003).

5.3 Overview of Delphi Results

5.3.1 Demand Side Issues

To get an idea of the future and sustainability, it is interesting to show some data from the Delphi study. In the beginning of the Delphi study the respondents were asked to answer the questions displayed in the box below, representing their thoughts on the demand side of sustainability.

Questions on future prospects for 2020 (source: MANVIS, Delphi Survey):

Which of the following general future prospects for 2020 best corresponds to your personal expectations?

Concerning:

A) Consumer Behaviour:

• Consumers reject increased prices for "sustainable" products.

• Strong perceptions by consumers of community values, environmental con-cerns and social goals create new markets for sustainable products and ser-vices.

• Other opinion

• No opinion

B) Sustainable Policy Coherence:

• Global, European and regional governance bodies promote sustainable de-velopment by integrated policy actions that include market incentives and regulations.

Global trade regulations focus on ensuring free competition on global markets. Sus-tainability standards are set on a regional level and differ widely throughout Europe. Local government struggles with the power of multinational manufacturing compa-nies.

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Concerning the first question, 63% of the respondents think that “strong perceptions by consumers of community values, environmental concerns, and social goals create new markets for sustainable products and services”. Another 25% believe that consumers reject increased prices for "sustainable" products. When it comes to the second ques-tion about ‘Sustainable Policy Coherence’, the answers show that 50% of the respon-dents believe that global trade regulations focus on ensuring free competition on global markets. Sustainability standards are set on a regional level and differ widely through-out Europe. Local government struggles with the power of multinational manufacturing companies are similar”. 39% believe that “global, European, and regional governance bodies promote sustainable development by integrated policy actions that include mar-ket incentives and regulations” is the most likely to happen.

It appears from this data − at least from the demand side of the market − that sustain-ability will be an important issue for manufacturing in the years to come. However, from the (liberal) policy and market perspective the majority of the respondents believe that the accent will be on free competition and that sustainability will mainly be an issue on a regional level. This creates some discrepancy with the first question or, if the demand side really adheres to the concept of sustainability, it can create a synergy effect. The latter leads to “a road less travelled” towards sustainability of which the FutMan report speaks so poetically.

In the following paragraphs, the results from the ManVis Delphi survey will be de-scribed, also in relation to the trends described above. First an explanation will be given which statements were selected for this chapter and why. After that, the state-ments will be described based on the Delphi results.

5.3.2 Relevant Statements

For this chapter a number of statements were selected that can have some impact on environmental sustainability. The criteria for this selection were:

• Efficiency effects on the use of materials and energy sources;

• Substitution effects concerning materials and energy sources which have less environmental impact than conventional materials/energy sources;

• Reduction of the emission of pollutants.

Based on these criteria the following statements were selected:


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S011 Integrated Sustainable Manufacturing Environmentally friendly technologies will be integrated into all production proc-esses, so that zero waste and zero emission manufacturing is achieved without using technologies that reduce factory emissions at the end of the manufacturing process (filters etc.).

S013 Renewable Resources Manufacturing processes are significantly altered to cope with the specific char-acteristics of renewable resources (materials and energy).

S024 Sustainable Decision Making Social, environmental and economic aspects are given equal importance in com-panies' decision-making processes.

S029 Number of Materials Reduced The number of different materials in each product is reduced by half.

S031 Used Parts/Remanufacturing

Most products contain used parts that have been remanufactured.

S032 Companies Take Back Products Companies generally take back their products and take care of their end-of-life treatment.

S058 30% of European Cars Are Hybrid Cars Hybrid (combined electric and internal combustion engine) cars have a 30% share of the European Union car market.

S059 10% of the Cars Have Fuel Cells 10% of new cars produced in Europe are fuel cell cars with hydrogen stored on board.

S061 Car Parts Are Reused/Remanufactured 80% of car parts are re-manufactured or reused to reduce waste and increase resource efficiency.

S62 Trains Compete with Air Transport Trains are fast enough to compete effectively with air transport across the EU.

The discussion of these statements considers the aspects: importance and time of re-alisation, effects, barriers, and the level of R&D. Then also the different expert charac-teristics and organisational backgrounds will be taken into consideration. The discussion of the results will be finished by giving some insight into the differences be-tween the statements for the different countries.

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Importance and time of realisation

To analyse the importance of the statements according to the experts, the percentage of the experts who assessed the statements of high importance (value=1), or important (value=2) was taken. This data, which was used for the Y-axis, was put into one figure together with the data that was available concerning the time of realisation of the statements, the X-axis. To reach one point in time the mean of the time span in which the statement would be realised according to (accumulated) 50% of the respondents was taken.3 This resulted into the figures displayed below.

The statements with the highest importance that will be expected to be realised the earliest are "Renewable Resources" (S013) together with "Car Parts Are Reused/ Re-manufactured" (S061). Both statements are focussed on adaptation of the production and products to facilitate the use of renewable resources. "30% of European Cars Are Hybrid Cars" (S058), "10% of the Cars Have Fuel Cells" (S059), and "Integrated Sus-tainable Manufacturing" (S011) are also considered important statements but with a longer time until realisation. "30% of European Cars Are Hybrid Cars" (S058) and "10% of the Cars Have Fuel Cells" (S059) both concern alternatives for the combustion en-gine while "Integrated Sustainable Manufacturing" (S011) concerns zero-waste and zero-emission manufacturing. A noteworthy point of attention is that the level of exper-tise of the experts assessing statements S058 and S059 is relatively high (24% and 21%).

Figure 5-1 shows that the statements on environmental sustainability will probably be realised by 2020. This could mean that manufacturing will make an important step to-wards sustainability within the next 20 years. One point of attention is that concerning statements S004 and S029, 20% or more of the experts point out that they do not know if this statement will ever happen.

Concerning the importance of the statements on sustainability, it is obvious from the figure above that the statements are all deemed important by at least 60% of the ex-perts. This could mean that sustainability is a very important issue, but it could also mean that the statements represented in the figure above are issues on which some kind of consensus, or accepted inevitability, has been reached. But this would be a subject for further research.

3 Due to the large percentage that estimated that statements S031 (34%) and S032 (28%)

were about to happen before 2010 these statements were corrected.

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Figure 5-1: Importance and time of realisation dealing with environmental sustainability – assessment by all experts

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Barriers

The most important barriers that were identified for the selected statements are mainly technical feasibility ("Manufacturing with Living Organisms" (S004), "Number of Materi-als Reduced" "S029", "Used Parts/Remanufacturing" (S031), "10% of the Cars Have Fuel Cells" (S059), "Renewable Resources" (S013), "Integrated Sustainable Manufac-turing" (S011)) and economic viability ("Sustainable Decision Making" (S024), "Com-panies Take Back Products" (S032), "30% of European Cars are Hybrid Cars" (S058), "Car Parts are Reused/Remanufactured" (S061), "Trains Compete with Air Transport" (S062), "Renewable Resources" (S013), "Integrated Sustainable Manufacturing" (S011)). For statement S024 "Sustainable Decision Making", two other barriers are of importance: social acceptability and education/qualification. This is interesting to see, as statement S024 is specifically aimed at sustainable decision making in companies. The fact that these two barriers are named can mean that more education is necessary for managing sustainability within companies. The possibility that the actual implemen-tation of sustainable decision making could place some kind of burden on companies could be an explanation for the assessment of social acceptability being identified as a barrier. For "Manufacturing with Living Organisms" (S004) and "Number of Materials Reduced" (S029), the lack of R&D funding is seen as an important barrier; this could be explained with the technical and experimental nature of these statements. The barrier concerning EU legislation is only named as a major barrier in one of the statements: "Companies Take Back Products" (S032). Based on this, one could say that legislation is not a major barrier.

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Figure 5-2: Main barriers for statements dealing with sustainable development – as-sessment by all experts

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Figure 5-3: Main effects for statements S004, S011, S013, S024, S029, S031, and S032 – assessment by all experts

Effects

Concerning the effects of the selected statements, Figure 5-3 shows that the increase of effects will be on environmental quality and living and working conditions. The ex-pected increase in environmental quality is high, ranging from 79% (S004 − "Manufac-turing with Living Organisms") to 98% ("Car Parts Are Reused/Remanufactured" (S061) and "Integrated Sustainable Manufacturing" (S011)). Most of the experts be-lieve that for all statements, the competitiveness will increase, ranging from 40% ("Companies Take Back Products" (S032)) to 85% ("Manufacturing with Living Organ-isms" (S004)). However, there are also some who believe that competitiveness will decrease, but only for "Companies Take Back Products" (S032), "Sustainable Decision Making" (S024), and "Integrated Sustainable Manufacturing" (S011) 20% or more of the experts believe this will happen. The assessments of the effects of the statements on employment are more ambiguous than this. Although for some of the statements there is a substantial increase of employment ("Sustainable Decision Making" (S024) and "Companies Take Back Products" (S032)), the increase is visibly less than for the other effects. The experts asses that the realisation of four of the statements will result in a decrease of employment with more than 20% ("Manufacturing with Living Organ-isms" (S004), "Renewable Resources" (S013), "Sustainable Decision Making" (S024), and "Number of Materials Reduced" (S029)). Finally, the effects on regional differences

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will increase; three statements are assumed to result in an increase with more than 40% ("Manufacturing with Living Organisms" (S004), "Integrated Sustainable Manufac-turing" (S011), and "Renewable Resources" (S013)). Statements S024 "Sustainable Decision Making" and S062 "Trains Compete with Air Transport" are the only state-ments which show a decrease of more than 20%.

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Figure 5-4: Main effects for statements S058, S059, S061, and S062 – assessment by all experts

Level of R&D

For the statements "Sustainable Decision Making" (S024), "Used Parts/ Remanufactur-ing" (S031) and "Companies Take Back Products" (S032), there is no data available when it comes to R&D levels. The highest levels of R&D for the statements "Manufac-turing with Living Organisms" (S004), "Integrated Sustainable Manufacturing" (S011), "Renewable Resources" (S013), and "Number of Materials Reduced" (S029) are di-vided between Japan, the USA, and Europe. Other countries are hardly ranked (rang-ing from 1% to 2%) as having the highest level of R&D concerning these statements. "Manufacturing with Living Organisms" (S004) has the highest level of R&D in the USA, while for "Integrated Sustainable Manufacturing" (S011) and "Renewable Resources" (S013), the level of R&D is assessed by the experts to be the highest in Europe. When it comes to statement S029 "Number of Materials Reduced", the highest level of R&D is more diverse and is divided by the three geographical regions.

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The statements on the transport sector show a similar geographical dispersion. Hardly any regions outside the USA, Japan, and Europe are seen as having the highest level of R&D. Japan has the highest level of R&D for the statements "30% of European Cars are Hybrid Cars" (S058), "10% of the Cars Have Fuel Cells" (S059) and "Trains Com-pete with Air Transport" (S062). While Europe has the highest level of R&D for the statement “Car Parts are Reused/Remanufactured” (S061). A possible reason for this outcome is that Japan and the USA with large and innovative car companies like Toy-ota and General Motors have a larger budget for R&D than ‘smaller’ European car companies.

Differences in assessment between experts’ characteristics

The assessment of the importance of the statements is not influenced by the experts’ characteristics. For the time of realisation of the statements this is different. According to experts of R&D industry and university, general managers and operation managers, the statements "Sustainable Decision Making" (S024) and "Number of Materials Re-duced" (S029) will be realised later than according to government officials. The oppo-site goes for the statement "Car Parts are Reused/Remanufactured" (S061) which government officials assess to be realised later than the experts of other occupations do.

When it comes to differences in the assessment of the effects of the different state-ments, the government officials tend to estimate the effects to be lower than the other occupations do. The employment effects of "Integrated Sustainable Manufacturing" (S011) are estimated higher by the R&D-universities than by government officials. Also the effects on regional differences for the statements "Sustainable Decision Making" (S024), "Used Parts/Remanufacturing" (S031), and "Companies Take Back Products" (S032) are estimated less by government officials than by R&D in industry and univer-sity, general managers, and operation managers. For the statements S032 "Compa-nies Take Back Products" and S058 "30% of European Cars Are Hybrid Cars", this also is the case when it comes to effects on living and working conditions.

An exception to the relatively low assessment of government officials is "Used Parts/Remanufacturing" (S031) where the effects on competitiveness are assessed lower by R&D in industry and university, general managers, and operation managers than by government officials.

The differences in the assessment of effects between male and female experts were not high. Although for the statement "Used Parts/Remanufacturing" (S031), the female experts believed that this statement would have a strong effect on living and working conditions (61%) while male experts believed this to be less so (43%).

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When it comes to barriers, there are some differences between the characteristics of the respondents and their assessment of the barriers. The first difference is on EU-legislation. For the statements "Integrated Sustainable Manufacturing" (S011) and "Sustainable Decision Making" (S024), government officials assess these barriers to be lower than the other occupations. The opposite goes for social acceptability which the general managers asses to be higher than the government officials. Concerning eco-nomic viability there are not many differences but concerning S058, R&D in industry and university and general managers expect economic viability and technical feasibility to be a higher barrier than operation managers and government officials (72% and 73% versus 52% and 50%).

Lack of R&D funding is assessed higher by R&D in industry and university, general managers, and operation managers than by government officials for the statements "Companies Take Back Products" (S032), "30% of European Cars are Hybrid Cars" (S058), and "Car Parts are Reused/Remanufactured" (S061). Concerning the state-ment "30% of European Cars are Hybrid Cars" (S058), this is surprising to see be-cause when it comes to the barrier of technical feasibility, the R&D in industry and university, general managers, and operation managers expect technical feasibility to be a less high barrier than government officials (56%, 61%, 52% versus 71%).

When it comes to barriers, there is little difference between the assessment of male and female experts. Exceptions are "30% of European Cars are Hybrid Cars" (S058) and (S059) "10% of the Cars Have Fuel Cells" where there is a clear difference be-tween males and females when it comes to the barriers social acceptability (male 12% and female 25%) and economic viability (male 69% and female 44%). The same goes for the statement "10% of the Cars Have Fuel Cells" (S059) where female experts as-sess legislation to be less of a barrier than male experts (3% and 17%).

The largest differences can be discerned when analysing the assessments of the geo-graphical regions were the level of R&D is the highest for a certain statement. Govern-ment officials assess the level of R&D in Europe to be lower than in the USA and Japan especially for the statements on transport (S058, S059, S061, and S062). It is interesting to see that a similar picture appears when female and male experts are compared, where the female experts tend to asses the level of R&D in Europe to be lower than male experts do.

Differences in assessment between organisation characteristics

As shown in the previous paragraph, a difference between assessments and occupa-tion does exist. Because the categorisation of occupations is similar to the organisa-tional categorisation one would expect a similar outcome but this is not the case. For

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the general statements − "Manufacturing with Living Organisms" (S004), "Integrated Sustainable Manufacturing" (S011), "Renewable Resources" (S013), "Sustainable De-cision Making" (S024), "Number of Materials Reduced" (S029), "Used Parts/ Remanu-facturing" (S031), and "Companies Take Back Products" (S032) −, no significant differences can be discerned. This is somewhat different for the statements on trans-port.

The only statement that shows a difference in the assessment of importance is "10% of the Cars Have Fuel Cells" (S059). This statement is less important and will be realised later according to government organisations in comparison to R&D and companies. When it comes to effects, companies and R&D believe that "30% of European Cars Are Hybrid Cars" (S058) will increase living and working conditions and competitiveness. Government organisations think less so. Concerning statement S062, R&D and re-search/companies think that differences between regions will grow. This is contrary to the assessment of government and public authorities.

The most important differences when it comes to the assessment of barriers are the following: "30% of European Cars are Hybrid Cars" (S058) where companies believe that lack of R&D might be a barrier while government thinks less so. The opposite ap-plies to "10% of the Cars Have Fuel Cells" (S059) where technical feasibility will be a high barrier according to government officials. In the case of "Car Parts Are Re-used/Remanufactured" (S061), government experts believe that EU-legislation will be a high barrier while R&D and companies do not assess this to be so high. The opposite goes for lack of R&D funding. For "Trains Compete with Air Transport" (S062), R&D and Research/companies think that a lack of R&D funding might be a barrier while government and public authorities do not think so.

Finally, the differences in the assessment of R&D level are also seen here: the level of R&D in the EU is assessed lower than USA and Japan by government organisations (this applies to "30% of European Cars Are Hybrid Cars" (S058) and "10% of the Cars Have Fuel Cells" (S059)).

Differences in assessment between states

To compare the differences between Member States concerning the selected statements, importance and their current position in Europe were taken as the two indicators to position the different countries towards each other. Figure 5-5 shows that when it comes to the assessment of the importance of the statement between Member States, there is a concentration of importance towards the New Member States and Turkey. This could mean that especially in the countries were the need to work on environmental sustainability is high also the importance of it is recognised. But this

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does not always seem to be the case, as for example Austria and France are also giving high importance to the selected statements. If the outcome for the importance on transport is analysed, it is clear that concerning this sector for some countries there are still important goals to achieve concerning environmental sustainability, for example The Netherlands and Norway.

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Figure 5-5: High importance of selected statements per country – assessment by all experts

When looking at the second indicator, the current position of the country relative to Europe, many of the countries do not see their country as a frontrunner in Europe. In the experts' view, the availability of the necessary knowledge to realise the statements seems to be clustered in Sweden, Denmark, and the UK. Concerning the statements on transport, especially Germany comes forth as a frontrunner in this sector. This could be explained by the large automotive industry which is located in Germany.

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Figure 5-6: Current position of your country in comparison to Europe – assessment by all experts

5.4 Conclusions

The goal of the ManVis study was to create powerful visions on manufacturing for the decades to come. Based on the analysis of the results of the Delphi study, the most important visions that can be seen when it comes to environmental sustainable devel-opment are:

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After 2010 environmental sustainability will be realised

Environmentally sustainable development is an important issue and will continue to be so. The majority of the experts who were consulted assess the statements that were selected on the subject as important/very important. Most important are statements on renewable resources/remanufacturing/recycling. The main barriers for these are tech-nical feasibility and economic viability. Social acceptability is not an issue here but when it comes to decision making based on the principles of sustainability, there are strong differences of opinion. The time of realisation will not be in the present but will be approximately between 2010 and 2020.

New Member States will make big leaps forward with environmental sustainability and create an atmosphere for innovation

For New Member States, the possibility to make steps forward on sustainability is clear. Political pressure concerning the reduction of environmental impact on these countries is higher than in the other Member States. Also the fact that many new (energy) infra-structures and technologies will be built in these countries makes it possible to use ‘state of the art technology’ and also creates an atmosphere of innovation as compa-nies could use experiences from these countries to improve for example their produc-tion processes, use of renewable resources, and transport systems. This also can lead to an economic impulse for the New Member States since a majority of the experts thinks that competitiveness will benefit from the developments in alternative energy resources concerning transport.

Economic viability and technological feasibility will be overcome by applying a system approach

The most important barriers that are named by the experts for reaching the statements are economic viability and technological feasibility. Although legislation is often referred to as a barrier by external sources, this is not an important issue according to the ma-jority of the experts. Economic viability and technological feasibility are strongly related to the demand side of the market. If the market is willing to pay a price than almost everything is possible. To deal with the barriers, it is important to look at the whole sys-tem of a certain sector but also to the interactions between sectors. This means design, production, use, and societal and political implications (including involving stake-holders) and also to be aware of the fact that sectors always interact. For example the changes in design, production, and the logistics of collecting and processing used and discarded products will have a substantial impact on the manufacturing industry, trans-portation companies, and design studios.

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6 Managing Knowledge in European Manufacturing Authors: Heidi Armbruster, Petra Jung-Erceg (Fraunhofer ISI) and Krsto Pandza (University of Maribor)

6.1 Introduction Contemporary business literature is largely flooded by constructs such as resources, competency, capability, dynamic capability, and organisational knowledge. A reader unfamiliar with a theoretical discourse is likely to find the existence of these often highly linked and similar constructs confusing and ambiguous. It does not, however, change the fact that knowledge and its different forms have entered the debate on existence and identity of organisations and redirected attention from products and markets to less tangible and, therefore, conceptually more challenging constructs.

For the High-level group of the European Commission, the shift from resource-based to knowledge-based manufacturing belongs to one of the main changes required for se-curing the future of the European industry. According to them, the industry can only survive with the capabilities to concentrate on high-added-value products and tech-nologies offering a broadened service range that fulfils worldwide customer require-ments. Therefore, the knowledge integration from all fields of manufacturing – from manufacturing networks down to the individual components of manufacturing sys-tems – is essential.

From a knowledge-based perspective, a manufacturing firm is conceptualised as social organisation specialising in creating, integrating, and co-ordinating dispersed knowl-edge (Kogut and Zander 1992, Grant 1996, Spender 1996, Tsoukas 1996). This view implies that organisations are better than "an invisible hand of the market" in creating and transferring knowledge. The knowledge itself, however, remains an ill-defined con-struct that resists a development of all encompassing definition. Discourse on knowl-edge is largely framed within two-dimensional categorisations such as tacit versus explicit, individual versus collective, and knowing-how versus knowing-that.

Perhaps the most widely debated one is the distinction between tacit and explicit knowledge. This debate is concerned with how well articulated or implicit the knowl-edge is. The credit for this categorisation goes to Polanyi (1958) who noted that knowl-edge is often highly personal, embedded in ideals, values, experiences and is therefore difficult to articulate and not easy to transfer. This knowledge labelled as tacit sharply differs from explicit knowledge which is easy to codify, store and transfer.

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The second categorisation is concerned with the level of analysis when knowledge is discussed. Some scholars (Grant 1996, Nonaka and Tekeuchi 1996, Hargedon and Fanelli 2002) adopt a stance about knowledge as being highly individual. This makes an individual a necessary and unavoidable unit of analysis, since organisational knowl-edge is an aggregation of individual knowledge. The second stream of thoughts is based on the assumption that every human behaviour as well as every activity is from the very beginning social in the essence. Brown and Duguid (2001) argue that knowl-edge is distributed among people and does not lie within individuals. Weick and Rob-erts (1993) emphasise a social system as a unit of analysis when explaining organisational performance with the concept of collective mind. This second stream of thoughts understands knowledge as much more that just a sum of individual knowl-edge.

The perspective on knowledge less often adopted refers to the Rayle (1949) distinction between knowledge-that and knowledge-how. This debate is akin to an everlasting debate about differences between theoretical knowledge and practical knowledge. Knowledge-that is comprehended as factual and declarative knowledge. As an antip-ode to knowledge-that, knowledge-how highlights the essential role of human action in knowing how to gets things done. This knowledge is explicitly concerned with enabling and facilitating a certain work or activity.

6.1.1 Knowledge Management and Competitiveness

Knowledge-based theory implies that knowledge is an ultimate source of a firm’s com-petitive advantage and as such it enters the strategic management debate. A predomi-nant view in strategic research advocates that performance asymmetries are accounted by different resources endowments (Wernerfelt 1984, Barney 1986) or by idiosyncratic and path-dependent histories in which firms accumulate capabilities to deploy, renew, and reconfigure resources in response to changes in the external envi-ronment (Teece et al. 1997, Eisenhardt and Martin 2000, Zollo and Winter 2002). Two different constructs appear in this debate. Resources can be tangible assets such as facilities and process technology, or intangible, such as patents, brand name, reputa-tion and trade secrets (Hall 1992). If a resource is understood as a more or less firm-specific asset to which a monetary value can be attached, a capability refers to a firm’s capacity to deploy and reconfigure resources. Makadok (2001) refers to a capability as a special type of a resource whose purpose it is to improve the productivity of the re-sources possessed by the firm. Capability is often discussed in terms of level. For ex-ample, Verona (1999) classified capabilities into functional and integrative capabilities. The former allows a firm to deepen its functional knowledge, such as R&D expertise, manufacturing knowledge, and marketing expertise. The latter binds different functional

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capabilities and additionally absorbs critical knowledge from external sources. Prahalad and Hamel (1994) coined the term core competency that is akin to Verona’s definition of functional capabilities.

A capability can be conceptualised as collectively held and action-oriented knowledge of how to make things done. It can also be defined as a system where dispersed knowledge is integrated. This integration is achieved by the co-ordination of different levels of knowledge. Dosi et al. (2000) assert that firms possess knowledge about how to do things and this knowledge cannot be disaggregated into individual knowledge.

A special type of strategically important knowledge is represented by the construct of a dynamic capability (Teece et al. 1997). It represents a high-level capability that enables companies to continuously reintegrate and accumulate knowledge to respond to shifts on markets. This concept is highly important since it emphasises the role of managers as agents in shaping the process of organisational knowledge (capability) development (Adner and Helfat 2003). The process of capability development is often described as self-reinforcing process of experiential learning (Gavetti and Levinthal 2000). The con-cept of dynamic capability implies, however, that managerial cognitive capabilities of making-sense of existent knowledge stocks and creative imagination of future business opportunities are of importance for the process of organisational knowledge develop-ment.

The knowledge and its different forms are salient construct in understanding of manu-facturing competitiveness, despite the fact that knowledge is not easily managed con-struct. Development of knowledge is always conjectural and involves a double conjecture (Loasby 1998) – about the kind of future it is reasonable to prepare for and about the appropriateness of particular capabilities to those kinds of futures.

Knowledge is of strategic importance because it is valuable, rare, imperfectly tradable and inimitable. Manufacturing companies will more likely to build and sustain its com-petitive advantage on knowledge than on tangible resources and products. This will ask from manufacturing companies to nurture existing knowledge as well as accumulate new knowledge that will make them capable of creating new business opportunities or respond to emerging opportunities.

6.1.2 Knowledge Management Activities

There are various approaches on understanding and managing individual and organ-isational knowledge processes within companies (e.g. Nonaka and Takeuchi 1994, 1996; Probst et al. 2000; Davenport and Prusak 1998; Leonard-Barton 1995, etc.). Most approaches consider the acquisition of knowledge, the development of knowl-edge, and the sharing of knowledge as core knowledge management activities. All ac-

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tivities are interrelated as, for instance, actions in knowledge acquisition will influence knowledge development and sharing. Developing, sharing and acquiring knowledge may be allocated to internal or external activities. While knowledge development and sharing is taking place within the company, thus internally, knowledge acquisition is defined as the purchase of knowledge from external sources (see Figure 6-1).

Knowledge management activity: Acquiring knowledge

Due to fast knowledge life cycles and a strong fragmentation of knowledge among ex-perts, companies are sometimes not able to develop the knowledge they need in order to be successful. On the contrary, they have to acquire knowledge from external sources. Technologies, new organisational concepts, new products and processes are developed in universities, research institutes or in other companies. Companies may find access to external knowledge bases by recruiting external experts or cooperating with them, by collaborating with other firms, by accessing stakeholders' knowledge (e.g. customers) or by acquiring knowledge-intensive products (Probst et al. 2000).

Acquiring Knowledge

Developing Knowledge

Sharing Knowledge

Internal perspective External perspective

Source: According to Probst, Raub and Romhardt, 2000, adopted.

Figure 6-1: Knowledge management activities

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Knowledge management activity: Developing knowledge

The development of new products or services and of new technical or organisational processes is at the heart of every company and accounts for competitive advantages. Thus, the development of new knowledge is a particularly important knowledge man-agement activity. Compared to acquiring knowledge, developing knowledge takes place within the company, thus, for example, the development of a new automotive component or a new manufacturing technology traditionally developed in company's research and development department. However, it is not only the development of en-gineering knowledge which might be of importance for companies, it is also non-technical knowledge which might create competitive advantage in the company. For instance, the implementation of new organisational concepts such as total quality man-agement or just-in-time approaches might enhance firm's competitiveness and per-formance as well. In addition, some approaches of knowledge management also include the development of knowledge on an individual level. This comprises all differ-ent kinds of human resources development programmes (Probst et al. 2000).

Knowledge management activity: Sharing knowledge

It is crucial for the company to provide an environment where employees share and distribute their knowledge and experiences among colleagues in order to make this individual knowledge useful for the whole company. One difficulty is to distribute the knowledge where it is needed because not every employee needs the knowledge of all other employees (Probst et al. 2000). Therefore, knowledge sharing may take place either informally or formally. Informal knowledge sharing occurs between two or more individuals within a team meeting, in the lunch break or in a working group. It is not centrally managed but companies provide an environment and possibilities in order to facilitate knowledge sharing such as open space offices, communication corners or quality circles. On the other hand, formal knowledge sharing secures the exchange of knowledge among employees in a rather systematic and centralised way. For instance, "lessons learned" which are established for project evaluation take place in many firms on a regular basis after every project. This secures the exchange of project knowledge and experiences to employees working on following projects. Instruments such as yel-lows pages, data bases in the intranet or communities of practice are also trying to dis-tribute individual's knowledge to other people in the company. One particular problem of knowledge sharing is the willingness of the employees to share their knowledge to other people as knowledge always means power and influence in a company. There-fore, instruments which support and provide incentives for sharing knowledge are also intensively discussed in knowledge management approaches (Probst et al. 2001; Wenger 1998; Roehl 2000).

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6.2 Managing Knowledge in Manufacturing across Europe The theoretical frame described above dividing the knowledge management into the internal and external activities (see Figure 6-1) will be further used for structuring the analysis of the survey results.

6.2.1 Knowledge Management Activities

Internal Knowledge Management: Developing and Sharing Knowledge in Manu-facturing

In the ManVis Delphi survey several statements are asking for the actual and future extent of internal knowledge development and knowledge sharing in European manu-facturing industry. The following statements cover internal knowledge management activities.

S015 Self-Managing Teams Self-managing teams with a wide range of tasks, including planning and control-ling, are widespread in the shop-floor organisation of production.

S021 Knowledge Sharing Companies promote the sharing of knowledge amongst individuals through the establishment of a communication friendly organisational culture and the provi-sion of communication channels across formal structures.

S027 Knowledge Based Activities The share of knowledge based activities (engineering, R&D etc.) reaches 80% of the value of manufacturing product. (The remainder comprises direct labour costs, material and purchased services)

S040 R&D Near Production R&D within companies is, as a rule, performed close to manufacturing sites.

S046 Learning in the Company A fixed part of working time is used for acquiring new competencies, using re-sources provided by the employer.

S047 Qualification Certification Occupational training certificates for production workers which can be acquired at any point of the professional career are developed throughout Europe.


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The link of some of these statements to knowledge management is obvious such as for statement S021 "Knowledge Sharing", statement S027 "Knowledge Based Activities", statement S046 "Learning in the Company", statement S047 "Qualification Certifica-tion" and statement S053 "Reduction of Unskilled Labour". For the statements S015 and S040, the connection to knowledge management might be less obvious.

Self-managing teams (S015) are established to increase self-organisation and coop-eration between the employees which in turn should lead to better performance and higher motivation. Increased cooperation and self-organisation support knowledge sharing and knowledge development because team members are forced to exchange their knowledge and experiences in order to successfully accomplish their various team tasks.

The location of R&D close to manufacturing sites (S040) fosters cooperation between employees of research and production. This supports knowledge sharing between re-search engineers, technical engineers, and workers as well as knowledge development for all of them.

The Future of Internal Knowledge Management: Results of the ManVis Survey

Figure 6-2 shows the assessment of all experts on importance and time of realisation of internal knowledge management activities in the manufacturing industry. The results reveal that the experts have an unambiguous opinion on internal knowledge manage-ment activities. The promotion of knowledge sharing amongst employees (S021) and learning in the company (S046), increased knowledge based activities (S027), R&D near production (S046), widespread use of self-managing teams (S015), as well as the reduction of unskilled labour (S053) are all considered to be very important. Thus, ex-perts believe that internal knowledge management activities such as knowledge devel-opment within the enterprises as well as knowledge sharing amongst employees in order to increase a company's knowledge base is highly important for the future of manufacturing companies. Particularly, learning in the company as one main activity of internal knowledge development is seen as very important for the future of manufactur-ing firms.

Whereas the estimation on the importance of internal knowledge management activi-ties is rather homogenous, experts' assessments on the time of realisation differ among the statements. Particularly, experts are more sceptical about a short-term re-alisation of a reduced unskilled labour force (S053) as well as about an increased share of knowledge based activities of manufacturing products (S027). For both state-ments, the majority of experts think that they will become reality after 2015. However, according to the experts all other statements in terms of internal knowledge manage-

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ment activities are supposed to be realised around 2010. One reason for experts' scep-ticism for the realisation of reduced unskilled labour and increased knowledge activities might be the strong formulation of the two statements. The probability of realisation that 80% of the value of manufacturing products is composed of knowledge based activities is rather low. This is also represented by a high share of experts (13% in the first Del-phi round) indicating that the realisation of this statement will never occur. However, this share decreases to 8% in the second round. Statement S053 is also strongly for-mulated. Reaching a share of unskilled labour of less than 10% is a rather ambitious goal. For instance, at present in Germany, the share of unskilled labour force in manu-facturing industry is 25%. A share of unskilled labour of less than 10% is probably diffi-cult to reach.


S015

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S021: Knowledge sharing within companies(4%, 10%)

S027: Knowledge based activities(8%, 7%)

S040: R&D near production(13%, 8%)

S046: Learning in the company(4%, 4%)

S047: European Qualification Certification(4%, 16%)

S053: Reduction of unskilled labour(7%, 14%)



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S021: Knowledge sharing within companies(4%, 10%)

S027: Knowledge based activities(8%, 7%)

S040: R&D near production(13%, 8%)

S046: Learning in the company(4%, 4%)

S047: European Qualification Certification(4%, 16%)

S053: Reduction of unskilled labour(7%, 14%)


Figure 6-2: Importance and time of realisation concerning internal knowledge man-agement– assessment by all experts

Changes in the experts' estimations between Delphi's first and second round are small, except for two statements. There was an increase in the importance of "Self-Managing Teams" (S015) between the first and the second round. While in the first round 80% of all experts think that self-managing teams are highly important there were 90% in the second round indicating that the widespread use of self-managing teams is of high im-portance for manufacturing firms. In addition, the estimations on the time of realisation

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have slightly changed to an earlier realisation of a widespread distribution of teams with a wide range of tasks including planning and controlling. Furthermore, the estimations on the location of R&D indicating that it is geographically closely linked to the manufac-turing sites have also changed from the first to the second Delphi round. In the second round 79% of all experts think that this statement will be realised sometime whereas in the first round only 63% thought that this will ever occur. There were far fewer experts indicating that a realisation of this statement will never occur (from 20% of all experts in the first round to 13% in the second round).

However, one main barrier across all statements dealing with internal knowledge man-agement activities is supposed to be the level of education and qualification (see Figure 6-3). Most experts think that the employees are not adequately qualified to ac-quire and exchange knowledge. Moreover, experts also expect that internal knowledge management activities are economically not effective. This was particularly empha-sised for the location of R&D close to manufacturing sites as well as learning in the company during working hours. Obviously, experts think that the costs of developing and sharing knowledge within manufacturing companies might exceed the benefits. However, experts' estimations on the effects of internal knowledge management statements are contradictory to the barrier of economic viability. Experts almost unani-mously indicate that all statements treating internal knowledge management activities will have a positive impact on Europe's competitiveness. Moreover, statements on in-ternal knowledge management are supposed to have one of the strongest impacts on competitiveness compared to the influence of all other statements. Thus, on the one hand, learning in the company (S046) is supposed to strengthen a manufacturing com-pany's competitiveness but at the same time it is economically not sufficient. This con-tradiction in experts' assessments might reflect the different time horizons they underlie. Short-term knowledge management activities might not be economically effi-cient as employees are involved in knowledge sharing and developing which costs time and therefore money. In the long-run, the benefits of knowledge management might pay off and experts see its impact on Europe's competitiveness.

Further effects of internal knowledge management are supposed to be an improvement in the living and working conditions in Europe. Almost all experts think that increased learning and sharing of knowledge will lead to better living and working conditions in Europe. This estimation is not surprising as with increased knowledge management activities, the level of education increases and in turn this leads to more high-quality jobs and an improved economic situation of employees.

There were no differences in experts' estimations on effects and barriers of internal knowledge management activities between the first and second Delphi round as well as across countries. Thus, experts' opinion on this issue is consolidated.

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EU legislation

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EU legislation

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Figure 6-3: Main barriers for statements concerning internal knowledge management – assessment by all experts

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Knowledge sharing withincompanies (S021 - 1)

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Figure 6-4: Expected increasing and decreasing effects for statements concerning in-ternal knowledge management – assessment by all experts

External Knowledge Management: Acquiring Knowledge

There is a set of the statements giving us some conclusions on the sources and chan-nels of how the companies will acquire new ideas and knowledge from its environment to achieve the required competitiveness for the decades to come.

S018 Joint R&D in Technology Clusters Competitive production sites in Europe are almost exclusively contained within technology clusters where pre-competitive R&D activities between various neighbouring industrial partners and research organisations are common.

S019 Strategic Importance of Industrial Systems The improvement speed for the value chain, the performance of the industrial system, is more important for the competitiveness than the market success of in-dividual products.

S020 Workforce Diversity In order to strengthen their innovation capabilities, the companies have ensured workforce diversity, employing people with completely different educational, pro-fessional and cultural backgrounds.

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S023 Virtual Company The internal structure of most companies is characterised by constantly changing networks of different individual specialists.

S025 Achieving Innovation Competence Innovation in big multinational companies is exclusively achieved by corporate venturing activities with spin-offs or by the acquisition of innovative SMEs.

S026 Stakeholder Involvement External stake holders are incorporated into product development processes by the majority of companies.

S049 Share of Females The proportion of female employees amongst technical specialists and manage-ment in the manufacturing sector has reached their share of the population.

The content of statements S018, S019, S022, and S025 refers to design, intensity, and fields of co-operations in order to achieve the competitive R&D activities. Whereas statement S018 stresses the pre-competitive cooperation between different research institutions and companies, statements S022 and S025 illuminate the power balance between big companies and SMEs in creating innovations. On the other hand, state-ment S019 indicates the role of success vertical cooperation plays in being innovative.

The assessments of statements S020, S023, and S049 give answers to the question which role the different individual competences will play in achieving creativity (S020) and how a variety of specialised knowledge could be made available for the companies (S023, S049).

Eventually, statement S026 assesses the need of involving external stakeholders into the product development process to achieve market success.

Figure 6-5, showing the experts´ assessment on importance and time of realisation of different companies´ activities in acquiring external knowledge, reveals that the joint R&D among companies and other institutions (S022, S018) is on the one hand consid-ered more important than acquiring different individual competences (S020, S023) or stakeholder involvement (S026), however needs some more time for its realisation.

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The Future of Managing External Knowledge: Results of the ManVis Survey


S018S019

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S018: Joint R&Din technology clusters(8%, 6%)

S019: Strategic importance of Industrialsystem(5%, 9%)S020: Workforce Diversity(6%, 12%)

S022: SME networks(4%, 6%)

S023: Virtual Company(7%, 23%)

S025: Achieving Innovation competence(24%, 22%)

S026: Innovation together with Stakeholder(7%, 18%)

S049: Share of Females(19%, 8%)


Figure 6-5: Importance and time of realisation concerning external knowledge man-agement – assessment by all experts

Cooperative R&D activities (S018, S019, S022, S025)

The level of expertise of almost all statements concerning the cooperative R&D (except for the rather provocatively formulated statement S025, stating that innovation in multi-nationals can only be achieved through spin-offs or acquisition of the SMEs) is very high. Compared to all other statements, the statements on cooperative R&D activities are placed in the middle with regard to the time of realisation as well as importance.

There is no real consensus among the experts concerning the time of realisation of "Joint R&D in Technology Clusters" (S018), but more experts are expecting their me-dium-term realisation before 2015 than those expecting a realisation after this period. As shown in Figure 6-6, the main barriers of realisation have not been clearly stated but the possible realisation is linked with rather positive than negative effects. If the "Joint R&D in Technology Clusters" comes to realisation, it will have a strong positive impact on the competitiveness (85% of experts) but at the same time it will lead to in-creased regional differences (63%).

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Lack R&D Funding

Joint R&Din technology clusters (S018 - 2)

Strategic importance of Industrial system (S019- 2)SME networks (S022 - 2)

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Figure 6-6: Main barriers for statements concerning knowledge management in coop-erative form – assessment by all experts

It is surprising that the rather extremely formulated statement putting the functioning of the manufacturing system and process in front of market product success (S019) has been assessed as very relevant (81% experts). The estimated realisation rate of this statement increased in the second round (from 72% to 84%) and the strong opinions dispersion regarding its realisation time from the fist round has became more focussed towards the medium time-frame between 2010-2015 (50% of experts agree with it). The economic viability as well as education and qualification have emerged as the two main barriers for its realisation (see Figure 6-6). Experts think that the improvement speed of the industrial system (S019) would have a strong positive impact on Europe's competitiveness (87%) and employment (41%).

The statement on successfully competing SME-networks (S022) is the second most important one among all, and belongs to the statements with the lowest "never" rates. As shown in Figure 6-7, according to the experts, it is the statement with the most and highest positive effects in terms of competitiveness (over 90%) and employment (over 80%). All together it can be concluded that competitive SME-networks experience ab-solute undisputed agreement all over Europe.

On the one hand, for some countries like Spain, Greece, and Austria, the realisation of successfully competing SME-networks is more important than it is for others. However, Swedish experts consider it not that important and have problems with the estimation

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of its realisation time ("don't know" rate 22%). Almost all high industrialised Western European countries with the exception of France consider themselves more advanced whereas all Eastern and South-eastern European countries think that they are ex-tremely lagging behind in this field.

Concluding we can say that there is no doubt about the high importance and high reali-sation probability for manifold joint innovation activities between R&D organisations of all kinds, related both to basic and applied research, with special emphasis on SME-networks. But there is neither real agreement on the realisation time nor on their impact on employment and regional differences. With the exception of statement S025 con-cerning the outsourcing requirement of innovation creation for multinational companies which over 50% of experts in countries like Germany, Austria, and Sweden do not be-lieve, there are no remarkable national dissensions regarding the importance and time realisation of the group of "cooperative R&D statements". Although there is a clear dif-ference regarding the estimations of current position of the countries between the New Members and Candidate Countries which according to the majority (over 50%) of their experts are strongly lagging behind and old Member States which assess themselves as average, there is no country placing itself really on the top in this field.

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Figure 6-7: Expected increasing and decreasing effects – assessment by all experts

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The role of workforce diversity in achieving innovations (S020, S023, S049)

The statement concerning workforce diversity (S020) is placed in the mid field of impor-tance but on top as regards realisation probability. Although this statement with its 85% of realisation probability belongs to the highest ones, there is no real consensus about its time-frame; 30% of the experts see it coming until 2010, 30% until 2015, and 30% until 2020. Furthermore, there is no disharmony among the experts of different age, occupation, or gender, with the exception of the category government and public who consider it slightly more probable than the others. It is interesting that qualification and education is seen as its main implementation barrier, estimated far higher than social acceptance (see Figure 6-8). Although the experts obviously consider the workforce diversity a crucial innovation factor, they also consider the workforce qualification and education as not adequate for working at the diverse environment. The realisation of this statement is seen as very effective not only for increasing of competitiveness (85%) and living and working conditions (73%) but as well for employment (66% − the third highest rank among all statements). Increasing of regional differences is the only negative impact expected.

The statement about constantly changing network of individual specialist as a basic organisational structure has the highest "don't know" rate (23%) among the group of management related statements and one of the highest overall. This rate level implies a general difficulty in assessing the future of this pretty extremely formulated statement. For 60% of those experts who felt capable to assess the realisation time-frame (70% will be realised, 6% "never" and 23% "don't know"), it will be realised in the medium-term, until 2015. Compared to others, the statement has one of the lowest importance rates. Both the choice and the estimated intensity of the main barriers are practically identical as in case of workforce diversity (see Figure 6-8). The expected positive ef-fects (competitiveness, living and working conditions, and employment) are also the same but with poorer intensity (see Figure 6-9).

Taking a look at the overall results of statement S049, saying that the proportion of female employees among technical specialist and management in manufacturing sec-tor will reach their share of the population, signalised that the "desired" diversity won't be realised by merely employing more females. This statement has been estimated as the third least important one, has very high "never" (20%) and "don't know" (17%) rates and its realisation is not expected before 2015. Despite the fact that during the last decades the share of females in engineering and manufacturing studies has increased all over the Europe, the overall awareness of professional females as sources of high qualification and innovation is still missing. There is obvious consensus on inadequate qualification (90%) and problems of social acceptability (81%) as the two main barriers for employing a higher share of females at responsible positions in manufacturing.

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Workforce Diversity (S020 - 1)

Virtual Company (S023 - 1)

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Figure 6-8: Main barriers for statements concerning workforce diversity and stake-holder involvement – assessment by all experts

If the results of all three statements (S020, S023, and S049) related to the integration of different individual competences to secure the innovation capability tried to be linked, it can be concluded that there seems to be a pan-European consensus about the ne-cessity of professional, educational, and cultural diversity to secure innovation (S020) and its positive economic and environmental effects. On the other hand, despite its high relevance, the question of how the workforce diversity will be secured still remains open. According to the experts´ opinion it is less probable that it will be solved by es-tablishing constantly changing networks of different individual specialists and more probable that the companies will try to tie people with different backgrounds to the company on the long-term. The clear rejection of an increased share of females at re-sponsible positions (S049) might lead to the question, whether the assessed high rele-vance of implementation of the workforce diversity within the companies was really meant seriously.

Regarding the different national estimations on workforce diversity, there are two inter-esting results. First of all, there is no typical splitting between old Member States and New Member States and Candidate States regarding the level of importance or realisa-tion probability. Secondly, it seems that the Scandinavian countries (e.g. Sweden,

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Norway) and Spain, especially due to higher estimated barrier of social acceptability, have more doubt about the realisation of workforce diversity than the others.

Stakeholder involvement into the process of product development (S026)

Although the statement "Product innovations together with the stakeholders" belongs to the one third with the lowest importance, it seems to gain a slightly higher importance among experts aged below 40 compared to older ones.

18% of the experts could not imagine the possible realisation time-frame of this state-ment. Although the realisation of all statements concerning acquiring of external knowl-edge is expected in the medium-term, which is pretty soon in overall comparison, the statement concerning stakeholder involvement with its short-term realisation leads within this group.

Economic viability (50%) and education and qualification (46%) are seen as the highest barriers in realisation of this statement over all respondent groups, whereas the social acceptability takes the third place with 38% (see Figure 6-8).

The very high estimated positive impact on competitiveness (almost 80%) on the one hand is contradictory to the pretty low overall relevance of this statement on the other hand. It is as well surprising that the experts do not expect higher positive impacts on the living and working conditions and environment (see Figure 6-9).

Compared to results of other statements referring to external knowledge this is the one with the biggest national differences. On the one hand, the active role of stakeholders in product development is very important for Slovakia, France, Turkey, Greece, and Slovenia and of low importance for Denmark, Norway, Hungary, Finland, Estonia, and Sweden. These countries are far more suspicious about the statements´ realisation (high "don't know" or "never" rates) than the countries which expressed high impor-tance and see it coming until 2015.

It is remarkable that there is no country considering itself really top in the field of stake-holder involvement (top average 5%). In contrary, almost half of all countries think that they are extremely lagging or at least limping behind. The Candidate Countries (Bul-garia, Croatia, and Rumania) consider EU-legislation an additional barrier for the reali-sation of stakeholder involvement.

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Figure 6-9: Expected increasing and decreasing effects – assessment by all experts

6.2.2 Working Conditions for Knowledge Management Activities

Organisational theory as well as management practice strongly emphasise the impor-tance of employees' expertise and competences for a company's competitiveness. In order to develop and maintain employees' knowledge and competences a diversely qualified, sustainable, and flexible work force with a reasonable fluctuation rate is nec-essary. The following statements of ManVis monitor working conditions which facilitate knowledge management activities in manufacturing industry:

S008 Manufacturing with People Over 60

Manufacturing systems where people aged 60 and above can work without diffi-culty are in widespread use.

S048 Self-Employment The majority of workers in production are self-employed and offer their services to a number of customers in different places.

S050 Work from Home Most jobs at all working levels in manufacturing (shop-floor, management, sup-port) include tasks that are done from home.

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S052 Office Factory Innovations in machine technology will transform the factory’s environment into one that resembles an office environment (e.g. no noise, no pollution, space, no accidents).

S054 Work-Life Balance Tailored configurations of working conditions and benefits reflecting age and fam-ily situation are the norm in manufacturing companies.

Bearing in mind that employees' knowledge represents a competitive advantage for companies and the establishment of adequate working conditions for these employees is one possibility to maintain and motivate employees, the results of ManVis are sur-prising. "Work from Home" in manufacturing (S050), "Self-Employment" (S048), special configurations of working conditions reflecting age and family situation ("Work-Life Bal-ance") (S054), manufacturing systems where people aged over 60 and above can work without difficulty (S008), and new machine technologies transforming the factory into an office environment without noise, pollution and no accidents (S052) are considered to be of rather low importance. Even though experts think that work-life balance and a factory which resembles an office are supposed to be of higher importance compared to the other working conditions they all reach one of the lowest scores of importance compared to all other statements. Some experts even suppose that the realisation of these statements will never occur. The shares of experts thinking that the realisation of these statements will never take place are 16% for "Work-Life Balance" (S054), 27% for "Work from Home" (S050), and 34% for "Self-Employment" (S048). However, ex-perts at least think that manufacturing systems for older employees (S008) and "Office factories" (S052) are more realisable, as only 10% of all experts estimate that these two arrangements will never happen. But it is noteworthy that the majority of experts see the establishment of "Office Factories" (S052) rather not in the near future.

One reason for the high "never" rates of statements S054, S050, and S048 might be due to the way of formulating the statements. Particularly the formulation of statement S048 that the majority of workers will be self-employed as well as S050 indicating that most jobs are accomplished from home might have led many experts to the conclusion that the implementation of these statements is rather unrealistic and will never occur.

Nevertheless, although industrial psychologists emphasise the importance of instru-ments attracting motivated people and developing a flexible and sustainable workforce, the experts think that these instruments are not important or even not realisable. Par-ticularly for the statements regarding self-employment of workers (S048) and "Work from Home" (S050), experts unambiguously consider these concepts unimportant. These two statements rank as the least important of all statements.

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Figure 6-10: Importance and time of realisation concerning working conditions – as-sessment by all experts

Comparing the assessments from the first and second round of the survey regarding the implementation of work-life balance concepts, there has been a change in experts' opinion concerning the importance of this statement for the future of Europe's manufac-turing. Whereas in the first round 57% of all experts believed that work-life balance approaches were highly important, in the second round, 67% of all experts think that work-life balance concepts are a future asset for companies. Obviously there have been some experts that reconsidered their opinion and assess work-life balance con-cepts in the companies as much more important for the future of manufacturing.

The main barrier for all these statements dealing with working conditions is their social acceptability. Experts unambiguously think that efforts in self-employment (S048), in establishing manufacturing systems for older employees (S008), as well as working from home (S050) might be socially not accepted. The second main barrier for the statements regarding working conditions is the level of education and qualification be-ing from the experts' point of view not adequately developed in order to successfully implement these kinds of working conditions.

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However, the main barriers for the establishment of factories which resemble an office environment (S052) are the technical feasibility and the economic viability. Experts obviously think that a factory without noise and pollution might be technically and eco-nomically not efficient.

The increasing and decreasing effects of working conditions differ between "Work from Home" (S050) and "Work-Life Balance" (S054) on the one hand, and "Self-Employment" (S048) on the other hand (see Figure 6-12). While "Self-Employment" is considered to entail rather decreasing effects, "Manufacturing with People over 60", "Work from Home", "Office Factory", and "Work-Life Balance" are supposed to have increasing effects. Most of the experts think that working from home (S050), "Work-Life Balance" (S054), "Office Factory" (S052) and manufacturing systems for older workers (S008) increase the living and working conditions in Europe as well as Europe's com-petitiveness. Contrary, experts assess that self-employment (S048) will have a de-creasing impact on Europe's living and working conditions, however an increasing effect on Europe's competitiveness. Thus, estimations differ in the effects on the living and working conditions but are largely supposed to have a positive effect on competi-tiveness.

0%

50%




EU legislation

Economic viability

Lack R&D Funding

Manufacturing with people over 60 (S008 - 1)

Self-Employment (S048 - 1)

Work from home (S050 - 1)

Office Factory (S052 - 1)

Figure 6-11: Main barriers for statements concerning working conditions – assessment by all experts

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Country-specific analyses reveal further results on experts' estimations of the current position of their country.4 For instance, estimations on work-life balance concepts differ across countries. The majority of experts in France, Italy, Turkey, Bulgaria, Hungary, and Spain think that their countries are in a lagging position with regard to work-life balance concepts compared to other European countries. There is no country in which a majority of experts indicate that their country holds a top position in this issue. How-ever, around 20% of experts from Sweden indicate that they have top positions in terms of work-life balance approaches.

With regard to statement S052 stating that factory's environment resembles an office environment, analyses also reveal differences across countries. Experts from Sweden and Germany see themselves in a far better position than the average score across all European countries. Once again, there is no country in which a majority of experts indi-cate that their country holds a top position in this issue.

Effects

60%

40%

20%

0%

20%

40%

60%

80%

100%

Dec

reas

e

In

crea

se Work-Life Balance (S054 - 2)

Office Factory (S052 - 1)

Work from home (S050 - 1)

Self-Employment (S048 - 1)

Manufacturing with people over 60(S008 - 1)

EnvironmentQuality

Living andworking


Differences

Figure 6-12: Expected increasing and decreasing effects for statements concerning working conditions – assessment by all experts

4 These analyses are based on first round's results as in selected statements of the second

round there were not sufficient answers for every country to draw conclusions.

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In sum, statements on working conditions are considered to be less important than statements on knowledge management. This is surprising as working conditions are the prerequisites for sustainable knowledge development and sharing in companies. Experts think that a main barrier for the implementation of these working conditions is their social acceptability. The effects of the realisation are mainly considered to be in increased living and working conditions. Analyses across countries reveal that there is no majority of experts seeing their country in a top position with regard to working con-ditions. However, 20% of Scandinavian experts think that their countries are in top po-sition in terms of working conditions. To conclude, motivating and sustainable working conditions are not supposed to have top priority in Europe's manufacturing companies. However, according to the ManVis results, Scandinavian countries might be driving forces for the development of equalising working conditions.

6.3 Summary and Conclusions Internal as well as external knowledge management activities are supposed to be very important for the future of the European manufacturing industry. The majority of experts believe that acquiring knowledge by co-operating with industrial partners and research organisations or by employing people with completely different educational, profes-sional and cultural backgrounds is an important issue for the future of manufacturing companies. Similarly, internal knowledge management activities such as the develop-ment of knowledge by acquiring new competences, by increasing qualification certifi-cates or by reducing the amount of unskilled labour as well as knowledge sharing within manufacturing companies through self-managing teams, a communication friendly organisational culture or through the location of R&D departments close to pro-duction are also considered to be very important for the future of manufacturing. How-ever, analyses of the ManVis data also reveal contradictions, problems, and inconsistencies concerning knowledge-based activities of the manufacturing industry.

Regarding the acquisition of external knowledge bases, experts are indeed aware of the fact that clustering, networking, and other types of joint innovation activities have a positive impact on Europe's competitiveness. On the other hand, experts' opinions con-tradict to this positive impact on competitiveness as they estimate that economic viabil-ity might be one severe barrier for an effective realisation of external cooperative activities. Moreover, experts' estimations on possible effects on employment and re-gional differences are also indistinct. Thus, although there exist a variety of policy measures at the European level, supporting inter-organisational clusters and networks in order to strengthen a company's innovation capacity, there is need for more trans-parency regarding the different forms of possible inter-organisational co-operations as well as regarding the positive and negative impacts these co-operation forms could

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have for manufacturing companies and the entire European economy. Furthermore, an indisputable agreement on the importance of manufacturing SMEs sets a challenge to refocus on the content of their search for knowledge. The pragmatic and problem-solving search usually practiced by SMEs needs to be accompanied by more strategic and far reaching co-operations focused on developing new competency. Especially co-operations in clusters and with universities will more likely help the SMEs to overcome uncertainties of developing new competency and implementing potentially discontinu-ous technology.

Concerning the demand of increased workforce diversity as a further activity for acquir-ing external knowledge, experts from all over Europe again show a highly developed sensibility for this topic. However, it remains extremely challenging to create more di-verse knowledge structure bases that rely on a variety of experiences, expertise and cultures. For instance, the experts' assessments demonstrate that employees' educa-tion and qualification is one barrier that might hinder the implementation of increased workforce diversity. They believe that most employees are not sufficiently competent to successfully work together with colleagues who have diverse professional, educational, and cultural backgrounds. The conclusion first derived emphasises the role of educa-tion for securing diversity. It postulates that the European educational system should boost activities focused on enabling knowledge integration between different nationali-ties and disciplines. In particular, the understanding of technology development and its consequences for the economy and society should be provided not only among engi-neers, but also among all other manufacturing actors, especially business and social occupations. Offering vocational courses like "Manufacturing for non-engineers" as a reflection of the wide-spread courses "Business for engineers" might present a possible instrument for this. The second conclusion postulates the need to generate an aware-ness among European manufacturing experts that not only the educational system but also the manufacturing companies themselves have to take responsibility for promotion and development of employees' and organisational competences. These competences are necessary for working in a diverse environment. Only joint activities of companies and educational system will enable future employees in manufacturing to work across functional, organizational and cultural borders.

Estimations on the involvement of stakeholders into product development processes, as another example of incorporating external knowledge bases into companies, reveal a far lower relevance for this issue compared to all other activities of external knowl-edge acquisition. Except for a clear assessment on the positive effects on competitive-ness, experts' assessments are rather unclear and even contradictory on this issue. Further qualitative and more detailed analyses are needed to investigate reasons for the low relevance of stakeholder involvement.

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As with external knowledge management activities, internal knowledge management activities such as knowledge sharing supported by a communication friendly organisa-tional culture, acquiring new competences during working time or the reduction of un-skilled labour through trainings are also considered very important for the future of Europe's manufacturing industry. Experts believe that these activities will be realised to a great part within the next 5 years. They foresee positive effects on living and working conditions as well as on Europe's competitiveness. Obviously, experts expect internal knowledge management activities to gain competitive advantages for manufacturing enterprises. However, one main barrier is seen in the economic viability of these con-cepts. On the one hand, learning in the company (S46) is supposed to have a very strong impact on the competitiveness of Europe, on the other hand, experts think that learning in the company during working hours is economically not viable. This contra-diction might reflect the different time horizons the experts apply. In the short-term, learning in the company during working hours might not imply a positive impact for the company, in the long-term the benefit of learning in the company might exceed the costs and hereby enable a gain in competitive advantages. Thus, the key question lies in the return on investment of knowledge management activities. When do they pay off? Only if there are instruments to measure the effects of knowledge management, critics applying a short term perspective on knowledge management might be per-suaded that that in the long-term, knowledge management will pay off.

However, one main barrier for internal knowledge management activities is seen in the employees' level of education and qualification. Obviously, there is strong scepticism among the experts towards the educational system as well as towards the employees' capacity to implement and "live" knowledge sharing and knowledge development within manufacturing companies. Probably even more severe is the fact that many experts believe knowledge sharing and knowledge development to be economically neither efficient nor effective. Furthermore, experts think that knowledge sharing in the com-pany is socially not accepted. This leads to the conclusion that companies might lack the culture to share knowledge. Only if companies are able to develop and establish a culture of knowledge sharing the positive effects of knowledge management can be utilised.

Working conditions are clearly considered less important not only in comparison to a company's knowledge management activities but also compared to the importance of the entire statements. Obviously, there is almost no sensitivity for the relevance of em-ployees' working conditions. This is surprising since working conditions are prerequi-sites for sustainable knowledge development and sharing in companies. Experts think that the main barrier for the implementation of these working conditions is their social acceptability. Thus, not only the fact that working conditions do not have a high priority

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in Europe's manufacturing companies, but also that social values and norms as well as traditional role models hinder the implementation of such working conditions is a seri-ous problem for the future of manufacturing industry. Only with motivating and fair working conditions for the employees manufacturing companies are able to keep their valuable workforce and be competitive on the market. To provide and support these working conditions is the future challenge of European society and policymakers.

Key results

• Acquiring knowledge from external sources (e.g. by cooperating with industrial partners and research institutions or by employing people with different educa-tional, professional and cultural backgrounds) is considered very important for the future of manufacturing

• Internal knowledge management (e.g. knowledge development by acquiring new competencies or knowledge sharing between employees of manufacturing companies) is also considered very important

• Working conditions (e.g. work-life-balance concepts, work from home, office factory) are considered much less important than internal and external knowl-edge management activities. This is surprising because establishing adequate working conditions are one important way to motivate employees and to main-tain a diversely qualified, sustainable and flexible workforce.

Key challenges

• Employees' qualification and education is considered to be one severe barrier for an effective knowledge management

• Both, internal knowledge management and inter-organisational R&D networks are considered to have a positive effect on competitiveness but experts are critical towards their economic viability.

• Experts think that knowledge sharing in the company is socially not accepted

• Working conditions are seen as not very important for the future of manufactur-ing industry


• Offering vocational courses like "Manufacturing for non-engineers" in order to increase the understanding of technological development and its conse-quences

• Strengthen the awareness of manufacturing companies that they are responsi-

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ble for the development of employees' professional, social and intercultural competencies

• It is important to estimate the return of investment of knowledge management activities. Instruments of how to measure the effects of knowledge manage-ment activities might decrease the sceptic that knowledge management is economically not viable

• Develop measures to create a culture of learning and knowledge sharing in the companies

• Strengthen the awareness that working conditions that respect the employees' private situation is very important in order to maintain an effective workforce.

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7 Future Innovations in the Manufacturing Industry – Cross-Checking ManVis Results against other Foresight Databases

Author: Maurits Butter (TNO)

7.1 Introduction The March 2000 Lisbon European Council set the objective to make the EU the “most competitive and dynamic knowledge based economy in the world”. Next to economic issues like competitiveness, employment and other economic issues, also more social issues like environment and social cohesion were considered key issues. The ManVis project focuses on the development of shared visions on how the manufacturing indus-try can on one hand contribute to these objectives and on the other hand how a transi-tion to a more competitive and dynamic manufacturing industry can be made.

The FutMan project showed that technological and social innovations are crucial for the future of the manufacturing industry (FutMan 2003). But also more recently, an EU pa-per on emerging science and technology research topics in manufacturing confirms the importance of innovation for an increase in productivity, reduction of costs and the creation of new markets (Sá da Costa 2005). Also innovation can be considered a key factor in addressing major social issues like environmental impact and mobility.

Innovation is addressed in the ManVis Delphi survey in several places, within the con-text of discrete manufacturing processes, products, services, and organisation. How-ever, a Delphi survey is a systematic method for eliciting and collating informed judgments on a specific topic, through the circulation of a set of carefully designed, sequential questionnaires giving feedback. So, the innovations included in the ManVis Delphi are the result of a process in which several experts (the preparation panels) discussed the possible Delphi statements. Also, because of limited time available for experts to fill in the questionnaire, also a limited number of statements (innovations) can be included in the Delphi survey. The question is if all innovation areas are then addressed in the survey? Also, the limited time gives little room for putting the state-ments into a systematic broader context. This chapter puts the Delphi statements on innovation in a broader context, using Dynamo as the central tool and source for analy-sis. Dynamo is an expert system used in over 10 projects to gather information on fu-ture developments. The system now contains over 3000 developments, based on foresight studies, expert workshops and research portfolio’s.

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S&Tdevelopments Innovations IssuesInnovation

developmentInnovationdiffusion

Researchquestions

Inventions

Needs

Functions

Technology push

Market pull

Figure 7-1: Dynamo Approach

The basic approach used in the Dynamo system is two folded. The first element is a distinction between three types of future developments, 1) S&T developments, 2) Inno-vations, and 3) Issues. This distinction is based on the three major institutional actors directly linked to the innovation process:

• Research, incorporation the Academia as well as more applied research and technology organisations;

• The industry, which applies research knowledge to create innovations;

• The society/market, in which the innovations are applied5.

Science and Technology developments are considered enabling inventions that can be applied in innovations. These developments as such are not focussed at the fulfilment of social, but more at technological functions. Innovations are considered commercial applied science and/or technology in an innovative new way. They use new insights in S&T, focus on market/societal needs, and provide applications that address their spe-cific social functions. Issues are considered the demand side of our society. They are problems of economic, social, and environmental nature where innovation can offer an answer or solution.

The second element of the Dynamo concept is based on the fact that the information demand can be divided by aggregation level, where economic arrangements are fun-damentally different. Dynamo makes a distinction between five levels of development:

5 Of course, also indirect stakeholders, like governments, NGO’s and intermediary organisa-

tions also are important. However, as they are not main contributors to the primary proc-ess, they are also indirectly addressed.

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L1: Trans national economies

L2: National system of innovation

L3: Organizational networks

L4: Organizations

1

2

3

4Deve

lopmen

ts

Figure 7-2: Levels of Development

• Level 1: International institutions This trans-national level deals with broad developments, that need multi-stakeholder involvement, are discussed in international environments, and lead to global strategies, setting the international innovation framework.

• Level 2: National systems of innovation This national level focuses on subjects that can be addressed within sectoral institutions. Results will have an impact on the structure of the national innova-tion network.

• Level 3: Specific networks This third level focuses on economic arrangements between organisations. The areas have a certain competition, or complementary character and changes will have direct short term consequences on innovation and research.

• Level 4: Individual organisations This level is on specific developments that can be addressed by individual or-ganisations, sometimes with some co-operation with others. These develop-ments lead to results that directly change the environment of individuals.

This chapter uses Dynamo to sketch an overview of innovation within the manufactur-ing industry, with innovations as focal point. It will also describe the main global socio-economic challenges that are relevant for the manufacturing industry, as well as the major basic research paradigms (limited to the focal sectors of ManVis). Please note that the limited space for reflection only allows a “scratching the surface” approach.

7.2 Analysis

7.2.1 Introduction

The information basis for analysis of the ManVis statements is given by Dynamo. At this moment, Dynamo includes over 3000 S&T developments, innovation and issues,

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gathered by Internet search, National R&D project portfolios, and several foresight studies. Not all developments are of interest for ManVis, as it focuses on six industrial sectors (Rubber and Plastics, Transport, Machinery, Fabricated Metal Products, Elec-tronics, Electrical Equipment, Instruments, and Traditional Products). The question is which developments can be considered a priority to which sectors.

In this chapter, an overview is given of the so called “Level 1 developments” included in Dynamo and considered relevant for ManVis (based on the industrial sectors. Please note that this chapter of the ManVis report only focuses on importance for innovation. Some developments in Dynamo (like “Changes in government”) naturally have an im-pact on the ManVis domain, but are not discussed because they are not considered to have a major impact on innovation.

7.2.2 Important Emerging Social Issues

Dynamo now incorporates 18 interrelated, global socio-economic challenges. Of these 18 challenges, eleven challenges are considered of major importance to the manufac-turing industry, offering major opportunities for the industry or severe problems. The following table gives an overview of the global socio-economic challenges that can be considered relevant for innovation in the focal sectors of ManVis.

Overview of the global socio-economic challenges included in Dynamo and considered relevant for innovation in the ManVis domain.

Global socio-economic challenge

Description

Pervasive globalisation Enlargement of economies to a global scope due to enhanced transport, ICT and other cultural developments

Ageing population Increase of average age due to an increase of welfare, advanced medical care, higher hygiene.

Climate change Change in the global, regional and local climate, due to increase of consumption of fossil fuels and other greenhouse gases

Over-exploitation of natural resources

Unbalance between consumption and production of natural resources due to increase in economic growth.

Knowledge based economy and society

Need for increase in knowledge intensity of the economy and society to stimulate economic growth.

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The information society Problems as a result of the ongoing transformation of our society to an information intensive network.

Independent consumers and citizens

Increasing need of consumers and citizens for information and power in political, economic and other social processes.

War and terrorism Increase of tensions between societies and sub-societies, leading to problems in security and safety.

Transformation of the healthcare system

Structural changes in the healthcare system due to demographic developments, increase in welfare and innovation.

Transformation of the food industry

The transformation of the food industry to a modern, high tech, safe global economic system.

Unsustainable mobility Problems emerging from globalisation and increase in mobility, like environmental problems, accessibility and security.

Other challenges, like changes in public governance, immigration and integration, socio economic sustainability, growing regional disparities and social marginalisation, and the expansion of the EU are not considered of direct major importance for innovation in the ManVis domain. We are aware that there is a relation of ManVis to these challenges, but they are considered to have little impact on the structure of the manufacturing in-dustry and have high implications for innovation.

In the following pages, the challenges are divided into underlying socio-economic themes that are of interest to the ManVis domain. This gives an overview of important innovation related developments in society from the perspective of ManVis and can be considered important demands of our society for the industry. It can lead to changes in the market, new markets, or changes in framework conditions that ask for innovation.

Climate change

Economic growth and increase of welfare has led to an increase of energy use. As the resource is mainly fossil fuel based, this is accompanied by an increase in greenhouse gases. The rapid economic growth of countries like China and India is enhancing the discharge of greenhouse gases. This can initiate a climate change, regarded highly important by e.g. insurance companies like Lloyds (flooding, violent weather patterns, drought, rising sea levels).

The issue of climate changes leads to a demand for innovations that use renewable resources. Especially new sustainable energy systems (both B2C and B2B and for

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manufacturing itself) can be considered a demand. This includes renewable energy systems, energy efficiency (generation, distribution and use), broadly applicable in the industry and for consumers. Important underlying innovation related issues for the manufacturing industry are:

• Energy efficiency in the manufacturing industry

• Modernisation of energy chains

• Greening the energy supply

• Energy efficiency in manufacturing products.


The economy is fuelled by natural resources, like materials, water, space, energy carri-ers. A balance between the production of resources by the ecosystem and this re-source use is needed. As the world economic growth is strong (e.g. China, India), and the ecological footprint of most countries is too big, the use of natural resources is in-creasing leading to over exploitation of the natural resources. This can lead to an un-balance in our economy.

For the manufacturing industry the presence of natural resources is an important framework condition. Both, as a “user” of these resources and as a producer of prod-ucts that “use” these resources, it is of extreme importance. This will create a demand for using renewable resources, both materials and energy (for energy: see Climate change). Also it emphasizes the need for energy and material efficient products and production systems. Important underlying innovation related issues for the manufactur-ing industry are:

• Water management and efficiency (industrial and consumer)

• Miniaturisation and dematerialisation of products

• Greening of raw materials

• Recycling and reuse of products

• Closed loop production.

Environmental impact by toxic substances

An environmental impact due to industrial processes is still an important issue. Al-though some steps are made with the introduction of REACH and environmental tech-nologies, current production and consumption is clearly not sustainable. This leads to

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degeneration of environmental quality, and the process is enhanced by economic growth.

The manufacturing industry uses toxic materials within the manufacturing process and also produces products that contain materials that can lead to environmental impacts. It will have to reduce the use and production of environmental impacts. Important under-lying innovation related issues for the manufacturing industry are:

• Alternatives for toxic materials in the production process and products

• The uncertainty of environmental impact of bio- and nanomaterials

• Environmental impact of dispersed air emissions

• Reduction of hazardous waste, emissions to water and air.

Pervasive globalisation

Initiated by the developments in ICT, globalisation of the world economy is unavoid-able. This will lead to changes in the economic structure, as well as in our social struc-ture. Some of the most important themes are: World competitiveness, nationalism, economic opportunities, global environmental impact, shifting of labour to low cost countries, brain drain, inter-connectiveness of economies. This can have a high impact on the EU, like unemployment due to increased global economic competition, cultural tensions, and problems solving environmental problems.

The globalisation of the economy has a high influence on technology and the manufac-turing industry. Issues like how to decentralise and restructure the production and dis-tribution system are just some examples of the complex changes lying ahead. Important underlying innovation related issues for the manufacturing industry are:

• Internationalisation of markets

• International restructuring and repositioning of value chains

• Virtualisation of business

• Cultural differences in a globalised economy

• Increased global prices for raw materials.

Ageing population

Due to an increase in welfare, advanced medical care, and better hygiene people will live longer. This leads to a reduction of the number of children per family and an overall increase in age of citizens. This will lead to tensions in the economic structure, like la-

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bour market, funding of pensions, balance between capacity demand and supply of the working force.

The demographic changes have major impacts on the manufacturing industry, for products, as well as the production. As the average age of both employers and con-sumers will rise, this will change the capacities of the workforces as well as the charac-ter of the consumer demand. Important underlying innovation related issues for the manufacturing industry are:

• Synchronisation of human skills to the production process

• Product development for elderly people

• Independence for elderly people

• Ageing and medical care.


Stated in the Lisbon agreements, the main economic challenge is to increase the inno-vativeness of the economy. The major issue is to enhance the knowledge base of our economy and society, leading to questions like how to enhance innovation within busi-ness, how to synchronise education, what skills are needed (human capital), how to operationalise a service economy, what are new structures of knowledge intensive work?

The need to increase the knowledge intensity of the manufacturing industry is strong. Cost reduction, increase in productivity, increase in quality and new markets ask for new technologies and innovations. However, to establish this more knowledge based economy is not easy due to existing human, technological and financial capital. Impor-tant underlying innovation related issues for the manufacturing industry are:

• Globalisation of knowledge and research

• Restructuring the educational system, including e.g. integration of education and business and life long learning

• Innovation and entrepreneurship

• Integration and synchronisation of research and innovation

• Increasing low knowledge labour demand.

The information society

The transformation of our society to a more information based structure is well on its way. The explosive growth of the Internet, together with the development of a ubiqui-

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tous ICT network, leads to access to information whenever and wherever. However, the Information Society also has it downsides, like the “have-nots”, personal/private information, or stress. Although started more than two decades ago, this is still a major socio-economic challenge to deal with the opportunities in a positive way.

The innovation wave concerning ICT had much impact on the manufacturing industry, both from the products and the production process point of view. This wave is still ac-tive and will lead to more changes in the industry. Important underlying innovation re-lated issues for the manufacturing industry are:

• Access to information and information overload

• Changing social structures on work, education and private life

• Public and private information security

• The “digital divide”

• Increase in the information intensity of labour

• Living in a networked society.

Independent consumers and citizens

Due to the increase in availability of information, demographic changes (age, reduced households), and the increase in welfare, consumers and citizens are more and more informed. This leads to changing demands, like diversified products, more information on products, safe and sustainable products, and involvement of users to the develop-ment of products.

The challenge to deal with the increasing interaction with customers will have a pro-found impact on the production and retail connected to the manufacturing industry. Interaction with emancipated customers is important. Important underlying innovation related issues for the manufacturing industry are:

• Diversification and individualisation of consumer demands

• Producer-consumer interaction

• Reduction in product costs vs. increase in quality demand

• Addressing the increasing need of consumers for product and process informa-tion.

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War and terrorism

Different social philosophies, religions, globalisation, or sustainability issues (e.g. pov-erty, access to natural resources) can lead to tensions between and within societies. This forms a threat to our economy and society and leads to issues of counteracting terrorism, organisation of defence, and how to deal with cultural differences.

Looking at recent terrorist attacks and the war in Iraq, the manufacturing industry will be faced with new challenges. These challenges are both on new products and the security of the facilities. Important underlying innovation related issues for the manufac-turing industry are:

• Security of industrial complexes, both physical and virtual

• Personal and (international) national security

• Privacy of information.


During the last decades the possibilities to prevent and treat diseases have developed enormously (due to e.g. genetics, ICT, new medical insights, changing lifestyles). This has led to longer life expectancy, but also to a shift towards a higher demand for treat-ment of age-related diseases. Also the organisational structure of healthcare systems is undergoing changes due to privatisation and ICT developments. Another important development is the emerging of problems due to globalisation and new diseases (AIDS, Sars). All these developments lead to a need for a transformation of the health-care system.

Although the industrial sector for medical equipment is not part of the ManVis domain, still the manufacturing industry is an important producer of more consumer oriented products that are of importance. Also other equipment producers will have supplier functions to the medical equipment industry. So, important underlying innovation re-lated issues for the manufacturing industry are:

• The convergence of nanotech, biotech, cognitive science and ICT to quality of life

• The increase of efficiency of the healthcare system

• Individualisation of consumers and patients

• Identification and control of (global) epidemics and new diseases.

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Transformation of the food economy

The organisation of the food economy is changing because of animal diseases, the free market economy, and new technological developments like biotechnology. But also the change of consumer demands for diversity, cost reduction and an increase in quality lead to a need for institutional reforms. Underlying issues like public acceptance and safety of genetic engineering, CAP reform, monitoring of food safety, animal epi-demics, or obesities show the need for a transformation of the food economy.

The impact of these challenges to the ManVis domain is limited, as they are most rele-vant for the agricultural industry and the food industry. Some important underlying in-novation related issues are:

• Evaluation and monitoring of food safety and quality

• Identification and control of veterinary epidemics.

Unsustainable mobility

Technological possibilities and globalisation have led to an increase in demand for mo-bility. However, transport today is one of the most prominent environmental problems, leading to health problems, congestion, environmental impact, and delays. This has consequences to spatial planning, technological problems, infrastructural designs, and modality questions.

One of the sectors that are addressed in the ManVis project is transport. It is obvious that sustainable mobility is an important issue for this sector. However, looking at the problems from a holistic point of view, sustainability includes more than environmental aspects like accessibility, safety, and economic growth. Important underlying innovation related issues for the manufacturing industry are:

• Local environmental impact, like noise and ambient air quality

• Local, regional, national and international accessibility/congestion

• Transport safety

• Integration and synchronisation of modalities

• Increase in mobility, and/or decoupling mobility from economic growth.

7.2.3 Key Enabling Technologies and Research Areas

The other side of innovation is fed by developments in science and technology. In the table below, the basic research paradigms are listed and constitute the fundament to analyse possible important research topics interesting for the manufacturing industry.

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These new insights into knowledge and technology are considered enabling to innova-tion.

Overview of the basic research paradigms included in Dynamo and considered relevant for innovation in the ManVis domain.

Basic research paradigms

Description

High power computing, interfaces and ubiquitous networks

The major advances in electronics and telematics lead to high power computing, new human and technical interfaces and wireless and wired computer-network systems

Intelligent mechatronics

The new generation of the hybrid world between ICT and mechanical systems, induced by advanced developments in ICT.

High tech machining New methods and tools for the manufacturing of products are initiated by several high tech developments, like laser technology, near-net shape technologies, CAM systems.

Molecular biotechnology

More scientific insight in biological systems on the micro and nano level has led to new perspectives on the functioning of the human body, industrial biosystems and other areas.

Nano-manufacturing New technological developments enable insight on an atomic level and the possibility to create structures on a nano level.

Advances in materials New ways of materials production, with e.g. nano-structures make new materials with special characteristics, like stronger, smarter, lighter and more temperature resistant.

Energy technology New energy related technologies, initiated by new developments in e.g. catalysis, electrical power processing, fuel cell technology and combustion/incineration.

Theoretical knowledge on modelling of materials, processes and behaviour

New theoretical knowledge that describe physical, chemical and social processes and can be translated to simulation models.

In the following pages these basic research paradigms are discussed.

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Theoretical knowledge for products and process modelling

During the industrial revolution, the development of new products and processes shifted from serendipity to purposive research driven development by focussed ex-periments. Due to the increase in theoretical knowledge in material characteristics and reaction kinetics, and to new advanced ways of computer modelling, a new shift is oc-curring to virtual experimentation. This modelling of product characteristics and proc-esses on a molecular level will increase the efficiency of the development and monitoring of products and processes.

As materials and processes are important in manufacturing, gaining more theoretical knowledge on properties of materials, (chemical) processes and mechanical systems can have significant effects (computational chemistry). It will enable efficient develop-ment of new materials, but is also a crucial input to the simulation of processes and materials (modelling) which is for example crucial for further development of nano-manufacturing. Also, it will enable a reversed engineering approach where specific ma-terial demands can be translated to production processes. Behavioural modelling can be of value to evaluate and synchronise production processes and products, thus in-creasing efficiency and quality.

Advances in materials

Developments in the field of materials are foreseen, initiated by new catalysts and other reaction systems, new theoretical insights in material behaviour, new possibilities in hybrid polymers, and advances in nanotechnology. These will lead to materials with new or improved characteristics like conductivity, strength, weight, intelligence, resis-tance to temperature/corrosion/scratching etc.

This basic research paradigm is significant because of its enabling character for the development of materials with high performance and special high quality functions. These innovation themes lead to a reduction of costs and improved productivity, but especially to new markets. Looking at this research area of material technology, the S&T development that is most prominent is nanomaterials. Other important research themes are smart materials, advanced catalysis, high performance materials, ad-vanced coatings, fuel cells, and advanced adhesives.

Nano-manufacturing

A third basic research paradigm is nano-manufacturing. New technological develop-ments enable insights on an atomic level and the possibility to create structures on a nano level. Examples can be found in lithography, electron microscopy, focussed ion-

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beam technology, etc. These technologies will enable the development of new manu-facturing methods for the production of nano-applications.

For manufacturing the most promising research area are the Micro Electronic Mechani-cal Systems. This will enable the production of miniaturised devices like sensors. This research paradigm is important for the ManVis domain, both as enabler for new prod-ucts and as enabler for new production methods. However, the actual development of this technology will take place in highly specialised universities and companies.


For the last decades, information and communication technology was considered a new enabling Kondratieff wave. Based on advances in electronics leading to computers and new telecommunication systems, our economy has changed dramatically. This wave is still continuing and examples of research topics are ubiquitous: computing, artificial intelligence, advanced computing, human interfaces, ubiquitous networks, telematics, digitisation, and intelligent electronic devices.

Also, this research paradigm can have a huge impact on the manufacturing industry (and ManVis domains). Combined with the ongoing social trend to more individualisa-tion, the need for information and connectivity of consumers it will enable new high tech networked products.

Intelligent mechatronics

The hybrid world between ICT and mechanical systems has been highly stimulated by the advanced developments in ICT. New developments in micro/nano manufacturing, embedded systems, advanced sensors and biomechanics, connected to better control systems and system modelling are giving an impulse to the increase of intelligence in mechatronics, as well as miniaturisation of mechanical systems.

This research paradigm's main element is Robotics. Although this area can be seen as “traditional”, a new phase of research is initiated by the miniaturisation of mechatronic devices, new software (e.g. imaging) and advanced process modelling. This leads to enhanced automation in the manufacturing industry, but also to enhanced intelligence in products.

High tech machining

The discrete mechanical manufacturing of products is an important research paradigm. This field is influenced by an increasing demand in precision and manufacturing speed. New technologies and methods are developed in the area of laser technology (bend-

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ing, cutting, joining, etc.), near-net shape technologies, CAM systems, propulsion tech-nology, micro machining (micro grinding, -cutting, etc.), and new joining technologies.

These technologies enable advances in process and quality control with higher accu-racy as well as faster and more flexible mechanical production and are highly relevant for the manufacturing industry.

Energy technology

Energy technology is an important issue on European and national level. Based on the developments in oil prices as well as climate change, this research paradigm is in-creasing in importance. New technologies in the field of e.g. renewable energy (solar energy, biomass conversion), fuel cells, energy storage, catalysis, or high power elec-tricity systems are creating momentum for the development of e.g. new transport en-gines, domestic energy systems, and centralised energy generation.

For the ManVis domain, these developments are mainly of importance for the product side. Although of course the industry also uses energy, this research can lead to the development of new energy systems to include in products.

Molecular biotechnology

Understanding more about biological systems on the macro, meso, micro, and nano level has led to new perspectives on the functioning of the human body, industrial bio-systems, and other areas where biological phenomena occur. Important research themes are genetic engineering, in vitro cultures, protein engineering, and modern bio-process technology.

The field of molecular biotechnology is in general still of limited importance to the manufacturing industry. At this time, only some application areas are emerging, like bio manufacturing and advanced sensors. However, in the long run the fusion between ICT, advanced materials, and biotech are expected to lead to new markets and reduc-tion of manufacturing costs. Both, genetics as well as molecular monitoring techniques, are examples of the biotech side of converging technologies.

7.2.4 Main Innovation Themes for Industries

From the perspective of the industry, the most important point of view is looking at in-novations. Here, research supply and market/society demand are integrated into new commercial applications. In this paragraph the related innovation themes for the Mavis domain are discussed.

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In Dynamo sixteen major innovation trends are now identified. Fourteen are considered important for the manufacturing industry 6. In the following diagram you can see these fourteen innovation trends, with underlying innovation themes.

Major innovation trends

Description

Smart Housing Advances in computing/networks, mechatronics, molecular biotech and materials lead to increase of intelligence of systems and smart applications in the domestic environment.

Advanced housing and constructions

Advances in computing, materials, high tech machining and energy technology lead to efficient and environmentally friendly houses and constructions, as well as design and construction.

Smart consumer goods

Clothing, footwear and furniture are examples of semi durable consumer goods where innovation is seen, initiated by ICT and advanced materials.

Economic and environmental industrial processes

Initiated by theoretical knowledge on chemical conversion and materials (e.g. on nano level) and sensor technology, new non traditional reactor concepts are possible.

Efficient medical care

The trend of efficient medical care is the result of high tech developments in ICT, biotechnology, material and medical science.

High tech product manufacturing

Initiated by improvements in ICT and manufacturing on nano-scale new methods, manufacturing will see innovations in diversification of products, increase in speed, etc.

New organisational concepts

There are trends in product service systems, sharing facilities and functional sales, leading to reduction of costs, improving quality and added value for business.

The information society

Enabled by ICT networks and a more social process of globalisation, intelligent networks of communication are emerging around several economic and social functions.

6 Sustainable regions, cities & rural areas, and Space exploration & sustainable aeronautics

are excluded due to mismatch with the focal sectors of Manvis.

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Sustainable energy production and distribution

Initiated by the greenhouse effect and decreasing fossil fuel reserves this trend is strong, with a focus on e.g. renewables, hydrogen economy, clean fossil fuel and decentralised generation.

Sustainable transport The increase in mobility led to problems in safety, environmental impact and accessibility, which is addressed by new transport systems, innovations in logistics and sustainable fuel.

Economic and environmental industrial processes

This trend focuses on industrial processes like chemical and food processing. New conversion concepts, separation methods, modelling, and advanced use sensors for monitoring and control lead to efficiency improvements and reduction in waste. Reac-tion and process design (or industrial process technology) deals with the design and development of new processes to design the best processes (fastest, cheapest, clean-est etc.). It includes the development, scale-up, and design of chemical manufacturing facilities.

From the perspective of the ManVis domain, this trend has little significance. Just the development of advanced sensors for the management and control of continuous pro-duction processes (e.g. chemical industry, refineries and food industry) are a potential interesting innovation theme.

High tech product manufacturing

This trend focuses on the manufacturing of products. The further use of ICT in the manufacturing industry increases the high-tech character of manufacturing. It enables miniaturisation of manufacturing processes, increase in production speed, higher qual-ity, reduction of costs, and increased individualisation of production.

Looking at the ManVis domain, the following innovation themes are of interest:

• Miniaturisation and precision manufacturing

• Efficient manufacturing

• Advanced service robots

• Sustainable manufacturing.

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Networked Information Society

Information and communication technologies create new methods of production, trade and communications. This sector has become the second largest of the Union's econ-omy and employs more than 2 million people in Europe. To maximise the effort in this field economically and socially, the future generation of technology will be more inte-grated into the environment and more accessible, offering a multitude of services and applications more easily. The ultimate aim is to introduce more user-friendly technolo-gies in all areas: personal security and privacy, teaching and training, access for the elderly and the disabled, telecommuting, electronic commerce and administration, on-line health (e-health), intelligent transport, etc.

The ManVis sectors can benefit from this innovation trend, both by product and proc-ess innovations as well as new services. Relevant innovation themes are:

• E-business

• Mass customisation

• Tele maintenance.

New organisational structures

This trend focuses on the organisation of business. Developments in ICT, as well as pervasive globalisation and the individualising of consumers initiate new business models and concepts. Value chains are changing, the participation in design and pro-duction by consumers increases, and new business concepts emerge. Other important changes are seen in sharing facilities and functional sales. This leads to reduction of costs, improving quality and added value for business.

These new organisational innovations also are of interest to the ManVis domain. Some important new organisational structures are:

• Virtual manufacturing

• Product service systems

• Internet based consumer driven assembly.

Smart housing

New materials, sensor technology, new organisational concepts and other ICT devel-opments will lead to more efficient services and increased comfort for civilians. The intelligence in design of domestic products as well as the intelligence of the products themselves will increase due to these new insights.

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For the ManVis domain, this trend especially focuses on new or improved products in the domestic sector. Relevant innovation themes are:

• Domotics

• ICT networks and infrastructure

• Sustainable indoor climate systems

• Advanced service robots

• Advanced household appliances

• New housing concepts

• Advanced domestic sanitation.

Sustainable construction and buildings

Driven by demand for sustainability and customer individuality as well as developments in materials, ICT and mechatronics initiate innovations in the construction process and the actual buildings. The design of buildings is highly computerised and will enable more and more participation of customers. New materials will allow faster and cheaper construction as well as flexible buildings. Also monitoring and evaluation of buildings is possible in a more economic way.

For the ManVis domain, this innovation trend mainly focuses on new products. Rele-vant innovation themes are:

• Advanced housing materials

• Electronic monitoring of buildings

• Subsoil building and construction

• New construction methods.

Sustainable energy production, distribution

The current energy system based on fossil fuels must be made more sustainable as fossil fuels are slowly depleting, while demand is growing and fossil fuels stimulate en-vironmental problems. The innovation domain of sustainable energy stands for genera-tion, transport, and the use of energy in a manner that is globally reliable, safe, affordable, has low-emission, and is efficient (Brundtland Commission/Sustainable En-ergy Protocol). The main focus lies in technological development and integration of renewable sources in all aspects of energy supply (storage, distribution, use).

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For the manufacturing industry addressed in the ManVis project this innovation theme is of limited interest. Energy systems as well as distribution of energy are not sectors in the ManVis domain. However, as this trend is one of the major innovation trends, we feel it needs to be mentioned in this chapter. The only innovation themes relevant are:

• Advanced energy reuse systems

• High efficient energy networks and infrastructure.

Sustainable transport systems

Increased mobility of people amongst others induced by globalisation and personalisa-tion trends has put pressure on the safety, speed, availability of fuel, and the environ-ment. As a result there is an urge for major innovation themes in transport, especially in the field of reduction of environmental impact, efficiency of transport infrastructures (more efficient use), and information systems.

As transport is one of the sectors in the ManVis domain, this innovation trend is of high importance. Relevant innovation themes are:

• Low or zero emission vehicles

• Multi modal transport systems

• Automated vehicle guidance systems

• Traffic information systems

• Sustainable ships

• Light weight transport.

Smart consumer goods

The advances in materials and ICT also enable an increase in quality of semi durable consumer goods like clothing, footwear, and furniture. Products can be smarter from the perspective of active interaction with their environment, presenting information as well as higher quality like scratch resistant, breathing textures, anti fouling, stronger, and lighter.

An important aspect of the manufacturing industry is the production of semi-durable consumer goods. This innovation trend is of high importance. Relevant innovation themes are:

• Smart packaging

• Sensor-integrated products

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• Next generation mobile communication devices

• Smart textile consumer goods

• Logistic and information integrated management.

Next to these “generic” innovation themes, for some sectors specific innovation themes are of importance. For the Rubber and Plastics sector, based on e.g. nanomaterials and new theoretical models, new materials are possibly creating higher quality and new markets (e.g. disinfectant textiles, smart packaging materials, ultra light weight materi-als). Also, the trend to sustainability is continuing to lead to an increase in use of re-newable feedstock.

A major theme within the Transport sector is the increase of intelligence and individual-ity in cars and other transport vehicles. The initiating factor is the fast development of research in telematics which enable the use of intelligent electronic devices. Also, based on new materials (catalytic, high performance, renewable) and developments in energy technology, sustainable transport systems are gaining priority.

In the Machinery sector, the increase of intelligence can be considered a major issue. Advances in robotics, nano-manufacturing (MEMS) and telematics are combined, lead-ing to smart manufacturing systems. On the one hand, this can lead to an upscaling of manufacturing of specialised products like biosensors or wireless sensors. On the other hand, downsizing to micro factories and decentralisation of production processes to regional areas are possible.

Within the area of Fabricated Metals Products, limited innovation themes are relevant (except the generic). New, high performance materials, leading to increase in strength and better processing are possible, making use of nanomaterials and new coatings. Also some smart metal materials are possible (memory) and a combination with poly-mers.

One of the sectors where significant innovations are expected is the Electronics, Equipment and Instruments sector. Based on nanotech and ICT developments, the intelligence and individuality of products and systems are expected. One example is the networked wireless devices that are expected to see an increase.

The Traditional Products will profit from advances in materials (high performance, re-newable, smart) and sensor technology. This will on the one hand increase quality and add new functionalities and on the other hand will increase the “intelligence”.

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7.3 Reflection on ManVis Statements As said before, technological and organisational innovations are important elements in the ManVis Delphi survey. The statements dealing with innovation are included in all Delphi chapters, except the Strategy, Organisation and Management. From the total of 101 statements, 68 are innovation related. In this chapter these statements are ana-lysed regarding the Dynamo S&T developments, innovations and socio-economic is-sues.

7.3.1 Science and Technology Developments and ManVis

Part of the ManVis questionnaire is connected to the S&T developments listed in the previous chapters. In the following table this relation is shown.

Basic research paradigms ManVis Delphi statement

Theoretical knowledge for product and process

S01, S07, S64, S65, S80

Advances in materials S28, S29, S30, S66, S76, S77, S90, S91, S97, S98, S99, S101

Nano-manufacturing S03, S04, S05, S72, S90, S91


S01, S02, S07, S08, S34, S35, S36, S45, S52, S65, S68, S69, S79, S80, S81, S86, S94

Intelligent mechatronics S01, S05, S06, S07, S08, S09, S14, S34, S35, S36, S37, S45, S52, S57, S69, S82, S83, S86, S87, S92, S93, S95, S96

High tech machining S06, S09, S10, S12, S37, S67, S73, S74, S75, S96

Energy technology S13, S58, S59, S88

Molecular biotechnology S04

Most ManVis statements relevant to the research paradigm to search for new theoreti-cal knowledge to model products and processes focus on the development of software to automate production methods. Some also address the need for virtual development and testing. What is slightly missing is the attention to translate consumer needs to e.g.

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material design by fundamental knowledge on material characteristics (although S080 is linked to this research theme).

Advances in materials are in the core of the manufacturing industry. Looking at the ManVis statements, this is addressed significantly and broadly. Smart materials, com-posites and some metal oriented statements are highlighted. However, some important trends in materials research are given little attention like adhesives, ceramics, and light weight materials. These themes can have significant impact on the manufacturing in-dustry, both from the production and product point of view.

Nano manufacturing is a specialised emerging theme of research, which has produc-tion as well as the application aspects. In the ManVis survey, the approach to address the opportunities of nano manufacturing is not systematic. In focuses mainly on MEMS and bottom up assembly on atomic scale. The actual application of MEMS in both pro-duction and products is not addressed fully, although this can be one of the major initia-tors of innovation for the manufacturing industry.

The wave of ICT is still going on and examples of research themes are ubiquitous computing, artificial intelligence, advanced computing, Human interfaces, ubiquitous networks, telematics, digitisation, and intelligent electronic devices. ManVis mainly fo-cuses on issues in the production- and distribution-process. New possible products are not addressed. These developments will ask for new, more integrated production methods also in traditional industries.

Intelligent mechatronics in production processes are strongly emphasized. Many Man-Vis statements are addressing the issues around this research paradigm. However, also here, the issues looking at the new possible products and their conclusions for manufacturing are hardly addressed. The question is still how intelligent mechatronics can open new markets and what effect this will have on the manufacturing industry.

High tech machining is mainly a research paradigm that deals with the manufacturing process. Most technologies are addressed by ManVis.

As the rising price of crude oil and the greenhouse effect initiate the development of sustainable energy, new energy technologies are gaining interest. The ManVis study did not cover the production of energy systems, so it is not expected that research on new energy systems was addressed. However, also little attention is given to the incor-poration of new energy technology in the production process and products.

In the field of molecular biotechnology, at this moment little direct relevance is seen. However, at medium-term or in the longer term, DNA or other molecular biotechnol-ogies can initiate innovations in production and products. This is practically not ad-dressed in the ManVis project.

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7.3.2 Global Socio-Economic Challenges and ManVis

The global socio-economic challenges gathered in Dynamo can be seen as an impor-tant demand of society for the industry, or a source of problems that needs to be ad-dressed by society. Part of the ManVis questionnaire is connected to the challenges described in the previous chapters. In the following table the relation is shown between the global socio-economic challenges and the ManVis statements, from the perspective of innovation.

The innovations considering the challenge of pervasive globalisation are addressed by ManVis by innovations in automation and (global) network development. Attention to innovations in the field of “enablers” for higher added value, financial security, or virtual reality is limited.

Global socio-economic challenges

ManVis Delphi statement

Persvasive globalisation S06, S07, S22, S25, S37, S38, S39, S45, S48, S83

Ageing population S01, S02, S08, S54

Climate change S13, S38, S58, S59, S62

Protection of the environment S11, S30, S38, S58, S59, S61, S98, S99


S13, S29, S31, S32, S38, S58, S59, S61, S76, S77, S99,S100


S01, S18, S19, S25, S33, S35, S48, S65, S80, S81, S86, S92, S95

The information society S01, S34, S48, S50, S68, S79, S84, S88

Involved consumers and citizens

S02, S09, S10, S14, S26, S36, S79, S84

War and terrorism


S93

Transformation of the food economy

S101

Sustainable mobility S58, S59

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Aging population is also an important global challenge. Also here, ManVis gives atten-tion to enable the elderly to work for the industry, but limited attention is given to new products for elderly people.

Climate change is highly linked to new energy technologies. As limited attention is given to this research paradigm, also little attention is given to climate change. An ex-ception is the field of transport, where some statements are addressing the problems around reduction of the impact of transport on climate change. Also some attention is given to renewable energy resources.

The protection of the environment and the impact of the manufacturing industry on the environment are addressed by statements on recycling and prevention of waste and emission. The statements are of high aggregational level and limited. In depth analyses of underlying issues and possible innovation related solutions are focussed on recy-cling. Emerging issues like aerosols, endocrine disruptors, fine dust, and toxic sub-stances in production and products are not addressed.

Over exploitation of natural resources in the survey is mainly addressed by statements concerning recycling. Some issues of use of fossil fuels in transport are also ad-dressed. However, attention to aspects like renewable resources, dematerialisation and miniaturisation, and increase of product life are limited. This challenge is mainly product oriented.

Looking at the ManVis statements, the knowledge based society is mainly addressed by ICT related innovations. Sharing information, increasing communication, and intelli-gence in production processes are issues included. Some issues on organisational innovations are also included, like product/service systems, participation of consumers in design and global human resource management. Little attention is given to converg-ing technologies and organisational innovation that facilitate the knowledge intensive process of creation.

Information society related statements focus on the divers ICT related innovations. Some logistics aspects, education/training, and e-business related aspects are ad-dressed. Also here, limited attention is given to the product side of manufacturing lead-ing to demand of network related products.

The challenge of focusing on the increasing need of consumers to be involved is ad-dressed by statements on diversification of products. However, new developments in mass customisation and increase of demand of consumer information are lacking.

The challenge dealing with war and terrorism is significant is today’s world. ManVis does not address any problems, like new demand for this kind of products, but also their own safety looking at protection of the industrial complex.

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Also new opportunities because of changes in the healthcare system are hardly ad-dressed. Although limited effects on the production process are expected, it will lead to demand for new consumer products. This is also the case for the food industry.

The unsustainability in transport is addressed by many statement concerning climate change, environmental impact and overexploitation of natural resources. There is lim-ited need for special transport and sustainability related statements. Some more atten-tion could be given to the safety and security of transport.

7.3.3 Innovation Trends and ManVis

The first question is if all major innovation trends are addressed in the Delphi survey. In the table below, the major innovation trends are listed and combined with the relevant statements.

Innovation trend ManVis Delphi statement

Efficient and effective healthcare S02, S34, S36, S88, S93,

Sustainable transport S02, S14, S29, S30, S31, S34, S36, S57, S58, S59, S61, S76, S88, S91, S101,

Economical and environmental industrial processes

S03, S04, S05, S06, S07, S11, S13, S36, S69, S86, S98, S99,

Smart housing S02, S14, S31, S34, S76, S88, S91, S97, S101,

Networked information society S02, S14, S34, S68, S88

Smart and efficient (semi-) durable consumer goods

S03, S14, S28, S29, S30, S31, S34, S76, S82, S88, S101,

Sustainable building and constructions

S02, S06, S28, S30, S34, S35, S76,

Healthy and safe food S28, S30, S34, S101,

Sustainable energy production and distribution

S11, S59

High tech product manufacturing S01, S02, S03, S04, S05, S06, S07, S08, S09, S10, S11, S12, S13, S14, S31, S34, S35, S36, S45, S52, S61, S64, S65, S66, S67, S68, S69, S70, S72, S73, S74, S75, S81, S86, S87, S90, S91, S92, S95, S96, S98, S99, S100,

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Sustainable agriculture S06, S34, S45,

New organisational structures S14, S32, S33, S36, S43, S54, S60, S71, S79, S80, S84,

The statements relevant for the trend in efficient and effective healthcare are mainly focussed on more generic intelligent electronic devices and medical systems (S02, S34, S36, S88). Limited attention is given to biotech related medical developments, like artificial tissues and organs and “lab-on-a-chip” sensors. On the other hand, the market of MEMS and health and healthcare (S93) is considered important in mid term by 77% of the experts.

Sustainable transport is given much attention in the survey. Also here, the generic intel-ligent electronic devices are addressed, but also much attention is given to sustainabil-ity issues like recycling and alternative fuels. Two other areas are the use of advanced materials (e.g. coatings and high performance materials) and logistic innovations. Lim-ited attention is given to more systematic innovations, like multi-modal transport sys-tems and intelligent traffic management. Also much attention is given to the automotive industry and less to other transport modalities.

The innovation trend on economical and environmental industrial processes is ad-dressed by statements on micro manufacturing, on sustainable processes (renewable resources and end-of-pipe technologies), and on manufacturing automation. Also im-portant is the high tech maintenance. Little attention is given to the development of new process equipment for the chemical or food industry (e.g. alternative reactors, ad-vances in separation technology, process monitoring equipment, or process miniaturi-sation). These areas can be interesting new markets.

Especially advanced materials and ICT developments prove to be an interesting initia-tor of developments in the field of Smart housing. The ManVis statements focus on sustainability issues and some electronic devices, but attention to interesting areas like monitoring systems in houses, new flexible building methods, domestic ICT networks, using smart materials in the domestic area (e.g. self cleaning surfaces), domestic ro-bots are addressed mostly in an indirect way.

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7.4 Final Conclusions

7.4.1 Global Socio-Economic Challenges for Manufacturing

Many global socio-economic challenges are a chance for the manufacturing industry. The role of innovation to challenges like climate change, over exploitation of natural resources and unsustainable mobility clearly is important. However, they will have structural consequences for the industry. The reduction of organisations in the value chains, increase of participation of consumers, new technological systems (e.g. in en-ergy), shift towards added value on products, and knowledge intensification are some examples. These are changes which are systemic of nature and need a multi sectoral approach, involving stakeholders from industry, governments, research and NGOs.

Many opportunities can be expected for products and markets. Demand for sustainable products, individual products, high quality, new products in the field of terrorism, the ongoing innovation wave on ICT, and biotech will lead to new products and markets. Getting an overview of possible new lead markets is of high importance.

Manufacturing itself shows fewer opportunities. Some challenges, like overexploitation of natural resources, environmental impact, and climate change are relevant for manu-facturing. A new emerging challenge is “war and terrorism” which leads to a need for more security in the industry itself. Also challenges like ageing and the knowledge based economy can be addressed by innovations, but also need institutional changes.

7.4.2 Basic Research Paradigms for the Manufacturing Industry

The manufacturing industry can benefit significantly from science and technology de-velopments. The major research paradigms considered of importance to the ManVis domain are: High power computing, interfaces and ubiquitous networks, intelligent mechatronics, high tech machining, advances in materials, energy technology, and theoretical knowledge on modelling of materials and processes.

These research paradigms are enabling innovations on both process and product. They enable more intelligent manufacturing through sensing and information process-ing and also increase production speed. Research will be of limited importance to is-sues like sustainability. New fast, high quality, precise technologies are initiating innovations in manufacturing.

Like the issues, science and technology has high potential to create new products and markets. Products will be more sensible to their environment (advanced sensing), are interconnected, incorporate smart materials with new functionalities, and introduce re-newable energy sources.

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An important fundamental research paradigm is the shift to virtual manufacturing by increased knowledge on materials and processes. This can lead to modelling and simulation. It will enable the shift from discovery based science and product develop-ment, to application based problem solving.

7.4.3 Main Innovation Themes for Manufacturing

The major product oriented innovation potential can be found in the field of networked products, sensorised products and application of advanced materials. The smart com-munication network devices will be further developed and introduced in new markets like housing (e.g. domotics), healthcare (e.g. remote diagnostics), and transport (e.g. mobile communication). Sensorised products also have the potential to be broadly used throughout the whole economy. The advanced functionalities of new materials will create smarter, lighter, stronger products, but also create or improve functionalities like anti-fouling, scratch resistance, and integrated information.

The innovations in manufacturing itself will mainly benefit from increased intelligence, networked systems and increase in precision. Some innovations in the area of sustain-ability can be realised. Automation can be improved and manufacturing can be made more flexible. However, the potential for more radical innovations is limited.

Looking at new business concepts some more systemic changes are identified. Changes in value chain (e.g. factory outlet, direct retailing), increased customer partici-pation, and product service systems are examples of new business concept that can create added value.

7.4.4 Reflection on ManVis Statements

The Delphi statements used in ManVis were the result of consultation with stake-holders of certain sectors in the manufacturing industry. Dynamo is used to give reflec-tion on the field the statements addressed.

The first conclusion that can be drawn is that the outcomes of the ManVis Delphi sur-vey are biased towards the discrete manufacturing processes. Much attention is given to the technological developments to make products. Less attention is given to new products and therefore new emerging markets. Looking at the positive effects de-scribed for innovation in chapter 8, productivity and reduction of costs are well ad-dressed, but new markets are underemphasised. Especially developments in networked products, sensors, and advanced materials are important. This will have a significant effect on the manufacturing industry.

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The science and technology developments concerning manufacturing itself are ad-dressed sufficiently. Some areas are addressed in a limited way (e.g. molecular bio-technology), but this will have no severe consequences because of their limited impact on the manufacturing industry in short or medium time. However, from the product side there is less coverage – especially in the fields of important areas like MEMS, ICT net-works, and some functionalities of advanced materials.

Looking at the emerging global socio-economic challenges, climate change has been given little attention. However, as the more energy systems oriented sectors were not included, this can be expected. The challenge of pervasive globalisation is also ad-dressed in a limited way. As this issue is expected to have a high impact on the manu-facturing industry, a specific foresight could be of interest to identify innovations that can help to solve the problems on this issue. This also counts for the challenge on knowledge based society. Many challenges are more product oriented and therefore call for research on this (healthcare, food, over exploitation, information society). The last remark is on the challenge on war and terrorism. As this is not addressed, it calls for a separate study on the risks and opportunities concerning this challenge.

Several main innovation opportunities are hardly addressed because of the manufac-turing technology orientation. Transport is an important exception.

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7.4.5 Final Conclusions

The following conclusions can be drawn:

• The future of the manufacturing industry still focuses on the manufacturing process and reduction of costs. More emphasis is needed on the new opportu-nities of materials, ICT, and other developments for new businesses (prod-ucts). A new foresight on emerging markets for the manufacturing industry would be of interest.

• Sustainability is an important challenge, which can also lead to new opportuni-ties. Recognition to this challenge is limited.

• Diversification of products and including customer participation in design and manufacturing is a major challenge of the manufacturing industry that needs attention.

• New industrial business concepts are emerging, like product service systems and other changes in the value chain. There is a need for a systematic over-view of possibilities and consequences.

• War and terrorism is not really an issue, but with the increase of risk this should be given more attention.

• In almost every industrial sector analysed there are opportunities for innova-tion. This is often product oriented. Only the innovation potential of fabricated metal products is slightly limited.

• Often a multi sectoral approach is needed to benefit from the innovation oppor-tunities. A multi sectoral foresight project, including active participation of in-dustry, would be beneficial for the manufacturing industry.

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8 Demand Perspectives on Manufacturing Visions. In-sights from the Stakeholder Strand

Authors: Philine Warnke, Fabiana Scapolo (JRC-IPTS)

8.1 Introduction A number of previous studies on the future of manufacturing have been indicating that the way manufacturing will be operating in the future is heavily depending on the de-velopment of the societal framework in which it is embedded (cf. Flanagan et al 2003). Accordingly, when looking at the future of manufacturing it is crucial to consider the future demands of the people who will be using the products, working and learning in factories, doing research for manufacturing and living in areas where production plants are located. Clearly, aspects like these can only be tackled by taking into account changes within society as a whole instead of confining the view to manufacturing alone.

This is why, in the ManVis project a separate strand of activities, carried out by JRC-IPTS, has been analysing the demand perspective on the future of manufacturing thereby complementing the analysis of the Delphi survey. This chapter reports the re-sults from this part of the ManVis project.

When analysing the societal demand on manufacturing it is clear that there is a wide range of stakeholders concerned. Within the demand perspective strand of the ManVis project we have therefore been seeking interaction with people from different stake-holder organisations. For this reason the structure of this chapter is different from the others that rely on the Delphi survey as their main source of information.

To tackle the future of manufacturing from the demand perspective the following meth-odology was adopted within this strand of the ManVis project (see Figure 8-1):

Before the ManVis Delphi Survey started, stakeholders from different organisations were approached by the JRC-IPTS team in a written form to give their opinion on the layout of the survey. As a result, demand side statements on the future of manufactur-ing were suggested to be included into the survey.

When the results from the survey’s first round were available, the JRC-IPTS team or-ganised a “demand perspectives workshop”. In this workshop, stakeholders from dif-ferent organisations concerned with various demand aspects of manufacturing like consumer organisations, environmental NGOs, a student organisation and trade unions representatives were invited. The aim of this workshop was to complement the Delphi

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analysis by adding demand perspective aspects that were not – or not adequately – addressed by the Delphi survey.

In the following section (8.2) we give some background from the academic debate indi-cating why the demand perspective is of special relevance for the future of manufactur-ing. Finally, in Section 8.3, we develop the content of the main issues. The analysis integrates three legs of information, the results from an expert-workshop that was look-ing at the future of manufacturing from the demand perspective, the results of the Del-phi survey, and supporting literature in the area. The results from the workshop are the main source of knowledge and reference, to then be integrated with the results from the Delphi survey and from the literature. In particular, we are drawing upon previous future studies and especially on the outcomes of another recent European Foresight project on the Future of Manufacturing (FutMan). In the FutMan project a separate line of research was dealing with “influence of socio-economic contexts in which manufac-turing occurs, including changing demand patterns” (Flanagan et al 2003). This study was in turn based on an extensive analysis of literature.

Delphi SurveyReportDelphi-

Interpretation

ManVis Final Report:

Manufacturing Visions and

Conclusions for Research Policy

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Scenarios on the Future of Manufacturing from previous work

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Report on revised scenarios

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Figure 8-1: Integration of demand perspective within the overall ManVis project frame-work

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8.2 Relevance of the Demand Perspective for the Future of Manufacturing – Insights from the Academic Debate

A number of studies concerned with the future of manufacturing in Europe have pointed out that the way manufacturing is interacting with its socio-economic framework is likely to undergo major transformations already in the near future. At the core of this transformation are the expected changes in the way knowledge is generated, main-tained and applied. It has been widely concluded that in increasingly dynamic and competitive markets the capacity to innovate and create new knowledge is becoming the key factor for companies to preserve sustainable competitiveness. As technology driven differences in products and processes become easier to imitate the capability of organisations to produce new knowledge will become the main competitive asset (Manufuture 2004).

However, it is expected that the necessary capability to innovate cannot be developed by companies in classical ways. Companies will have to find ways to access a more diverse range of knowledge sources often located within local clusters of customers and users but also across their own organisation. Already in 1999, the IPTS “futures project” – setting out to explore the major challenges to Europe within the knowledge society – was concluding that the knowledge economy will be increasingly customer driven (Synthesis report p. 22) and therefore changing demands will play a major role in shaping the competitive enterprise of the future. From another perspective, the ex-pert group on sustainable production and consumption (European Commission 2001, p. 18) came to the conclusion that participation of other actors outside the traditional R&D institutions will be a key factor for successful innovation approaches.

Also within the economics of knowledge it has for some time now been argued that with the rise of knowledge economy, innovation will be fed by an increasing variety of knowledge sources and less and less be confined to R&D departments and to explicit research activities (Foray 2004). Accordingly, the importance of drawing on external sources of knowledge has increasingly been stressed. Especially the important role of users in initiating and carrying out innovation has been emphasised (cf. v. Hippel 2005, Smits and Kuhlmann 2002 p. 11). These findings are very much in line with previous results from innovation studies that have been pointing to the fact that the capability of national or regional systems of innovation is greatly depending on the way companies are able to interact with competent and knowledgeable users (Lundvall et al. 2002).

At the same time the close interaction with local knowledge sources is more and more perceived as a chance for “localising” manufacturing and as an alternative to unre-stricted off-shoring of production (Futures project p. 22, Manufuture 2004 working document p. 18).

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Another development giving renewed emphasis to the importance of demand aspects for the future of manufacturing is the expected shift of manufacturing companies from product manufacturers to providers of integrated product-service packages. This shift is demanding new ways of generating knowledge and linking up with local knowledge of customers and users (Flanagan et al 2003).

To build up the innovative capacity needed for this type of knowledge generation, com-panies need to not only to open up to others. Another major requirement is “unlocking intellectual capital and human creativity throughout the organisation” (Hague et al. 2002) which implies workplace innovation throughout the organisation and the devel-opment of new concepts on quality of work.

All these developments are strongly indicating that in the future the “demand perspec-tive” will not only be a major external driving factor for change in manufacturing but become a core issue for the capability of innovation systems.

8.3 The Demand Side Aspects Shaping the Future of Manufac-turing – Results from the Stakeholder Workshop

Based on a review of previous studies on the subject the analysis of the demand per-spective strand was clustered around the two thematic areas “Challenges to manufac-turing arising from emerging demands of users and consumers on products” and “Challenges to manufacturing arising from emerging patterns of working, learning and living”. These two areas were specifically addressed in the demand perspective work-shop. Within both areas the stakeholders highlighted a number of future challenges to manufacturing that, from their point of view, should be addressed by manufacturing visions. These challenges will be reported and linked to results from the literature and the Delphi results in the following paragraphs. Though the separation between the two areas is somewhat artificial and, as the analysis will show, there are a number of crosscutting aspects, we will stick to the structure in this report in order to be able to report the interventions of the stakeholders more faithfully. However, there is one ex-ception we would like to point to: Within the demand perspective workshop it was strongly emphasised that a substantial reduction of environmental impact of manufac-turing for the future is urgently required. Especially reduction of resource use and emission of harmful substances was strongly demanded. It was felt that the ManVis Delphi survey did not place enough emphasis on visions of environmentally sustainable production. It was expected that consumers will increasingly embrace the interests of future generations and demand products that are produced with a maximum of envi-ronmental sustainability. However, as in this report a specific chapter is dealing with

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environmental aspects of manufacturing we decided to integrate these aspects into this chapter (Chapter 5).

8.3.1 Challenges to manufacturing arising from new demands on products

Within the following paragraphs we will discuss challenges for manufacturing that are emerging due to changing demands on products on the base of the outcomes of the demand perspective workshop, the ManVis Delphi survey and the literature survey. The issues that were identified are grouped around the following five clusters: (1)Traceability and transparency of products, (2) usability or products for diverse user groups, (3) embracing user centred innovation, (4) processes of social innovation, and (5) system innovation towards sustainable production and consumption. The last para-graph (6) is giving a summary of the results on this topic and drawing some first con-clusions for policy.

(1) Traceability and Transparency

Future consumption patterns are expected to become increasingly complex and di-verse (Flanagan et al 2003, p. 59). There is a clear mainstream trend towards more individualistic values. At the same time in some groups of society there is a growing emphasis on sustainable concepts of life. In the demand perspective workshop partici-pants emphasised that across these different attitudes the demand for more transpar-ency on product features is likely to be increasing.

Future consumers will be demanding more information about the products they pur-chase. On the one hand some groups of consumers will want to know about environ-mental impact such as energy consumption or material use as well as ethical implications (child labour etc.) and social impact to adapt the consumption to their val-ues. These consumers will want to make sure that what they buy has no negative im-pact either on themselves on others or on the environment. On the other hand across all groups of consumers concerns about health and safety as well as product quality will still be rising in the future. Both groups of consumers will want to buy products pro-duced in compliance with laws and regulations. Companies will therefore increasingly be called upon to provide information about their products and production processes in a transparent way. This challenge could be addressed in different ways.

Companies might provide information in databases via the internet, in special con-sumer information forums or through intermediaries like consumer associations. Trans-parent labelling procedures might be developed to enable consumers to compare information. However, to be able to derive the information required it will be necessary

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to trace product information through global value chains. This might become a major challenge for manufacturing in the future. New ICT technologies are likely to play an important role here. Through (fast) wireless communication or through electronic labels it will become easier to trace information about products and production processes and also to communicate this information wherever it is needed. Accordingly the trend to-wards “intelligent” and “networked” products offers a number of opportunities to support consumers increasing demand on transparency. However, as these technologies often involve the handling of personal data, it is important to carefully consider data protec-tion and privacy issues. Again, consumer associations can be an important mediator in implementing sustainable solutions that satisfy information demands without violating information autonomy.

The ManVis Delphi survey did not directly deal with the traceability of product informa-tion However, Delphi statement S0347 did deal with one of the potential enabling tech-nologies:

S034 Electronic Labels8 Electronic labels (e.g. RFID tags) containing relevant product and process infor-mation are embedded in most manufactured products.

In the Delphi survey this statement received almost universal confirmation: No Delphi respondent indicates that this might never happen. The majority of the Delphi experts expect it to be realised between 2010 and 2015 but many even think it could come true earlier. Almost 76% of the experts state that technical feasibility will be the main barrier. Another 65% expect economic barriers. Fewer people expect the main barriers block-ing the implementation of electronic labels in Europe to be related to EU legislation and standards (23%) or to social acceptability (16%).

Among the Delphi experts who expressed an opinion on that, 50% think that electronic labels can have a positive impact on working and living conditions. It is possible that this refers not only to provision of information but also to extended product functions that can be achieved by electronic labels.

7 Please note that all the statements cited with numbers within this chapter refer to the Man-

Vis Delphi survey that was carried out within the Delphi strand of the project. The assess-ments of these statements are also referring to this survey. More detailed information on the Delphi results can be found in the other chapters of this report.

8 This statement was included in the second round of the Delphi survey. Accordingly all the figures that are given refer to these results.

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Highlighting message:

Manufacturing visions need to address the question how manufacturing in the future will serve consumer demands regarding more transparent provision of product and process information. Electronic labels are clearly on the rise to be used in manufactur-ing. Accordingly there is a high potential to use these labels to facilitate transparent provision of information. This potential should be exploited as early as possible within the R&D process. Research and legislation dealing with electronic labels and their ap-plication should therefore quickly incorporate this aspect. At the same time it is impor-tant to look for solutions that are socially acceptable. Integration of relevant stakeholder groups in the early phases of development of tagging technologies seems a suitable measure to achieve these objectives.

(2) Usability for all

The increasing number of disabled people in Europe and on the other hand, the fact that the average age of the population in Europe is increasing and is expected to in-crease to higher levels by the year 2020 will be key factors in the appearance of new types of demands that will have to be met by the manufacturing industry. Instead of making people with special needs buy special products for a large sum of money, products should be adaptable to various needs.

To meet this demand it is a key requirement to integrate users with special needs into the design process (EDF 2005, p. 8). In the demand perspective workshop stake-holders underlined that there are many expert users among consumer groups with special needs who are willing to contribute with their knowledge. Above this users from these groups could systematically be integrated in development of norms and stan-dards to ensure the suitability of products for a large variety of user groups. It is ex-pected that such a systematic attention to inclusiveness of design will increase awareness for usability and thereby make many products better to use for all. This again is likely to open up new business opportunities for European companies. Through the achievement of better products and a more innovative attitude, benefits for the whole society are to be expected from such an approach.

The Delphi survey did not address the challenge of usability and design for groups with special need within its section on “product concepts”. This neglect was regretted by a number of stakeholders in the demand perspective workshop. However the Delphi sur-vey considered some approaches for a deeper integration of users into the design and manufacturing process that are promising for a better integration of special user de-mands. These will be discussed in the next section.

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(3) User centred innovation

As it was highlighted before, innovation studies have pointed out that including users into the design and production process is highly beneficial not only to meet the diverse demands of future users but also to ensure lasting competitiveness within knowledge society. This diagnosis was strongly supported by the stakeholder workshop. There are two aspects of this that seem to be of particular relevance for the future of manufactur-ing industry in Europe: The facilitation of user integration through technological and organisational solutions and the implication of user integration for the location of manu-facturing activity.

Approaches to realise user integration

There are different approaches for including users into the innovation process each of them being suited for different types of products (v. Hippel 2005). One option is to let users do the final configuration of products themselves. For this purpose users could be provided with a platform or a toolkit that allow them to build a product that exactly matches their needs. Another possibility is to offer users access to production equip-ment so they can influence the manufacturing process. This could be supported by ICT technologies like Virtual Reality user labs or tele-controlled machinery. The third option is to systematically integrate users into companies’ innovation processes.

This option was addressed by the ManVis Delphi survey within Delphi statement S026:

S026 Innovation together with Stakeholder External stakeholders are incorporated into the product development process by the majority of companies.

While many Delphi experts did not feel in a position to assess when this will be realised (18% of them said “I do not know”), only a small number of Delphi experts does not believe at all in the realisation of this idea. Most the other respondents expect that this will come true already between 2010 and 2015. 79% of the experts who expressed an opinion on that expect a positive impact on competitiveness from this.

These figures underline the assessments from the stakeholder workshop and the re-sults from innovation studies. Integration of stakeholders and users can be seen as a key factor to innovation and competitiveness and should therefore be placed at the core of “Manufacturing Visions”. However, the high level of uncertainty about the reali-sation shows that the topic is not yet widely considered and discussed.

Furthermore, experts from the Delphi survey expect barriers related to economic viabil-ity (more than 50% of experts), barriers related to education and qualifications (more than 40% of experts).

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The “Do it yourself” option on user involvement into manufacturing was also addressed by the Delphi survey through Delphi statement S036:

S036 Self-Service9 Premium industrial products, sold and distributed in a Dell/Ikea like fashion, con-trolled by self diagnostic functions and assembled and maintained on a do it yourself base are the norm.

However, this idea did not receive a particular enthusiastic uptake by the Delphi re-spondents: Only 13% of them think it is of high importance for the manufacturing indus-try. The main barriers that are expected are related to social acceptability (61% of experts) and to technical feasibility (with 54% of experts in both cases). Economic vi-ability is thought a main barrier by 48% and education and qualifications by 25% of the Delphi respondents. This almost universal rejection is in clear contrast to the observa-tion of innovation scholars who expect an increasing willingness of innovative and crea-tive users to spend effort to create their own personal products. Furthermore, existing approaches towards this option have been economically successful (Hippel 2005).

It is possible that this result indicates a lack of imagination within the manufacturing community regarding societal changes that are pointing towards the emerging of com-pletely new manufacturing approaches. However, another explanation could be the mentioning of self-diagnostic functions which is only one possible feature of the toolkit option but certainly one that poses major social and technological challenges.


Policy making in support of European manufacturing should keep an eye on the emerg-ing of various approaches towards “Do it yourself manufacturing” to make sure that European manufacturing is adequately prepared for arising challenges in that quarter. This is especially important as the path outlined in this statement implies severe changes in established manufacturing concepts in terms of technology but also in terms of organisational practice. For R&D policy it seems advisable to monitor emerg-ing technologies likely to be connected to these developments and to ensure adequate uptake within the European research area.

9 This statement was included in the second round of the Delphi survey. Accordingly all the

figures that are given refer to these results.

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The Delphi survey addressed a few technological concepts that have some potential to facilitate user integration into design and production. These concepts are related to current efforts on customisation of manufacturing such as Delphi statement S014:

S014 Customisation All complex products will be treated individually throughout their lifespan by the manufacturing system.

Such a manufacturing system will be able recognise individual products and to adapt the production process in real time as needed. This again implies that there is a highly sophisticated information and control system as well as extremely flexible and adapt-able production processes and machinery. Such as system will enable “build to order” concepts that allow customers to influence the production process according to their specific needs until the last moment.

In the Delphi survey 28% of the experts state that they do not know when or if this will be realised but only 7% do not believe that this will ever become reality. From the rest the majority expects it between 2010 and 2020. More than half of the experts (54%) see economic viability as a barrier for the realisation of such a system and 58% expect technical difficulties (Technical feasibility as a barrier).

Thus it can be concluded that the realisation of “Build to order concepts” through indi-vidualised manufacturing systems still poses major challenges.

Another approach to facilitate flexible adaptation of products to customer demand is the customisation through software programming. The share of software and electronic components within products is continuously increasing. At the same time in a number of cases these components can be adapted to new functions easier than other parts of a product. Therefore it seems feasible for more and more products to be adapted to customer demands through software programming. This option was also taken up by the Delphi survey in statement S035:

S035 Customisation by Software The functionality of products is mainly achieved by software programming or the adaptation of electronic components. Therefore only a few suitable hardware components are necessary.

Of experts in the Delphi survey 37% have been indicating that this is an important issue for the European manufacturing industry. The development is widely thought beneficial for the competitiveness of European manufacturing (84%). However, many of the re-spondents (71%) expect that this solution will face major technical difficulties. In addi-tion, economic viability is seen as a main barrier by 44% of the experts. Nevertheless, only few experts (8%) think that this vision will never be realised. Most of the other ex-

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perts are expecting this option to come true between 2010 and 2015 (37%) (another group of 27% indicating 2015-2020). Almost 40% of the experts perceive a lack of R&D funding as an important barrier.

It can be concluded that manufacturing experts expect huge efforts from industry and research to overcome current barriers to customisation by software and electronic components. This means again, that the next ten years will see major developments in that area. From the point of view of the demand perspective it is highly desirable that these research efforts embrace the demands of future users and customers. On the one hand it is important that future tools for software customisation could offer facilities for users and customers to take part in the customisation process. On the other hand in the face of diversifying demands, it is important that they incorporate a maximum of flexibility.

Implications for localisation of manufacturing

The establishment of close cooperation between users and producers is closely linked to the question where innovation, R&D, and manufacturing will take place in the future. The fact that user centred knowledge generation is drawing on local knowledge sources is implying that at least some parts of the value generation chain are locally based. To establish joint learning processes between customers and producers on a continuous base it seems especially desirable for R&D activities to be carried out geo-graphically close to local knowledge sources but also production is likely to need strong local roots. In the stakeholder workshop a vision of dispersed local excellence centres where innovation is generated in close interaction between users and providers of goods and services closely connected to localised manufacturing facilities was out-lined. This is implying a new balance of local and global elements within the manufac-turing value chain.

Some of the Delphi survey statements were indeed addressing this issue.

S037 Local Small Scale Production10 The majority of products are almost completely produced in local small scale pro-duction sites using multifunctional equipment.

19% of the Delphi experts state that local small scale production as described by the statement will never be realised. Another 10% feel that they “do not know” what to ex-



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pect regarding the realisation of this statement. From the rest of the experts the major-ity expects this for 2010-2015 (42%) while 17% indicate before 2010, 25% 2015-2020, and 16% after 2020.

The most important barrier is thought to be economic viability which is indicated by 80% of the experts. Also technical feasibility is indicated as a barrier by 57% of the Delphi respondents.

On the other hand, the development of local small scale production is thought to have positive impacts on employment by a large majority of Delphi experts (72% of the ones who expressed an opinion on that point). Some of the Delphi experts are expecting negative impacts on competitiveness (15%) but many more think that competitiveness will benefit from this (69%).

The notion of localised and dispersed manufacturing close to customers and markets has long been an element of far reaching manufacturing visions. As indicated in state-ment S037 of the Delphi survey, manufacturing technologies facilitating this kind of production need to be able to fulfil a number of functions in a flexible way as it is also described in statement S010 of the Delphi survey. Other flexible technologies with a high potential are “Rapid Manufacturing Technologies” described by statement S012 while the most radical solution is the assembly of atoms outlined by statement S00311.

It can be concluded that visions of locally rooted and dispersed knowledge generation and manufacturing centres are not widely developed. Though there is an agreement between Delphi experts and stakeholders that local manufacturing is offering a poten-tial to increase employment and competitiveness, putting it into practice seems to be extremely challenging. Therefore it seems worthwhile to explore this issue further. Par-ticularly, there is a need to spell out in more detail the technological implications and the conditions for economic feasibility.

Highlighting Message:

The stakeholders have been strongly demanding new and more open forms of innova-tion that embrace local knowledge of users. Also recent literature is considering this as a key factor for ensuring sustainable competitiveness for European manufacturing in-dustry within the emerging knowledge economy. Also ManVis experts are expecting benefits from this, although they do not offer a clear picture. Manufacturing visions should therefore embrace solutions for open innovation approaches. These solutions need to describe strategies and procedures for open innovation as well as supporting

11 For assessments of the Delphi results for these statements see the respective chapters.

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technological elements. Also the balance between local and global elements in the value generation chain needs to be tackled. The issues addressed by the Delphi sur-vey are offering some potential but are too much staying within classical supply ori-ented innovation paradigms. The shift to a truly inclusive approach might call for more radical out of the box solutions.

(4) Social innovation

In the previous section it was discussed how companies will have to draw on a wider range of knowledge sources in their innovation processes. However, in the future other forms of innovation might emerge that are not primarily initiated by companies but by innovative user groups, communities of people with similar needs or local communities like cities or rural areas. These groups might develop completely new approaches for fulfilling needs and functions on a more collective level. Already now there are initia-tives across Europe in this direction (e.g. mobility provision initiatives, consumer co-operatives, etc.). Though at the moment this type of solution for fulfilling needs is clearly a minority phenomenon it might in some ways anticipate the future. For manu-facturing the emergence of such solutions would mean completely new ways of inter-acting with customers. Instead of offering products or even product service packages they would need to become part of the joint innovation process. Stakeholders ex-pressed their view that visions on the future of manufacturing should give some ideas in this direction.

(5) Systemic innovation

The participants of the demand perspectives workshop firmly pointed out that to reduce the environmental burden of production and consumption, innovation within the manu-facturing industry should focus on the development of sustainable prod-uct/production/service systems. It was stressed that the development and adoption of “clean technologies” is extremely important but not sufficient to achieve the substantial sustainability improvement that is required. For this, technological solutions need to be embedded into social and organisational innovation. This again needs more interdisci-plinary approaches to technological innovation. It was stated that this type of system innovation is demanding a new way of thinking from people in companies (especially engineers but also management) that is not yet widely spread. R&D policy as well as education needs to support the necessary shift.

It is reckoned that the demand for such a more holistic approach on innovation is also pushed by another important development within the manufacturing industry: The in-creasing focus on the service content attached to product (Manufuture 2004, 13). This development implies that, for some sectors of manufacturing industry, “companies

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could switch their focus to selling need fulfilment, satisfaction, or experience. They could offer a mix of tangible products and intangible services, designed and combined to jointly fulfil a users need.” (suspronet 2004). It has been pointed out by a number of studies that this strategy could be a way to enhance competitiveness of high wage lo-cations such as Europe (suspronet 2004, Manufuture 2004, Flanagan et al 2003). However, it needs to be stressed that a shift towards product service systems does not necessarily imply sustainability benefits (see chapter 5). At the same time it is clear that selling provision of services or functions instead of products themselves is also calling for a more systemic innovation approach so e.g. it becomes necessary to take into ac-count the whole product life cycle when manufacturing the product or determining the price. The demand for more systemic innovation approaches is therefore required by servation and sustainable system innovation at the same time.

The ManVis Delphi survey statement S03312 was also addressing the issue of serva-tion:

S033 Purchase of Use Customers do not buy products that they use in the long-term. The manufactur-ers of the product maintain their ownership and provide services as needed.

7% of the Delphi experts stated that they “do not know” when this will be realised and another 7% do not believe in it all. This leaves 85% of people who expect such a de-velopment. Asked to specify the time horizon, experts were divided. However, the larg-est group (42%) said 2010-2015 and another group of 27% of the experts indicated 2015-2020. Nevertheless the economic viability is seen as a major barrier by 60% of the Delphi experts. 76% of the experts expect that one of the main barriers hindering this development will be a lack of social acceptability. This assessment is shared by some of the participants of the stakeholder workshop who stressed that the wish to actually own products is strongly routed in western culture and often fulfils more than just “practical” functions. However, the expectation of a growing importance of design-ing product service systems is shared by the stakeholders.


The shift towards a focus on product service systems and the need for sustainable sys-tem innovation are two separate developments both posing specific challenges for the future of manufacturing industry. However, for a successful design of product service systems similar competencies have to be developed as for sustainable system innova-



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tion. Both developments are calling for more holistic and systemic approaches to inno-vation in manufacturing industry involving people across disciplines and professions. Therefore, strengthening the ability for systemic innovation seems highly desirable.

(6) Summary and policy conclusions

The analysis revealed a number of challenges to European manufacturing arising from developments of demands from users and consumers. It was emphasised that ad-dressing these challenges will not only serve particular interests of users and consum-ers but significantly strengthen competitiveness of European manufacturing industry. It was further argued – in line with findings from the Manufuture group and literature – that the close interaction with users and customers on a local level is offering an oppor-tunity to keep high value adding parts of the manufacturing value chain within Europe while at the same time ensuring the supply of highly customised products suited to the needs of European customers and users.

The following key challenges for European manufacturing industry were outlined:

• Facilitating transparent provision of information on products and processes

• Ensuring product usability for groups with special needs

• Preparing for social innovation

• Enabling systemic innovation

• Developing technological and organisational visions for localised manufacturing approaches

• Facilitating user centred innovation

Except for a few specific aspects, the first four issues had not been addressed by the ManVis Delphi survey.

Regarding user centred and localised manufacturing, the ManVis survey had taken up a number of aspects. However, the Delphi results revealed that there is only a limited recognition of the challenges arising from changing demand patterns within the com-munity of manufacturing experts that was addressed by the ManVis survey. This again is pointing to the deep transformation European manufacturing needs to undergo on the road towards the “user driven innovation system” (Manufuture 2004, p. 8). Policy and more specifically R&D policy could support this transformation on several levels.

The main message towards R&D policy that was revealed by the analysis in this area is not primarily addressing the content of R&D, but the way research and innovation for manufacturing is to be performed:

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To cope with the demands of a knowledge society, manufacturing needs to adopt a new approach toward innovation. Research activities within manufacturing will have to open up their focus and embrace knowledge sources from users and customers.

This requirement has major implications for R&D policy supporting manufacturing. R&D funding can have a major impact on the transformation process that is required by sys-tematically fostering an orientation towards user driven innovation through its funding strategies. The following measures could be suited to reach this objective:

• Supporting joint learning between users and producers ranging from user cen-tred innovation to social innovation initiatives by providing spaces and tools for joint innovation initiatives.

• Demanding user integration and participative approaches in publicly funded R&D projects

• Supporting the development of methodologies for participative design. This could e.g. be done by funding small pilot projects realising advanced participa-tive design concepts.

• Funding research projects starting from user initiatives.

• Inclusion of representatives of consumer organisations into the development of future oriented R&D strategies such as the Manufuture technology platform.

• Promoting integration of socio-economic aspects into technological oriented re-search projects e.g. by requesting consortia to take on board partners with knowledge in this area.

• Promote long-term thinking through Foresight activities that embrace demand aspects

We consider this change of perspective the most important policy measure resulting from our analysis. However, on top of this the analysis revealed a number of concrete developments that could be supported by targeted funding initiatives such as:

• Technologies and concepts facilitating user integration into innovation proc-esses

• Tagging Technologies

• ICT solutions supporting usability

• Approaches towards product customisation via software or electronic compo-nents that allow for maximum flexibility and user integration

• Technologies and concepts facilitating localised manufacturing approaches

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• Technologies and concepts facilitating localised manufacturing approaches

• Technologies and concepts facilitating personalisation and build to order con-cepts

• Monitoring of emerging “Do it yourself manufacturing” concepts and associated technologies

Furthermore supportive policy measures that would help to foster the transformation needed within manufacturing were outlined:

• Include knowledge on sustainability requirements into education on all levels

• Support transparency, usability and sustainability through legislation and stan-dardisation

• Support transparency, usability and sustainability through public procurement

• Including user and consumer groups – especially from user groups with special needs – into standardisation processes.

8.3.2 Challenges to Manufacturing Arising from Emerging Demands on Working, Learning and Living Patterns

In the following paragraphs, we will discuss challenges for manufacturing that are aris-ing due to changing patterns of working, learning and living. The arguments are based on the outcomes of the demand perspective workshop that are again related to the outcomes of the Delphi survey and the literature survey. The issues that were identified are grouped around the following five clusters: (1) the learning organisation (embrac-ing: “balancing individual and organisation learning”, “new forms of skill development”, “widening the concept of research” and “avoiding exclusion from learning processes”), (2) workplace innovation, (3) building-up a competent workforce, and (4) sustainable structuring of work. The last paragraph (5) is giving a summary of the results on this topic and drawing first conclusions for policy.

(1) Fostering continuous learning in manufacturing

It has already been emphasised at the beginning of this chapter that the emergence of knowledge economy is considered the crucial driving factor of change for manufactur-ing in the future. In the previous section it was discussed how this change challenges manufacturing companies to include external knowledge sources from customers and users into innovation processes. However, the new modes of knowledge generation are also posing major challenges to the organisational structures of manufacturing companies. Previous future studies have argued that the most important competitive

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factor for the European manufacturing industry will be knowledge and know-how, routed in organisational structures or linked to humans and their capability to use and apply these knowledge-based resources in a creative, imaginative and innovative way (Flanagan et al 2003, p. 37). It is widely expected that only “learning organisations” will be able to meet future challenges. The implications of this for manufacturing compa-nies are discussed in depth in Chapter 6 of this report. The experts in the demand per-spective workshop were sharing the general diagnosis of the need to develop strategies and instruments for implementing continuous learning in manufacturing companies. There was a general expectation that manufacturing needs to adapt to new requirements regarding acquisition, organisation and management of knowledge. It was emphasised that at the moment the majority of manufacturing companies are still relying on traditional methods (e.g. traditional general human resource management, training systems with poor strategic structure and rather focused on the immediate short-term profit requirements, etc.). Accordingly, it was expected that many companies will have to undergo a radical transformation process to become learning organisa-tions. It was reckoned that this transformation process will be extremely challenging for many of these companies.

Starting from this general analysis the experts in the demand perspective workshop pointed to some aspects that in their view deserve closer attention:

Balancing individual and organisational learning

According to the participants of the workshop finding an adequate balance between individual and organisational learning will be crucial in the future. When learning is more and more done “on the job” and less documented in formal certifications there is a danger that it is oriented only towards the requirements of the task at hand without building up sustainable competence profiles securing employability above the current job. Furthermore, as in a knowledge economy knowledge is becoming the main asset not only for organisations but also for individuals, people need to be able to handle this asset. It was felt important that people are aware of their own potentials and how to manage them. These questions are addressed too little in the current discussion on the learning organisations but should be part of manufacturing visions from the point of view of the stakeholders. The high relevance and positive assessment given to state-ment S04613 of the Delphi survey that is proposing a high grade of engagement of companies for the solution of these issues seems to indicate that Delphi experts were reasoning in similar ways.

13 For an exhaustive discussion of the results for this statement c.f. chapter 6

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Acquiring new skills in a new way

In the demand perspective workshop it was highlighted that in the future knowledge will increasingly be gained not only through formal processes but also from experience. This would mean to take certain risks to try new approaches in manufacturing that can allow individuals and organisations to gain experience. This particularly will need to be developed in integration between universities, business schools and industry. It was felt that university curricula should better prepare students for a manufacturing career. In-dustry and universities should work more closely together to enable students to gain practical experience in an early stage of their education.

Widening the concept of research

In the demand perspective workshop another aspect of opening innovation was dis-cussed: To facilitate the necessary changes in manufacturing organisations outlined above there is a need to overcome the narrow focus of R&D as a single source of in-novation that is still prevalent in many companies but also in the policy arena. Stake-holders felt that especially research funding should broaden its scope and allow for research that is fed from a broader range of sources than university and R&D depart-ments. On the other hand this implies that new modes of cooperation between re-search institutions and companies have to be developed. Joint learning processes are likely to replace the formal exchange of codified information. The boundaries between different actors of the knowledge generation process will have to be blurred and people will need to switch between different knowledge generating environments on a regular base.

Avoiding Exclusion from learning processes

Severe concerns were raised in the demand perspective workshop that with the emer-gence of knowledge based manufacturing, job opportunities for people with little or no formal qualification will be rapidly declining. This would mean that in the future more and more people within society become excluded from learning and experience gain-ing.

This fear is reinforced by the result of the Delphi survey:

S053 Reduction of Unskilled Labour Knowledge based manufacturing leads to a share of less than 10% of unskilled labour force

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This is expected to come true in the future by 79% of the Delphi experts (14% say that they “do not know” and only 7% say “never”). 44% of the Delphi experts expect a de-crease of employment as a result.

Stakeholders in the demand perspective workshop stressed that manufacturing visions should provide ideas on how learning in manufacturing can be organised in a way that allows learning for people on all skill levels. Education policy is called upon to support these efforts. Otherwise major social and economic problems could be the conse-quence of a lasting exclusion of parts of the society.

Another approach to avoid lasting exclusion of people with lower levels of formal quali-fication from manufacturing is to adapt tools and technologies accordingly. An impor-tant advancement in this direction is the development of human-machine interfaces that allow for an intuitive handling of tools and machines. Recent developments in ICT technologies (displays, speech recognition, image processing, control algorithms, etc.) might lead to a major breakthrough towards man-machine communication in the future. The ManVis Delphi survey did ask the experts for their opinion on a fairly radical vision on this within statement S002:


This statement is confirmed as a possibility for the future by as many as 80% of the Delphi experts while only 9% say “never” and 10% would not know. Among the “believ-ers” the largest group (32%) expects this between 2010 and 2015 but another large group (28%) sees it only after 2020. This makes intuitive man-machine communication one of the few strong technological long-term visions that seem to be prevalent among manufacturing experts in Europe. Around 80% of the Delphi experts expected a posi-tive impact on competitiveness and an improvement of living and working conditions from such an advancement of man-machine communication. Technical feasibility as one of the two most important barriers was named by 47% of the Delphi experts and economic viability by only 28%. A lack of R&D funding was perceived by 37% of the Delphi experts.

Highlighting Message

The transition towards “learning organisations” is demanding severe efforts not only from companies but also from individuals and overall society. Therefore, visions that emphasize the “learning organisation” should not focus on the company level alone, but also address the consequences for individuals and the consequences for the over-

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all society. To achieve a sustainable implementation of learning processes it is crucial to jointly address these three levels.

(2) Workplace innovation

Stakeholders in the demand perspective workshop strongly emphasised the close rela-tionship between competitiveness within the knowledge economy and workplace inno-vation across the entire organisation. It was concluded in the discussion that new modes of knowledge generation and innovation as they are expected to emerge in the future cannot be implemented at central company level alone. Workplaces have to be reshaped in a way that enables every member of a learning organisation to contribute to the learning and innovation process in a creative way. This implies that concepts of “quality of working life (QWL)” that have long been around need to be revisited and implemented with a new focus. The implementation of self-managing teams as they are described within the Delphi statement S015 was considered an important (though not the only) element of this. Delphi experts seem to share this assessment as a large ma-jority of them think the establishment of such teams of high importance for the Euro-pean manufacturing industry and expect positive effects for competitiveness as well as for living and working conditions.14 Also, the emphasis Delphi experts give to enabling conditions for learning as described in statement S046 of the Delphi survey (for de-tailed information on the outcome cf. Chapter 6) is underlining the assessment of the stakeholders.

A number of recent research projects have also been pointing out that with the emer-gence of knowledge based economy workplace innovation that enables people from every workplace to take part in to learning from all becomes a crucial competitiveness. The approach of achieving a convergence between improvements in quality of working life and competitiveness has been referred to as the “high road option to innovation” (cf. Hague et al. 2002 for an extensive review of the debate). This option will call for unorthodox approaches to organisational innovation and creative out of the box think-ing. In the light of this assessment it seems worrying that many current developments point to deteriorating working conditions (see (4) Sustainable structuring of work).

In the demand perspective workshop it was stressed that one important precondition for successful workplace innovation is the participation of employees. Furthermore it was reckoned that trade unions can play an important role in facilitating this process by contributing their knowledge about employees' demands into workplace innovation processes.

14 For an exhaustive analysis of the Delphi results on this statement cf. Chapter 6.

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Within the ManVis survey statement S055 was addressing this issue:

S055 New Role of Trade Unions Co-management of the development of competencies for the company and its workforce by trade unions or other representatives of employees is widespread practice.

71% of the Delphi experts who expressed an opinion on this expect that this would improve working and living conditions. Nevertheless, only a minority of 20% think that this is of high importance for the European manufacturing industry. As many as 24% do not believe that this will ever be realised while another 24% do not know when to ex-pect it. This indicates that there is a widespread scepticism about trade unions playing such an active role in companies’ competence building.

Highlighting Message

Workplace innovation enabling a contribution to innovation from every workplace is seen as a major requirement for ensuring competitiveness in the knowledge economy by stakeholder experts as well as by literature. Previous concepts for securing the qual-ity of working life have to be revised with respect to the new conditions and applied with a renewed urgency.

(3) Building-up a competent workforce

Attracting people to manufacturing careers

Concerns on the lack of attractiveness of manufacturing as a career was emphasized in the discussion in the demand perspective workshop. Especially in the face of ex-pected shortage in skilled personnel for the future it will be important for manufacturing to offer an attractive working environment for future generations. This concern has been voiced by a number of people concerned with the future of manufacturing for some time now (see e.g. Manufuture 2004, p. 35). In the demand perspective work-shop, it was stated that the ability and willingness of manufacturing companies to pay adequate salaries will have a major impact on career planning of young people. How-ever, in the workshop it was also agreed that there are factors in choosing a career that are not only related to money, but also to the prestige related to certain professions. It was emphasised that education from early stages would play an important role in im-proving the knowledge about manufacturing.

Another issue that was raised is the urgent need for manufacturing to attract more women to a manufacturing career. Without substantial progress in this respect manu-facturing is likely to face serious shortages in skilled and competent personnel in the

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long term future. In the light of this assessment it seems worrying that Delphi experts do not think the recruitment of women for manufacturing jobs of particular importance and also do not expect major effects on competitiveness from increasing the share of females in manufacturing (cf. results on S049 see Chapter 6).

Inclusion of aged and disabled persons

Experts in the stakeholder workshop pointed out that in the face of demographic change and the growing share of people with disabilities securing the inclusion of eld-erly and disabled persons into the manufacturing workforce is an important element for ensuring the competitiveness of manufacturing in the future. It was emphasised that tools and workplaces should be adapted to the needs of these groups. It was also stressed that this can be done without excessive costs if it is reckoned early on in the workplace design. As with product design (see above), it was emphasised that such inclusive approaches to workplace design would bring major benefits not only for groups with special needs but for the quality of every workplace.

Delphi statement S008 was specifically addressing this topic:

S008 Barrier-free manufacturing Manufacturing systems where people aged 60 and above can work without diffi-culty are in widespread use

79% of the Delphi survey experts expect improved living and working conditions thereby supporting the view of the demand perspective workshops participants.

However, 17% of the Delphi experts said that they do not know whether or when this would be realised. 9% indicated that they do not believe in the realisation at all. Of the rest the majority (35%) expects this to come true between 2010 and 2015 or 2015-2020 (27%). The importance given to this is not particularly high compared to the other statements. Economic viability is named as one of the main barriers by only 37% and technical feasibility by even less (17%). 59% see social acceptability as an important barrier, while education and qualification is indicated by 36% as one of the two main barriers. This indicates that the integration of people of that age into manufacturing is likely to pose difficulties even more from society than at the actual workplace.

Statement S006 was also dealing with a technical solution that could facilitate work in manufacturing for disabled and aged persons:

S006 Cobots Robots move freely in factories, flexibly assisting workers in various tasks, in-stead of being confined to a fixed working space.

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As many as 86% of the Delphi experts expect this to become reality some time (4% do not believe in it and 11% did not know). The largest group of these people expects this only after 2020. More than 80% expect improvement of living and working conditions. Technical feasibility as one of the two main barriers is named by 57% of the Delphi experts and economic viability by 43%. 86% of the Delphi experts who expressed their opinion on this expect increased competitiveness if this was realised.

Another valuable improvement for accessibility of manufacturing workplaces for dis-abled and aged persons can be achieved by adequate man machine interfaces. As discussed above this technical option was found rather promising in the Delphi survey.

Highlighting message

Improving accessibility to manufacturing workplaces for aged and disabled persons will be a future challenge for manufacturing. There are technical options available that are highly promising to support this aim. At the same time these options form strong long term visions for manufacturing to improve competitiveness and flexibility. It seems a promising strategy to foster these technological options while at the same time ensur-ing that the potential for achieving improved inclusiveness in manufacturing workplaces is fully exploited. To achieve this, users from the respective groups should be inte-grated in the development process (c.f. 8.3.1. (3) User centred innovation).

(4) Sustainable structuring of work

As empirical studies have shown, the intensification of work is one of the most signifi-cant trends in working conditions over the last years (cf. Eurofound 2002, pp. 17 ff.) The reasons for this are manifold (ibid.). As a consequence new types of health prob-lems related to stress and excessive demand are increasingly being recognised. The maintenance of “workability” especially for an ageing workforce is becoming a concern. This trend is particularly worrying in the light of arguments discussed above pointing to a tightening relationship between quality of working life and competitiveness of Euro-pean industry. Stakeholders in the demand perspective workshop accordingly ex-pressed their view that manufacturing should strive towards sustainable structuring of work with support from policy. Sustainable structuring of work was defined as a proc-ess with the following requirements: fair contribution of work and income; integration and participation of all employees; balance of working and living life (see also Euro-found 2002, p. 6).

The reconciliation of working and non working life is one pillar of sustainable structuring of work. Both the EU Social Policy Agenda (European Commission 2000) and the EU Employment guidelines (European Commission 2002) have included the compatibility

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of work and family life into their core policy values. With the increasing entrance of women into the labour market this will most likely become an even more pressing chal-lenge for European society. In the future both men and women will want to engage in family care as well as in other activities outside the working environment while at the same time pursuing their professional carrier. The desire to reconcile private and pro-fessional life is increasingly becoming an issue for both men and women. Already now many employees are expressing their wish for reduced working hours or individualised working time arrangements (Merllie and Paoli 2001). Organisational solutions need to be developed and supported by technological equipment. Results from a number of research projects are offering ideas for innovative flexible forms of work supported by advanced ICT technologies like telecommuting facilities. These concepts should be embraced by visions on the future of manufacturing.

Within the ManVis survey statement S054 addressed this issue:

S054 Work-Life Balance15 Tailored configurations of working conditions and benefits reflecting age and fam-ily situation are the norm in manufacturing companies.

95% of the Delphi experts who expressed an opinion on that expect that this would improve working and living conditions. Nevertheless, the overall importance given to this is rather low (only 15% think it of high importance for manufacturing industry). However, 75% of the Delphi experts think that this will be realised, 41% of them expect it between 2010 and 2015, 27% between 2015 and 2020, and 26% expect it only after 2020.

Highlighting message

Sustainable structuring of work is seen as a precondition for realising workplace inno-vation and thereby ensuring lasting competitiveness as discussed above. Furthermore improving health and quality of life is an important objective for European policy. How-ever, it seems that in the face of high unemployment and tightening economic condi-tions this aspect does not receive particular attention in the current debate. There might be a danger that worsening working conditions undermine attractiveness of manufac-turing for competent personnel and also the innovation capacity of European manufac-turing industry.



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(5) Summary and policy conclusions

The analysis of the results of the stakeholder workshop together with an assessment of the relevant Delphi results and literature from the field identified a number of key chal-lenges arising from emerging new patterns of working, learning and living:

• Balancing individual and organisational learning

• Implementing new ways of acquiring skills within manufacturing

• Taking a new approach to workplace innovation enabling contribution to innova-tion from all workplaces

• Widening the concept of research to include a broader range of knowledge generating activities (open innovation)

• Securing a competent workforce

o Attracting competent people to manufacturing especially women

o Improving accessibility of manufacturing workplaces for groups with special needs

• Foster sustainable structuring of work and facilitate a better reconciliation of working and non-working life.

• Avoiding exclusion from learning processes

These issues were all in some way or other addressed by the ManVis Delphi survey. The results revealed that the experts who answered the Delphi survey stressed the tremendous importance of incorporating continuous learning processes into manufac-turing companies in much the same way as the stakeholder representatives in the de-mand perspective workshop. Both groups are expecting that companies will have to make huge efforts to become truly learning organisations.

However, when it comes to the nature of these efforts assessments differ between Delphi experts and stakeholders from the demand side. While the ManVis Delphi ex-perts placed rather low emphasis on working and living conditions, the participants of the demand perspective workshop strongly emphasised the close interrelation between the learning capacity of companies and the quality of workplaces. Workplace innova-tion was seen as crucial prerequisite for ensuring innovation capacity and thereby competitiveness of European manufacturing companies. It was pointed out, that emerging types of knowledge generation call for contribution to innovation and learning processes from every workplace which is only possible if the workplace is enabling such contributions. Adaptation of working environment to emerging new patterns of living and working was thought to be a part of these enabling conditions. Although the

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participants in the demand perspective workshop recognised the economic difficulties companies are facing in realising workplace innovation it was thought that without these efforts companies will not be able to meet future challenges and fail to attract a competent workforce in the future.

Similar to chapter 8.3.1, the main conclusion for R&D policy aiming to support Euro-pean manufacturing is less directed towards the content of R&D but more towards the way R&D and thereby R&D funding is conducted:

R&D funding could foster workplace innovation and thereby the ability of European manufacturing to incorporate learning and embrace new modes of innovation by sys-tematically integrating this aspect into the funding strategies.

This could be realised through:

• Supporting research projects in assessing the impact of new manufacturing technologies on workplace quality

• Supporting projects adopting interdisciplinary approaches (including social sci-ence)

• Supporting innovation projects that involve other actors than classical R&D de-partments

• Integrate representatives of the workforce into strategy building processes such as the ManuFuture platform.

More directly, specific projects exploring strategies and technological options for work-place innovation could be launched. Two technological areas were discussed that offer promising potential for sustainable workplace design: New types of man machine inter-face and new types of robots. It seems crucial to exploit this potential when funding research in these directions.

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9 Differences in the Future of Manufacturing between EU Member States

Authors: Anna Rogut, Bogdan Piasecki (University of Lodz)

9.1 The Challenge of Enlargement Threat of deindustrialisation and relocation of European manufacturing outside Europe is one of the EU problems (COM (2003) 704 final; O’Mahony, van Ark, 2003; Denis et. al, 2005). Enlargement can stop these processes, particularly because the EU has been absorbing a group of countries with relatively low-wage economies, but also with a considerable technological experience.

"In making location choices, multinationals research three main factors: production cost estimates, potential market position advantages, and, to an increasing degree, local support services. For low value added products, production costs are usually the de-termining factor. In the case of high value added product … today's location decision is more complex than ever before … there is strong evidence that economic success is not pre-determined and can be developed and, on a national scale, development is not zero-sum game. Local capacities in fields such as education and enterprise networking can be created or improved by concerted actions, thereby increasing the region's ability to attract outside investment. In addition, the factors that encourage endogenous eco-nomic activity can be similarly stimulated." (Davies, 1995, p. 10)

This issues new challenges to the New EU Member States (including Candidate Coun-tries), related to maintaining or attaining their competitiveness.

There are two main approaches to preserving or attaining competitiveness: the Low Road approach (basing on lowering production costs, especially wage rates) and the High Road approach (Davies, 1995).

Current competitiveness of New Member States and Candidate Countries is mainly accordant to the Low Road approach and based, first of all, on lower (than in the EU15) labour costs; unit labour costs are currently lower by between 16% and 53%. This ad-vantage is, however, temporary due to the process of convergence with the rest of the EU, although the rates of convergence will vary. In addition, the cost advantage is re-duced by lower labour productivity (COM (2004) 274 final). Therefore, it can be as-sumed that continuation of the Low Road approach will not restrain the relocation processes, especially because the significant and increasing competition of cheaper producers from outside the Community should always be reckoned. The example of

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China shows their cost advantage which refers not only to traditional sectors but also to products with a strong technological content (electronics). More recently, China has moved into other sectors with a major technological content, such as chemicals, and even into leading-edge sectors, as ICT and biotechnologies, and research and design activities. Also other countries, for example India, have adapted, in addition to its tradi-tional sectors such as textiles, a niche strategy in fields with high added value, such as biotechnologies and ICT, based on the creation of clusters of local companies and American and European multinationals (SEC(2004)1397). These trends strengthen the possibility that certain industries, especially low-tech industries, would move outside Europe, bringing other user or supplier sectors in their wake. Some companies have already delocalised, or intend to do so, in order to benefit from lower labour costs. The phenomenon of relocation is also beginning to extend to research activities and high-tech sectors, although it is not possible to quantify it accurately or to distinguish it from the worldwide expansion in industrial activity (COM(2004) 274 final).

Thus, it can be assumed that the way of raising the competitiveness of New Member States and Candidate Countries should be much closer to the High Road approach, based on a more efficient use of resources and investment in processes, technological innovation and employee upskilling. Such an approach seems to create a more effec-tive path towards achieving the strategic goals set out for the New Start for the Lisbon Strategy (COM (2005) 24), especially in the context of contributing to a strong Euro-pean industrial base, encouraging enterprise, innovation and research so that Europe and its regions are better equipped to deal with the effects of economic and social change. It also allows to face many challenges over the coming years "… including a dramatic increase in social and economic disparities following enlargement, a likely acceleration in economic restructuring as a result of globalisation, the effects of the technological revolution, the development of the knowledge-based economy and soci-ety, an ageing population and a growth in immigration." (European Communities, 2003).

Economies of New Member States and Candidate Countries have already initiated a broad process of restructuring and modernisation. Although they still tend to be more specialised in labour-intensive sectors, their industrial structures have been gradually reoriented towards intermediate or high-tech sectors (Weber et al., 1999). Also joining the EU "offers the prospect of the New Member States achieving rapid rates of growth in GDP and productivity as they catch up with the European average. As they replace redundant ageing technology with state-of-the-art processes they will jump a genera-tion in terms of their technological capacity” (ManuFuture High Level Group 2004, p. 14). Currently, however, New Member States and Candidate Countries are still characterised by a technology gap.

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Based on the Gerschenkron hypothesis ('advantage of backwardness'), claiming that the 'potential' for growth is highest where the 'initial gap' is the highest, one can expect that the catching-up process will be accelerated. "Of course … actual growth is not necessarily equal to potential growth as countries … might not be able to exploit this potential." (Landesmann, 2003, p. 2) It will depend on 'social capabilities' encompass-ing a wide range of institutional and behavioural requirements which are necessary so that actual catching-up comes as close as possible to potential catching-up.

Later in this chapter, results of the ManVis survey are presented which indicate the main fields of technology gap existence and try to diagnose socio-economic context accelerating or hindering the catching-up process. Therefore it is not the objective of the chapter to provide a detailed presentation of the role and significance of particular statements and their mutual relations, as these issues are presented detailedly in the previous chapters. The chapter focuses on differences in the assessment of the future development trends of European manufacturing observed in different groups of coun-tries: old Member States (OMS), i.e. the group covering EU15 plus Norway; New Member States (NMS), i.e. the group covering ten countries that became EU members in May 2004 and Candidate Countries (CC), i.e. Romania, Bulgaria, Turkey plus Croa-tia.

The presentation is divided into three selected topics: transformation from resource-based into knowledge-based manufacture (illustrating the level of competitiveness of manufacturing in each of these three groups), intensity of cooperation (reflecting the level of development of some socio-economic capabilities increasing the catching-up potential), and threat of relocation of manufacturing.

9.2 On the Road from Resource-Based to Knowledge-Based Manufacture

This section discusses the 1st and 2nd Delphi round results presented in three subsec-tions. The first one is focused on statements related to emerging product technologies:

S028 Smart Materials Smart materials that adapt to different conditions by changing properties (e.g. dynamics, size, shape, thermal behaviour) are in widespread use.

S029 Number of Materials Reduced The number of different materials in each product is reduced by half.

S030 Nanomaterials for Coatings Nanomaterials are in widespread use to apply coatings with special features (e.g. self-cleaning, anti-reflexive, anti-fouling) to a variety of products.

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S034 Electronic Labels Electronic labels (e.g. RFID-tags) containing relevant product and process infor-mation are embedded in most manufactured products (S034)

Statements related to smart materials and electronic labels were subject of both, 1st and 2nd Delphi round.

The second part reports on new manufacturing technologies and focuses on the follow-ing statements:

S003 Nano Manufacturing Products can be manufactured bottom-up through the self-assembly of atoms or molecules.


S005 MEMS Micro-electromechanical systems such as actuators with integrated sensors and microprocessors are used all over the factory as active components (e.g. active workpiece fixtures).

S012 Rapid Technologies Technologies based on processes that add materials have replaced a substantial share of today's cutting and forming technologies.

All these statements were subject of both, 1st and 2nd Delphi round.

The last part shows the prospects of flexible automation and is based on the following statements:

S001 Intelligent Control Most manufacturing operations are controlled by self-learning intelligent control-lers.


S006 Cobots Robots move freely in factories, flexibly assisting workers in various tasks, in-stead of being confined to a fixed working space.

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S007 Manless Factory Fully automated production in the man-less factory is as flexible as production with humans.

S009 Reconfigurable Manufacturing Systems A reconfigurable manufacturing system achieved by coupling simple machine modules to create complex systems (plug and produce) is in widespread use.

S010 Process Integration The integration of several processes into one machine makes the production of complete products from single machines standard ("Factory in a Machine").

These statements were subject only of the 1st Delphi round.

9.2.1 Emerging Product Technologies

ManVis results highlight a substantial technology gap between old Member States on the one side and New Member States and Candidate Countries on the other. It is dem-onstrated by the Figure 9-1 showing the differences in the assessment of the current position of each group of countries in the fields of emerging product technologies, new manufacturing technologies and flexible automation (presented in the following part of this chapter) in comparison to Europe. A considerably higher percentage of experts from New Member States and Candidate Countries specify the position of their country as lagging.

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Figure 9-1: Current position in the field of emerging product technologies, new manu-facturing technologies and flexible automation. Assessment by group of countries dur-ing the 1st Delphi round

The 2nd Delphi round shows some reduction in the technology gap, especially between old and New Member States, however, in this case only some of statements have been assessed ("Smart Materials", "Electronic Labels", "Nano Manufacturing", "Manufactur-ing with Living Organisms", "MEMS" and "Rapid Technologies"). On the other hand, it is difficult to compare the results of the 1st and the 2nd Delphi rounds directly, because of a substantial percentage of experts who did not participate in the 2nd round (Figure 9-2).

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Figure 9-2: Current position in the field of emerging product technologies, new manu-facturing technologies and flexible automation. Assessment by group of countries dur-ing the 2nd Delphi round

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The perceived technology gap does not influence the assessment of the importance and the time of realisation of emerging product technologies. In both cases there is consensus among the experts representing different groups of countries.

Similar consensus can be observed in the assessment of the impact of emerging prod-uct technologies on environmental quality, living and working conditions, and competi-tiveness. Some differences can be seen in the assessment of regional and employment effects. In the former case, an a little bit higher percentage of experts rep-resenting old Member States point to emerging product technologies as being respon-sible for the growth of regional differences (Figure 9-3). On the other hand, a considerable percentage of the experts in each group of countries indicate the neutral effect. These results are also reflected by the 2nd Delphi round.

Figure 9-3: Expected effects of emerging product technologies on regional differences. Assessment by group of countries (1st Delphi round)

As far as employment effects are concerned, the statement "Smart Materials" (S028), which is considered (especially by the experts from old Member States) to have a negative influence on the situation on the labour market, is noteworthy. A similar effect can be expected in case of "Nanomaterials for Coatings" (S030). In this case the nega-tive effect is highlighted a little more often by experts from old Member States and Candidate Countries (Figure 9-4).

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Figure 9-4: Expected effects on employment of emerging product technologies. As-sessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels")

The main barriers to realisation of emerging product technologies are: lack of R&D funding and economic viability. Figure 9-5 shows that lack of R&D funding is more of-ten indicated by the experts from New Member States and Candidate Countries.

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Figure 9-5: Lack of R&D funding as a barrier blocking emerging product technologies. Assessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels")

By contrast, experts from old and (on a more limited scale) New Member States point to economic viability as a barrier for realisation of emerging product technologies, es-pecially in the case of electronic labels. An exception to the rule is "Smart Materials": according to experts from old Member States and Candidate Countries, economic vi-ability is a barrier of particular importance in this case (Figure 9-6).

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Figure 9-6: Economic viability as a barrier blocking emerging product technologies. Assessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels")

There is a high consensus among the experts that social acceptability, EU legislation, and education do not pose barriers blocking emerging product technologies. There are however, some exceptions to the rule. One of them is "Electronic Labels": in this case, in each group of countries, a high percentage of the experts consider social acceptabil-ity and EU legislation as barriers to realisation of the statement. The second one is formed by statements related to a reduced number of materials and nanomaterials for coating. In this case, education is stressed as a barrier, especially by experts from Candidate Countries and (on a more limited scale) New Member States.

9.2.2 New Manufacturing Technologies

Expert's assessments in the area of new manufacturing technologies once again con-firm the substantial technology gap between different groups of countries (see Figure 9-1 and Figure 9-2). In this case, however, all experts (despite some differences con-cerning the estimated time of realisation of particular statements) agree that new manufacturing technologies will become reality only in the longer perspective (Figure 9-7); particularly in the case of "Nano Manufacturing" and "Manufacturing with Living Organisms".

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0%

20%

40%

60%

80%

100%

OMS NMS CC OMS NMS CC OMS NMS CC OMS NMS CC

< 2010 2010 - 2015 2015 - 2020 > 2020 never

NanoManufacturing

Manufacturing withLiving Organisms MEMS

Rapid Technologies

Figure 9-7: Time of realisation of new manufacturing technologies. Assessment by group of countries (2nd Delphi round)

Like in the case of emerging product technologies, also new manufacturing technolo-gies are considered to affect the employment negatively and to rise the regional differ-ences. In the former case, the most pessimistic assessment is typical for experts from New Member States; the highest percentage of the experts from this group expect that new manufacturing technologies will result in a fall in employment (Figure 9-8).

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Figure 9-8: Expected effects on employment of new manufacturing technologies. As-sessment by group of countries (2nd Delphi round)

The main barriers blocking the realisation of emerging product technologies are: tech-nical feasibility, economic viability, and lack of R&D funding.

There is a quite broad consensus among the experts that technical feasibility is a very strong barrier, especially in the case of nano manufacturing and rapid technologies. Lower ranked is economic viability, followed by lack of R&D funding. In the latter case the barrier is (as a rule) more often indicated by the experts from New Member States and Candidate Countries (Figure 9-9).

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Figure 9-9: Lack of R&D funding as a barrier blocking new manufacturing technologies. Assessment by group of countries (2nd Delphi round)

9.2.3 Prospects of Flexible Automation

There is a full unanimity concerning the importance of all statements related to flexible automation, although the advancement of these processes in New Member States and Candidate Countries is much delayed (see Figure 9-1 and Figure 9-2).

The experts’ opinions differ quite considerably in assessment of time horizons for reali-sation of flexible automation statements. The exception here is "Manless Factory" (S007). The most cautious are the experts from New Member States (Figure 9-10), which is particularly evident in the cases of "Intelligent Control" (S001), "Talk to Ma-chines" (S002), "Cobots" (S006), and "Reconfigurable Manufacturing" (S009). In addi-tion, a much higher percentage of the experts from Candidate Countries (as compared to New Member States) see flexible automation as a short- and medium-term strategy. It is particularly surprising when confronted with the differences in the assessment of the current position of the country in comparison to Europe (Figure 9-1 and Figure 9-2).

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Figure 9-10: Time for realisation of flexible automation. Assessment by group of coun-tries

Flexible automation is hampered by technical feasibility, although this barrier is a little more often chosen by the experts from old and New Member States. Also social ac-ceptability is a very important barrier blocking the flexible automation, particularly in the cases of "Manless Factory" and "Cobots"; in these cases lack of social acceptability is a little more often pointed out by experts from old Member States and Candidate Coun-tries. Other blocking factors are economic viability, more important for experts from old Member States, and the education/qualification barrier, most strongly felt in Candidate Countries and New Member States.

9.2.4 Final Remarks

The ManVis Delphi results confirm that a substantial technological gap remains be-tween old Member States, on the one hand, and New Member States and Candidate Countries, on the other hand. It can be seen in each of the above discussed areas: emerging product technologies, new manufacturing technologies and flexible automa-tion. It is still a reality, despite the fact that since the beginning of the 1990s there can be observed huge advancements which use all possible ways of technology transfer: foreign direct investment, licensing, learning by exporting and imitation.

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The technology gap can be deepened by existing barriers, among which the top ranked are: lack of R&D funding and (in some cases) education and qualification which are much more strongly indicated by the experts from outside old Member States.

It is expected that the transition from resource-based to knowledge-based manufactur-ing will result in an increase in regional differences and deterioration of the situation on the labour market. These fears are indicated particularly by the experts from New Member States and Candidate Countries and are strongly correlated with an assess-ment of future effects of joint R&D in technology clusters (S018), R&D near production (S040) and networks of specialised SMEs (S022).

That points to a strong fear of a possible asymmetric development of European manu-facturing. The fear is also indicated in many previous analyses16 that highlight the ten-dency to the concentration of economic activity and human capital primarily in the EU’s core regions. Also the specialist infrastructure, research and development, know-how, and other high value-added activities concentrate on these areas which imply that low value-added activities are localised in the peripheries of the Community.

The EU enlargement, combined with cost advantages of New Member States and Candidate Countries, can stimulate the process of convergence. However, it will be to a large degree dependent on the adaptation abilities of their economies.

16 For example: Buigues P., Ilzkovitz F., Lebrun J., The Impact of the Single Market by Indus-

trial Sector: The Challenge for Member States, European Economy, Special Edition, Brus-sels, 1990; The Case of Greece, Ireland, Portugal and Spain, Economic and Social research Institute, Office for Official Publications of the European Communities, Luxem-bourg 1996; Midelfart-Knarvik K. H., Overman H. G., Redding S. J., Venables A. J., The Location of European Industry, Economic Paper No 142, April 2000; Aiginger K., Europe's Position in Quality Competition. Background report for "The European Competitiveness Report 2000", Enterprise Directorate-General, European Commission, September 2000; European integration and the functioning of product markets, European Economy, Special report No 2/2002; A new partnership for cohesion. Convergence. Competitiveness. Coop-eration. Third report on economic and social cohesion, European Commission 2004.

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Key results

• The differences in assessment of current position of country in comparison to Europe may indicate a technology gap which is characteristic for the New Member States and Candidate Countries. The technology gap can especially be noticed in fields like:

- reduced number of materials in each product, nanomaterials for coat-ings and electronic labels – in the case of emerging product technolo-gies,

- MEMS and rapid technologies – in the case of new manufacturing technologies and

- flexible automation (it applies to all statements in this area).

• Assessment of barriers blocking the realisation of statements related to tech-nology and flexible automation shows a lot of similarities. An exception to the rule is lack of R&D funding significantly more often highlighted by experts from New Member States and Candidate Countries.

Key challenges

• Possible increase in regional differences and deterioration of the situation on the labour market as a consequence of the transition from resource-based into knowledge-based manufacturing.

• Insufficient expenses on R&D. In case of New Member States and Candidate Countries the role of stimulator might be given to the change in level of public expenditure on R&D. The level of public expenditure on R&D is recognised as a factor encouraging non-public sector for such an investment and varies from 0,4% to 0,6% GDP depending on the country. If the public expenditure ex-ceeds this level it causes the dynamic of private expenditure to grow three, four times and visible economic effects. When public R&D expenditure is be-low this level, R&D institutions spend their financial means on their own needs that are necessary to keep their existence, e.g. basic research work, and con-sequently little attention is paid to the application and economic benefits deriv-ing from research work.


• Use of a structural fund as an additional tool to increase the level of R/D founding.

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• Improvement in socio-economic capabilities encompassing a wide range of institutional and behavioural requirements which are necessary so that actual catching-up comes as close as possible to potential catching-up.

• Development of regionally dispersed research and knowledge infrastructure.

• Emphasis on programmes for supporting technology diffusion.

• Promotion of partner networks and new area for collaboration.

9.3 Intensity of Cooperation – From Individual to System Com-petition

This section presents the results of the Delphi survey focused on following statements:

S017 Outsourcing To reduce costs and to focus on core competencies, companies outsource twice the percentage of manufacturing activities and support functions outsourced to-day.

S018 Joint R&D Competitive production sites in Europe are almost exclusively contained within technology clusters where pre-competitive R&D activities between various neighbouring industrial partners and research organisations are common.

S019 Industrial System The improvement-speed for the value-chain, the performance of the industrial system, is more important for the competitiveness than the markets success of individual products.


S040 R&D Near Production R&D within companies is, as a rule, performed close to manufacturing sites.

Statements S018, S019, S022, and S040 were subject of both 1st and 2nd Delphi round.

Each of the statements mentioned above presents different ways of enhancing the in-novativeness and competitiveness of European manufacturing and European SMEs in particular.

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Statements S017 and S019 can be treated as indicators of a value-chain cluster ap-proach (e.g. an industry cluster identified as an extended input-output or buyer-supplier chain. It includes final market producers and first, second, and third tier suppliers that directly and indirectly engage in trade. It is comprised of multiple sectors or industries).

Statement S022 can be seen as a network approach where network is defined as a group of firms with restricted membership and specific, and often contractual, business objectives. The network concept emphasises the specific forms of governance based on social relations, trust, and the sharing of complementary resources. Although net-works develop more readily within clusters, ties between firms in networks are typically more formal than in clusters.

Statements S018 and S040 can be treated as indicators of regional innovation systems containing a specialised cluster of firms supported by a developed infrastructure of supplier firms and knowledge and technology diffusion organisations (co-operation in innovation activity between firms and knowledge creating and diffusing organisations, such as universities, colleges, training organisations, R&D institutes, technology trans-fer agencies, business associations, and finance institutions).

The last part of the section reports on supporting trends (technological, social, and or-ganisational) facilitating the networking.

Technological trends are represented by closely defined procedures and specifications of work methods and are common in most companies to maximise the efficiency (S016). Another statement related to this topic (S034 "Electronic Labels") has already been discussed in Section 9.1.

Social and organisational trends are represented by the following statements related to learning organisation:

S015 Self-Managing Teams Self-managing teams with a wide range of tasks, including planning and control-ling, are widespread in the shop-floor organisation of production.

S020 Workforce Diversity In order to strengthen their innovation capabilities, the companies have ensured workforce diversity, employing people with completely different educational, pro-fessional and cultural backgrounds.

S021 Knowledge Sharing Companies promote the sharing of knowledge amongst individuals through the establishment of a communication friendly organisational culture and the provi-sion of communication channels across formal structures.

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S023 Virtual Company The internal structure of most companies is characterised by constantly changing networks of different individual specialists.

S026 Innovation Together with Stakeholder External stakeholders are incorporated into product development processes by the majority of companies.

S046 Learning in the Company A fixed part of working time is used for acquiring new competencies, using re-sources provided by the employer.


9.3.1 Clusters, Networks, Cooperation

Cooperation includes a wide range of relationships: business networks, industrial dis-tricts, specialised industrial agglomerations, local production systems, industrial or pro-duction systems, innovation systems, industry clusters, national-regional-cross-border clusters, clusters of competence, value-chain industry cluster etc. A cluster concept is increasingly used to cover all these phenomena. Although there is a multitude of defini-tions of clusters, all of the concepts share the idea of proximity, networking and spe-cialisation and represent attempts to capitalise on the externalities – both hard externalities in the sense of economies of scale and soft externalities in the sense of social, institutional and cultural foundations of clusters – arising from a sectoral concen-tration in a given region.

Clustering can be seen as one of the ways of enhancing the innovativeness and com-petitiveness of the European SMEs (Porter, 1998; Becattini et. al, 2003), supported by informal networking, supply chain development, improved workforce skills, and institu-tional capacity building. Regional clustering is even perceived as the way to compete globally, especially in the context of opportunities related to the new economy offering the possibility to use worldwide sourcing to lower input costs. Firms in regional clusters may then replace local collaborators with more far-reaching networks, possibly under-mining the cluster as a place of dense local interaction and knowledge creation. There are, however, some limitations stemming from the character of learning process as a base for cluster innovation. Learning needs both codified and informal tacit knowledge. The latter cannot be isolated from its individual, social, and territorial context, which is difficult to codify and transfer through formal channels of information (Regional clusters in Europe, 2002).

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Regional clusters are also being increasingly involved in global networks orchestrated by transnational corporations using ICT to co-ordinate global activities. It could how-ever entail changes in the number, type, and relative power of firms in the separate clusters (Clusters and SME Globalisation, 2000). For this reason a great importance is attached to clustering and networking in the Manufacturing Vision Document seeing them as one of the ways of moving European manufacturing towards ‘innovating pro-duction’.

It is not surprising in this context that for 66% to 90% of the experts, statements related to clusters, networks, and cooperation are of high importance. However, the develop-ment of clustering differs across the groups of countries and is a relatively poorly ad-vanced in the case of New Member States and Candidate Countries. This is confirmed by the assessment of the current position of New Member States and Candidate Coun-tries in comparison to Europe (Figure 9-11).

Figure 9-11: Current position in the field of cooperation statements. Assessment by group of countries (1st Delphi round)

The 2nd round demonstrates some improvement in the assessment of the current posi-tion, particularly between old and New Member States.

The statement addressing the networks of specialised SMEs as a tool to compete suc-cessfully in the global marketplace (S022) has placed itself at the head of statements describing clustering/networking trends. This result should not be surprising, taking into consideration the fact that the experts expect networking to improve all parameters of the business conditions (environmental quality, living and working conditions, employ-ment, and competitiveness). An exception here is a much more pessimistic assess-

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ment of expected effects on regional differences. Significant percentage of experts, particularly from Candidate Countries and New Member States, point to an increase of regional differences in this case (Figure 9-12).

Figure 9-12: Expected effects on regional differences of clustering/cooperation state-ments. Assessment by group of countries (2nd Delphi round except S017: outsourcing)

Although the majority of experts define the horizon for realisation of networks of spe-cialised SMEs for years 2010-2015, they point to some significant barriers blocking this trend and to education-qualification factors and in particular economic viability (in both cases much more often highlighted by experts from Candidate Countries and New Member States).

From the point of view of competitiveness of European manufacturing, statements ad-dressing the emerging of value-chain clusters ("Outsourcing" and "The improvement-speed for the value-chain") and regional innovation systems ("Joint R&D in technology clusters" and "R&D Near Production") are of great importance. The more important one – in the opinion of the experts – is "The improvement-speed for the value-chain" (S019) which will become a reality, however, in the longer term (Figure 9-13).

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Figure 9-13: Time of realisation of "Outsourcing" (S017) and "Improvement-speed for the value chain" (S019). Assessment by group of countries (results from the 1st Delphi round for S017 "Outsourcing" and from the 2nd round for S019 "Improvement-speed for the value chain")

There are interesting variations in the assessment of the expected effects and the main barriers to these two statements realisation. Such variations can be noticed particularly in the estimates of employment effects, changes in living and working conditions, and impact on regional differences.

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According to the experts, a particularly pessimistic assessment concerns outsourcing and its impact on employment and living and working conditions (Figure 9-14). The highest level of pessimism is typical for the experts from old Member States and re-flects fears of deindustrialisation and relocation of European manufacturing, in the longer time. This anxiety is also expressed by the experts from New Member States and reflects fears connected with a rising level of welfare which in consequence will result in elimination of their traditional (cost-based) comparative advantages.

Figure 9-14: Expected employment effects of clustering/cooperation statements. As-sessment by group of countries (2nd Delphi round except S017 "Outsourcing")

Those threats also exert their influence on the assessment of barriers to outsourcing and make the experts from old Member States indicate social acceptability as the main barrier on a more frequent basis (Figure 9-15).

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Figure 9-15: Social acceptability as a barrier to clustering/cooperation statements. As-sessment by group of countries (2nd Delphi round except S017 "Outsourcing")

Interesting differences can also be seen in the last group of statements describing the regional innovation system approach. This group is represented by two statements: "Joint R&D in technology clusters" (S018) and "R&D Near Production" (S040)

Considering the position of each of these statements solely within the group of 5 statements related to networking/clustering issues, the assessment of their importance appears to be very similar in each of the three groups of countries. Certain variations in the positioning of these statements, noticeable in the group of old Member States, are too small to consider them as statistically significant.

However, comparing the position of each of these statements in the context of all 55 general statements that characterise the directions of the future of European manufac-turing, an exceptionally high position of "Joint R&D in technology clusters" in the group of Candidate Countries draws special attention. The scores given by the experts from Candidate Countries rank this statement on the 8th position, whereas the experts from old and New Member States place this statement on the 30th and 21st position in the ranking respectively (1st Delphi round results). The experts from Candidate Countries are also far more optimistic about the time horizon of this statement's realisation (Figure 9-16). Nearly 60% of the experts from Candidate Countries think that joint R&D in technology clusters will become reality by 2015 at the latest. In the case of old Mem-

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ber States such an opinion is shared by only 47% of the experts and 46% for the ex-perts from New Member States.

Figure 9-16: Time of realisation of joint R&D in technology clusters (S018). Assessment by group of countries (2nd Delphi round)

This kind of optimism can be built on the basis of a deeper conviction about a positive impact of joint R&D in technology clusters on living and working conditions, expressed by the experts from Candidate Countries (Figure 9-17). As many as 74% of the experts from Candidate Countries believe that joint R&D in technology clusters will contribute to an improvement in living and working conditions. In other groups, such an opinion is expressed by 60% (old Member States) and 69% (New Member States) of the experts.

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Figure 9-17: Expected effects on living and working conditions of clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017: out-sourcing)

It is the group of Candidate Countries where joint R&D in technology clusters encoun-ter greatest social acceptability (Figure 9-15); within this group 18% of the experts point to social acceptability as one of the main barriers for joint R&D in technology clusters, whereas in New Member States this percentage amounts to 24% and in old Member States to 27%. Although joint R&D activities in technology clusters become widespread in Candidate Countries, they can, however, face higher qualification barriers.

In case of the last statement, "R&D Near Production" (S040), there is also no unanimity among the experts from different groups of countries. These differences are noticeable when the position of this statement is compared with all 55 general statements that describe the directions of the future development of European manufacturing. In this case, however, a different view is typical for the experts from old Member States, who give a higher importance to this strategy, than the experts from New Member States and Candidate Countries (1st Delphi round). One reason for such a result could be the economic viability which, in case of New Member States and Candidate Countries, is blocking realisation of this trend (Figure 9-18).

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Figure 9-18: Economic viability as a barrier to clustering/cooperation statements. As-sessment by group of countries (2nd Delphi round except S017: outsourcing)

9.3.2 Supporting Trends

Technological Trends

The realisation of all the above statements is supported by a diffusion of work specifi-cations and procedures (S016). This statement can be considered an expression of levelling off the conditions (a creation of the common framework) in which the coopera-tion between different firms is conducted. In the assessment of the importance of this statement, substantial variations in the opinions of the experts from the individual groups of countries can be noticed. The experts from New Member States place S016 in the top 10 most important statements, whereas the experts from old Member States and Candidate Countries place it on the 31st and 32nd position, respectively.

The variations in the opinions can also be seen in the estimate of time when work specifications and procedures become widespread. The highest optimism is typical for the experts from old Member States (Figure 9-19): almost 53% of the experts from old Member States believe that work specifications and procedures will become wide-spread by 2010 already and another 24% think that this will happen by 2015 at the lat-

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est. The respective data for New Member States say about 24% (time horizon till 2010) and nearly 40% (by 2015). The assessments of the experts from Candidate Countries are even less optimistic; nearly 10% of the experts anticipate that S016 will be wide-spread by 2010 and another 20% extend the time horizon to 2015. Different expecta-tions concerning the time of realisation of this statement can be one of the factors that differentiate the speed of intensification of various forms of cooperation within different groups of countries.

Figure 9-19: Time of realisation of "Work Specifications and Procedures" (S016). As-sessment by group of countries

It seems that the above differences in the importance of work specifications and proce-dures can be a result of a stronger conviction in New Member States (than in the two remaining groups of countries) about a positive impact of closely defined procedures and specifications of work methods on competitiveness. However, no significant differ-ences were revealed as far as the assessment of barriers blocking the realisation of work specifications and procedures are concerned. The only exception here is the lack of R&D funding which was considerably more often indicated by the experts from New Member States.

Learning organisation

There is a very high consensus among the experts concerning the importance of all statements related to learning organisation. The estimates of the experts coming from different groups vary according to the current position in comparison to Europe and the

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time horizon. In the former case the results of ManVis Delphi show that – likewise for technology – New Member States and Candidate Countries lag substantially behind old Member States in the transition to a knowledge-based economy.

As far as the time of realisation of statements related to learning organisation is con-cerned, the experts only agree about "Knowledge Sharing" (S021). In the remaining cases, there are certain differences (Figure 9-20). However, statistically significant are only the assessments of statements related to self-managing teams (S15), workforce diversity (S020), and virtual company (S023). The most varied estimates were given to "Self-Managing Teams". 38% of the experts from old Member States claim that such development will become reality by 2010 and another 41% of the experts think this will happen by 2015 at the latest. The percentages of the experts from New Member States who express similar opinions amount to 17% and 47% respectively (2nd Delphi round).

Figure 9-20: Time of realisation of "Work Specifications and Procedures" (S016). As-sessment by group of countries

There is a certain ambiguity among the experts concerning the expected effects of the realisation of the learning organisation scenario. The biggest (statistically significant) differences in opinions can be noticed in relation to the regional consequences (Figure 9-21). The common feature in this case is that the majority of the experts expect that with learning organisations becoming widespread, the regional differences will grow.

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The only exception here is "Reduction of Unskilled Labour" (S053) which will cause a large decrease in regional differences.

Figure 9-21: Expected impact of learning organization on regional differences. As-sessment by group of countries (1st Delphi round except S015: self-managing teams and S046: learning in the company

There is quite a broad consensus among the experts concerning the barriers to realisa-tion of statements related to learning organisation. All groups of experts place educa-tion and qualification as the main barrier. Lower ranked is social acceptability, followed by economic viability. Statistically significant differences can be noticed mainly in rela-tion to "Workforce Diversity" (S020) and "Virtual Company" (S023).

As far as the workforce diversity is concerned, the experts from old Member States point to the barriers in the form of social acceptability and education/qualification on a more frequent basis (than others). On the other hand, the experts from New Member States more often point to technical feasibility as the main barrier, whereas the experts from Candidate Countries indicate economic viability, EU legislation, and a lack of R&D funding.

In the case of "Virtual Company", the experts from old Member States point to the bar-riers of social acceptability and technical feasibility more frequently than their counter-parts from the other groups of countries. The experts from New Member States indicate economic viability and EU legislation on a more frequent basis, whereas the experts from Candidate Countries – like previously – more often point to the lack of R&D funding.

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9.3.3 Conclusions

There are two main channels of change from individual to system competition. The first one is the development of system competition based on cost advantages (outsourcing and focussing on core competencies and better performance of the industrial system by the improvement-speed for the value-chain). The second one is the development of a system competition, based on knowledge-intensive advantages arising from a geo-graphical concentration supported by informal networking and institutional capacity building (networks of specialized SMEs, joint R&D in technology clusters, and R&D near production).

Old Member States use both channels (system competition based on cost advantages and knowledge-intensive advantages) with similar intensity. New Member States and Candidate Countries prefer system competition based on knowledge-intensive advan-tages, especially networking and joint R&D in technology clusters. In the case of New Member States, outsourcing provides a supporting strategy, whereas Candidate Coun-tries use a better performance of the industrial system via the improvement-speed for the value-chain. Both groups of countries attach relatively little importance to the strat-egy based on regional vicinity between production and R&D activities.

The concentration of New Member States and Candidate Countries on the develop-ment of a system competition based on knowledge-intensive advantages is inasmuch justified, as for the time being these countries possess substantial cost advantages. However, the source of these advantages is mainly a relatively low cost of labour; unit labour costs are currently significantly lower than in the old Member States. This ad-vantage seems to be temporary due to the process of convergence with the rest of the EU (although the rates of convergence will vary). In addition, the cost advantage of the New Member States is reduced by the fact that their labour productivity is lower than in the old Member States. An underestimation of strategies that form strong system com-petition based on cost advantages can finally weaken (even in a relatively short term) the chances to face the competition from other low-wage economies substantially.

It seems that old Member States adapt quicker strategies towards system competition. The majority of the experts from these countries share the belief that outsourcing, net-works of specialised SMEs and the improvement-speed for the value-chain will become reality by 2015 at the latest. A substantial part of the experts believe that it will happen even earlier, that is before 2010. Also R&D near production can become widespread by 2015, although in this case the experts’ opinions are strongly divided, and almost 27% of the experts even think that it will never happen. Old Member States will need more time on R&D in technology clusters, which will become reality only in a longer perspec-tive by 2020. Also in this case, the experts’ estimates vary noticeably and 23% of the

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experts think it will never happen. Similar estimates concerning the time of realisation of particular strategies are characteristic for the experts from Candidate Countries. Most cautious are the experts from New Member States. The largest proportion of the experts from these countries think that particular strategies can become reality not ear-lier than by 2015. Also in this case some statements reveal big variations in the opin-ions. This particularly concerns "R&D Near Production" – where more than 23% of the experts believe that it will never happen – and "The improvement-speed for the value-chain" (over 16% of the experts share the view it will never happen).

However, such conclusions should be taken with due caution since there is a relation-ship between the level of optimism about the time of realisation of particular strategies and the type of organisation from which an expert comes. The highest level of optimism is typical for the experts who represent enterprises; they most often claim that each of the discussed statements will be realised by 2010 already and by 2015 at the latest. Among the experts from enterprises, the highest level of optimism is characteristic for the experts representing big firms (more than 250 employees). Since the experts from enterprises are most numerous in the group of old Member States, this can distort the situation in a certain way. In the group of old Member States, there is also the highest proportion of the experts employed in large firms.

All the experts agree that all strategies related to the development of system competi-tion will decisively raise the competitiveness of European manufacturing. A less opti-mistic assessment concerns employment effects and impacts of regional differences. Negative employment effects concern particularly outsourcing and they are most often indicated by the experts from old Member States. Also joint R&D in technology clusters and the improvement-speed for the value chain cause negative employment effects; this time, however, this aspect is most frequently pointed to by the experts from New Member States. There is also a fear that the realisation of the analysed statements will be connected with an increase in regional differences.

There is a relatively high consensus among the experts about the fact that the main factors blocking the change from individual to system, particularly competition, include education/qualification and economic viability. An essential barrier, particularly for out-sourcing, is social acceptability, pointed to especially by the experts from old Member States. An additional factor blocking a dynamic development of system competition can be an uneven development of trends supporting the development of various forms of cooperation.

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Key results

• It seems that old Member States adapt strategies of development of system competition a little quicker and they are more advanced in the transition to a knowledge-based economy.

• The main factors that block moving from individual to system competition in-clude education/qualification and economic viability. These barriers exert their influence in each group of countries with more or less equal strength. An es-sential barrier, particularly for outsourcing, is social acceptability, especially pointed by the experts from old Member States.

• Technical feasibility can be felt as a barrier in the case of the improvement-speed for the value-chain and it is most strongly highlighted by the experts from New Member States.

• An additional factor blocking a dynamic development of system competition can be an uneven development of trends supporting the development of vari-ous forms of cooperation. Although the ManVis Delphi only dealt with one such trend (work specifications and procedures), the diversity in the estimates of the experts from different groups of countries concerning the time of reali-sation of this statement can suggest that we can have a similar situation also in other areas (e.g. legal and administrative environment, other framework conditions).

Key challenges

• There is a fear that moving towards system competition will be connected with an increase in regional differences (this fear is most often expressed by the experts from old and New Member States and concerns especially outsourc-ing, networks of specialised SMEs, and R&D near production).


• Promotion of full involvement of the New Member States into European initia-tives in order to prevent concentration of positive effects only in some regions and to counteract the growth of regional disparities.

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9.4 Threat of Relocation of Manufacturing This section presents the results of the ManVis survey related to the following reloca-tion statements:

S039 Relocation Outside EU Production is subsidised or almost completely relocated outside Europe.

S041 Transport Costs High transport costs outweigh the advantages of lower production costs outside the EU.

S042 Relocation Because of Environmental Legislation European companies almost completely relocate production (except final assem-bly) because of environmental standards set by the EU.

S044 Local Manufacturing Local manufacturing is widely used to minimise the risks of global distribution chains.


9.4.1 The Threat of Relocation

Relocations are treated as one of the most dangerous risks for the European manufac-turing. It is expected that EU enlargement can stop these processes, particularly be-cause the EU is absorbing a group of countries with relatively low-wage economies. This advantage is, however, temporary due to the process of convergence with the rest of the EU. In addition, the cost advantage is reduced by the fact that their labour pro-ductivity is much lower than in the current Member States. Nevertheless, the compara-tive advantage of the New Member States has already led numerous producers in the EU15 to locate some of their production there – and this is likely to continue.

At the same time the EU industry faces continuing competition from other developed economies and from new competitors. These trends strengthen the possibility that cer-tain industries, especially low-tech industries, would move outside Europe, bringing in their wake other users or supplier sectors. Some companies have already delocalised, or intend to do so, in order to benefit from lower labour costs. The phenomenon of relo-cation is beginning also to extend to research activities and high-tech sectors, although it is not possible to quantify it accurately or to distinguish it from the worldwide expan-sion in industrial activity (COM(2004) 274 final).

264

ManVis results confirm the anxiety about the migration of European manufacturing. All the experts are aware of the threat of relocation of the European manufacturing; they differ, however, considerably in their estimates concerning the time horizon when it is likely to happen (Figure 9-22).

As far as the "Relocation Outside EU vs. Subsidies" (S039) is concerned, the highest pessimism is expressed by the experts from old Member States; 16% of all experts from this group think that their industries will face the alternatives of migration or sub-sidy before 2010 (in Candidate Countries such view is shared by 12% of the experts, whereas in New Member States over 5%). Further 33% of the experts believe that this alternative will need to be decided on by 2015 at the latest. An opposite distribution of answers can be noticed in the case of the assessment of the time of realisation of "Re-location because of Environmental Legislation" (S042).

On the other hand, however, it appears that there are also a large proportion of the experts who do not believe in the possibility of relocation. As many as 26% of the ex-perts from old Member States and 33% of the experts from New Member States think that their countries will never have to choose between relocation and subsidies for in-dustry. The percentage of such experts from Candidate Countries is significantly lower and it amounts to slightly more than 14%. A significantly higher proportion of the re-spondents in individual groups of countries believe that relocation due to environmental legislation will never become reality. It will be prevented by other trends analysed within the ManVis Delphi, first of all by local manufacturing (S044). In the short-run; relocation will be hindered by high transport costs (S041). The experts’ estimates concerning these statements are presented in the later part of the chapter.

265

Figure 9-22: Time of realisation of S039 "Relocation Outside EU vs. Subsidies" (2nd Delphi round) and S042 "Relocation because of Environmental Legislation" (1st Delphi round). Assessment by group of countries

The experts from different groups of countries also differ when the assessment of the importance of threat that results from moving European manufacturing outside the EU is concerned. Experts from New Member States attach the highest importance to the relocation issues (Figure 9-23). This probably results from the fact that they have al-ready been observing first signals of the migration wave which could be intensified in a few years’ time. It will depend on the speed of the convergence process and, conse-quently, narrowing the gap in the level of labour costs, and on the directions and inten-sity of restructuring of their industries.

266

Figure 9-23: Importance of S039: relocation outside EU vs. subsidies (2nd Delphi round) and S042: relocation because of environmental legislation (1st Delphi round). Assessment by group of countries

The differences in the intensity of the wave of migration of industries entail the differ-ences in the assessment of the consequences of future relocation of the European manufacturing. However, there is a wide consensus among the experts that regardless of the reasons for relocation (labour costs or environment legislation) the industry mi-gration will decisively deteriorate the labour market conditions; the percentage of the experts who express such opinion ranges from 73% (Candidate Countries) to 87% (New Member States). Similar unanimity concerns the assessment of changes in the extent of regional differences. In this case from 50% (New Member States) to more than 74% (old Member States) of the experts share the view that relocation will in-crease regional differences.

There is also a broad consensus among the experts concerning a positive (increase) impact of relocation on the environmental quality.

Much bigger variations can be noticed in the estimate of the two remaining aspects (living and working conditions and competitiveness), both between individual groups of countries and within each group.

When the assessment of changes in living and working conditions is concerned, almost twice as many experts from old Member States believe that relocation will deteriorate these conditions. As for the assessment of "relocation vs. subsidies", such opinion is expressed by more than 51% of the experts from old Member States compared to over 37% respectively and more than 31% of the experts from New Member States and Candidate Countries. In the group of New Member States and Candidate Countries a

267

substantial percentage of the experts think that relocation will bring improvement in these conditions; this opinion is expressed by 43% (in the case of relocation vs. subsi-dies) to 48% (as for relocation because of environment legislation) of the experts from New Member States and from more than 48% to 51% of the experts from Candidate Countries.

Even stronger variations can be observed when the assessment of shifts in the level of competitiveness is concerned. Almost 40% (old Member States) to over 37% (New Member States) and nearly 27% (Candidate Countries) of experts think that "relocation vs. subsidies" will decrease the competitiveness of European manufacturing. But still an equally high percentage of the experts (almost 46%, 48% and 61% respectively) believe that the competitiveness of European manufacturing will increase.

9.4.2 Opposite Trends

There is a wide consensus among the experts concerning the possibility of preventing the migration of European manufacturing (Figure 9-24). The most important option to do so is local manufacturing (S044) followed by high transport costs (S041). Much big-ger scepticism can be observed in relation to the third option which is high automation vs. low labour costs (S045).

Figure 9-24: Importance of "Transport Costs" (S041), "High automation vs. low labour costs" (S045) and, "Local Manufacturing" (S044). Assessment by group of countries (2nd Delphi round except S041)

However, substantial variations were revealed when the time horizon in which particu-lar strategies can become reality (Figure 9-25) was concerned. The strongest scepti-

268

cism, especially among the experts from New Member States, concerns "Local Manu-facturing" (S044). Almost 12% of the experts from New Member States share the view that this development is not possible until 2020 and more than 25% think it will never happen. The respective data for the remaining groups amount to 9% and about 17% for the experts from old Member States and almost 6% and 4% for the experts from Candidate Countries.

Figure 9-25: Time of realisation of "Transport Costs" (S041), "High automation vs. low labour costs" (S045) and "Local Manufacturing" (S044). Assessment by group of coun-tries (2nd Delphi round except S041)

9.4.3 Final Remarks

ManVis results confirm the anxiety about the migration of European manufacturing. This anxiety is more often indicated by the experts from New Member States. It con-firms earlier assumptions, according to which the continuation of the Low Road ap-proach will not prevent relocation processes.

269

Key results

• ManVis results confirm the anxiety about the migration of European manufac-turing. This anxiety is more often indicated by the experts from New Member States.

Key challenges

• Low Road approach, using first of all lowering production costs, especially wage rates, does not stop relocation processes, particularly in the context of increasing competition of cheaper producers from outside the EU.


• The way of raising the competitiveness of New Member States and Candidate Countries should be much closer to High Road approach, based on more effi-cient use of resources and investment in processes, technological innovation and employees’ upskilling.

I

Figures Figure 2-1: New technologies for manufacturing ............................................................ 6

Figure 2-2: Basic Science-Technology Cycle for macro-innovations (Meyer-Krahmer; Dreher 2004)................................................................................ 7

Figure 2-3: Importance and (weighted) time of realisation for selected statements – assessment by all experts (n=1104) ...................................... 9

Figure 2-4: Main barriers for selected emerging product technologies – assessment by all experts (average n= 1065) ........................................... 10

Figure 2-5: Expected increasing and decreasing effects for selected emerging product technologies – assessment by all experts (n=1068)..................... 11

Figure 2-6: Importance and time of realisation – process technologies ....................... 15

Figure 2-7: Barriers for statements – process technologies (2nd round)...................... 16

Figure 2-8: Effects – process technologies (2nd round) ............................................... 17

Figure 2-9: Importance and time of realisation for selected statements of flexible automation – assessment by all experts ....................................... 20

Figure 2-10: Main barriers for selected statements of flexible automation – assessment by all experts ......................................................................... 22

Figure 2-11: Expected increasing and decreasing effects for selected statements of flexible automation – assessment by all experts................. 23

Figure 2-12: Manufacturing related technologies on the Science-Technology Cycle for macro-innovations ...................................................................... 26

Figure 3-1: Expertise – Machinery................................................................................ 31

Figure 3-2: Importance – Machinery – machinery concepts (S066, S067, S070) ......................................................................................................... 32

Figure 3-3: Time of realisation – Machinery – machinery concepts (S066, S067, S070)............................................................................................... 32

Figure 3-4: Barriers – Machinery – machinery concepts (S066, S067, S070).............. 33

Figure 3-5: Effects – Machinery – machinery concepts (S066, S067, S070) ............... 34

Figure 3-6: Importance – Machinery – machinery programming and communication (S064, S068, S069) .......................................................... 35

Figure 3-7: Time of realisation – Machinery – machinery programming and communication (S064, S068, S069) .......................................................... 35

Figure 3-8: Effects – Machinery – machinery programming and communication (S064, S068, S069) ................................................................................... 36

Figure 3-9: Barriers – Machinery – machinery programming and communication (S064, S068, S069) .......................................................... 37

II

Figure 3-10: Importance – Machinery – simulation and business concepts (S065, S071).............................................................................................. 38

Figure 3-11: Time of realisation – Machinery – simulation and business concepts (S065, S071) .............................................................................. 38

Figure 3-12: Effects – Machinery – simulation and business concepts (S065, S071) ......................................................................................................... 39

Figure 3-13: Expertise per statement – Fabricated Metal Products ............................. 43

Figure 3-14: Barriers – Fabricated Metal Products – product materials (S072, S076 and S077)......................................................................................... 44

Figure 3-15: Effects – Fabricated Metal Products – product materials (S072, S076 and S077)......................................................................................... 45

Figure 3-16: Barriers – Fabricated Metal Products – production technologies (S073-075)................................................................................................. 46

Figure 3-17: Effects – Fabricated Metal Products – production technologies (S073-075)................................................................................................. 47

Figure 3-18: Effects – Fabricated Metal Products – sector structure (S078)................ 48

Figure 3-19: Expertise per statement – Electronics, Electrical Equipment and Instruments ................................................................................................ 56

Figure 3-20: Importance and time of realisation – Electronics – micro technologies (S087, S089, S092, S093).................................................... 57

Figure 3-21: Barriers – Electronics – micro technologies (S087, S089, S092, S093) ......................................................................................................... 58

Figure 3-22: Highest level of R&D – Electronics – micro technologies (S087, S089, S092, S093) .................................................................................... 58

Figure 3-23: Importance and time of realisation – Electronics – semi-conductors (S090, S091) ........................................................................... 59

Figure 3-24: Barriers – Electronics – semi-conductors (S090, S091)........................... 60

Figure 3-25: Highest level of R&D – Electronics – semi-conductors (S090, S091) ......................................................................................................... 60

Figure 3-26: Importance and time of realisation – Electronics – data and power transmission (S088, S094) ........................................................................ 61

Figure 3-27: Barriers – Electronics – data and power transmission (S088, S094) ......................................................................................................... 62

Figure 3-28: Highest level of R&D – Electronics – data and power transmission (S088, S094) ........................................................................ 62

Figure 3-29: Importance and time of realisation – Electronics – in-machine testing (S086) ............................................................................................ 63

Figure 3-30: Barriers – Electronics – in-machine testing (S086) .................................. 64

Figure 3-31: Highest level of R&D – Electronics – in-machine testing (S086).............. 64

III

Figure 3-32: Plastics consumption by industry sector, Western Europe 2003 (Plasticseurope 2004)................................................................................ 68

Figure 3-33: Barriers – Rubber and Plastics – materials (S097, S098, S099, S100 and S101)......................................................................................... 74

Figure 3-34: Effects – Rubber and Plastics – materials (S097, S098, S099, S100 and S101)......................................................................................... 75

Figure 3-35: Barriers – Rubber and Plastics – processes (S095, S096) ...................... 76

Figure 3-36: Effects – Rubber and Plastics – processes (S095, S096)........................ 77

Figure 3-37: Importance to European manufacturing industry – Traditional Products (S079, S080, S081, S082, S083, S084, S085) .......................... 81

Figure 3-38: Time of realisation – Traditional Products (S079, S080, S081, S082, S083, S084, S085) .......................................................................... 82

Figure 3-39: Barriers – Traditional Products (S079, S080, S081, S082, S083, S084, S085)............................................................................................... 83

Figure 3-40: Expertise – Transport ............................................................................... 93

Figure 3-41: Time of realisation and importance to European manufacturing industry – automotive technologies (S057-S059) ...................................... 94

Figure 3-42: Barriers – Transport – automotive technologies (S057-S059) ................. 95

Figure 3-43: Effects – Transport – automotive technologies (S057-S059)................... 95

Figure 3-44: Time of realisation and importance to European manufacturing industry – future production trends (S061, S063) ...................................... 96

Figure 3-45: Barriers – Transport – future production trends (S061, S063) ................. 97

Figure 3-46: Effects – Transport – future production trends (S061, S063)................... 98

Figure 3-47: Time of realisation – Transport – new transport trends (S056, S060, and S062)........................................................................................ 99

Figure 3-48: Barriers – Transport – new transport trends (S060, S062) ...................... 99

Figure 3-49: Effects – Transport – new transport trends (S056, S060, S062)............ 100

Figure 4-1: R&D leadership, statements where Europe is considered to be in the lead by the ManVis experts ............................................................... 118

Figure 5-1: Importance and time of realisation dealing with environmental sustainability – assessment by all experts............................................... 131

Figure 5-2: Main barriers for statements dealing with sustainable development – assessment by all experts .................................................................... 133

Figure 5-3: Main effects for statements S004, S011, S013, S024, S029, S031, and S032 – assessment by all experts .................................................... 134

Figure 5-4: Main effects for statements S058, S059, S061, and S062 – assessment by all experts ....................................................................... 135

IV

Figure 5-5: High importance of selected statements per country – assessment by all experts............................................................................................ 139

Figure 5-6: Current position of your country in comparison to Europe – assessment by all experts ....................................................................... 140

Figure 6-1: Knowledge management activities........................................................... 145

Figure 6-2: Importance and time of realisation concerning internal knowledge management– assessment by all experts ............................................... 149

Figure 6-3: Main barriers for statements concerning internal knowledge management – assessment by all experts .............................................. 151

Figure 6-4: Expected increasing and decreasing effects for statements concerning internal knowledge management – assessment by all experts ..................................................................................................... 152

Figure 6-5: Importance and time of realisation concerning external knowledge management – assessment by all experts .............................................. 154

Figure 6-6: Main barriers for statements concerning knowledge management in cooperative form – assessment by all experts..................................... 155

Figure 6-7: Expected increasing and decreasing effects – assessment by all experts ..................................................................................................... 156

Figure 6-8: Main barriers for statements concerning workforce diversity and stakeholder involvement – assessment by all experts............................. 158

Figure 6-9: Expected increasing and decreasing effects – assessment by all experts ..................................................................................................... 160

Figure 6-10: Importance and time of realisation concerning working conditions – assessment by all experts .................................................................... 162

Figure 6-11: Main barriers for statements concerning working conditions – assessment by all experts ....................................................................... 163

Figure 6-12: Expected increasing and decreasing effects for statements concerning working conditions – assessment by all experts ................... 164

Figure 7-1: Dynamo Approach.................................................................................... 171

Figure 7-2: Levels of Development ............................................................................ 172

Figure 8-1: Integration of demand perspective within the overall ManVis project framework .................................................................................... 202

Figure 9-1: Current position in the field of emerging product technologies, new manufacturing technologies and flexible automation. Assessment by group of countries during the 1st Delphi round ................................... 234

Figure 9-2: Current position in the field of emerging product technologies, new manufacturing technologies and flexible automation. Assessment by group of countries during the 2nd Delphi round.................................. 235

Figure 9-3: Expected effects of emerging product technologies on regional differences. Assessment by group of countries (1st Delphi round) ......... 236

V

Figure 9-4: Expected effects on employment of emerging product technologies. Assessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels") ........................... 237

Figure 9-5: Lack of R&D funding as a barrier blocking emerging product technologies. Assessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels") ........................... 238

Figure 9-6: Economic viability as a barrier blocking emerging product technologies. Assessment by group of countries (results from the 1st Delphi round for S029 "Number of Materials Reduced" and S030 "Nanomaterials for Coatings" and from the 2nd round for S028 "Smart Materials" and S034 "Electronic Labels") ........................... 239

Figure 9-7: Time of realisation of new manufacturing technologies. Assessment by group of countries (2nd Delphi round)............................ 240

Figure 9-8: Expected effects on employment of new manufacturing technologies. Assessment by group of countries (2nd Delphi round) ...................................................................................................... 241

Figure 9-9: Lack of R&D funding as a barrier blocking new manufacturing technologies. Assessment by group of countries (2nd Delphi round) ...................................................................................................... 242

Figure 9-10: Time for realisation of flexible automation. Assessment by group of countries .............................................................................................. 243

Figure 9-11: Current position in the field of cooperation statements. Assessment by group of countries (1st Delphi round) ............................. 249

Figure 9-12: Expected effects on regional differences of clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017: outsourcing) ....................................................................... 250

Figure 9-13: Time of realisation of "Outsourcing" (S017) and "Improvement-speed for the value chain" (S019). Assessment by group of countries (results from the 1st Delphi round for S017 "Outsourcing" and from the 2nd round for S019 "Improvement-speed for the value chain") ...................................................................... 251

Figure 9-14: Expected employment effects of clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017 "Outsourcing")..................................................................... 252

Figure 9-15: Social acceptability as a barrier to clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017 "Outsourcing")..................................................................... 253

Figure 9-16: Time of realisation of joint R&D in technology clusters (S018). Assessment by group of countries (2nd Delphi round)............................ 254

VI

Figure 9-17: Expected effects on living and working conditions of clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017: outsourcing) ........................... 255

Figure 9-18: Economic viability as a barrier to clustering/cooperation statements. Assessment by group of countries (2nd Delphi round except S017: outsourcing) ....................................................................... 256

Figure 9-19: Time of realisation of "Work Specifications and Procedures" (S016). Assessment by group of countries.............................................. 257

Figure 9-20: Time of realisation of "Work Specifications and Procedures" (S016). Assessment by group of countries.............................................. 258

Figure 9-21: Expected impact of learning organization on regional differences. Assessment by group of countries (1st Delphi round except S015: self-managing teams and S046: learning in the company....................... 259

Figure 9-22: Time of realisation of S039 "Relocation Outside EU vs. Subsidies" (2nd Delphi round) and S042 "Relocation because of Environmental Legislation" (1st Delphi round). Assessment by group of countries .................................................................................... 265

Figure 9-23: Importance of S039: relocation outside EU vs. subsidies (2nd Delphi round) and S042: relocation because of environmental legislation (1st Delphi round). Assessment by group of countries ........... 266

Figure 9-24: Importance of "Transport Costs" (S041), "High automation vs. low labour costs" (S045) and, "Local Manufacturing" (S044). Assessment by group of countries (2nd Delphi round except S041)....... 267

Figure 9-25: Time of realisation of "Transport Costs" (S041), "High automation vs. low labour costs" (S045) and "Local Manufacturing" (S044). Assessment by group of countries (2nd Delphi round except S041)....... 268

Figure A-1: The ManVis Approach ..............................................................................XIV

Figure A-2: Experts’ backgrounds by participating countries (First Round).............. XXIV

Figure A-3: Experts’ backgrounds by participating countries (Second Round) ......... XXV

Figure A-4: Expert participation of ManVis for participating countries and relative weight according to employment in manufacturing (n=3121) .............................................................................................. XXVIII

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Annex 1: Methodological Annex

The ManVis Approach The ManVis project had two major objectives: First, to provide detailed input to Euro-pean policymakers at all levels (national, regional, EUREKA, EU) for informed decision-making on actions towards sustainable and competitive manufacturing in Europe, and second, to support European manufacturing industries to learn about and face the long-term challenges of changing markets and frameworks. Further, it is meant to initi-ate a discourse on manufacturing issues and enhance communication and knowledge flow between actors of manufacturing innovation in Europe and to develop advanced visions on sustainable and competitive manufacturing of the future.

In order to achieve these goals, the ManVis research was based on two approaches: First, the consultation of experts of their views on future needs in manufacturing through a pan-European Delphi survey; second, the linking of Delphi results to scenar-ios on the future of manufacturing which have been developed in previous projects and were advanced for this purpose.

Within the ManVis project, multiple actors from different positions and disciplines and from different European countries and other parts of the world discussed their visions, values and expectations on the future of manufacturing. The ManVis project team col-lected the views and feedbacks of experts from research, industry and stakeholders and established new databases. It constitutes a knowledge community on trends, vi-sions and alternatives in manufacturing, product and service engineering and facilitates the new public debate.

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Input from previous Foresight Activities

Analysis, Assessment and Policy Recommendations

"European Manufacturing – Quo Vadis?" Conference

Demand SideScenarios

Stakeholder Groups

OverseasManufacturing

Experts

European Manufacturing

Experts

Pan-European Delphi Survey in 2 rounds

Figure A-1: The ManVis Approach

The project demanded the integration of fragmented perspectives. Throughout the pro-ject different ideas, solutions, and approaches were collected, linked to each other, and spread across borders of nations, sectors, and disciplines in order to benefit from dif-ferent approaches to common manufacturing problems.

The ManVis project mainly consisted of three strands of activities which were closely linked with each other as well as a set of integrative joint activities. Each strand was led by one responsible partner. Strand D encompassed the European Delphi survey. The other two strands, Strand S – Stakeholder Participation and Strand O – Over-seas Involvement, exchanged results with the Delphi strand.

Emphasising and elaborating the demand side perspective on manufacturing was an important aim of this project. Consequently, the views of users, consumers and other societal groups concerned with manufacturing contributed to the development of the Delphi survey. In parallel to the Delphi activities, scenarios on the development of the demand side of manufacturing were generated by experts and stakeholders.

The core activity of the project was a pan-European Delphi survey on manufacturing issues which was conducted in two rounds. The Delphi methodology is the most widely established tool for generating long-term visions among a heterogeneous and wide-spread community and therefore the ideal instrument with respect to the special pur-pose of this project. Experts from 22 nations were involved in shaping the content and scope of the survey. A questionnaire for a Delphi survey usually lists several state-ments on a specific topic and experts are asked to assess these statements to a set of categories. In order to avoid an isolated view of Europe’s manufacturing issues, ex-

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perts from overseas were also involved in the development of the statements of the ManVis Delphi questionnaire and commented on the results of the survey.

Finally, an integrative analysis was conducted that included all the information gathered during the ManVis activities and policy conclusions were drawn in order to support European policy decision processes.

1 Strand S – Stakeholders and Demand Side Manufacturing is deeply rooted in its socio-economic context. For example advanced concepts of factory optimisation can only be realised if they are consistent with chang-ing values and lifestyles. The attitude of stakeholder groups has a severe impact on the future of manufacturing. Consumer opinions towards sustainability will determine whether companies will have to apply the same social and environmental standards to their manufacturing locations worldwide. The standpoint of citizens in Europe has an influence on legislation towards cycle-economy and thereby the factory concepts of the future.

Emphasising and elaborating the demand side perspective on manufacturing was therefore an important activity within the ManVis project which was managed by the JRC Institute for Prospective Technological Studies (IPTS). For this purpose, the views of users, consumers and other societal groups concerned with manufacturing were collected and integrated into the design of the questionnaire. This way, experts answer-ing the survey were not only confronted with visions similar to their own, but also with ideas stemming from very different considerations. A second task was to spell out the interdependencies between developments in manufacturing and its socio-economic context. Possible directions of this co-evolution were elaborated in desk research and in a scenario type analysis based on the FutMan17 scenarios.

With these intentions, Stand S contained four work packages

Stakeholders and User Inquiries

The first work package was created to develop demand oriented statements for the Delphi survey based on the FutMan scenarios. The results went directly into the state-

17 The EU project FutMan developed policy scenarios for manufacturing considering the sus-

tainability concept, carrying out expert interviews on technology trends and elaborating sectoral views on manufacturing. The scenarios that were developed within the project of-fer coherent long-term visions of 2015-2020 European manufacturing to serve as a base for strategic planning for policy action See “The Future of Manufacturing in Europe 2015-2020, The Challenge for Sustainability”, Final Report, Karlsruhe, March 2003.

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ment generation phase. The main activity of this work package was a written inquiry among a broad group of stakeholders from consumer associations, trade unions, NGOs, etc. for the purpose of getting a more comprehensive perspective on future de-mand patterns of production and consumption.

Stakeholder Workshop

The second work package was included a stakeholder workshop which took place on March 11th 2005 in Seville, after results of the first Delphi round were available. In the course of this workshop, representatives from various stakeholder organisations had the chance to identify aspects from their perspectives that were not sufficiently covered by the previous Delphi round.

Demand Side Scenario Development

The third work package was devoted to the development of ‘Demand-side scenarios’. In a scenario-building workshop on May 31st, 2005 in Barcelona, a group of 15 stake-holders and experts from a broad variety of backgrounds, created the scenarios based on issues from the previous Stakeholder Workshop, preliminary results of the Delphi questionnaire, previous foresight projects like the EUREKA Informan project18 and the EU FutMan scenarios, as well as relevant literature (including new Foresight exer-cises). These scenarios were used to include the demand side perspective into the setup of the second round of the Delphi survey and to match expert opinions with de-mand side scenarios.

Validation and Testing of Scenarios

The fourth work package confronted manufacturing experts and policy makers with the developed scenarios in order to validate them. In the final step the validated scenarios were used in testing workshops with policy makers of different European levels. The objective of the work package was to derive and discuss policy options and to provide policy orientation for future European initiatives, especially targeted at the interfaces between RTD policy, innovation policy, internal market and international trade policy, environmental policy, and education policy.

18 The EUREKA Informan project for instance pursued cross national analysis of different

national foresight studies and their statements on manufacturing's future. The results were collected in a database (www.cambridgeuniversityfutures.co.uk/v2/home.asp) and then published in several national reports; e.g. for Germany: Schirrmeister, Elna; Warnke, Philine; Dreher, Carsten: Untersuchung über die Zukunft der Produktion in Deutschland, Fraunhofer ISI, Karlsruhe, Oktober 2003.

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2 Strand O – Overseas Manufacturing Experts The future of manufacturing cannot be assessed on a European level alone. Develop-ments in other regions of the world greatly influence European manufacturing. Accord-ingly, prior foresight exercises on the future of manufacturing have been criticised for their lack of global dimensions. For this reason, the ManVis project comprised an inter-national workshop where experts from other regions of the worlds contributed their views on the global development of manufacturing. The input from this workshop was also used for the creation of the questionnaire and for the drawing of policy conclu-sions.

In Particular, Strand O consisted of the following work packages:

International Panel Development & Coordination

More than 20 manufacturing and foresight experts from Asia, Africa, America and Aus-tralia as well as a number of long-term strategic planners from multinational companies were contacted by the lead partner, the Institute for Manufacturing at the University of Cambridge (IfM), and agreed to contribute to the research. Among these experts were international academics, representatives of multinational companies and governmental experts, as well as experts from the IMS.

Workshop to review and advise statement generation

In April 2004, international experts from North America, Asia and Africa participated in an International Committee Meeting where they were asked to review initial Delphi statements, comment on the coverage of major issues for global manufacturing and structure of statements, and to create statements if they felt issues were missing. More international input derived from experiences of international foresight activities. For example the Japanese Delphi 2003 was an important source from Japanese NISTEP19 experts. The results of this meeting were – like the results from the Stakeholder and User Workshop – used for the generation of statements for the actual Delphi survey.

International Interviews

Experts from China, Japan, and the United States were interviewed in April 2005, in order to identify their views and visions on the future of manufacturing in Europe. Sen-ior government representatives and representatives from industrial sectors gave their opinion on what the future of manufacturing is going to be like or should be like in their countries and in Europe.

19 Nippon Institute for Science and Technology Policy

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Development of policy recommendations

The international experts’ opinions on potential policy initiatives were discussed during another workshop and were afterwards – in consultation with ifm – integrated into the ManVis policy recommendations.

The involvement of international experts in the ManVis research will be the starting point for a continuous international exchange on manufacturing foresight, involving the IMS initiative and parallel foresight activities e.g. in Japan and other countries.

3 Strand D – Delphi (European Manufacturing Experts) Strand comprised the core of the ManVis project, a Delphi exercise involving almost all the EU and Candidate Countries. The Delphi team consisted of eight partners, each of them taking responsibility for the execution of the survey in more than one country. All partners from the Delphi team had extensive experience in survey methodologies as well as in policy counselling. The specific experience of the partners with respect to different aspects of manufacturing was complementary which led to a full coverage of all relevant aspects. In addition, each partner had intensive knowledge of the specific situation of manufacturing in the countries within his responsibility as well as excellent contacts to the industry and research institutions. This expertise allowed the develop-ment of one condensed questionnaire comprising national and stakeholder views from all over Europe. In co-operation with national correspondents, each Delphi team mem-ber organised national workshops for statement generation and output dissemination considering specific national circumstances.

3.1. The Delphi Methodology The Delphi methodology is a long-established tool for forecasting future technological (and other) developments. With the raise of Foresight activities as a systematic effort on supporting policy in setting priorities in science and technology policy and to stimu-late communication between actors in innovation systems, Delphi studies have often been used as a tool to collect a wide range of opinions as a base for further panel de-bates (e.g. in the U.K Foresight programme). The advantage of the approach is its abil-ity to collect a large amount of information in a structured form. However, there are certain drawbacks that do not allow Delphi to be used as the sole tool of a Foresight exercise.

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The Delphi process can be defined as

• a systematic method for eliciting and collating informed judgements on a particular topic, through

• the circulation of a set of carefully designed, sequential questionnaires giving feed-back to the respondents between circulation rounds to allow them to modify their later opinions, should they wish to, taking into account the earlier responses as a whole (Loveridge 1999)

Feedback on the first results of a survey round is an essential feature of the Delphi method. At the beginning of each round, the experts are informed about the answers of the other participants of previous rounds, in order to give them an idea whether their opinion is consistent with the majority or opposing. In the light of this information, ex-perts are asked to answer the same questions again. Usually in the course of a Delphi survey, the respondents decide more towards the general opinion. This way, consen-sus is established.

3.2. The ManVis Delphi Approach The Delphi methodology has been adapted by the project team to meet the specific demands of the project. The main adaptations were related to the process of genera-tion and design of the Delphi questionnaire; other methodological advancements re-lated to the proceeding in the survey.

A questionnaire for a Delphi survey typically consists of a list of statements on a certain topic – in this case the "Future of Manufacturing" – and a set of categories on behalf of which experts evaluate those statements. Accordingly, the structure of the survey and the statement generation are the crucial tasks in the preparation process.

The ManVis project adopted a broad perspective on manufacturing by including the following aspects: “Technologies”, “Management and Organisation”, “Supply Chain and Logistics/Location”, “Product Concepts”, and “Working Conditions”. “Sustainability” and “Skills and Competencies” were considered cross-cutting issues.

The ManVis project team determined the frame conditions for the Delphi survey (scope of manufacturing to be covered by the project, criteria for expert selection, dimensions to be asked in the survey, sector coverage, and structure of questionnaire) during the kick-off meeting in January 2004.

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3.2.1. Sectors While certain issues are relevant to all manufacturing branches, there are specific prob-lems and aspects in each sector of the industry. These differences result from different product and process technologies on the one hand, but also from different innovation patterns and structures within the industry. Therefore, the ManVis coordinators decided to integrate sector specific questions into the ManVis questionnaire. The decision on which sectors should be covered was extremely difficult given the heterogeneous struc-ture of manufacturing in Europe and the relating differences in perspectives of the par-ticipating countries. The following considerations were guiding the decision: the chemical industry was excluded mainly because it was reckoned impossible to develop a suitable set of general questions applying to continuous and discrete manufacturing at the same time. For this reason, a covering the process industry would have meant to give up coherence in the project results. In addition, there have been recent exercises on future developments in the chemical industry by TNO-STB and on a European level as a part of the FutMan exercise. The food industry has been excluded for similar rea-sons. It seemed impossible to cover developments in this sector in sufficient depth. Furthermore, there had already been a multinational Delphi exercise on the influence of biotechnology on food production. For the other sectors, a statistical analysis was per-formed on the basis of OECD and Eurostatt data, ranking the sectors according to the number of people employed in Europe. Finally, the selection was performed in a way that for each country at least one of the most important sectors was included. This way the following sectors were selected:

• Machinery • Fabricated metal products • Electronics, electrical equipment and instruments • Rubber and plastics • Traditional products (Textile, Textile Products, Leather and Footwear, Furni-

ture, non-metallic minerals (ceramics) • Transport equipment (motor vehicles and others).

3.2.2. Categories The following considerations were guiding the selection: A main achievement of fore-sight is the linkage between science and technology developments and socio-economic needs. Therefore it is extremely important that experts do not only indicate the likeliness of a development but also its effects on society. Moreover, the experience from former Delphi studies showed that experts may assess a development as likely

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but nevertheless undesirable or the other way round. To clearly separate these two dimensions the desirability is explicitly asked for. Together with the desirability and the expected effects the evaluation of the importance of the issue to the European manu-facturing industry will allow a sophisticated ranking of the research topics. For the plan-ning of research funding and policy measures it is essential to have an idea of the time horizon of a development and of the main barriers hindering the development. Addi-tionally, it is important for the Commission to know the European position in a field to adopt the right measures. On the other hand, for national governments or associations the position of each country inside the EU is of interest. Although ManVis is not at-tempting a national analysis, its aim is to enable national agencies to perform their own analysis of the data and develop national innovation strategies on this basis.

The following categories were actually chosen for the evaluation of the statements in the Delphi questionnaire:

• Time Horizon for Realization (2005-2010; 2010-2015; 2015-2020; >2020; Never)

• Expected effects on: Environmental Quality, Living and Working Condi-tions, Employment, EU Competitiveness, Regional Differences (none; in-crease; decrease)

• Two most important barriers for realisation of statement (Educa-tion/Qualification; Technical Feasibility; Social Acceptability; EU Legislation; Economic Viability; Lack of R&D Funding)

• Importance to European manufacturing Industry (high, medium high, me-dium low, low)

• Highest Level R&D (EU; Japan; USA; China; Korea; Australia; emerging Asian markets; South America; Africa; others)

• Current position of your country in comparison to European average (top, little above average, little below average, lagging)

• Additionally, experts had to assess their own degree of expertise on each statement (high, medium high, medium low, low)

3.2.3. Statement Generation A first draft set of statements derived from a desktop research activity and was based on the results of previous projects (Informan and FutMan) and on the "Manufuture"

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document that was developed by a European expert group for the Manufuture confer-ence held at Milan in December 2003. In a two day meeting of the ManVis project team, this set of statements was discussed and finalised.

These first 150 statements on the future of manufacturing were then sent out to all na-tional partners in advance to be discussed in the following 22 workshops, one in each country participating in the project. In the national workshops as well as the interna-tional and stakeholder workshops mentioned above, the participants were asked to review the draft set of statements on the "Future of Manufacturing" that was developed by the Delphi team. For discussion, the following guidelines applied:

• The participants had to be experts on different aspects of manufacturing, some of them from industry (relevant sectors for the country) others from research institu-tions and associations.

• The whole general section of the draft questionnaire and of one sector had to be discussed

• The following criteria were to be applied for the evaluation of the statements:

• Each statement had to be relevant for the future of manufacturing

• The expected realisation time of the statement had to be at least 10 years.

• The statement had to be easily understandable

• The statement had to be unambiguous

• The realisation probability of the statement was to be estimated between 10 and 90 per cent

• Missing topics were to be collected

• Country specific statements were to be prepared if thought necessary.

In the consolidation phase, a finalised Delphi questionnaire combining results from all three strands was developed. To give individual countries the opportunity to reflect on specific questions or problems, it was also possible to add statements which were only to be asked in this specific country.

Through workshops in the involved 22 countries, 280 manufacturing experts from the research community and the industry contributed to the shaping of the survey. Fur-thermore, a number of policy actors participated in the discussions.

3.2.4. Expert Selection The national ManVis partners were in charge of proposing experts for the Delphi sur-vey. To facilitate a balanced response between different groups of experts and to en-

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sure the usability of the results for the objectives of the ManVis project, the following criteria were established for the expert selection:

• Type of Organisation

• research institute (40%),

• production company (40%),

• others such as consultants, associations, policy actors (20%)

• For companies: minimum share of 20% of SMEs (<250 employees)

• Type of expertise (to be specified during data selection only if available)

• Technology (50%)

• Organisation/Management, Working Conditions (50%).

The participants of the ManVis Kick-Off Meeting in January 2004 also agreed on the following additional recommendations for the selection of the experts:

• Both, users and developers of technologies or concepts had to be included (e.g. for companies R&D personnel as well as production managers).

• Different levels within the companies had to be represented (upper management, operative level, ...)

• The sector structure of the individual country had to be represented (within the se-lected sectors of the project)

• As many female experts as possible were supposed to be included.

For the selection of experts participating in the national workshops, roughly the same criteria were applied. However, as it was impossible to meet all specifications exactly, it was actually left to each partner to establish an adequate group.

The expected reply rate for each expert group (e.g. industry and research institutes) varied between the countries and contacts of national correspondents. Therefore, the partners had decided to apply the criteria for expert selection to the survey replies (filled out questionnaires of the first Delphi round). Each national correspondent esti-mated the specific response rate for each group and adjusted the criteria for the ad-dressed experts accordingly.

The target number of 3000 experts participating from all over Europe was allocated to the different countries following the number of employees in the selected sectors of each country. For statistical reasons and to enable comparison between countries, smaller countries aimed to deliver a minimum number of approximately 30 answers per statement regardless of the number of employees in their manufacturing industry. Thanks to the great efforts of the national partners, a total of 3121 experts participated in the survey. Of these experts, 5 % related to manufacturing companies, 36 % to re-

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search institutes, and 9 % to government or other public institutions. However, this rela-tion between experts' backgrounds varied between countries (see Figure A-2). In Bel-gium, for instance, 94% of the participants belonged to the industry sector in contrast to 26% in Poland. For the second round, Belgium reaches even 100% in that area. At this point, it is remarkable that two thirds of the participating countries do present a share of industry experts in the range 45-65 % and consequently fulfil the criteria set by the steering board. Experts' origin according to individual statement was being cross checked. Here, no preferences in the assessments showed when comparing the views of industry experts, researchers, and public representatives.

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Figure A-3: Experts’ backgrounds by participating countries (Second Round)

3.3. Conduction of the Survey The ManVis team decided to use an electronic questionnaire for the conduct of the Delphi survey. This was mainly based on practical reasons since a digital survey is quicker and cheaper than a conventional one on paper. The easy adaptability through programming also allowed for intensive interaction between the numerous partners, so the questionnaire could easily be optimised and translated in as many languages as needed. Also, the format allowed for more sophisticated ways of presenting the infor-mation. Most importantly however, statistics on the results could be compiled immedi-ately after the information was provided by the experts without having to go through complicated data processing. The layout of the survey was designed carefully in order to bypass potential spam filters and to enable experts to answer the questionnaire even with slower internet connections. The experts’ confidence was also strengthened, e.g. through personalised addressing of the experts by well known national partners or by strict appliance of data protection.

Resulting from great differences in the countries' number of targeted experts, country specific ways to approach the experts developed. In general, the selected experts were addressed by e-mail and received a personalised internet based questionnaire with a

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unique password. In addition some countries sent out printed letters, while others phoned the experts to increase the number of replies. A co-nomination link was estab-lished, allowing the experts who participated in the national workshops to nominate other experts. To ensure expertise of the participants, an open self-nomination, for in-stance through the internet, was impossible.

The electronic questionnaire also included supporting features like a help function and a welcome page in almost 20 different languages. The preparation phase, translation and address collection ended in September 2004. The survey’s first round started Sep-tember 1st and was closed in October 2004. The database was established in Novem-ber 2004.

Confronting experts with the results of the first round is an essential part of the Delphi research as described above. In order to generate a common opinion, experts are in-formed about the answers of other participants, so that they can evaluate whether they are consistent with a potential majority. Within the ManVis project, instead of only pro-viding the majority opinion, experts had detailed results of the first round for particular statements as well as a short interpretation of the statements’ assessment for each topic with the request to rethink their original assessment (see Annex).

The European Commission had previously agreed to include only about 20 statements in the second Delphi round. Applying the following criteria, 22 statements were actually chosen by the project team for the second Delphi round (see Annex 3):

• Statements contradicting each other, for example:

• Relocation vs. Local Manufacturing ( e.g.: S039, S041, S042 vs. S037, S044)

• Organisational Competence Development vs. Providing of Working Conditions (e.g. : S021, S046 vs. S054, S050)

• High Automation Prevents Relocation vs. Flexibility Problems (e.g.: S045 vs. S007, S014)

• Contradictory results from the first round within one statement, for example:

• High never rate vs. early realisation (e.g. S041: 23% never vs. 60% comes soon)

• High never rate vs. high importance (e.g. S024: 30% never vs. 32% high im-portance)

• Differences between different expert groups (e.g. between governmental and research experts)

• Differences between different levels of expertise (e.g. between experts with high and low expertise level)

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• Statements which are of potential interest for the EU commission.

The wording of those 22 statements remained the same as in the 1st round while the design of the electronic questionnaire was slightly adjusted: The new questionnaire was divided into five topics of 3 to 6 statements. For each topic, one page of interpreta-tion including a chart in English and a short interpretation in each language was pro-vided for the experts to reassess their prior opinions. Personal assessments of the first round could be confirmed, changed, or added if partly missing in the first round. At the end of the new questionnaire, detailed results for all statements were provided for the experts (see Annex 4). The second Delphi round started March 7th 2005 and was closed on May 10th, 2005.

3.4. Analysis The actual number of replies per country differed from the set targets. While smaller countries met or even exceeded the targeted number, bigger countries fell short of re-ply expectations. Also, the number of processed statements per participant varied a lot between countries. Participants from smaller countries responded to the whole set of statements relatively more often than those of bigger countries who concentrated on earlier statements more often. Therefore, a country specific weighting factor was de-veloped which weighs the average per country over all statements in proportion to na-tional employment within the manufacturing industries.

This was supposed to prevent potential over or under representation of countries and allowed an adequate overview on Europe (here the ManVis countries). An unweighted comparison between different countries is still possible with the gathered data, but it has to be kept in mind that for some of the smaller countries and statements the num-ber of answers dropped below the statistically critical count of 30 (this applies to some extent for the Netherlands, Austria, Belgium, Denmark, Norway, and Estonia).

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Figure A-4: Expert participation of ManVis for participating countries and relative weight according to employment in manufacturing (n=3121)

It was decided to include all answers of the experts in the analysis, regardless of the experts' self assessment of expertise per statement. Since this general Delphi study aimed at reflecting the vision on manufacturing of a wide range of experts, it also avoids the over enthusiasm of experts with the highest expertise per statement which has been observed in several former Delphi studies. A comparison of experts with higher expertise and the overall answers showed a slightly higher assessment of the importance of the statements from experts with higher self-assessment. However, no significant changes occurred in the ranking of importance among the statements. Even the detailed assessment of some statements on much specialised technical issues with very high percentages of experts with low expertise showed no significant difference. A detailed analysis of the groups of different expertise was therefore part of the final in-terpretation only.

Because of the complex structure of the questionnaire, not all experts completed it en-tirely. Some of them chose to answer only those sections they felt most comfortable with. Nevertheless, each statement has been answered by more than 1200 experts in the first round, allowing for a solid statistical analysis of statements. The median num-ber of answers per statement in the first round was 1332. Since no systematic differ-

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ences have been discovered after the first round (for instance with respect to expert origin, country etc.), it was considered risk-free to include all answers, regardless of the number of statements each expert answered. In the second round, 1.359 experts par-ticipated.

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Annex 2: Statements – 1st Round ManVis Delphi Survey (Autumn 2004)

I. General Section: Manufacturing Technology

001 Intelligent Control: Most manufacturing operations are controlled by self-learning intelligent controllers.

002 Human Machine Interface: Communication between humans and machines is as easy as communication between humans.

003 Nano Manufacturing: Products can be manufactured bottom-up through the self-assembly of atoms or molecules.

004 Manufacturing with living organisms: Manufacturing processes for inorganic (non organic) products that utilise the functions of micro-organisms or other living organisms are put into practical use.

005 MEMS: Micro-electromechanical systems such as actuators with integrated sensors and microprocessors are used all over the factory as active compo-nents (e.g. active workpiece fixtures).

006 Cobots: Robots move freely in factories, flexibly assisting workers in various tasks, instead of being confined to a fixed working space (Co-bots).

007 Flexible automation: Fully automated production in the man-less factory is as flexible as production with humans.

008 Barrier-free manufacturing: Manufacturing systems, where people aged 60 and above can work without difficulty, are in widespread use.

009 Reconfigurable Manufacturing Systems: A reconfigurable manufacturing system achieved by coupling simple machine modules to create complex sys-tems (plug and produce) is in widespread use.

010 Process Integration: The integration of several processes into one machine makes the production of complete products from single machines standard ("Factory in a Machine").

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011 Integrated sustainable Manufacturing: Environmentally friendly technologies will be integrated into all production processes, so that zero waste and zero emission manufacturing is achieved without using technologies that reduce factory emissions at the end of the manufacturing process (filters etc.).

012 Rapid technologies: Technologies based on processes that add materials have replaced a substantial share of today's cutting and forming technologies.

013 Renewable Resources: Manufacturing processes are significantly altered to cope with the specific characteristics of renewable resources (materials and energy).

014 Customisation: All complex products will be treated individually throughout their lifespan by the manufacturing system

II. General Section: Strategy, Organisation and Management

015 Self-managing teams: Self-managing teams with a wide range of tasks, in-cluding planning and controlling, are widespread in the shop-floor organisation of production.

016 Work specifications and procedures: Closely defined procedures and speci-fications of work methods are common in most companies to maximise the efficiency.

017 Outsourcing: To reduce costs and to focus on core competencies, companies outsource twice the percentage of manufacturing activities and support func-tions outsourced today.

018 Joint R&D: Competitive production sites in Europe are almost exclusively con-tained within technology clusters where pre-competitive R&D activities be-tween various neighbouring industrial partners and research organisations are common.

019 Industrial system: The improvement-speed for the value-chain, the perform-ance of the industrial system, is more important for the competitiveness than the markets success of individual products.

020 Workforce Diversity: In order to strengthen their innovation capabilities, the companies have ensured workforce diversity, employing people with com-pletely different educational, professional and cultural backgrounds.

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021 Knowledge sharing: Companies promote the sharing of knowledge amongst individuals through the establishment of a communication friendly organisa-tional culture and the provision of communication channels across formal struc-tures.

022 SME networks: Networks of specialised SMEs compete successfully in the global marketplace.

023 Virtual company: The internal structure of most companies is characterised by constantly changing networks of different individual specialists.

024 Sustainability: Social, environmental and economic aspects are given equal importance in companies' decision-making processes.

025 Innovation competence - big companies vs. SMEs: Innovation in big multi-national companies is exclusively achieved by corporate venturing activities with spin-offs or by the acquisition of innovative SMEs.

026 Innovation together with Stakeholder: External stakeholders are incorpo-rated into product development processes by the majority of companies.

027 Knowledge based activities: The share of knowledge based activities (engi-neering, R&D etc.) reaches 80% of the value of manufacturing product. (The remainder comprises direct labor costs, material and purchased services)

III. General Section: Product Features and Concepts

028 Smart materials: Smart materials that adapt to different conditions by chang-ing properties (e.g. dynamics, size, shape, thermal behaviour) are in wide-spread use.

029 Number of materials reduced: The number of different materials in each product is reduced by half.

030 Nanomaterials for coatings: Nanomaterials are in widespread use to apply coatings with special features (e.g. self-cleaning, anti-reflexive, anti-fouling) to a variety of products.

031 Used parts / remanufacturing: Most products contain used parts that have been remanufactured.

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032 Companies take back products: Companies generally take back their prod-ucts and take care of their end-of-life treatment.

033 Purchase of use: Customers do not buy products that they use in the long-term: they buy the products' functionality. The manufacturers of the product maintain their ownership and provide services as needed.

034 Electronic labels: Electronic labels (e.g. RFID-tags) containing relevant prod-uct and process information are embedded in most manufactured products.

035 Customization by Software: The functionality of complex products is mainly achieved by software programming or by the adaptation of electronic compo-nents. Therefore only a few suitable hardware variations are necessary.

036 Self-Service: Premium industrial products, sold and distributed in a Dell/ IKEA-like fashion, controlled by self-diagnostic functions and assembled and main-tained on a do it yourself base, are the norm.

IV. General Section: Logistics/Supply Chain

037 Local small scale production: The majority of products are almost com-pletely produced in local small scale production sites using multifunctional equipment.

038 JIT/Multi modal transport: Transport by train and ship prevails in the EU due to restrictions on delivery by truck.

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Annex 3: Statements – 2nd Round ManVis Delphi Survey (Spring 2005)

I. High Automation

039 Relocation outside EU: Production is subsidised or almost completely relo-cated outside Europe.

045 High automation: The benefits of high automation outweigh the advantages of lower labour costs outside EU.

II. Local Manufacturing as an Alternative to Relocation

037 Local small scale production: The majority of products are almost com-pletely produced in local small scale production sites using multifunctional equipment.

039 Relocation outside EU: Production is subsidised or almost completely relo-cated outside Europe.

044 Local manufacturing Local manufacturing is widely used to minimise the risks of global distribution chains.

III. Knowledge Development and R&D

018 Joint R&D: Competitive production sites in Europe are almost exclusively con-tained within technology clusters where pre-competitive R&D activities be-tween various neighbouring industrial partners and research organisations are common.

022 SME networks: Networks of specialised SMEs compete successfully in the global marketplace.

027 Knowledge based activities: The share of knowledge based activities (engi-neering, R&D etc.) reaches 80% of the value of manufacturing product. (The remainder comprises direct labor costs, material and purchased services)

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040 R&D near production R&D within companies is, as a rule, performed close to manufacturing sites.

IV. New Concepts of Making Business

019 Industrial system: The improvement-speed for the value-chain, the perform-ance of the industrial system, is more important for the competitiveness than the markets success of individual products.

024 Sustainability: Social, environmental and economic aspects are given equal importance in companies' decision-making processes.

033 Purchase of use: Customers do not buy products that they use in the long-term: they buy the products' functionality. The manufacturers of the product maintain their ownership and provide services as needed.

036 Self-Service: Premium industrial products, sold and distributed in a Dell/ IKEA-like fashion, controlled by self-diagnostic functions and assembled and main-tained on a do it yourself base, are the norm.

V. Competence Development of Firms

015 Self-managing teams: Self-managing teams with a wide range of tasks, in-cluding planning and controlling, are widespread in the shop-floor organisation of production.

046 Learning in the company: A fixed part of working time is used for acquiring new competencies, using resources provided by the employer.

049 Share of Females: The proportion of female employees amongst technical specialists and management in the manufacturing sector has reached their share of the population.

054 Work-Life Balance: Tailored configurations of working conditions and benefits reflecting age and family situation are the norm in manufacturing companies.

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VI. Implementation of Generic Technologies in Manufacturing

S003 Nano Manufacturing: Products can be manufactured bottom-up through the self-assembly of atoms or molecules.

S004 Manufacturing with living organisms: Manufacturing processes for inor-ganic (non organic) products that utilise the functions of micro-organisms or other living organisms are put into practical use.

S005 MEMS: Micro-electromechanical systems such as actuators with integrated sensors and microprocessors are used all over the factory as active com-ponents (e.g. active workpiece fixtures).

S012 Rapid technologies: Technologies based on processes that add materials have replaced a substantial share of today's cutting and forming technolo-gies.

S028 Smart materials: Smart materials that adapt to different conditions by changing properties (e.g. dynamics, size, shape, thermal behaviour) are in widespread use.

S034 Electronic labels: Electronic labels (e.g. RFID-tags) containing relevant product and process information are embedded in most manufactured products.

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Annex 4: The ManVis Questionnaire 2nd Round – Examples

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Annex 5: The ManVis Consortium

Fraunhofer

ISI

InstituteSystems andInnovation Research

Project Co-ordination:Fraunhofer ISICarsten [email protected] [email protected]

University of Lodz, Departmentof Entrepreneurship andIndustrial PolicyBogdan Piasecki

Institute for ProspectiveTechnological StudiesFabiana Scapolo

Industrial Research andDevelopment CorporationJan Sjögren

Ascamm FoundationMyriam García-Berro

Fundación Observatorio deProspectiva TecnológiaIndustrialAna Morato Murillo

Institute for StrategyTechnology and Policy STBMaurits Butter

University of Cambridge,Institute for ManufacturingFinbarr Livesey

Austria, ARC Systems Research Belgium, Agoria, the multisector federation for the technology industry Bulgaria, BAMDE, Bulgarian Association for Man-agement Development and Entrepreneurship Croatia, University of Zagreb, Faculty of Economics Department of Organisation and Management Denmark, DTI, Danish Technological Institute Estonia, EIETTU, Estonian Institute of Economics at Tallinn Technical University Finland, VTT, Technical Research Centre of Finland France, CMI Germany, ISI, Fraunhofer Institute for Systems and Innovation Research Greece, LOGOTECH SA, Innovation & Development Hungary, FME, Foundation for Market Economy Italy, FR, Fondazione Rosselli

Netherlands, TNO-STB, TNO-Institute for Strategy, Technology and Policy Norway, Sintef, Stiftelsen for industriell og teknisk forskning ved Norges Tekniske Hogskole Poland, University of Lodz, Department of Entrepre-neurship and Industrial Policy Romania, AES-Manager, Academy of Economic Studies Slovakia, University of Technology, Department of Manufacturing Systems, Faculty of Manufacturing Systems Slovenia, LAPOM, University of Maribor, Faculty of Mechanical Engineering Spain, Ascamm Foundation, OPTI, JRC-IPTS Sweden, IVF, Industrial Research and Development Corporation Turkey, Tubitak, Scientific and Technical Research Council of Turkey United Kingdom, Cranfield University – School of Management, Cambridge University Institute for Manu-facturing

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Documents

Final Report v12 - Europaforesight.jrc.ec.europa.eu/documents/Final_Report_final.pdf · Myriam Garcia-Berro (ASCAMM) Jan Sjögren (IVF) ... Final Report The present report presents