KETs: A Competitive Advantage for Europe Presentation to IMCO Committee EP, Brussels, 20 March 2012
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1 KETs: A Competitive Advantage for Europe Presentation to IMCO Committee EP, Brussels, 20 March 2012 Gabriel M. Crean, VP for Technology, CEA Technology, CEA Chair HLG KET Sherpa Group 1
2 Outline Message 1 Message 2 Europe is failing in efforts to turn science into product, global market share and employment Message 3 KETs are crucial to sustainable European economic growth Refocus and Rebalancing of Commission Research and Innovation Budget necessary Message 4 Leverage Deployment of KETs to ensure significant synergies between Innovation & Structural Funds
3 KETs are essential to develop and manufacture advanced products Definition of Key Enabling Technologies Knowledge intensive High R&D intensity Rapid innovation cycles High capital expenditure Highly skilled employment 6 Key Enabling MULTIKETS Technologies BOX Nanotechnologies Micro and nanoelectronics Biotechnology Photonics Advanced materials Advanced manufacturing systems 3
4 KETs can revolutionize traditional products World first! ELIOT, the first plastic pipe that communicates and is detectable 4
5 (Multi) KETs are strategic all along EU value chains Car industry Lighting Nanoelectronics Material Biomass GaN SOI material KETs: Advanced materials Nanotechnologies Biotechnologies From KETs to final product Equipment Component Biolsoprene Biobased Synthesis rubber, Adhesives, elastomers MOCVD reactor LED Litho scanner Nano component (Low power) KETs: Advanced manufacturing Systems Biotechnology KETs: Nanoelectronics Photonics Product Car tyres Lamp Mobile phone From product to societal challenge Solutions & services Societal challenges Biobased tyres CO2 reduction Energy efficiency (Climate change) Lighting Energy efficiency (Climate change) Nomadic communication Knowledge society 5 5
6 Triggering a virtuous cycle from manufacturing IMPACT on TECHNOLOGICAL INNOVATION b) Impact on the local ecosystem including SME s Global Fab (+ embedded pilot line) ST Microelectronics + IBM Alliance Equipment suppliers Material and consumable suppliers Services Over 100 SME s 24/02/ CEA Tous droits réservés
7 Triggering a virtuous cycle from manufacturing IMPACT on TECHNOLOGICAL INNOVATION b) Impact on the local ecosystem including SME s + 30 spin-off And start-ups Global Fab (+ embedded pilot line) ST Microelectronics + IBM Alliance Equipment suppliers Material and consumable suppliers Services Over 100 SME s 24/02/ CEA Tous droits réservés
8 Triggering a virtuous cycle from manufacturing IMPACT on TECHNOLOGICAL INNOVATION a) Impact on public research + 30 spin-off And start-ups Global Fab (+ embedded pilot line) ST Microelectronics + IBM Alliance Equipment suppliers Material and consumable suppliers Services Over 100 SME s Technologic al Research Global Partnership Along the value chain 2010 Under contract Under instruction Large companies SME s 500 Companies Including Over 300 SME s 24/02/ CEA Tous droits réservés
9 Outline Message 1 Message 2 Europe is failing in efforts to turn science into product, global market share and employment Message 3 KETs are crucial to sustainable European economic growth Refocus and Rebalancing of Commission Research and Innovation Budget necessary Message 4 Leverage Deployment of KETs to ensure significant synergies between Innovation & Structural Funds
10 Disconnection between patents share and manufacturing share Case Study: Li-ion battery production % Li-ion battery cell production share in 2008 % Advanced Material Patent Share USA 1% 30% Europe 0% 31% Asia 87% 35% 12% Source: European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW), CGGC, Lithium-ion Batteries for Electric Vehicles : THE U.S. VALUE CHAIN, October % Others 10
11 Aggressive US federal and regional (state) action to attract foreign firms 2005 BASF invests significantly in lithium-ion cathode materials research and development 2010 BASF breaks ground for North America's most advanced production facility for Lithium-Ion battery materials in OHIO Washington Oregon Idaho Montana North Dakota South Dakota Wyoming Nevada $200 million production facility Nebraska Utah California Colorado $95.5 million grant from the US Kansas DoE Arizona New Mexico Texas Oklahoma Minnesota Iowa Missouri Arkansas Wisconsin Illinois Michigan Indiana Kentucky Tennessee Louisiana Mississippi Alabama Ohio Georgia Maine Vermont DoE New Hampshire under New York the American Massachusetts Recovery and Reinvestment Act. Rhode Island Connecticut Pennsylvania New Jersey West Virginia Virginia North Carolina South Carolina $50+ million production facility $24.6 million grant from the US Delaware Maryland October 27, 2010 in Elyria, Ohio March 15, 2010 Alaska in Jacksonville, Florida Hawaii Florida 2006 SAFT forms a joint venture with Johnson Controls 2009 SAFT America to Build New Advanced Battery Plant in Jacksonville, Florida The new plant will manufacture lithium-ion cells, modules and battery packs for military, industrial, and agricultural vehicles 1. Argonne National Laboratory Source: BASF.com, SAFT.com, chemweek.com, prnewswire.com
12 Disconnection between patents share and manufacturing share Case Study: Bioethanol production % Bioethanol production share in 2009 % Industrial Biotechnologies Patent Share USA Europe 5% 54% 34% Brazil 34% 36% China 3% 23% Asia Source: European Biomass Industry Association, European Biofuels Technology Platform (EBTP), European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW) 4% 7% Others 12
13 US attracts our early KET champions (financing 50% of Pilot Lines, and giving loans for the rest) UK INEOS Bio builds a plant in the US with >95% subsidies and loans guarantees Washington Montana North Dakota Minnesota Vermont Maine Oregon Nevada California Idaho Utah Wyoming Colorado South Dakota Nebraska Kansas Wisconsin Iowa Illinois Missouri Michigan New Hampshire New York Massachusetts Rhode Island Connecticut Pennsylvania New Jersey Indiana Ohio Delaware West Maryland Virginia Virginia Kentucky Arizona New Mexico Oklahoma Arkansas Tennessee North Carolina South Carolina Texas Louisiana Mississippi Alabama Georgia Alaska Hawaii Florida $130 million production facility to produce advanced biofuels from waste $50 million Grant from the U.S. Department of Energy $75 million loan guarantee from the U.S. Department of Agriculture Source:Cross-sectoral Analysis of the Impact of International Industrial Policy on Key Enabling Technologies (Danish Technological Institute with IDEA Consult, 2011),
14 Disconnection between patents, Science, Manufacturing and Market Case study: PV Cell production % PV cell production share in 2010 % Photonics Patent Share Europe = 79 % of global market USA = 5 % USA 5% 27% Europe 13% 29% 67% ASIE = 11 % 42% Asia 15% 2% Others Source: Photon International Mars 2010, European Competitiveness Report 2010, European Competitiveness in Key Enabling Technologies (TNO/ZEW) «JP Morgan, PV News, Oliver Wyman Analysis 14
15 The European valley of death Knowledge Market The valley of death 15
16 Outline Message 1 Message 2 Europe is failing in efforts to turn science into product, global market share and employment Message 3 KETs are crucial to sustainable European economic growth Refocus and Rebalancing of Commission Research and Innovation Budget necessary Message 4 Leverage Deployment of KETs to ensure significant synergies between Innovation & Structural Funds
17 European three pillars bridge to pass across the valley of death Technological facilities Pilot deployment Pilot line Globally competitive manufacturing facilities Knowledge Market Research & technology organisations Industrial consortia The valley of death Anchor companies 17
18 Rebalancing of EU RDI funding programmes Asia and US federal R&D funds mainly go to applied Development whereas Europe has the highest share of Basic Research Funding Development Applied FP7 Basic % 32% 11% 44% 48% 46% 32% 28% 33% 24% 24% 22% 19% 45% 36% China Korea US Japan Sum of Member States CIP - 6% EIT - 2% FP7 92% EU Note : The selection of the 12 member states has been done dependant on the size and the availability of data. The result should not differ much when the other 15 countries are added since the biggest R&D budgets are taken into account. Note : For all countries are displayed the latest figures available. Source: Key Science and Engineering Indicators, National Science Board, 2010 Digest, NSF, OECD Research and Development Statistics, Own analysis
19 US Accelerating Focus on Industrial Leadership
20 Participation of Industry in EU Framework Programmes Falling Fact: Industry participation has fallen from 39% in FP4 to 31% in FP6 and currently accounts for only 25% in FP7.
21 HLG-KET recommendations:
22 PCAST Obama 1 proposed actions: strong overlap to reindustrialise with HLG-KET recommendations the US observed Barack H. Obama, State of The Union 2011 speech, Jan 25 Pillar 2: accelerating the manufacturing process Pillar 3: co-location R&D/Manufacturing At stake [right now] is whether new jobs and industries take root in this country, or somewhere else. [ ] The rules have changed. The future is ours to win. But to get there, we can't just stand still.[ ] We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build Pillar 1: technology infrastructure the rest of the world. All these investments -- in innovation, education, and infrastructure -- will make America a better place to do business and create jobs. The first step in winning the future is encouraging American innovation. [ ] In America, innovation doesn't just change our lives. It is how we make our living. [ ] This is our generation's Sputnik Valley of death moment. [ ] We'll invest in biomedical research, information technology, and especially clean energy technology an investment that will strengthen our security, protect our planet, and 1. President's Council of Advisors on Science and Technology create countless new jobs for our people. Source: Report to the President: Ensuring American Leadership In Advanced Manufacturing (PCAST, 2011), Combining the funding Pillar 3: overcoming the market failure
23 Outline Message 1 Message 2 Europe is failing in efforts to turn science into product, global market share and employment Message 3 KETs are crucial to sustainable European economic growth Refocus and Rebalancing of Commission Research and Innovation Budget necessary Message 4 Leverage Deployment of KETs to ensure significant synergies between Innovation & Structural Funds
24 KETs as the glue between Innovation & Societal challenges Providing European technology bricks that enable European product solutions KETs Technology Bricks LEIT Photonics nanoelec ICT Nanotec Biotec Materials Manufacturing Smart grid Medical device Electric car Solar panels KETs KETs KETs KETs Product applications to address societal challenge Secure, clean and efficient energy challenge The health, demographic change and wellbeing challenge Towards more inclusive, innovative and secure societies challenge Food Security, Sustainable Agriculture and the Bio-economy Smart, green and integrated transport challenege Resource efficiency and climate action challenge Societal Challenges
25 Conclusion : building a bridge to success for Europe Public Financing Development of Technology building Re-industrialisation of Europe: KETs Pilot Lines & blocks within DG INFSO, Deployment financed by DG Res & Inv, H2020 and Structural Funds Capacity Build-out on a level playing field: KETs industrial Policy Private Financing CEA. All rights reserved 25
26 Message 1 Message 2 Conclusions Europe is failing in efforts to turn science into product, global market share and employment Message 3 KETs are crucial to sustainable European economic growth Refocus and Rebalancing of Commission Research and Innovation Budget necessary Message 4 Leverage Deployment of KETs to ensure significant synergies between Innovation & Structural Funds
27 Thank you for your attention
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