Industry 4.0 and Implications for European Regions

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1 Industry 4.0 and Implications for European Regions Lisa De Propris Professor of Regional Economic Development, Birmingham Business School RSA Winter Conference 2017

2 Contents Introduce MAKERS Define I4.0 Present a broader interpretation of I4.0 Levels of disruption Readiness

3 What is MAKERS? A network of business, academia and policy In UK, France, Italy, Spain, Sweden, US, Singapore, Switzerland Research agenda: to under the drivers, enablers and dynamics of a new manufacturing model for Europe.

4 WP7 Skills WP6 Sustainabilty WP8 Industrial Policy WP1 Industry 4.0 WP2 Innovation & knowledge transfer WP 3 SMEs and LPSs WP5 Glocal value chains WP4 Reshoring

5 Technological change

6 Revolution or evolution?

7 Evolutionary - revolutionary Schumpeter and Kondratiev (1930s-1940s) Nelson and Winter (1980s) Christopher Freeman and Carlota Perez Dosi technological paradigm

8 Kondratiev s Long Waves Indices of economic activity Steam Cotton Railways Iron Steel Electricity Chemicals Autos Electronics Synthetics Petrochemicals now K1 K2 K3 K4 K s

9 Technological revolution Perez 2004, 2010 Technology follows a trajectory Crucial time between the demise of the obsoleting one and the emergence of a new one technological hole

10 Technological revolution Indicator of economic trend Technological hole Kogler knowledge space time

11 4 th Industrial revolution Biotech, nanotech, neurotech, green & renewables, ICT & mobile tech, 3D, AI, Robotics, sensoring & space tech, drones

12 EU def of Industry 4.0 Efficiency driven arguments Smart and webbed factories Large plants Large firms or multinational firms Mass customisation AI- IoT robotics- automation Cyber-physical systems (smart ordering, scheduling, control and delivery systems, big data. New combination capital & labour lower inventory upstream, in process and downstream. Max productivity

13 Berger Industry 4.0 Industrial excellence production process sophistication Degree of automation Workforce readiness Innovation intensity Value network VA Industry openness Innovation network Internet sophistication Berger 2014

14 In MAKERS Broader

15 Technological revolution Perez 2004, 2010 Growth effect depends on impact on economy and society ( techno-economic paradigm) the way socio-institutional structures are organised (Perez 2010:194)

16 Disruptive change

17 Take one technology: remote sensoring transport Home Cloud IoT Medical devices machinery agriculture

18 Industry 4.0 New technologies New production spaces (Connected factory) New markets I4.0 Local supply chains Personalised flexible Artisan customisation New business models (gig economy & servitisation) Sustainability core

19 Enable disrupting change at regional level Regional level National level

20 Regional Innovation Scoreboard 2017

21 Regional Innovation Scoreboard 2017

22 Regional Innovation Scoreboard 2017

23

24

25 Key issues Co-creation New ways of consuming, using, accessing or free-riding Servitising consumption and sourcing Downscaling Rethink products and processes from an ecological perspective

26 Regional index MAKERS I4.0 Readiness index Employment in high-tech sectors by NUTS 2 regions-% of total employment 2016

27 Pinch points for change Limited awareness of change Vested interests and resistance to change Risk and uncertainty Delusion about the inevitable supremacy of ONLY services Belief that businesses & market know better

28 Innovation matrix National scale Vision target Sustainability Institutional frameworkkey actors Technology Key new(enabling) technologies Regional innovation system Triple /quadruple helix Sector IDs, clusters, industrial commons

29 Regions acceleration Political understanding of scale of change information and education Design and communicate clear vision shared vision Join tech with sectors understanding regional applicability promoting technology adoption and application

30 Thank you

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