Denmark: Manufacturing Academy of Denmark (MADE)

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1 Digital Transformation Monitor Denmark: Manufacturing Academy of Denmark (MADE) June 2017 Internal Market, Industry, Entrepreneurship and SMEs

2 Denmark: Manufacturing Academy of Denmark (MADE) freeimages niller56 Fact box for Denmark s MADE policy initiative Policy Lever(s) Funding Model Target audience(s) MADE has a nationwide scope and is financed by both private and public funding. Its focus is on advancing the expertise and technology of Danish manufacturing through industrial research projects and a nationwide manufacturing ecosystem. Public-private partnerships The two research platforms in MADE are managed by an independent association MADE - Manufacturing Academy of Denmark. Two thirds of the funding are public (incl. university funding) with one third acquired from industry. Danish manufacturing SMEs and larger companies; stakeholders from research / academia. The general focus is on companies, universities and organisations seeking to advance their capabilities and strengthen the Danish manufacturing ecosystem. Concepts & Focus Areas MADE s research and innovation themes are focused on developing and implementing advanced manufacturing and Industry 4.0 solutions in the Danish manufacturing sector. Key drivers Establishing a world-class manufacturing sector in Denmark through the collaboration between industry, academia, educational institutions. Key barriers Implementation strategy Ensuring that the private and public partners continually jointly engage in an extensive, but mutually beneficial collaboration. Furthermore, it is of critical importance that MADE is able to secure long term funding. MADE was initiated and designed by parties from both industry and research. MADE as an independent organization is managed by industry, but its research projects and innovation activities are scoped by both parties in collaboration. Results achieved Network growth from 38 to 143 MADE members; 34 innovation activities with 2213 participants ( ); growth from 26 to 70 industrial research projects; significant external outreach. Budget Total budget of 50 million that covers The funds are acquired from participating companies, universities, associations, private foundations and public funds. Uniqueness factor Value-added for policy-makers Expected Impact MADE is an open collaborative initiative linking industry and academia nationwide to collaborate on industrial research projects that advance Danish manufacturing. The innovations of the projects are then shared with the broader industry. A national platform led by industry focusing on maximizing the impact of the public and private investments in Danish manufacturing industry and links to the European manufacturing ecosystem. Development of new technologies for manufacturing companies; strengthen the Danish technical research community; increased competitiveness of Danish manufacturing industry. In total, a strengthened Danish manufacturing ecosystem. Source: Digital Transformation Monitor 2

3 Introduction Manufacturing Academy of Denmark (MADE) is a national initiative launched officially in The innovative initiative brings together Danish manufacturing companies, five Danish universities and three RTOs in an effort to strengthen the Danish manufacturing ecosystem and facilitate investment in Danish manufacturing operations. The initiative is financed by mixed publicprivate sector funds amounting to 50 million between 2014 and 2019 across two PPP initiatives. MADE s main mission lies in applying research, driving innovation and strengthening education to improve the competitiveness of Danish manufacturing. The platform is managed by the independent association MADE (Manufacturing Academy of Denmark), offering a wide range of different activities to its currently 143 members. The initiative primarily targets Danish SMEs which contrary to larger members can benefit from a lower membership fee and access to specific support programmes. The design of MADE is unique in its strong bottom-up implementation approach. MADE has strengthened the Danish manufacturing ecosystem focusing on industrial research targeted at addressing issues defined by industry. MADE s strength lies in its lean, governance structures and knowledge sharing across the industrial and academic partners. Scenarios for future Danish production In 2010 the Danish branch of Manufuture published a collaborative study titled Manufacturing The report identified five future scenarios where Danish manufacturing can be competitive. These scenarios served as valuable contributions to preparing the MADE initiative. The five future scenarios address the given challenges and ambitions and focus in different ways on the need to develop production, productivity and the Danish framework surrounding the manufacturing sector: (1) The development of a highly competent manufacturing company that exploits new technologies and develops new products; (2) Coordination in and utilization of the industrial ecosystem comprising businesses, industries, universities and knowledge centres; (3) the development of an innovation factory that optimizes the interplay between design and manufacturing competences, whereby the factory develops intelligent products; (4) the development of a network of suppliers supported by flexible value chain integrators; and (5) A virtual business network capable of rapidly and effectively exploiting business opportunities and pool resources across the production process. Boosting Danish competitiveness At the outset of MADE, one of the main challenges was and still is the increased offshoring of Danish manufacturing. In the light of high salaries in Denmark, it was clear that competing on the basis of cost is not a viable option for the country. Therefore, means had to be explored where the value of a product made in Denmark would be greater than the high manufacturing cost. 2 Against this core challenge, MADE s primary goal is to ensure that Denmark has a highly productive world-class advanced manufacturing industry. More specific objectives of MADE is (1) to increase Denmark s competitiveness through industrial based research in manufacturing, (2) to strengthen the Danish technical research community, (3) to create an ecosystem focusing on research, innovation and knowledge sharing and (4) to optimize education to support manufacturing. In addition, MADE also aims to connect to other similar national initiatives in the field of manufacturing and to act as the central national hub for Danish production, and as a link to international parties. Stakeholders in Denmark agreed that the road towards more Danish manufacturing jobs required industry to become smarter, faster and more innovative in order to regain competitiveness. Policy levers for Denmark s MADE initiative Source: Digital Transformation Monitor 3

4 A PPP with bottom-up implementation Initially, MADE obtained seed funding from the participating companies, universities, associations, private foundations and public funds. Today, the initiative continues to grow with renewed funding from public and private sector funds that secures the organizations continued work until MADE focuses on developing platform solutions across the entire manufacturing system from technology to value chains and leadership. The Ph.D. projects address the challenges through multiple industrial pilot projects, which are used to test and develop the solutions in the factory environment. In this way, research is developed rapidly through many iterative learning loops providing feedback to both industry and academia. MADE is characterized by a bottom-up approach to implementation and definition of industrial challenges to be solved. This is reflected by the strong partnership between industry and academia to start the initiative, and the governance of the initiative. The Board of Directors and the Advisory Board are both mainly constituted by members of industry, with a minor representation of academia, and no representation of the Danish government. Funding secured from the state, but developed by industry MADE SPIR is referred to as a national investment project financed by mixed public-private sector funds. For the 5- year-period of the project ( ), a total of million Danish Crowns ( 24.1 million) was allocated. The managing entity known as MADE Manufacturing Academy of Denmark was set up as an independent association to oversee MADE SPIR. The Danish government is represented by the Innovation Fund Denmark, the largest single investor in the MADE platform. Innovation Fund Denmark provides funding to initiatives that strengthen the link between strategic research and innovation with the aim of enabling growth in industry. At the start of 2017, MADE Digital was launched, which focuses on digital solutions tailor-made to the specific needs of Danish manufacturing companies, characterized by many SME s that focus on niche products across multiple sectors. A combined investment from industry and the Innovation Fund Denmark of 25.9 million was invested in MADE Digital for the period Private financing MADE relies significantly on private sector funds. The public grants are cofinanced by different partners. The financial contributions across the MADE SPIR and the MADE Digital platform totals 23.9 million from participating companies, 3.0 million from foundations / associations and 4.3 million from participating universities and RTOs. Although the evidence of MADE s impact on the commercial activities of partners involved in the projects is in the infant stage, partners from the 15 most advanced projects have reported revenue increases of 135,000 and savings of up to 5.5 million. Combining research with SME support activities In addition to its diverse industrial research activities covered through 18 work packages, MADE provides access to state-of-the-art knowledge and experience for manufacturing companies who are not directly involved in the research projects, through innovation conferences, workshops, research and development laboratory visits and industrial visits. Through the Open Laboratory visits companies and academic researchers can gain insights into state-of-the-art technologies in a specific area, where a typical Open Laboratory involves short presentations, case studies and technology demonstrations. Industrial visits, on the other hand, refer to visits to companies excelling in a particular area. While serving mainly to inspire companies by delving into the experience of market leaders, the research teams also gain valuable insight into the current level of industrial excellence, and the opportunities yet to be addressed. Ultimately, networking is also an integral part of the visits. The Innovation conferences are more in-depth events, where the latest MADE research and industrial experience from the pilot implementation projects are presented and discussed. The themes covered range from lifelong product customization, hyper-flexible robots, 3D printing and the application of Big Data solutions in industry. SME members of MADE have the opportunity to participate in demonstration projects, where they obtain financial and knowledge related support in order to implement the state of the art solutions that derive from one of the MADE projects. The maximum duration of these projects is eight months with financial support of up to 12,250 per company. Participants can choose between focusing on their existing management systems, demonstrating new technologies, or a combination of the two. Target audience Prioritising SMEs MADE targets Danish manufacturing companies, in particular SMEs, by giving them the opportunity to participate in demonstration projects and open labs, and establishing research partnerships with larger companies. However, the initiative also brings together stakeholders from large manufacturing companies, RTOs (e.g. FORCE and DTI) and academia. 4

5 Concepts and focus areas Research for the benefit of industry The MADE SPIR platform contains nine research themes focusing on the Danish manufacturing challenges. Each research theme is tied to one work package: (1) High speed product development, (2) Modular production platforms for high speed ramp-up, (3) 3D print and new production processes, (4) Model based supply chain development, (5) Digitalisation of supply chains, (6) Lifelong product customisation, (7) The new Manufacturing Paradigm; (8) Hyper flexible automation and (9) Sensors and quality control. Through these nine focus areas MADE is developing new technologies and management methods for Danish manufacturing companies. Focus is placed on enabling the development and transfer of knowledge between MADE members. Ultimately, MADE seeks to make Denmark one of the most competitive manufacturing countries in the world. In addition to MADE SPIR, MADE has recently launched - MADE Digital which builds on the strong foundation established by MADE SPIR. MADE Digital provides a stronger focus on digital manufacturing solutions in line with the needs of Danish industry. The research themes are again diverse including the following work packages (1) Smart industrial products, (2) Digital assistance tools, (3) Sensor technologies and production data, (4) Digital manufacturing processes, (5) Smart factories, (6) Intelligent supply chains, (7) Organizing digital production, (8) Automation with collaborative robots, (9) Digital design. Leveraging the weight of Danish manufacturing One of the key enablers in the implementation of the initiative was the involvement of the Confederation of Danish Industry. The Confederation of Danish Industry assisted with the creation of MADE as an independent association which provided the basis for coordination and collaboration across the academic and industrial partners. As a result, representatives from partially competing large and small Danish companies and universities were persuaded to sit down together at one table and draw up a 5-year collaboration plan. Without the work and support of the Confederation of Danish Industries, this would have been difficult. Once MADE was established a clear differentiation of roles was established between DI and MADE, enabling MADE to focus on the execution of research and innovation activities, and DI to addresses the policy debate on behalf of industry. An additional driver of MADE lies in providing companies with multi-level membership options, attractive for large companies and SMEs alike. Large companies provide the majority of the private sector contributions, but receive increasing levels of subsidization if they enter research partnerships with SMEs. SMEs who participate in the research projects, provide funding in the form of their man hours and investments in machinery/technology. These partnerships have proven to be a successful way of developing solutions and products that the SME s can use to generate new business. Furthermore, the larger companies gain access to innovative solutions to the challenges they face. SWOT Matrix for MADE Strength An independent association responsible for platform leadership. Effective governance structure. Led by industry. Opportunities The successful scale-up of MADE Digital demonstrates that there is further potential for growth. Willingness to collaborate with Industry 4.0 initiatives in Europe may open up new opportunities for MADE. Source: Digital Transformation Monitor Designed by Danish research & industry Although MADE started as an association in 2014, the idea of a collaboration between industry and the research community, dates back to 2008, where academic and industrial representatives drew up several scenarios for future Danish production. To avoid increasing the offshoring of Danish manufacturing, both camps shared an understanding that industry and academia must engage in a continual cooperation. Indeed, the basic structure of the initiative, e.g. an industry-led Board and an Advisory Board consisting of individuals with competencies that are more wide-ranging, was designed by the involved academic and industrial partners. From the start, it was critical that the initiative would match the needs of the Danish manufacturing industry. The industrial research projects in MADE, was from the start divided into the nine thematic work packages, with each work package headed by one of the academic partners. Every half year, the steering committees in each work package report on the progress made in the specific work package projects and agree on a plan for the coming six months. Weaknesses The platform builds on sustaining the collaboration and trust between partners involved. It could seriously destabilize the work being done, if the parties develop a more regional focus. Threats The platform is financed through grant applications. It is necessary for MADE to secure more stable funding in order to ensure the long term effects of the platforms. 5

6 The process towards SPIR Once the basic structure and core contents of MADE were defined by involved partners, the search for funding from the government started. In other words: In the case of MADE, the design was ready before policy was formulated. The process towards a public private partnership picked up speed in early 2013 when researchers and the Confederation of Danish Industry got together to apply for a SPIR grant a PPP for a 5-year project. The application built on the framework jointly created by academia and industry. Besides highlighting the needs of the Danish manufacturing industry, the application included a preliminary overview of the organizational design and the structuring of the industrial research projects in the nine thematic work packages. The proposal was not subjected to any major changes in the application process. Once the SPIR application was approved, the requested public and private funds for the 5-year programme was provided and MADE was founded as an independent association. Initially, some researchers were concerned that an industry-led agenda would limit their academic freedom, and likewise, industrial partners was concerned that the projects would be too theoretical. However, through dialogue and strong project governance both parties have established a productive approach to the projects where the researchers challenge the status quo and the industrial partners advance the focus on applied science in the universities. Multi-level results and first impacts After only three years of operation, MADE has established a thriving Danish manufacturing ecosystem composed of partners from industry, academia, educational institutions and RTOs. Today, the platform counts 123 industrial partners, 5 universities, 3 RTOs, 6 educational institutions and 6 other members. Within its 18 research themes, MADE partners have created 70 research projects dealing with concrete challenges industry is faced with today. Furthermore, between 2014 and 2016 MADE organised 34 innovation activities/events, thereby involving 2213 participants. MADE has also made significant use of social media channels such as Twitter and LinkedIn to promote and disseminate results to Danish industry. In terms of MADE s commercial impact for participating partners, most of the research projects in MADE are still underway. However, the achieved and potential commercial results of the projects are followed closely in collaboration with the industrial partners. The estimation made by the industrial partners regarding the commercial impact of the research projects in MADE, is made for the 15 most progressed projects, with proven or anticipated commercial impact. MADE holds internal board meetings and steering committee meetings with Innovation Fund Denmark every 6 months, where challenges are addressed and corrective actions are agreed upon. Furthermore, formal reports on the platforms progress are made to Innovation Fund Denmark annually including an evaluation of the economic impact of each platform. In addition, MADE continuously monitors the impact of its initiatives and outreach activities. The challenge of attracting world-class researchers Traditionally there has been strong competition between universities in Denmark, just like anywhere else in Europe. The industrial partners identified this as a counter productive approach and promoted a national collaboration involving all top Danish researchers. At the prospect of a continued industrial outsourcing and a loss of manufacturing jobs, it was made clear to all parties, that a comprehensive collaboration across industry and academia was necessary. Achieved results for MADE in the period MADE platform membership Innovation and research activities MADE outreach Achieved and potential commercial results of the 15 MADE projects 123 industrial partners (400% up since 2013) 5 universities 3 RTOs 6 educational institutions 6 other members 34 innovation activities with 2213 participants 44 industrial projects (+26 to start 2017) 15 Demonstration/cluster projects for SMEs Social media: +385 followers on twitter; +650 twitter posts; +460 LinkedIn followers Website MADE.dk 59 MADE articles 16 periodic newsletters; +10,495 news s Achieved increased revenue: 135,000 Achieved savings: 5.5 million Potential increase in revenue over 5 years: Approx. 24 million Potential savings over a 5-year time frame: Approx million Source: MADE; Dansk Produktion MADE Report for Innovation Fund Denmark 6

7 A scalable and transferable model The wide-ranging scalable potential of MADE is demonstrated by the launch of MADE Digital, MADE SPIR s digital sister project. Despite being two years shorter, MADE Digital has almost the same budget as its predecessor ( 25.9 million). MADE Digital relies on the same successful structure in terms of governance and is also managed by MADE. MADE has experienced significant interest from other countries and regions in and outside of Europe who are interested in replicating the model. Among others, the government of South Korea has expressed an interest in exploring ways to set up a similar project in Korea. MADE is increasingly seeking partnerships with other European initiatives and organisations, e.g. Industrie 4.0 in Germany and the Dutch SMART Industry initiative. One important aspect to consider concerning the transferability of MADE is the small size of the country that enables a rapid set-up and roll-out. For example, there are 5 universities focusing on manufacturing in Denmark and all of them are heavily involved in MADE. However, there are also cultural factors to consider. In general, Danish people tend to be rather informal and are not afraid of speaking across hierarchies and have a high level of trust in people and institutions. This has equally contributed to a more constructive and balanced spirit of cooperation. Trusting industry to innovate The involved Danish funding bodies have from the start applied an approach to let industrial and academic partners define MADE s form and function. In so doing, it has taken a certain degree of risk leaving industrial and academic partners a high degree of autonomy. It is likely that if the government had defined everything from the start, the chances of MADE s success would have been lower. MADE can serve as an example of how trusting motivated stakeholders in this case industry and academia - can lead to significant results. In other words: MADE entered new grounds by not following any particular model, but leaving the involved partners to structure and develop MADE the way they wanted. References 1 Johansen, J., Madsen, O., Jensen, H. V., & Vestergaard, A. (2010). Manufacturing 2025: Future scenarios for Danish manufacturing companies. Aalborg: Center for Industrial Production and Department of Mechanical and Manufacturing Engineering. Retrieved from activities/ production-2025/ ² Moller, C. Business Process Innovation as an Enabler of Proactive Value Chains. Available at: 07/ _2?noaccess=true Willyam Bradberry/Shutterstock.com 7

8 About the Digital Transformation Monitor The Digital Transformation Monitor aims to foster the knowledge base on the state of play and evolution of digital transformation in Europe. The site provides a monitoring mechanism to examine key trends in digital transformation. It offers a unique insight into statistics and initiatives to support digital transformation, as well as reports on key industrial and technological opportunities, challenges and policy initiatives related to digital transformation. Web page: This report was prepared for the European Commission, Directorate-General Internal Market, Industry, Entrepreneurship and SMEs; Directorate F: Innovation and Advanced Manufacturing; Unit F/3 KETs, Digital Manufacturing and Interoperability by the consortium composed of PwC, CARSA, IDATE and ESN, under the contract Digital Entrepreneurship Monitor (EASME/COSME/2014/004) Authors: Demetrius Klitou, Johannes Conrads & Morten Rasmussen, CARSA and Laurent Probst & Bertrand Pedersen, PwC DISCLAIMER The information and views set out in this publication are those of the author(s) and should not be considered as the official opinions or statements of the European Commission. The Commission does not guarantee the accuracy of the data included in this publication. Neither the Commission nor any person acting on the Commission s behalf may be held responsible for the use which might be made of the information contained in this publication European Union. All rights reserved.

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