Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION. Research & Innovation Projects for Policy. Research and Innovation

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1 THE 4 TH Capitalising on the benefits of INDUSTRIAL REVOLUTION Research & Innovation Projects for Policy Research and Innovation

2 CAPITALISING ON THE BENEFITS OF THE 4TH INDUSTRIAL REVOLUTION European Commission Directorate-General for Research and Innovation Directorate D Industrial Technologies Unit D.1 Strategy Contacts Doris SCHROECKER, Yanaris ORTEGA GARCIA, Lukas BORUNSKY s Doris.SCHROECKER@ec.europa.eu,Yanaris.ORTEGA-GARCIA@ec.europa.eu, Lukas.BORUNSKY@ec.europa.eu RTD-PUBLICATIONS@ec.europa.eu European Commission B-1049 Brussels Manuscript completed in February Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the following information. The report was established based on the project analysis by an independent expert, Lucia Paris Bajos. More information on the European Union is available on the internet ( Luxembourg: Publications Office of the European Union, 2018 Print ISBN doi: /49710 KI-AZ EN-C PDF ISBN doi: / KI-AZ EN-N European Union, 2018 Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission documents is regulated by Decision 2011/833/EU (OJ L 330, , p. 39). For any use or reproduction of photos or other material that is not under the EU copyright, permission must be sought directly from the copyright holders.

3 European Commission Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION Research & Innovation Projects for Policy 2018 Directorate-General for Research and Innovation Industrial Technologies

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5 TABLE OF CONTENTS EXECUTIVE SUMMARY 5 POLICY CHALLENGES RELATED TO THE 4 TH INDUSTRIAL REVOLUTION 7 1. The human dimension: skills, jobs and work organisation 9 2. The business dimension: new businesses through manufacturing as a service 10 PORTFOLIO OF RECENT EU-FUNDED R&I PROJECTS FP7 and Horizon 2020 areas with contributions to this theme Portfolio of projects and topics covered Portfolio of beneficiaries 13 RESULTS AND IMPACTS OF EU FUNDING Added value of EU R&I investment R&I achievements supporting policy challenges Impacts for society and industry 21 POLICY RECOMMENDATIONS Raise awareness and deepen the understanding of the potentials and risks related to the 4 th Industrial Revolution Promote lifelong learning in factories and new learning methods Set up a European Manufacturing Skills Council Foster links and synergies between relevant policy actions such as the European Sectoral Blueprint Initiative on Skills Develop guidance and practical examples to address regulatory barriers 27 ANNEXES 29 Annex 1 List of projects 30 Annex 2 List of acronyms 31 Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION 3

6 4 Research & Innovation Projects for Policy

7 EXECUTIVE SUMMARY Europe is moving toward a more digitised society and economy. In this context, the 4 th Industrial Revolution changes the way we live and do business. It can be defined as a range of new technologies combining the physical, digital and biological worlds. It brings with it higher levels of automation and data exchange in manufacturing where it lifts production processes to a new level of capability. Rapid transformations in the design, manufacture, operation and service of manufacturing systems and products have a huge potential to drastically improve the flexibility and productivity of business and organisations. This report looks at how higher levels of autonomous processes and machinery will impact skills and jobs, and how higher flexibility in the integration of supply, production and delivery processes, could be used for new business opportunities. 30 EU funded research and innovation projects implemented since 2009 have been analysed. These projects have developed industrial and advanced manufacturing technologies related to the 4 th Industrial Revolution. The project analysis confirms the transformative nature of the 4 th Industrial Revolution. This is in line with the analysis in the Commission Communication on a renewed EU Industrial Policy Strategy. It points to a new industrial age which is transforming traditional manufacturing processes and the nature of work. This is also the context for the European Skills Agenda and digital skills policy, countering that many people remain without the skills needed for the industry of the future, including basic digital skills. The projects analysed focus on skilled employees in industry and develop new high-skilled job profiles either during project execution or plan to do it after the end of project during commercialisation. Particularly interesting are also projects developing new forms of work organisation and showing how technology can be adapted to the worker, as it is the capacity, constraint and skills of the worker which are the driver for designing the workplace and allocating the workload. Based on a picture of the technologies on the way to change manufacturing, jobs, skills needs and business models, this report suggests the skills to be prioritised and the following policy recommendations: > to raise awareness and deepen the understanding of the potentials and risks related to the 4th Industrial Revolution; > to promote lifelong learning in factories and new learning methods; > to set up a European Manufacturing Skills Council; > to foster links and synergies between relevant policy acions such as European Sectoral Blueprint Initiative on Skills; > to develop guidance and practical examples to address regulatory barriers. Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION 5

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9 POLICY CHALLENGES RELATED TO THE 4 TH INDUSTRIAL REVOLUTION

10 Manufacturing is considered the backbone of European economy. It provides 32 million jobs in more than 2 million enterprises, including around 13 million jobs in a growing high-tech manufacturing sector, 1 and around 60 million additional jobs related to associate services. 2 The share of manufacturing in the EU-28 was 16.1 % of GDP in Manufacturing is currently facing the 4 th Industrial Revolution (4IR), which can be defined as a range of new technologies combining the physical, digital and biological worlds. It brings higher levels of automation, autonomous processes and machinery, and data exchange in manufacturing where it lifts production processes to a new level of capability and demand driven customisation. Rapid transformations in the design, manufacture, operation and service of manufacturing systems and products promise a huge potential to drastically increase the flexibility in the way that supply, production and delivery processes can be integrated, offering new business and growth opportunities. The EU s Industrial Policy Strategy is set to strengthen industry s ability to continuously adapt and innovate by facilitating investment in new technologies and embracing changes brought on by increased digitisation and the transition to a low-carbon and more circular economy. It highlights also that companies on their side must do their part by upgrading the technology base, future-proofing business models, internalising sustainable development principles and embracing innovation. It recalls that the industrial transformation provides enormous opportunities, but reaping them will require substantial investment in advanced manufacturing, people s skills and talents, as well as intangible assets like research and innovation (R&I). 4 The New Skills Agenda for Europe 5 addresses skills as a pathway to employability and prosperity. 10 actions respond notably to the need for the right skills for the technological change and to master the digital components in practically every job. Following the Communication in 2016, the Digital Skills and Jobs Coalition was launched under the Digital Single Market initiative, 6 and in January 2018 the update of the European Qualification Framework was adopted. Also the Digitising European Industry initiative under the Digital Single Market priority addresses skills as a priority. This report focuses therefore on two important policy questions. One is about the human dimension of the 4IR and its impact on skills and jobs, which is also addressed in the European Skills Agenda and the digital skills policy. Secondly, the question is what forms of business innovation and new business models are under preparation, stimulated by advanced digital, machinery and cyber-physical technologies. This report synthesises what EU funded R&I projects on industrial and digital technologies found in relation to these questions and the policy recommendations derived from the projects results. The aim is to contribute to the European skills policies and to flash out the aspects and recommendations where policy and framework conditions have a direct impact on the appetite in industry for innovation and change. More information on the evidence and concrete results underlying the recommendations can be found on the project websites. The projects are listed in Annex I in this report. 1 Eurostat. Employment by industry breakdowns Jovane, F. et al., The ManuFuture Road. Towards competitive and sustainable high-adding-value manufacturing. Springer. 3 Eurostat. GDP percentage of total, industry breakdowns Communication Investing in a smart, innovative and sustainable European Industry - a renewed EU Industrial Policy strategy COM(2017) 479 of Communication A new Skills Agenda for Europe - Working together to strengthen human capital, employability and competitiveness, COM(2016) 381 of European Commission. Digital Skills at the core of new Skills Agenda for Europe digital-skills-core-new-skills-agenda-europe 8 Research & Innovation Projects for Policy

11 1. THE HUMAN DIMENSION: SKILLS, JOBS AND WORK ORGANISATION Current estimations point to a significantly higher demand for highly skilled employees compared to low skills in the timeframe to 2025, while there are indications that, relevant for the 4IR, in the manufacturing and Information and Communication Technologies (ICT) sectors, and for skilled trades workers, engineers and ICT professionals this demand is not always satisfied, 7 due to shortages and a mismatch between the type of workers employers are looking for and the skills of the current workforce. There are different ways to capture mismatches with concrete figures. 8 All in all though, there is a common understanding on the need for action for a fundamental update of education and training in Europe to be fully prepared to satisfy the demands of new job profiles and to provide the right skillsets or competences. To illustrate this with an often quoted outlook: 65 % of children now in primary school are estimated to be employed in jobs that do not exist today. 9 But there are also concerns about lifelong learning and education and training of grown-ups. In 2016, only around 11 % of adults (age 25-64) participated in education and training programmes. 10 Manufacturing, computer use and computer science accounted for less than 10 %. 11 Around 27 % of Europeans adults have basic or low digital skills. 12 In 2016, 37 % of the EU labour force had an insufficient level of digital skills. 13 Apart from formal education and training programmes, in the order of 30 % of employers provided non-formal education and training. 14 Employees with insufficient levels of training or flexibility to (re)train face a higher risk of unemployment and subsequently, higher incidence of poverty and social exclusion. Economic research is testing different approaches to capturing vice versa the impact of skills mismatches and shortages on industrial productivity. 15 The 4IR is thus not only expected to change future job profiles, but will also affect the way work on the shopfloor can be organised and how human centred manufacturing could empower workers. 16 The change from a mass production model to a mass customisation model implies also challenges to the way the work and resources are organised within a factory. New ways of working using new tools, processes and approaches will be needed in factories of the future (FoF) in order to better assess the machinery, skills and workforce resources to increase flexibility, agility and competitiveness. The question is also, how the flexibility and performance offered by new technologies could be used to support workers and integrate for example safe human-robot collaboration within on demand production and delivery requirements. 17 With regard to the human dimension of the 4IR, this report focusses on the following questions: > What is the impact of the 4IR on skills needs and future job profiles? > How is education and training 4.0 characterised? > How can new forms of work organisation look like? 7 Cedefop, Skill shortages in the EU. 8 Commission Staff Working Document accompanying the Communication A new Skills Agenda for Europe SWD(2016) 195 final of ; For more details, see Kiss, A., Vandeplas, A. (2016) Measuring skills mismatch. DG EMPL Analytical Web Note 7/ World Economic Forum. The Future of Jobs 10 Eurostat. Adult learning statistics, Table 1 and Table Eurostat. Adult learning statistics, Table Digital Scoreboard: Indicator group (Digital skills)>indicator (Digital skills indicator)>breakdown (basic and low). 13 Europe s Digital Progress Report This figure is from 2011, more updated survey is being analysed and will be published in forthcoming months. Eurostat. Adult learning statistics, Table For example OECD The future of productivity: main background papers Labour market mismatch and labour productivity: evidence from PIAAC data, Müge Adalet McGowan & Dan Andrews. 16 EFFRA. Factories of the Future roadmap of the Public Private Partnership Factories of the Future Multi-annual roadmap for the contractual PPP, 2013 Research priorities: Domain 5 Human-centred manufactuiring Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION 9

12 2. THE BUSINESS DIMENSION: NEW BUSINESSES THROUGH MANUFACTURING AS A SERVICE Prospects of new business models arise when smart manufacturing technologies and connected factories and supply chains create more flexibility in production. The Organisation for Economic Cooperation and Development (OECD) expects an increase in customisable goods and services via new production processes and new business models, mainly in industrial sectors. 18 The transition from the mass production model towards mass customisation manufacturing with competitive development, production and delivery costs implies much more shared, flexible but also more integrated value chain approaches. Uptake of new technologies which allow for co-design and co-creation could bring businesses closer to customers, directly addressing user needs and shortening product development time. New opportunities will arise from customer driven design, partnering for co-development, shared manufacturing, cloud computing, 3D printing or platforms to connect suppliers and customers. Reduced costs of launching new products and services could mean new business opportunities, and increased productivity levels. 19 Manufacturing in advanced economies is increasingly interlinked with services for value creation, and the differences between manufacturing and services have become increasingly blurred. 20 This servitisation of manufacturing alters the traditional industry business approaches and calls for new and innovative business models. The new service-focused business model is a competitive approach to seeking added value, with the potential of also being more ressource efficient. 21 Distributed manufacturing, virtual factoris and embedding services in new product-service combinations offer new opportunities with lower market access barriers for SMEs (small and medium enterprises) and start-ups, which usually have neither the capabilities to control the whole manufacturing lifecycle nor the market power to enforce their own interfaces and standards. Decentralised, clean, flexible and also smaller factories of the future promise new opportunities for manufacturing close to customers and in cities. As a large part of future growth in production is expected from these developments, the growing and complex interactions between manufacturing and services deserve a more integrated view on manufacturing and services at policy level. The speed of development of new technologies can be overwhelming for manufacturers and there are gaps among businesses across Europe. 22 The fast developments are especially relevant for the digital technologies, where the speed of adoption is linked to competitive advantages. Slow adopters can face more complex competitive landscape with new competitors providing different business models. Therefore, adjustments in businesses models may become one of key preconditions for competitiveness in the long run. A wider diffusion of advanced production technologies notably to SMEs is an important policy challenge in the transformation of industrial production. Many businesses lag behind in adopting the latest technologies due to cost of these technologies, limited resources or other barriers to innovation such as lack or uncertainties about data security. This report addresses the specific question on how the challenges of the 4IR can be turned into business opportunities. 18 OECD, The Next Production Revolution. 19 OECD, The next production revolution, in the conference Shaping the Strategy for Tomorrow s Production, Copenhagen. 20 The OECD is referring to manu-services, which involve combining advanced manufacturing with a range of different services, OECD Science, Technology and Innovation Outlook Dimache A., Roche Th., A decision methodology to support servitisation of manufacturing. International Journal of Operations & Production Management, Vol While in % of Finnish and 46 % of Swedish manufacturing entreprises use cloud services, it is only 7 % in Latvia and Poland. Source: OECD, Uptake of cloud services in industries. 10 Research & Innovation Projects for Policy

13 PORTFOLIO OF RECENT EU-FUNDED R&I PROJECTS

14 30 projects funded under FP7 and Horizon 2020 were found to address technologies of the 4IR and at least one of the selected policy challenges. The chapter on achievements summarises the results/findings of these 30 projects, implemented since The analysis includes projects under calls for proposals up to It is based on actual results and therefore does not include the most recent projects under the 2016 and 2017 calls for proposals. 1. FP7 AND HORIZON 2020 AREAS WITH CONTRIBUTIONS TO THIS THEME Because of its complexity and the fact that the 4IR is affecting every sector of the economy, relevant R&I activities were included in several programme parts across FP7 and Horizon 2020 (H2020). Most of them were though funded by in the programme parts on industrial technologies ( NMP and NMBP ) 23 and Information and Communication Technologies (ICT), especially under the FoF calls. In FP7, 19 projects were funded with EUR 64 million. The majority was part of the thematic areas Nanosciences, nanotechnologies, materials and new production technologies (FP7 NMP). In Horizon 2020, 11 projects were financed with EUR 47 million under the NMBP and ICT programmes. As it is expected, most of the projects belong to the FoF contractual-public Private Partnership calls for proposals. 2. PORTFOLIO OF PROJECTS AND TOPICS COVERED The main topics adressed were advanced manufacturing process (3 projects); adaptive and smart manufacturing systems (5 projects); digital, virtual and resource-efficient factories (1 projects); collaborative and mobile enterprises (2 projects); human-centred manufacturing (11 projects); customer-focused manufacturing (5 projects); and crosscutting issues (3 projects). The main type of actions within the projects portfolio is collaborative projects, with 22 out of 30 projects and 93 % of total budget. 23 Nanosciences, nanotechnologies, materials and new production technologies (NMP) in FP7 and Nanotechnologies, advanced materials, Biotechnology and Advanced Manufacturing and Processing (NMBP) in Horizon Research & Innovation Projects for Policy

15 3. PORTFOLIO OF BENEFICIARIES The largest number of participations (54 %) comes from the private sector, which has received EUR 49 million (44 % of the total portfolio budget). This shows the importance of the 4IR for the private sector and is in line with the overall participation of industry e.g. in the industrial pillar 24 of Horizon The second largest number of participations is found in the higher or secondary education and research organisations (20 % and 23 % of total participations, respectively), which represent 22 % and 32 % of the total budget. SMEs, representing 32 % of all participations were funded with EUR 31 million 28 % of the total budget. This is higher than the average for Horizon 2020 which itself has exceeded the 20 % goal for the first three years of implementation. This confirms the important role of SMEs in the European economy and in manufacturing. Furthermore, their participation could assure commercial exploitation of project results and faster technology takeup. The most involved countries in these projects have been Germany (EUR 19 million, 51 participations), Italy (EUR 14 million, 47 participations) and Spain (EUR 11 million, 41 participations), as it is shown in Figure 1. This reflects the importance of manufacturing, their size, links with other countries and efforts for modernising and digitising the manufacturing sector at the time. For instance, the German government has pioneered a 10to 15-year plan for applying digital technologies to the industrial sector.25 FIGURE 1 EU contribution (EUR) to Member States involved in the 30 projects analysed (FP7 and Horizon 2020 combined) EU Financial Contribution EUR 19 m EUR 0.1 m 24 Industrial Leadership, including Leadership in Enabling and Industrial Technologies (LEIT). 25 Plattform Industrie Capitalising on the benefits of THE 4TH INDUSTRIAL REVOLUTION 13

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17 RESULTS AND IMPACTS OF EU FUNDING

18 1. ADDED VALUE OF EU R&I INVESTMENT EU funded projects addressing the 4IR focus on priorities where the development and mastering of science and research-driven technologies underpins the global competitiveness of European industries and research. These R&I challenges are cross-sectoral and based on stakeholder input, with industry in a driving role and with special attention to ensuring the take-up of successful results and further industrial investments. For a large part of the Horizon 2020 programme, this process is formalised through contractual Public-Private Partnerships (PPP), such as FoF and Sustainable Process Industries. The greatest EU added value stems from the synergies and critical mass of transnational collaborations across Europe and beyond, required to tackle challenges of such a scale and complexity that no sector or single Member State can tackle alone. Collaborative projects also provide a context for vertical integration. They bring together many different types of organisations, ranging from materials developers, at the very front of the chain, to manufacturers or building contractors/construction companies at the end. Framework programme funding also helps to mitigate the considerable technological and financial risks in the development of intelligent and smart technologies, products and processes. Notably Horizon 2020 puts emphasis on helping to cross the valley of death for the upscaling of technologies or SMEs which involves still considerable risks. This is done through demonstration projects and pilot lines at higher technology readiness levels relevant to industry and financial instruments. The exploitation of (R&I) results would further benefit from faster implementation of the Single Market in the EU. In 2015, 30 years after the Single European Act and 10 years after the adoption of the Directive on services in the internal market, only 20 % of goods and 6 % of services were traded cross-border within the Single Market. Recent trends such as increasing digitisation of performance-enhancing services are likely to increase the tradability of services in the future. This in turn affects the policy intervention needed to support them. 2. R&I ACHIEVEMENTS SUPPORTING POLICY CHALLENGES 2.1. R&I achievements in relation to the human dimension: skills, jobs, work organisation Skills how to reinforce education and training The most significant skill shortages are in basic technical training, ICT literacy, science, technology, engineering, and mathematics (STEM), problem solving skills, self-directed learning, communication, teamwork and time management for the three main groups of industry workers: engineers, researchers / scientists and production workers. The FoF will be increasingly digitised. Besides digital skills, other general skills and abilities are required in order to prepare future workers for a short and long term learning: there is a need for new attitudes to work, as workers move from being assigned a job or task, to selecting it themselves; for autonomy and more flexible organisational structures; for a more positive attitude to failure; for multidisciplinarity, involving less repetitive tasks at the shop-floor; for playfulness or learning by doing. The EU R&I projects underlined that lifelong learning is particularly important. The disruptive nature of the 4IR technologies and their fast innovation cycles make lifelong learning programmes necessary for the optimum performance of the workforce and other stakeholders. They also showed that identifying training needs is an issue in itself, at strategic level as well as for individuals and companies. 16 Research & Innovation Projects for Policy

19 The MAN-MADE project developed a Training Needs Detector software which provides worker-specific training hints based on workers knowledge and skills, factory demands, job content and job allocation statistics. It compares workers knowledge, skills and needs with required competence of jobs and tasks, providing inputs for training programmes triggering workers lifelong learning. Education and training systems should cultivate, besides the key skills and competences, the capability of extending and applying the knowledge in an interdisciplinary and evolving field. The rapid evolution of the new technologies will require a continuous update of skills and knowledge, and by extension of educational systems. case and it could potentially help bridging the gap between new ICT knowledge and product / process innovation. Other projects have also analysed the potential of using digital manufacturing technologies for education and training, concluding that it can reduce the cost of producing new knowledge. For example, 3D printers make it easier for students to produce prototypes that help them to better understand the subject under study. The SatisFactory project developed a training and collaborative platform where workers can exchange work knowledge, experiences and practices, while team interactions are stimulated to capitalise on the more experienced workers skills and knowledge. Projects have stressed the need of a stronger collaboration between industry and education and research. 26 In order to strengthen this synergy, several projects have developed learning programmes that satisfactorily use the manufacturing plant as faculties ( teaching factories ). Project consortia stress the importance of starting the manufacturing education early in the students lifetime, so that the labour force has already acquired some key competences when entering the manufacturing world, which will facilitate life-long training in the long run. New technologies to facilitate learning: Some projects have developed methodologies and tools based on state-of-the-art augmented reality, wearable and ubiquitous computing or gamification technologies, adapted to each target group and sector needs. These contribute to facilitating learning and motivating the trainee. This has been tested by the same projects. For instance, the project ActionPlanT organised a summer school in order to assess the effectiveness of the learning methodology and the knowledge delivery mechanisms. The methodology developed is an efficient and innovative mechanism for competence development allowing trainees to face real life-like use Projects have emphasised the importance of not only training workers, but of also extending training programmes to end-users, decision-makers in industry, management and public administration. This would allow them to understand technology possibilities and also limitations, and consequently their responsibilities concerning risks and threats, and how to better support the development and deployment of new technologies. Collaboration between industry and education/research is perceived as a critical element for the success of the 4IR learning methodologies. The teaching factory is an example of how to implement this collaboration. 26 See also the study by the Joint Research Centre, Innovation and Industry: Policy for the Next Decade. jrc pdf Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION 17

20 Jobs There is a focus on skilled employees in industry and projects continue to develop new high-skilled job profiles either during project execution or plan to do it after the end of project during commercialisation. In order to capture the great variety of types of developed future high skilled jobs, relevant PPP set-up new job profiles as a Key Performance Indicator. From projects in the FoF PPP a first list includes: robotics programmer, machine designer, skilled maintenance Furthermore, this allows the conclusion that workers of the future should have a combination of technical and non-technical skills that allow them to acquire a competence set rather than specialisation in a single one; they will need to be adaptable, with the capacity to learn and to think critically. Know-how rather than physical labour will be needed. This continuous adaption must be ensured at all levels, from the top level managers, to engineers and operators of machines. This will result in longer working life and ability to work in an ageing population in Europe. The SatisFactory project developed a toolkit that allows supervisors to manage machinery and human resources in real-time. It takes into account the workers skills, in order to match each task to the suitable/required expertise of worker and experience. It also provides statistics that help evaluating the workload, the workers experience, and the condition of assets. technician, virtual reality manager and programmer, advanced operator with data processing knowledge, skilled technician in data science, process designer, energy and resource efficiency manager, supplier network design expert, design synthesis based facility planner, design synthesis based supply chain manager, remanufacturing engineer, cockpit supply chain strategist, artificial intelligence educator/supervisor, manager, smart robot operators, smart robot cell developer. This in return allows drawing conclusions and refining the needs for some specific technical skills and competences: knowledge of mechanical and electrical engineering processes; ability to work with computerised systems, to read and write machine programming code, to read manufacturing blueprints and to operate automated manufacturing systems; knowledge of augmented reality and artificial intelligence. New forms of work organisation As manufacturing processes are becoming more and more flexible, both in terms of their activities and in terms of their physical spaces, different forms of work organisation are emerging, which can affect worker-enterprise relationships. Projects focused on this aspect have notably developed new forms of work organisation in which the human dimension gains importance ( human centred manufacturing ), notably for jobs where human work cannot (easily) be replaced by automated systems in the near future. It means that the technology is adapting to the worker, as it is the capacity, constraint and skills of the worker which are the driver for designing the workplace and allocating the workload. These worker-centred models are meant to increase the worker s satisfaction (see projects Satisfactory, Manuwork and Factory2Fit), as well as to make the workplace healthier, safer and more attractive professionally. In some cases, results cover methodologies and tools redesigning the workplaces and adapting work allocation to the evolving profile of the worker and skills. The take-up of such technologies will need agreed approacheds for privacy as well. 18 Research & Innovation Projects for Policy

21 FIGURE 2 Human-machine interface. Technology develop by the FACTS4WORKERS project. 27 FACTS4WORKERS 2.2. R&I achievements in relation to the business dimension: manufacturing as a service Identification of new business models Projects have developed new business models, by approaching the concept of manufacturing as a service from different angles: > Demand-driven and local manufacturing: projects developed tools such as product configurators, co-design platforms and supply chain management frameworks. These would support the process of local product designed manufacturing for the client or by the client, while guaranteeing environmental sustainability and the compliance of EU product safety regulations in sensitive sectors. Projects28 have worked on customer-focused manufacturing models resulting in frameworks and tools for the acquisition of customer demand data, user feedback and data from product embedded information devices (big data approaches). Besides, they have contributed with knowledge-based business models, where the end-user collaborates in different phases of the manufacturing value chain. > Projects developed the concept of virtual factories, which combines the manufacturing assets of several independent factories to achieve complex manufac- turing processes, and ICT platforms and tools for plugand-play and pay-per-use manufacturing assets. > Other projects addressed the value chain integration, in which new business models and tools for the management of the manufacturing supply chain were developed. The project ManSYS developed a set of e-supply chain tools for metal additive manufacturing, which help overcoming communication problems with external suppliers, supply chain visibility and coordination. Technologies accelerating business innovations Digital fabrication technologies, which allow digital designs to be transformed directly into physical products, are identified as key technologies emerging from the 4IR. The most promising application domains of these technologies, according to the Diginova project, are: digital printing (digitisation of the traditional printing industry, 27 The FACTS4WORKERS project (636778) was funded under Horizon Some examples of projects are ADDFACTOR, ADVENTURE, Diginova, FALCON, ibus and TRANSPARENCY. Capitalising on the benefits of THE 4TH INDUSTRIAL REVOLUTION 19

22 decoration of products and surfaces, packaging, textile printing and display graphics), additive manufacturing (for durable goods, integrated electronics, sensing, power generation and transmission and energy storage), printed electronics (OLED lighting and displays, smart windows, printed sensors, thin heating elements and smart textiles) and personalised medical and healthcare applications (medical micro-factories, personalised diagnostics and drug delivery, tissue engineering scaffolds, treatment planning tools such as organ on a chip and digitally fabricated garments). The Diginova project also analysed the expected timeline to reach the market for these types of products. In the short term, it is expected that, for instance, applications of textile printing, printer sensors and OLED lighting and displays will be available on the market, while at mid-term (around 2025), smart textiles, personalised diagnostics and drug delivery, and smart windows will be on the market. Finally, it is expected that tissue engineering scaffolds and medical micro factories will be mature enough to be commercialised from Focusing further on additive manufacturing technologies (AM), the FoFAM project developed a roadmap for building the fundamental knowledge and defining actions necessary to accelerate the design, application and implementation in the market of AM technologies. The sectors fastest deploying AM technologies, according to the European Additive Manufacturing Strategic Research Agenda are medical and dental, aerospace, automotive, and consumer and electronics goods. Digital industrial platforms integrate the different digital technologies into real-world applications, processes, products and services, while enabling interactions between two or more customer groups. 29 They support the creation of ecosystems, in which any company can add specialised and innovative features through complementary innovations. The FALCON project, for example, has developed a platform to connect information on product and service usage; this will facilitate the gathering of customer feedback through social media, the collection of usage information through information devices embedded in products, the comprehensive processing of the collected data and customer feedback and, finally, the deployment of the identified information in the product-service development phase. Blockchain and other distributed ledger technologies are currently being used in the financial sector mostly. Other fields, such as B2C and B2B, 30 are realising the potential of radical organisational shifts towards more collaborative and automated processes. However, they seem to be relevant for industrial fields, but their deployment is hampered by issues ranging from interoperability, standards, intellectual property (IP) to liability and data protection. It would be interesting to assess technology potentials and up-take constraints. Barriers Digital Fabrication still needs to overcome technological barriers primarily related to: > Speed; > Reliability, stability and robustness; > A limited range of materials (composite materials and embedding electronics or sensor capacities are still a challenge, also the replacement of fossil based, rare earth materials or metals). Additionally, the uptake of technologies as well as of new business approaches in the 4IR is facing non-technological barriers. The projects raise the following issues related to EU policies: > Cyber-security: the servitisation of manufacturing is based on the use of digital tools and the sharing of digital data. New Commission initiatives in the area of data protection (Building the European Data Economy Communication 31) and cybersecurity (Cybersecurity package 32), are designed to raise awareness of the issues and propose ways to address them. With regards to ICT products and services, the aim is to increase overall transparency of cybersecurity assur- 29 Every platform consists of at least two stakeholders. Platforms can be horizontal (the range of users is connected among multiple sectors) or vertical (users within a single sector (sector specific). Vertical platforms are associated with manufacturing, supply chain optimisation and lifecycle and value streams. 30 B2B=business to business; B2C=business to consumer. 31 COM (2017) 9 final of Communication on Building a European Data Economy. communication-building-european-data-economy 32 COM (2017) 477 final of Proposal for a Regulation of the European Parliament and of the Council on ENISA, the EU Cybersecurity Agency, and repealing Regulation (EU) 526/2013, and on Information and Communication Technology Cybersecurity. 20 Research & Innovation Projects for Policy

23 ance to address vulnerabilities and strengthen trust in the digital single market and in digital innovation. 33 > Privacy issues related to wearable technologies and the Internet of Things in factories: the digitised work environment of the 4IR enables companies to collect a vast amount of information from the workplace that could be used for monitoring employees work and activities, in a way that damages the worker s dignity. Furthermore, the combination of data pertaining the behaviour of employees at work with external information, publicly available on the internet, may affect recruitment processes. 34 It is therefore essential that these data are used by industries only for legitimate purposes, and always respecting the privacy and dignity of the worker. > Product responsibility or liability: there is a need of clarity which party has legal responsibility for the quality assurance of products. In simple terms, when products are sold, the so-called strict liability doctrine holds the seller or manufacturer responsible for liability claims. In a distributed manufacturing model, there is a need to define the liability of each party. Liability issues have recently been investigated within the framework of several Digital Single Market initiatives, for example the Building European data Economy Communication (adopted January 2017) and upcoming intiatives on Artificial Intelligence, one of the issues is to reflect whether Directive 85/374/ EEC is fit for purpose vis-à-vis new technological developments (i.e. software, Cloud, Internet of Things, advanced robots and automated systems), and whether it covers cases of malfunctioning apps and non-embedded software. > Intellectual property issues: there is a need for a balance of open-source model and protection of IP, in a manner which allows the development of digital manufacturing. AM technologies will enable reproduction of any existing product design, manufacture the product, and potentially distribute it (as 3D CAD-STL file). Concerns with regard to IP are mainly based on the ease of digital file sharing and increased access to 3D scanning and printing technologies. However, the success of the free software movement, the emphasis on open innovation and its many ramifications into other fields of knowledge show that creativity can thrive with little need for exclusive protection of ideas, industrial designs and creative work. Copyright-based free licenses allow authors to share their work granting users all basic rights ( the four freedoms ) to enable them full autonomy in their work, thereby allowing the emergence of thriving innovative ecosystems. Having started in the domain of software, the question is how far this could be a model also in the field of hardware designs where patenting seems to be still predominant. 3. IMPACTS FOR SOCIETY AND INDUSTRY 3.1. Impacts in relation to the human dimension: skills, jobs and work organisation Skills how to reinforce education and training Projects have contributed to technology development for the 4IR, the identification of skills needed in the manufacturing field and new learning technologies and training methods. The goal of funding these projects is to enable stakeholders, notably industry and workforce, to benefit from the results, with impact on tackling skills deficiencies and mismatches between the demand and supply of skills. They are important as already, industry cannot find all the skills needed for new job profiles and further improvements in their competitiveness. A better understanding of the needs with regard to skills and core competences will also help policy makers to respond to better address the current social, economic and technological challenges in Europe. 33 Transparency of cybersecurity assurance means providing users with sufficient information on cybersecurity properties which enables users to objectively determine the level of security of a given ICT product, service or process. Source: COM (2017) 477 final of Proposal for regulation of the European Parliament and of the Council on ENISA, the EU Cybersecurity Agency, and repealing Regulation (EU) 526/2013, and on Information and Communication Technology cybersecurity certification ( Cybersecurity Act ). 34 Seidel et al., Robotics, Autonomics, and the Law, vol 14. Nomos, Germany. Capitalising on the benefits of THE 4 TH INDUSTRIAL REVOLUTION 21

24 The collaboration between academia and industry is a key factor in the modernisation of the current education and training programmes, which seem unable to meet the future challenges in the manufacturing sector. Projects have contributed to promoting education in manufacturing at an early stage in life, that is, children, teenagers and university students. Such approaches help the workforce to acquire some of the key competences of the manufacturing world. A widespread introduction of the approaches developed by R&I projects will enhance current systems and will tackle, at least partly, the skills deficiencies in Europe. Supporting measures for the integration of young people, lower-skilled and older workers in the labour market, will adap the training in academia to the new paradigms. Projects have pointed to the importance of a lifelong learning strategy. The methodologies and tools developed, based on state-of-art augmented reality, wearable and ubiquitous computing or gamification technologies, contribute to modernising the training system in industry and in education and training centres. They help to accelerate learning and enhance the motivation of the trainee, while increasing their capability to keep up with the pace of new technological advances. An appropriate company strategy for marketing and recruitment should also be pursued at the same time, in order to increase added value for the company and making the industrial employment more attractive to potential younger applicants. Around 60 % of large industries and more than 90 % of SMEs consider themselves lagging behind in digital innovation, in addition to strong digitalisation discrepancies which exist between industrial sectors. 35 Industry and SME oriented infrastructures such as Digital Innovation Hubs 36 and Open Innovation Test Beds 37 could be further developed as catalysts for the creation of eco- systems including the skills dimension and training, with the aim of increasing the awareness of the benefits of the 4IR and speeding up the adoption of emerging advanced manufacturing technologies. 38 The Horizon 2020 Work Programme 2018 in the area of industrial technologies calls for activities on Skills needed for new Manufacturing Jobs. 39 This coordination and support action is expected to develop strategies to bridge the skills gaps through upskilling of the existing workforce, to analyse new job profiles, leading to a longer working life for jobholders; and to help engage different stakeholders within the manufacturing sector. This topic is complementary to the activities launched under the Blueprint for Sectorial Cooperation on skills in AM. The Blueprint for Sectoral Cooperation on skills will build a partnership with key stakeholders from industry, research, universities, vocational education and training (VET) organisations and qualification organisations from different geographical areas. This action will support manufacturers to be better involved in assessing the skills gaps and in drafting of AM-related curricula at VET and higher educational level. 40 The project analysis and recommendations in this report could also contribute to the different European Commission s initiatives on education and training such as European Alliance for Apprenticeship, European Framework for Quality and Effective Apprenticeship, ErasmusPro, Blueprint for Sectoral Cooperation, etc. First experience with this interaction exists: the evidence found in the analysed projects contributed to the redefinition of the key competences for a lifelong learning set up within the European Reference Framework in late New forms of work organisation The projects have developed new work organisation models, which take into consideration the constraints of the workforce (e.g. older workers), and reflect the increasing flexibility of manufacturing processes and 35 European Commission. Pan-European network of Digital Innovation Hubs Digital Innovation Hubs Catalogue available at 37 Horizon 2020 LEIT-NMBP Work Programme wp1820-leit-nmp_en.pdf 38 Sensors, CPS, Internet of Things, robotics, lasers and cloud-based HPC simulation. 39 DT-FOF : Skills needed for new Manufacturing jobs (CSA) h2020/topics/dt-fof html 40 Also a new study is just starting to develop pan-european curriculum guidelines for KET and Advanced Manufacturing Technologies under the COSME programme and eu/rapid/press-release_ip _en.htm 22 Research & Innovation Projects for Policy