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Copy of Megatrends

For Oerlikon

Burkhard Böndel

on 31 December 2012

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Transcript of Copy of Megatrends

Oerlikon is tracking and analyzing the impact of technology and
megatrends within 4 areas Technology Rising cost of energy, falling cost of technology will lead to a surge in intelligent industrial solutions The "Exponential Growth Paradigm" The Power of Demographics What is happening…
The 3 digital accelerators, processing speed, data storage capacity and communication bandwidth are growing exponentially. They transform industries, societies and global value chains. Innovation cycles get significantly shorter, the world is increasingly connected and mobile. Emerging markets are leapfrogging old economy infrastructure and the cost of technology is falling drastically. What is happening...The world population will grow from 7bn to 10bn before peaking in 50 years from now. A unique but challenging growth opportunity period in human history lies ahead of us.Urban population in BIC (Brazil, India and China) alone, will increase by 600 mill. people within the next 20 years. Equivalent to a “5 mill. people city” every second month. More than 50% of the growth in middle class consumption until 2020 will come from emerging markets with China and India taking the lion share. However advanced economy markets will remain important in size and growth. Development in final consumption markets is an "and" not an "or". Emerging and advanced markets cannot be served with the same service/product offerings. Consumption pattern and preferences of emerging markets will require significant market and business adaptation to succeed in winning the customer and beat competition. Globalization Energy is the denominator in most environmental equations. From providing fresh desalinated drinking water, agricultural production, mobility, industrial production, heating/cooling to ITC. Energy consumption has throughout human history increased and is now even increasing exponentially.

Cleantech is driven by investments in renewable energy, primarily addressing energy production rather than reducing energy consumption.
With rising energy and declining technology costs the focus increasingly will be on lean energy consumption, enabled by technological advancements.

The industrial sector accounts for approx. 1/3 of total energy consumption worldwide. Recent estimates suggest that the US industry alone, can reduce energy consumption by up to 20% by using intelligent energy management systems. Environmentalism Technology Exponential growth in technology development drives innovations. New industries emerge and the 4th industrial revolution is on its way... Demographics Globalization Environmentalism MEMS From CAD files to globally distributed 3D manufacturing centers cuts out logistics and inventories Crowd sourcing It is not just specific industries or steps in the value chain that is subject to radical change. The face of innovation itself is changing.

Particularly R&D heavy industries will see changes in the way they innovative. The use of high speed analytics and crowdsourcing will gain importance as social media is being accepted in the business world. Ely Lilly – Innocentive
In 2001Eli Lilly provided funding to help launch InnoCentive. At the time an internet-based problem-solving forum.
Eli Lilly created a global, virtual R&D talent pool that solved molecular problems to develop new blockbuster drugs (Cialis)
More than 100 crowd-sourcing and innovation platforms have emerged. Fiat Mio developed by crowd-sourcing
Fiat Brazil launched the worlds first crowd-sourced car in 2010. Global car manufactures (BMW, Volvo, others) uses crowd-sourcing in their design process and beyond.
Final car specifications were submitted under Creative Commons licenses, becoming free to everyone, including others car companies. (no patents, no IP war, economy of abundance… Transformation: Exponential growth
Impact across the entire business environment Any material
Different 3D printing techniques makes it possible to print parts in a variety of materials and in combination with each other. From plastics, steel, magnesium, titanium cobalt chrome and even wood.
The wide range of materials make 3D printing suitable for a wide range of industrial applications 3D-printing will change the rules of manufacturing and reshape the global manufacturing value chain.

Additive manufacturing (3D printing) consist of: Adding layers of powder onto a build tray which is then solidified with liquid binder. Another technique is laser sintering; Electron Beam Machines (EBM) can be used to melt metal powder a layer at a time in a vacuum chamber to build the final 3D structures. 3D printing – How it works Seite 18 ZFU – 15. November 2012 Applications
Printed textiles in man-made fiber are already available
Dental and medical implants can be reproduced to match 100% existing bones, jaws, etc.
Capable of printing mechanical moving parts.
Certain electronics and mixed materials for commercial use are expected to be available within 12 months. 3D Printing with impact across the manufacturing value chain
Production and value chain steps will be eliminated.
Reducing product & development costs significantly.
Originally used for prototyping but increasingly applied to end user products. Today 20% of total 3D printing is for end market products
Digital spare part inventory  dematerialization (immaterial economy)
Customization at no additional cost
No waste material for printing parts in high cost material (aero and space industry) 3D printing – Applications Seite 18 ZFU – 15. November 2012 Applications
Intelligent buildings, roads, SMART cities with intelligently built energy management systems
Cars, trains and production equipment will become intelligent and self diagnostic, creating a complete new level of service and maintenance business.
MEMS will perform a range of self repairing functions as well as power use optimization and performance improvement An iPhone level based on MEMS sensors MEMS (Micro Electro Mechanical Systems)
MEMS devises have their own processing and communication capacity, they are networked and can perform mechanical functions via their micro sensors and actuators.
Sensors: include temperature, pressure, radiation, inertial forces (accelerometer, tilt sensors, etc.)
Actuators: includes micro-valves for control of gas and liquid flows, optical switches and mirrors to redirect or modulate light beams, micro-pumps to develop positive fluid pressures, micro-flaps to modulate airstreams on airfoils, vibration amplification, etc.
Small enough to be integrated/printed directly into clothes glasses (for augmented reality) or even the eye. Source: Booz & Co. 2011 The biggest contribution to global growth will come from emerging markets. But consumption patterns and preferences of these markets will require significant market and business adaptation to succeed.

Mass production for emerging market demand will thrive along with a growing global demand for customized products. This requires a flexible, regionally diversified production approach.
Customization and standardization will both prevail in the future, not just for products, but for the business model, marketing and manufacturing.
Enabled by technology, the entire value chain will be even more globalized than today.

In the future, successful companies master the contradictions in being local and global at the same time, as well as supplying standardized and customized products for diversified markets, taking globalization to a new level of complexity.

Faster innovation and global reach turns the corporate muscle into an important strategic asset. Corporate size matters.
The challenge will be to merge the advantages of the established corporations with entrepreneurial ideas. Emerging markets are driving global growth and globalization will intensify; in terms of competition, trade patterns and suitable business models. World largest corporations by region by market capitalization Competition intensifies, R&D disperse toward emerging countries with large talent pools, technological leadership shifts...
Next decade will be a battle for global leadership of new industries Global competition
intensifies Emerging markets are creating international competitors and industry champions;
Grown from large home markets with strong growth rates and low cost base.

India & China are catching up on R&D spending.
Huawei (China) and LG (S.Korea) are among the worlds leading innovative companies (Fast Company innovation list)

Competition:19 of the 30 largest economies will be emerging economies within 20 years.Global competition is increasing; In 2005, 9% of the world’s largest corporations were from emerging economies, by 2011 it was 30%.

Particularly India, Brazil and China are claiming technological leadership in various fields such as; Petro/chemical industry, technological services and alternative energy. New industries will be a battlefield with emerging market giants 3D printing MEMS will play a key role
in product intelligence Emerging markets are forming and establishing a market dynamic of its own. Global trade
patterns are shifting World population continues to grow and spurs a new urbanization wave. New consumption markets with a unprecedented number of consumers, however with different needs, will arise. SMART and flexible Beyond
BRIC SEWEC, N-11, different definitions of groups of next emerging markets have been defined based on attractiveness, GDP growth and population (investment perspective).
It will be important for companies to get the selection right. Consumption is moving toward emerging markets, requiring “SMART products” developed in emerging for emerging markets.
SMART products deliver basic functionality but at significantly lower cost, referred to as the 70%-30% rule: 70% functionality, 30% cost. "We will bring intelligence to everything that uses any kind of energy" - D. Burrus. On the brink of a 4th Industrial revolution Aging and urbanization are reshaping demand and consumption Emerging markets are taking globalization to a new level Pioneering the green revolution By 2015, except for the USA, advanced countries will for the first time ever have a higher percentage of 65-year old, than 0-15 year olds. Also emerging countries; South Korea and China are facing the problems of aging. In advanced countries average life expectancy is 80 years today, up from 40 years a century ago. By 2050, it will have climbed to 100 years.
Together with decreasing fertility rates, increasing life expectancy, has severe impacts on existing social security systems, labor markets and individual working lifetime.
In aging societies productivity gains are mandatory to sustain wealth. This can only be accomplished by transforming a industrial manufacturing intensive society into a knowledge, technology and innovation driven economy.
In emerging aging countries (China) it is a question of growing rich before growing old! General impact
Technology trends like digitalization, dematerialization, virtualization and automation create new industries like robotics or life sciences, boost productivity and revolutionize manufacturing. Intelligent products with MEMS, the internet of things, 3D printing, nanotechnology and new materials reshape our material world. Technology spurs the productivity of an aging population in the advanced economies and will significantly contribute to a sustained growth in wealth.
Exponential change is no longer limited to the digital industry. Companies in all industries and across the entire value chain will feel the effect of transformation. Innovate or vanish...
We will see a number of rather new industries gain importance in the 6th innovation wave:
Life science
Additive manufacturing
Due to the accelerated diffusion of technology corporate life span has decreased by nearly 50% over the past 50 years. The next wave of emerging markets represents 1.3 bn people. By 2020 these top 20 emerging markets have grown by 210 mill. people and 150 mill. additional people have been urbanized.
They account for 10% of world GDP and invest 22% of GDP in capital formation, in other words, they are investing heavily in establishing industries.
In average they have GDP growth rates of 5%. IMF estimates that global trade will grow from 23% in 2005 to over 30% of total GDP in 2020. Much of this growth is due to increased trade among emerging markets. The new market dynamics require local presence and brand affinity. Share of world GDP in ppp. "The ascent of BRIC is a phenomenon that has begun to transform the lives of millions of people in these nations, lifting them out of poverty and revolutionizing their ambitions. The rapid advance of these economies and the rosy prospects for others like them has become the dominant story of our generation" Jim O'neill Goldman Sachs estimate that 2 billion people will join the global middle class in the next 20 years. (Growth Map) Global energy consumption Energy prices Nano technology “Accelerated Innovation”The core management discipline for the next decade “This world is full of opportunities, but it is moving quickly, and innovation is the only way to stay ahead of these fast-moving developments and increasingly competitive pressures, they mandate rethinking your innovation process, the behaviour of your teams, and the structure of your enterprise.”Source: Curtis Carlson – 5 Disciplines of Innovation One overarching factor is “Accelerated innovation”, a direct consequence of exponential growth in technology development.
As innovation accelerates in the “exponential growth paradigm” companies will need to be anticipatory and apply their insights to innovative businesses.
To improve the ability to act anticipatory and cultivate the ability to innovate as a cultural attitude, Oerlikon is tracking and analyzing the impact of technology and megatrends within 4 areas: Technology
Environmentalism Examples from Advanced and Coating IP Issues Protection of IP rights has become increasingly difficult in a global economy. In the future, skip your problem, using crowdsourcing and other open innovation environments will reduce the relevance of IP, together with faster innovation cycles and faster market penetration. IP protection will become a thing of the past for several industries.
Fiats crowdsourced Fiat Mio's specifications are public available.
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