03 smart factories clean tech and customer experience

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Business Innovation Observatory

Trend report

Smart factories, clean tech

and customer experience;

how to scale-up the success

of learning with users?

October 2014

Enterprise

and Industry


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Trend reportSmart factories, clean tech and customer experience;

how to scale-up the success of learning with users?

Business Innovation Observatory

Contract No 190/PP/ENT/CIP/12/C/N03C01

Authors:Gavriel Avigdor, Nicolas Gauders, Hugo Hollanders, Rebeca Lucas, Natalia Mielech and Ren

Wintjes.

Coordination:Directorate-General for Enterprise and Industry, Directorate B Sustainable Growth and

EU 2020, Unit B3 Innovation Policy for Growth.

European Union, October 2014

The views expressed in this report, as well as the information included in it, do not necessarily reflect the official opinion or

position of the European Commission and in no way commit the institution. The Commission does not guarantee the accuracy

of the data included in this study. Neither the Commission nor any person acting on the Comm issions behalf may be held

responsible for the use which may be made of the information contained therein.


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Table of Contents

Executive summary 2

1. Overview and context of three trends 4

1.1. Smart factories 4

1.2. Clean technologies 6

1.3. Customer experience 9

1.4. Conclusion 11

2. Case studies 12

2.1. Description of case-studies and companies 12

2.2. Examples of companies, innovative solutions and success signals 15

3. Key innovation drivers and obstacles 19




4. Policy context and policy challenges: policies, regulations and instruments affecting the trends 21

4.1. Policy context 21

4.2. Policy context per trend 23

4.3. Policy challenges 26

5. Good policy practices 29




6. Policy recommendations 32

6.1. Recommendations from the case studies per trend 32

6.2. Synthesis of recommendations resulting from the workshop 33

7. Conclusions 36

8. Literature 37

9. Annexes 38


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List of figures

Figure 1: Criteria used for identification of trends and selection of case studies 4

Figure 2: EU manufacturing production and employment (2010=100) 5

Figure 3: Estimated Smart application processes market value (in EUR million) 5

Figure 4: Global venture and growth equity investment in cleantech companies, 2011-2013 7

Figure 5: Cleantech innovation performance 7

Figure 6: The material savings potential in European manufacturing per year 8

Figure 7: Global advanced analytics market growth (in billion EUR) 10

Figure 8: Ranking of online services capability to influence customer behaviour 10

Figure 9: From passive exchange of value to co-creation of value 11

Figure 10: Co-creation of societal and economic impact 11

Figure 11: Actors involved in policy promoting smart and clean production 30

List of tables

Table 1: Description of trends 4

Table 2: Increases in revenues due to improved customer experience 9

Table 3: Examples of solutions providing companies 16

Table 4: Main drivers and obstacles for smart factories 19

Table 5: Main drivers and obstacles for clean technologies 19

Table 6: Main drivers and obstacles for customer experience 20

Table 7: Case-study policy challenges 27


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Smart factories, clean tech and customer experience; how to scale-up the success of learning with users? 2

Executive summary

The main objective of the Business Innovation Observatory is

to identify and showcase successful and relevant business

innovation trends, for which the beneficial socio-economic

impacts justify public investments in scaling up the success.

This third Trend Report first provides an overview and

context of three identified trends. The trends involve: the use

of new manufacturing processes in Smart Factories, newenvironmental technologies and circular organisational

models concerning material flows (clean tech), and new

marketing practices in the case of Customer Experience. To

put it short: without Smart Factories Europe will continue to

lose more manufacturing jobs, without clean tech we will

continue to produce more waste, and without improving

customer experience, companies will not satisfy clients and

lose them.

Smart factoriesmesh business and production processes

with one another, draw on IT systems to optimize the use

and capacity of machines, react to production defects, andminimize adverse impacts. As such, smart factories are a key

component of the fourth industrial revolution and draw upon

innovations in for instance: smart process applications; next

generation forging; crowdsourced manufacturing; and

capacity optimization. Over the last decade manufacturing

jobs in the EU have decreased by 20%. The trend of Smart

Factories is essential to reverse this decrease and for a

European Industrial Renaissance to come true. The trend

emphasises the central importance and the possibilities of

industry for creating jobs and sustainable growth.

Clean tech represents innovative products and services

that: are superior in terms of their performance; reduce

negative ecological impacts; and contribute to the more

productive and responsible use of resources. The four case

studies of this trend concern: Closed-loop waste

management; Circular supply chains; Advanced Reverse

Treatment Technologies; and Energy harvesting. Successful

existing solutions developed by successful companies are

showcased. The potential impact includes for instance the

material savings in European manufacturing which are

estimated to be around 450 billion.

Customer Experience describes the idea of placing

customers at the centre of all considerations prior, duringand after the purchase of products or services. Increased

internet penetration rates provide enterprises with a new

medium through which they can engage and interact with

customers. In the past, enterprises relied heavily on

traditional market research that drew on focus groups and

interviews; however, enterprises seek to better meet the

needs of existing and prospective customers by drawing on

the high volume, variety and velocity of data emanatingfrom consumers online activity. By making modest

improvements in customer experience a hypothetical 100

billion company can gain additional revenues of up to 263

million over a three year period. The four case studies of this

trend concern: Neuro-marketing innovations; Predictive

Analytics; Enhanced customers support; and Customers

incentives.

In a second section the 12 case studies and a selection of

successful companies and their solutions are presented. The

cases show that visions on a future with more jobs, less

waste and more satisfied customers are real, since manysuccessful solutions already exist today, but the trends

should be scaled up in order to increase their full economic

and societal impact.

A third section describes the drivers and obstacles of a

further up-take. The main drivers concern new technologies,

regulation and high and increasing market potential and

awareness of the socio-economic impacts. The main

obstacles are: lack of understanding of the trends and

technologies involved, lacking awareness of the costs and

benefits, the (fear for the) disruptive nature, and the trends-

specific concerns regarding access to funding & skills.

In section 4 the policy context and policy challenges are

described. Many policy domains are influencing the business

innovation trends. At the EU level the many relevant

directives and programmes include those on research and

innovation policy (e.g. Horizon 2020 and COSME), financial

instruments, Entrepreneurship policy and Small Business Act

in support of SMEs, Data protection Regulation, Public

Procurement rules, Competition policy and state-aid rules,

ICT policies and instruments, and Consumer policy.

Subsequently a selection of good practice policies (at EU,

national and regional level) are discussed which couldsupport the scaling up of the successes of the business

innovation trends. Based on the case studies and the


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workshop, recommendations have been formulated in

chapter 6.

Chapter 7 concludes that a commonality in the three trends

is that they represent a more sustainable and systemic view

with circular feed-back-loops compared to the traditional,

linear, short term view on passive market-transactions. Inall the three trends it is not just about passive selling

(exchanging and extracting value), but about co-creation of

value. The creation of value from learning with users

contradicts with the old dictionary definition of consume:

meaning destroy, use up, or waste. Users of solutions

concerning the trends of smart factory, clean tech &

customer experience, continue the value creation process

through use. Generating societal and economic impact from

enabling technologies requires value co-creation from

collaboration and learning with users.

The recommendations are formulated into concrete

recommendations:

Facilitate the development and diffusion of

knowledge to scale up the trends:a first concrete

suggestion in this respect is to develop and diffuse

examples of cross-sector licence agreements which

allow the use of the application in another sector, but

agree not to sell it in the former sector. The second

concrete proposal is to establish a Proof of Concept

Fund in order to accelerate the evidence and trust in

solutions.

Adjust education and skills to scale up theinnovation trends:a concrete recommendation is to

promote pilot plants and learning lab environments

where experts and researchers can experiment, test

and learn with potential SME users and students. A

second recommendation is to support EU scale

mentorship programs with industry.

Develop stable regulatory frameworks:a concreterecommendation is to set up obstacle oriented forums

to solve regulatory issues, involving producers and

users of innovative solutions and regulators, and

possible other stakeholders.

Apply new models to measure socio-economic

impact: methods and indicators should be developed

and applied which allow stakeholders to evaluate the

costs and benefits of the introduction of new

innovative approaches for society, in terms of

economic, social and green impact.

Promote new collaborative approaches: Develop

and promote online community platforms on specific

sub-trends in for instance one of the over 30 clean

tech sub-sectors, which involve innovators, researchers,

users, investors and teachers.

Promote novel approaches to financing

innovation: two concrete recommendations are the

standardisation of regulation and procedures

concerning crowdfunding and the setting up of a Proof

of Concept Fund.


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1.Overview and context of three trendsThe procedure for the identification of new trends andrelevant company cases was based on a thorough review of

business literature and policy documents in order to identify

significant trends with socio-economic relevance.

The identification process for trends and case studies

involved two different approaches: the first one was a top-

down approach in order to identify significant and relevant

trends concerning their macro-level socio-economic impact

(Figure 1). The process involved a review of business

innovation literature and policy documents, an online search

for relevant trends in business-innovation along with the

consideration of current policy and trends.

Figure 1: Criteria used for identification of trends and

selection of case studies

The second was a bottom-up approach based on the

identification at the micro-level of companies which have

brought innovative solutions (products, services or processes)

to the market successfully. A wide range of sources was

used including internal and external company databases,

news and press releases, awards and contests, and industry

reports. Company cases were assessed based on both early

success signals (e.g. press reviews, first fund raisings,

awards, acquisition by an MNC, and technology transfers)

and late success signals (e.g. well performing fund

managers, high growth, initial public offerings (IPOs),

commercial contracts, and new rounds of fundraising).

Based on the identified trends and the pool of identified

company cases, the topics for potential case studies were

defined. This section provides some empirical backgroundinformation and evidence of three trends (Table 1)and their

societal and economic impact.

Table 1: Description of trends

Trend Description

SmartFactories

Smart factories mesh business andproduction processes with one another, drawon IT systems to optimise the use andcapacity of machines, react to productiondefects, and minimise adverse impacts. Assuch, smart factories are a key component of

the fourth industrial revolution and draw uponinnovations in for instance smart processapplications; next generation forging;crowdsourced manufacturing; and capacityoptimisation.

CleanTechnologies

Clean technology, otherwise known as clean

tech, represents innovative products and

services that: are superior in terms of theirperformance; reduce negative ecologicalimpacts; and contribute to the moreproductive and responsible use of resources.

CustomerExperience

Customer Experience describes the idea ofplacing customers at the centre of all

considerations prior, during and after thepurchase of products or services. Increasedinternet penetration rates provide enterpriseswith a new medium through which they canengage and interact with customers.In the past, enterprises relied heavily ontraditional market research that drew onfocus groups and interviews; however,enterprises seek to better meet the needs ofexisting and prospective customers bydrawing on the high volume, variety andvelocity of data emanating from consumers

online activity.

1.1.

Smart factories

Although manufacturing employment has been declining

rapidly over the last decade (Figure 2), the manufacturing

sector still contributes significantly to the European

economy, but an industrial renaissance is urgent. In 2010

about one in ten (9.8%) of all enterprises in the EU27 were

dedicated to manufacturing activities generating 27.1% of

total turnover and employing 22.6% of all people employed.1

These shares of manufacturing in European economies have

1Own calculations using data from Eurostats Structural BusinessStatistics.

case-studies on

3 trends :

1.Smart factories

2.Clean tech

3.Customer

experience

Macro success

criteria :

significant and

relevant socio-

economic impacts

Micro success

criteria :

Innovative and

successful trend

driving / solutions

providing

companies


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been declining over time due to increased competition from

abroad, fragmentation of value chains and a growing

services sector.

Figure 2: EU manufacturing production and

employment (2010=100)

Source: European Competitiveness Report 2013

However, manufacturing still has one of the highest

multiplier effects of all sectors; it is driving technological

innovation and providing skilled and well-paid jobs.2As

stated in the Dutch Smart Industry report,3business services

and other non-industry sectors strongly benefit from

demand from manufacturing industries. For every euro of EU

manufacturing output, 34 cents of input comes from other

supply sectors, so the influence of manufacturing goes far

beyond its direct contribution to GDP and employment.

Moreover, manufacturing disproportionately contributes to

exports, R&D, innovation, and productivity growth.4

Europe's economy cannot survive in a sustainable way

without a strong and profoundly reshaped industrial base.

The communication 'For a European Industrial Renaissance'

(2014) therefore urged Member States to recognise the

central importance of industry for creating jobs and growth.

As pointed out by the 2014 report of the Task Force on

Advanced Manufacturing for Clean Production,5Europe is the

global leader in supplying advanced manufacturing solutions,

but it lags behind in using them. For scaling up the long-term, macro-level (social, green and economic) benefits, it is

important to increase the use of advanced manufacturing in

European factories. In collaborative partnerships with users,

both the supplier and user learn how to develop and deploy

new smart manufacturing solutions.

2Cf. Mazarro, 20123Smart Industry; Dutch industry fit for the future (FME et al. 2014,

p.14);4McKinsey Global Institute (2012).5'Advancing Manufacturing - Advancing Europe' - Report of the TaskForce on Advanced Manufacturing for Clean Production, SWD(2014)120 final.

A smart process application is a new type of process-

centric and content-rich software used for supporting

business activities that are people intensive, highly variable,

loosely structured and subject to frequent change. The new

software category alters the way people create, manage and

interact with business activities by drawing on imported or

embedded data; a platform on which contributors can createcontent; process management for executing each step of the

business activity; document capture, output and

management capabilities; and embedded analytical tools.

When deployed within smart factories, smart process

applications analyse data collected by devices along

production lines to provide meaningful information to

management who, in turn, is able to make well-informed

decisions in complex, dynamic work environments. Smart

Process Applications have a tremendous market potential.

The market for Smart Process Applications is estimated to

reach EUR 20.2 billion by 2015, and to grow at a CompoundAnnual Growth Rate of roughly 18% towards 2018 (Figure

3).

Figure 3: Estimated Smart application processes

market value (in EUR million)

Source: TechNavio6

Next generation forgingis another smart factories trend.

It combines green and economic impact as it involves

integrating energy efficiency and pollution prevention into

the design of its processing systems. In order to do so, it

draws on lighter, stronger, and higher-quality alloys, which

enable forgings to compete with alternative materials; and

computer software that simulates heat-treatment, machinedistortion and design optimisation, thereby enabling forging

processes to predict the microstructure and mechanical

properties of products.

The industry can roughly be broken down into companies

focusing on castings and companies focusing on forgings.

The castings industry is well founded in the European

economy. The European foundry industry for ferrous castings

is the second largest in the world, though far behind China in

6Global Smart Process Application Market 2014-2018, TechNavio

(2013).


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this respect. For non-ferrous castings, however, the European

industry is estimated to be the largest in the world by

production volume.

On the demand side, the automotive industry is the most

important market segment. While iron castings are mostly

used in the automotive industry, steels castings areespecially used in the engineering and valve making

industries. Considering forgings, the European production

market collapsed in 2009 and has been recovering to a pre-

crisis point in 2010-11. There is significant growth potential

in volume due to the general Platform strategy and the

trends of downsizing engines, more Diesel powered cars and

four-wheel driven SUVs.

The smart factory trend also involves examples of open

innovation. Crowdsourced manufacturing is the process

by which manufacturers design products by combining their

patents with the services, ideas or content of the crowd. The

crowds input is typically uploaded onto a platform that is

used by manufacturers to co-design and test products within

a virtual (or real) environment.

The market for crowdsourced manufacturing is potentially

large. The value creation that can be achieved by this trend

stretches all along the manufacturing value chain, from

product development to business support functions and

customer service in a variety of manufacturing sectors, such

as consumer goods and advanced manufacturing, such as

semiconductors, automotive, and aerospace and defence,

By 2017, more than half of consumer goods manufacturerswill receive 75% of their consumer innovation and R&D

capabilities from crowdsourced solutions. According to the

research company Gartner,7consumer goods companies that

employ crowdsourcing in marketing campaigns or new

product development will boost their revenue by 1%

compared tonon-crowdsourced competitorsby 2015. So

crowdsourcing does bring companies a competitive edge,

according to Gartner. Indeed, Gartner sees a massive shift

toward applications of crowdsourcing, enabled by

technology, such as advertising, online communities,

scientific problem solving, internal new product ideas and

consumer-created products.

Capacity optimisation is the process by which

manufacturers avoid the sub-optimum use of their

resources. In order to do so, manufacturers are increasingly

using information and communication technologies (ICT) to

design production plans that consider a factory s logical

process; capacity; time set-up; flexibility; and constraints.

Examples of innovative services supporting the capacity

optimisation of factories include cyber-physical systems and

marketplaces; smart robots and machines; big data analytics;

increased connectivity and virtual industrialisation.

7http://www.gartner.com/newsroom/id/2603215

Experts agree that future production facilities will be much

smarter than todays factories. This intelligence will be made

possible by the use of miniaturised processors, storage units,

sensors, and transmitters that will be embedded in nearly all

conceivable types of machines, unfinished products, and

materials, as well as smart tools and new software for

structuring data flows. All of these innovations will enableproducts and machines to communicate with one another

and exchange commands. In other words, the factories of

the future will optimise and control their manufacturing

processes largely by themselves. However, experts also

agree that it will take a very long time to get to that point.

Still, that doesnt make the trend any less significant for

society. The German federal government has set aside

approximately EUR 200 million to help industry associations,

research institutes, and companies develop an

implementation strategy. The U.S. government also develops

its innovative manufacturing strategy. It plans to provide upto EUR 700 billion in funding for the establishment of a

national network of research institutes and businesses.

Public authorities are responsible for making ubiquitous

broadband networks available, and industry needs to put

data standardisation and transmission protocol systems into

place in a timely manner.

1.2.

Clean technologies

Clean technology, otherwise known as cleantech, refers to

innovative products and services that are superior in terms

of their performance; reduce negative ecological impacts;and contribute to a more productive and responsible use of

resources. The emergence of clean tech as a trend is deeply

embedded in productivity-based purchasing, which facilitates

its broader market economics for enhancing sustainability.

Thus, clean tech differs from the compliance-based

purchasing of environmental tech or green tech, both of

which describe the regulation driven market of the 1970s

and 1980s.

Cleantech is a fast growing market. In 2011 the global value

of cleantech manufacturing reached 198 billion and

although growth has been slowing down, the global value of

the cleantech sector is expected to be between 240 and

290 billion in 2015, close to that of the oil and gas

equipment market.8In 2011 China had the largest cleantech

sector (57 billion) followed by the EU (47 billion) and the

US (37 billion).

Venture capital investment is an indicator of start-up

activities and has declined from above 7 billion in 2011 to

8Van der Slot, A., W. van den Berg (2012), Clean Economy, LivingPlanet The Race to the Top of Global Clean Energy TechnologyManufacturing 2012, a report by Roland Berger StrategyConsultants for WWF.http://www.rolandberger.com/media/pdf/Roland_Berger_WWF_Clean_Economy_20120606.pdf


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less than 5 billion in 2013.9About half of cleantech venture

capital is devoted to energy-related technologies (Figure 4).

Figure 4: Global venture and growth equity investment

in cleantech companies, 2011-2013

Source: Global Cleantech Innovation Index 2014

Innovation performance at country level is measured by the

Global Cleantech Innovation Index which uses data for 15

indicators and captures both inputs to and outputs of

innovation (Parad et al., 2014). A comparison of the index in

201210 and 2014 shows that for most European countries

innovation performance has declined, in particular for

Denmark and Germany (Figure 5).

Figure 5: Cleantech innovation performance

Source: Global Cleantech Innovation Index 2012, Global Cleantech

Innovation Index 2014

9 Parad, M., S. Henningsson, T.A. Currs, R. Youngman (2014), TheGlobal Cleantech Innovation Index 2014 Nurturing tomorrowstransformative entrepreneurs.http://info.cleantech.com/CleantechIndex2014.html

10Knowles, V., S. Henningsson, R. Youngman, A. Faulkner (2012),Coming Clean: The Global Cleantech Innovation Index 2012.http://info.cleantech.com/2012InnovationIndex.html

Closed-loop waste managementrefers to the process by

which waste from one product is used to make another

product. The rise of this business innovation has been

facilitated by clean tech, which has triggered a shift from a

linear production model (Take, Make, Dispose) to a closed -

loop model (Cradle to Cradle).

The clean technologies applied in the closed-loop waste

management use extremely different techniques. As closed-

loop seeks to eliminate waste, the techniques must adapt to

the type of waste. Dealing with metal is not the same as

dealing with coffee. However, whatever sector they are used

in, all these clean technologies share the same objective of

leveraging on waste while not harming the environment.

These technologies are sparking a transition from the linear

model of production and consumption. In the traditional

model, the product life cycle has been characterised by

manufactured goods being created, used and disposed of as

waste. In the long term, it is unlikely that this cradle to

grave approach for products will be sustainable, as

resources become increasingly constrained and threaten

todays linear model economy.

The will to decouple growth from resource constraints has

led to the emergence of innovative waste management

activities, which have contributed to the EUs share of

municipal waste that has been recycled or composted rising

from 18% in 1995 to 42% in 2012.11Similarly, innovative

waste management activities are providing market players

with the opportunity to capitalise on EUR 750 billion of

material savings.12

The term circular supply chain fits within the broader

trend of the circular economy. The concept of the circular

economy is grounded in the study of non-linearity,

particularly observed in living systems. A major insight based

on the study of living organisms or eco-systems is the notion

to optimise systems rather than components. This involves

careful management of material flows, which in the circular

economy are distinguished as either biological or

mechanical. Biological materials are designed to re-enter the

biosphere safely and build natural capital (e.g. bacteria break

down leftover food into compost, used for plant growth).Technical materials are designed to circulate at high quality

within the circular supply chain. They are not meant to enter

the biosphere.

It is argued that repairable objects are becoming

unnecessary due to increased levels of recycling. However,

11Eurostat, 2014, In 2012, 42% of treated municipal waste wasrecycled or composted, Available at:http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/8-25032014-AP/EN/8-25032014-AP-EN.PDF [Accessed on 05 May 2014]

12World Economic Forum, 2014, Towards the circular economy:Accelerating the scale-up across global supply chains, Availableat: http://reports.weforum.org/toward-the-circular-economy-accelerating-the-scale-up-across-global-supply-chains[Accessed on 05 May 2014]

-2.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0

GreeceBulgaria

PolandRomania

TurkeyCzech Republic

SloveniaItaly

SpainPortugalHungaryBelgiumAustriaFrance

NorwayJapan

NetherlandsIreland

GermanySwitzerland

CanadaUK

DenmarkSwedenFinland

Israel

Change to 2012 Cleantech Innovation Index 2014


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most recycling processes result in new materials of a lower

quality and with a limited range of application areas.

The most effective circular supply chain consists of a

combination of various loops. It starts with the small loops

like reuse, enhancement and repair which can be conducted

by consumers themselves. Reuse activities increase theintensity with which each product is used before it reaches

end-of-life. Repair and enhance activities extend a products

life-cycle.

The environmental benefits of circular supply chains are

evident. In addition, circular supply chains (as part of a

nation-wide circular economy) increase the future resource

security of companies and countries. This becomes

increasingly important with rising world population numbers

and scarcer natural resource supplies. Companies and

consumers can save substantial amounts of money by

consuming fewer resources (Figure 6). This might be

substantiated by heavier taxation of resource consumption.

Figure 6: The material savings potential in European

manufacturing per year

Source: Ellen MacArthur Faundation and McKinsey

Next to the financial opportunities, a circular economy has

indirect benefits for business as well. Supply chains are

better managed, companies become less sensitive to price

volatility of resources, and they build a longer and better

relationship with their customers and other supply chain

partners.13

Advanced Reverse Treatment Technologies (ARTTs)

encompasses the processes used to transform wastewater

into a reusable and safe resource. As a part of the clean-

technologies, they intend to lessen the pollution related to

wastewater in the environment. The introduction of clean

technologies offers the possibility to reusing water

indefinitely. The most recent advances in clean technologies

for wastewater processing include: reverse osmosis, which

13 McKinsey, 2013, Circular Economy, Available at:http://www.mckinsey.com/features/circular_economy

uses a membrane for water purification; solid-liquid

separation, which uses filtration or flotation systems;

anaerobic digestion, which sees micro-organisms break down

biodegradable material and create biogas14; and waste-

eating bacteria cultivation, which draws on microbes that

generate electricity by cleaning up nuclear waste and other

toxic metals.15

There are three key benefits emanating from the use of

ARTTs. The first is the reuse of water. For example, in the oil

industry, large quantity of water is used in the extraction

process. On average, one barrel of oil generates 3 to 5

barrels of water. These wastewaters are heavily polluted

with hydrocarbons, solids and other contaminants. ARTTs will

clean these wastewaters and put them back in the loop,

lowering the input of freshwater. Hence, water separated

from oil can be reused in the extraction process over and

over.

The second benefit relates to advanced reverse water

treatment technologies ability to support water preservation,

as increased demand for water, combined with increasing

levels of pollution, is contributing to water becoming an

increasingly scarce resource.

Thirdly, clean technologies can be both energy generators

and energy efficient. Moreover, ARTTs have the potential to

reduce the costs of untreated wastewater. Most economic

costs owe to fishing, tourism and investment for securing

freshwater sources but social costs are also tied to polluted

waters that may be detrimental to the health of people and

wildlife.

Energy harvesting(EH) is the clean tech process by which

minute amounts of energy from one or more naturally-

occurring energy sources are captured and stored. Energy

Harvesting technologies are currently already applied in

everyday products like kinetic wrist watches or bicycle

dynamos which use wheel movement to generate an

electrical current. These applications already existed for a

very long period and are not revolutionary (anymore). In this

case we therefore focus on a new application domain for

energy harvesters, namely as power sources for wireless

sensors.

Energy harvesting applications can help to reduce the global

energy demand, by capturing otherwise lost energy. This is

both beneficial for the environmental and for companies

and households financial performance. Therefore, energy

14American Biogas Council, 2014, What is Anaerobic Digestion?,Available at:https://www.americanbiogascouncil.org/biogas_what.asp[Accessed on 28 April 2014]

15Michigan State University, 2011, Microbes generate electricitywhile cleaning up nuclear waste, Available at:http://msutoday.msu.edu/news/2011/microbes-generate-electricity-while-cleaning-up-nuclear-waste/ [Accessed on 28April 2014]


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harvesting technologies are currently being deployed to

improve the energy efficiency of devices.

In addition, energy harvesting solutions also provide

increased freedom to product designers. Devices can become

ever smaller, as there is no need for a voluminous battery,

and completely wireless. This wireless feature allows energyharvesting applications to power equipment and installations

at remote locations, not connected to the main power grid.

More localised power generation reduces the need for

expensive power distribution grids.

Finally, energy harvesting solutions help to power the minute

devices that are rapidly spreading as a result of trends like

the Internet of Things. The reduced installation and

maintenance cost of energy harvesting applications mean

that wireless networks become economically interesting to

install.

1.3.

Customer experience

Since the development and commercialization of innovations

has become more open, customer experience has become

an increasingly important source of value and innovation.

Economic and social progress not only depends on

technological capabilities but also on organisational,

marketing or design competencies, which means radically

shifting the attention from producing products to delivering

solutions and customer value.16

According to the 10th Consumer Markets Scoreboard

(2014)17 there is an improved performance across all

consumer markets in Europe. This improvement is

particularly marked for goods markets, while services

continue to be the main sources of dissatisfaction. The

markets are ranked by consumers, in an EU-wide survey,

based on 4 components: comparability of offers, trust in

businesses, problems & complaints and satisfaction with

businesses. The EU Consumer Agenda aims to maximise

consumer participation and trust in the market.

Two recent studies underline the growing importance of

customer experience. A study among US consumers18shows

that two-thirds of consumers are willing to spend at least5% more with a company that provides excellent customer

service (and one-fifth even willing to spend at least 20%

more). More than half of consumers will not finalize a

purchase transaction if they experience poor service. For

simple inquiries customers prefer to use companies

16Chesbrough, H. (2011). Open Services Innovation, Rethinking yourbusiness to grow and compete in a new era, Published byJossey-Bass.

17http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm

18Echo (2012), 2012 Global Customer Service Barometer Findingsfor the United States, a research report prepared for AmericanExpress.http://about.americanexpress.com/news/docs/2012x/axp_2012gcsb_us.pdf

websites or email, but for more complex enquiries

consumers prefer to interact with a real person over the

phone or even face-to-face.

A report by the Temkin Group19shows that by making

modest improvements in customer experience, a

hypothetical 100 billion company in the UK can gainadditional revenues of up to 263 million over a three-year

period (Table 2).

Table 2: Increases in revenues due to improved

customer experience

Total (million )

Retailer 263

Credit card user 226

Bank 215

Wireless carrier 201

Computer maker 197

Insurance carrier 145

Source: Temkin (2012)

The market for predictive analytics is expected to grow

strongly at about 33% per year to 21 billion in 2019.20 The

market for business-to-consumer (B2C) e-commerce

purchases is expected to grow more modestly at 14% per

year between 2014 and 2017 to reach more than $2,000

billion in 2017.21

Concerning neuro-marketing innovations, the market of

this customer experience trend is difficult to quantify.

However, according to the European Society for Opinion and

Market Research (ESOMAR), only 1% of the global market

research expenditure is spent on neuro-marketing

(~300 million). According to the GreenBook Research

Industry Trends Report the number of buyers who report

using neuro-marketing has remained steady at around 10%

in almost every poll since 2010. However, each year a higher

percentage of respondents say they are considering using

neuro-marketing at some point in the future (e.g. in 2013 in

total 21%), but when the next survey comes in, actual usage

has not really changed.22

Therefore, in spite of neuro-marketing being at a nascent

stage, it is expected to develop as companies seek to

enhance their competitive advantage. Neuro-marketing may

be further included in wearable smart electronics, whose

market according to Gartner will emerge as a

EUR7.5billion industry by 2016. Thereby, such neuro-

marketing applications and services may create value for

19Temkin, B. (2012), The ROI of Customer Experience AnalysisShows High Correlation Between Customer Experience andLoyalty, Temkin Group. www.oracle.com/us/solutions/customer-experience/roiofcx-temkingroup-1715500.pdf

20Case study 3421Case study 3522 http://issuu.com/researchshare/docs/grit-winter-2013.


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consumers, especially when combined with personal

preferences, while also providing more-detailed information

to retailers for targeting advertisements and promotions.23

Predictive analytics is a rapidly growing field that is

quickly expanding both its range of possible applications as

well as its customer base. It builds upon the mega trend ofbig data, as companies are increasingly embracing the

massive growth of data as a fourth factor of production,

alongside capital, people and materials.

A recent AgilOne Survey showed that European retailers are

not using predictive analytics as much as their US

counterparts but are significantly more advanced in their

application of the technique. Most US-based retailers are

only using predictive models for email, whereas around 50%

of European companies are also using predictive models for

direct mail and call centres.

The World Economic Forums Global Agenda Council on

Emerging Technologies has identified predictive analytics as

one of the 10 key trends in technological change. According

to a recent Research and Markets study, the global advanced

analytics market that covers predictive analytics, statistics

and descriptive data mining is expected to grow from

EUR 5.2 billion in 2014 to EUR 21.7 billion in 2019 (Figure

7). This represents a Compound Annual Growth Rate (CAGR)

of 33.2% from 2014 to 2019.24

Figure 7: Global advanced analytics market growth (in

billion EUR)

Source: Case study 34

Enhance customer support is another field in the

customer experience trend. Over 1 billion digital buyers

have spent more than EUR 900 billion on business-to-consumer (B2C) e-commerce purchases in 2013. Combined,

sales in North America, Asia-Pacific and Western Europe

account for 90% of the worldwide total.25The European e-

commerce industry is clearly dominated by the UK, Germany

and France. These three countries together represents

almost two third of the total European B2C e-commerce

sector of the EU.26

23http://www.gartner.com/newsroom/id/2211115.24 http://www.researchandmarkets.com/reports/2823026/advanced-

analytics-market-big-data-analytics.25 https://www.emarketer.com/Coverage/ConsumersEcommerce.aspx.26ecommerce-europe.eu.

According to Gartners estimations, in 2013, spending on

social software to support sales, marketing and customer

service processes exceeded EUR 750,000 million

worldwide.27Gartner estimates that 35% of all customer

relationship management (CRM) software is today consumed

using Software as a Service (SaaS), a software delivery

model in which the software is centrally hosted on the cloudby another software provider. Gartner expects that figure to

grow to just over 50% by 2020,28reaching a maximum of

80% to 85% by 2025. 29One of the biggest players in the

enhanced customer support field the San Francisco based

company Zendesk that was originally founded in

Copenhagen, Denmark has recently reached a market

capitalisation of nearly EUR 750 million according to Google

finance.30

With over 10 million people contributing to crowdsourcing

activities across the world in 2013,31 customer involvement

activities are a new form of how businesses interact withcustomers breaking with the traditional seller-buyer

relationship. Recent studies have shown that people are

increasingly turning to social media to solve problems and

communicate their complaints. A survey conducted by IAB

and Lightspeed in 201232demonstrates that 44% of adults

use the web to share grievances about productsand 57% of

consumers prefer to search online to solve customer service

issues.

Figure 8: Ranking of online services capability to

influence customer behaviour

Source: Technorati Media 2013 Digital Influence Report

27http://www.gartner.com/newsroom/id/1541415.28 http://www.crmsearch.com/crm-market.php.29 https://www.gartner.com/doc/2679218/gartner-crm-vendor-guide30 http://techcrunch.com/2014/05/16/zendesks-stellar-ipo-and-the-

current-tech-ipo-climate.31 http://www.crowdsourcing.org/editorial/eyekas-francois-petavy-

five-predictions-for-crowdsourcing-in-2014/30116.32 http://wallblog.co.uk/2012/03/16/the-confusing-rise-of-social-

customer-service-infographic.


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Such connections and interactions between costumers and

companies through social media and other digital platforms

are expected to grow in the coming years. The total number

of social media accounts, for instance, is expected to grow

from about 3.1 billion in 2012, to 4.9 billion in 2016.

Besides, the number of social media users is expected to rise

from 1.6 billion users in 2012, to 2.3 billion in 2016.33

Given that final consumption expenditure of households

accounts for 57% of EU GDP it is important that these

markets function well.

1.4.

Conclusion

The trends discussed in this report involve: the use of new

manufacturing processes (Smart Factories), new circular

organizational models concerning material flows (Clean

Tech), and new marketing practices in the case of Customer

Experience.

Although these three trends are identified and analyzed as

independent trends, they are emerging in a common context.

This context is described in earlier trend reports, but also in a

foresight study on manufacturing 34 , and has been

acknowledged by the EU Task Force on Advanced

Manufacturing for Clean Production (2014) as particularly

important for the future of European manufacturing: The

increasing scarcity of resources and the increasing demand

for customized products and services, calls for the

development and deployment of new production

technologies, organizational changes and significant

improvement of market analysis capabilities. Big Data

supported by advanced analytical tools, will enable firms to

better understand and optimise all stages of their value

chains, from design to distribution, including supply chain

management, production processes and marketing.

A commonality in the three trends is that they represent a

more sustainable and systemic view with circular feed-back-

loops compared to the traditional, linear, short term view on

passive market-transactions (Figure 9). In all the three

trends it is not just about passive selling (exchanging and

extracting value), but about co-creation of value. Learning

with users in value chains implies a different role forcustomers. A role that contradicts with the dictionary

definition of consume: meaning destroy, use up, or

waste, since users of (smart factory, cleantech & customer

experience) solutions continue the value creation process

through use.35Generating societal and economic impact

from enabling technologies requires value co-creation from

collaboration and learning with users (Figure 10).

33 http://www.radicati.com/wp/wp-content/uploads/2012/05/Social-

Media-Market-2012-2016-Executive-Summary.pdf.34A Manufacturing Industry Vision 2025, European Commission

(Joint Research Centre) Foresight study (2013)35See Vargo, Maglio & Akaka (2008) on value co-creation

Figure 9: From passive exchange of value to co-

creation of value

Source: Case study 36, PwC Analysis

We can conclude that the three identified business

innovation trends meet the macro level criteria of success in

terms of significant and relevant socio-economic impact,

beyond short term economic benefits. Some current impacts

have been evidenced and based on this evidence some

estimations of the future economic and societal impacts

have been presented.

Figure 10: Co-creation of societal and economic

impact

The economic impacts include amongst others: jobs,

productivity, market growth, sector growth, and increased

revenues. The societal impacts discussed concern for

instance: more jobs, material and energy savings, and

increased customer satisfaction. It is difficult to predict the

future full potential, but without Smart Factories Europe will

continue to lose more jobs, without cleantech we will

continue to produce more waste, and without improving

Customer Experience, companies will lose clients.


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2.Case studies2.1.

Description of case-studies andcompanies

The individual case-studies can briefly be described as

follows:

Smart factory

Smart process applications (Case study 25)

Smart Process Applications are a new type of software that

combining the benefits of process applications and advanced

analytics help businesses and factories manage theirresources, processes and systems. Data collected by devices

across production lines, logistic systems and plant sites are

processed and analysed to provide meaningful information

to decision makers.

They require highly skilled workers to develop the software,

and similarly highly skilled workers to implement the

applications at manufacturing sites and to operate them in a

production environment.

Smart Process Applications offer highly tangible benefits to

manufacturing companies deploying them in their productionprocesses. These include efficiency gains and cost

reductions, faster redevelopment and testing of

manufacturing systems. However, uptake of Smart

Application Processes in manufacturing environments is

hampered by the fact that the benefits that Smart Process

Applications offer is not understood by all potential clients.

Also, complex interactions with existing infrastructure, and

the extent to which the market is ready to adopt a new way

of thinking about manufacturing processes is slowing the

uptake of this innovation.

Company cases: Werusys (DE), Numeca (BE), Intelligent

Sensing Anywhere (PT), Canary Labs (USA).

Next generation forging (Case study 26)

Leading edge technologies are becoming more important

and drive innovation in the forging industry, the

manufacturing process involving the shaping of metal using

localised compressive force. This technological process is

expected to continue for the coming years, when the forging

industry needs to be more energy efficient and

environmentally friendly. In addition, next generation forging

techniques provide numerous benefits to customers.

The forging industry plays an important role in the

manufacturing industry and is also believed to play a key

role in Europe. The castings industry is well founded in theEuropean economy. The non-ferrous casting market is

estimated to even be the largest in the world by production

volume. The forging companies have faced great challenges

in the previous years due to increased competition and

higher energy costs.

Next generation forging technologies address a wide range

of challenges including a higher complexity of castings, more

stringent requirements regarding eco-efficiency,

affordability, the quality of products and delivery condition,

and finally a lack of specialisation and skills in production

facilities.

There are various factors that drive the uptake of the trend

of next generation forging which include environmental

regulation, a need for increasingly more efficient and flexible

manufacturing, and a strong and established customer base.

Factors which negatively impact the uptake of the trend are

the characterisation of the manufacturing industry having a

traditional approach towards technology, the risk for

European forging markets to lose part of their local markets,

and the detachment of European research centres or

departments from part of their end-customers.

Company cases: Simufact Engineering (DE), Voestalpine (NL),Schuler Group (DE), Sheffield Forgemasters International Ltd

(UK).

Crowdsourced manufacturing (Case study 27)

Crowdsourced manufacturing is defined as the process by

which manufacturers complement and expand their

processes with manufacturing capabilities, tools, equipment,

and ideas from a large group of people rather than from

own employees or commissioned suppliers. It includes

various forms of interaction between manufacturers, the

crowd and intermediaries such as crowdsourcing platforms.

The trend is still in its early stage, but todays online

platforms are sophisticated enough to provide substantial

benefits in solving many kinds of problems. The potential for

disruptive impact on cost alone makes early experimentation

worthwhile. More important are the broader implications for

innovation in the extended enterprise.

Crowdsourced manufacturing offers a variety of benefits. It

offers quick access to specialized resources and benefits

from the strength of weak ties of outside idea generation.

It can also lower production cost through better alignment

between consumer needs and product specifications, lessneed for in-house R&D, shorter time to market.


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Crowdsourced manufacturing for public sector goods might

save a lot of tax money this way. The market potential of

crowdsourced manufacturing is estimated to be large and

stretches all along the manufacturing value chain and across

different sectors such as advanced manufacturing and

consumer goods. By 2017, more than half of consumer

goods manufacturers may receive 75% of their consumerinnovation and R&D capabilities from crowdsourced

solutions.

Company cases: Shapeways (NL, USA), Quirky (USA), Hypios

(FR), Vehicleforge.mil by General Electric (USA), eYeka (FR).

First digitally connected toothbrush developed thanks to

ideas from eYeka's crowdsourcing community

Source: eYeka, case study 27

Capacity optimisation (Case study 28)

Capacity optimisation is a relevant trend for all European

companies that have a stake in manufacturing. Not only

does it provide a method to make more efficient use of

materials and energy, thus saving the environment, also it

can function as a catalyst to propel the innovativeness,

efficiency and optimisation of European factories forward.

There is still much to be gained by manufacturing companies

to make use of this trend, especially small and medium

companies in manufacturing, but there are positive signs on

the horizon.

By 2025, 80 to 100% of manufacturing could be using

Internet of Things applications, meaning the machines,

sensors and other connected and communicating to the

internet. This concept of the so-called Industry 4.0 combined

with capacity optimisation software is quickly becoming astandard technology in for example factory floor designing

or production planning. No matter for what scale, capacity

optimisation software allows manufacturers to make more

efficient, speedier and controllable production environments

where materials, processes and people can be managed at

fingertips.

The adoption of capacity optimisation can be accelerated

within the framework of Europe 2020 by providing a

common set of labour laws that make it less risky for

entrepreneurs to hire people abroad for foreign offices. This

initiative could fit within the flexicurity programmealthough more a tenacious standardisation of labour laws

where the interests of entrepreneurs are in balance with

labour security is called for.

Company cases: Quintiq (DE), Signavio (UK), Metaio (NL),

Siemens Electronics Manufacturing (DE).

Clean Technologies

Closed-loop waste management (Case study 29)

Closed-loop waste management refers to the process by

which waste from one product is used to make another

product. The rise of this business innovation has been

facilitated by clean tech, which calls for a shift from a linear

production model (Take, Make, Dispose) to a closed -loop

model (Cradle to Cradle). Hence, this case study lies at the

intersect of the linear and closed-loop models, as it seeks to

explore how companies are creating products and value by

recycling disposed waste.

The clean technologies applied in the closed-loop waste

management use extremely different techniques. However,

whatever the sector that they are used in, all these clean

technologies share the same objective of leveraging on

waste while not harming the environment. The products and

services showcased as examples in the case studies come

from diverse sectors: the textile, the tyre, the new material

and even the food industries.

These technologies are sparking a transition from the linear

model of production and consumption that has shaped the

global economy for the past 150 years or so. In thetraditional model, the product life cycle has been

characterised by manufactured goods being created, used

and disposed of as waste. In the long term, it is unlikely that

this cradle to grave approach for products will be

sustainable, as resources become increasingly constrained

and threaten todays linear model economy.

Company cases: Pectcof (NL), WornAgain (UK),

SecondLifElectronics (BG), Cycle4Green (FI), ALR Innovations

(IE), Alucha Technologies (ES)

Circular supply chains (Case study 30)

A circular supply chain restores, regenerates and reuses the

resources it already has at its disposal. In order to do so,

manufacturers aim to eliminate waste from their supply

chain; differentiate between consumable and durable

materials; and use renewable energy sources throughout the

supply chain.

Examples of circular supply chain activities include: product

designers working with re-processors to develop products

that can be easily disassembled and reused; retailers and

brand owners investing in waste collection, treatment and/or

reprocessing facilities; and manufacturers working with


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energy management companies and developers to deliver

renewable energy on-site.

Company cases: Sugru by FormFormForm (UK), StayGreenOil

(USA), Dutch aWEARness (NL), The Restart Project (UK).

Dutch aWEARness supply chain for its recyclable polyestercalled Reternity. Worn out garments are collected, shredded

and turned into new yarns and new fabric without quality

loss

Advanced Reverse Treatment Technologies (ARTTs)(Case study 31)

Advanced reverse treatment technologies are used in the

process of turning wastewater into a reusable and safe

resource; thereby reducing the negative impact wastewater

can have on the environment. The need to develop these

technologies has been triggered by increased urbanisation

and rising populations that place an environmental strain on

water supply. Advanced reverse treatment technologies aim

to alleviate this environmental strain by developing practical

and cost-effective solutions. For instance, companies have

developed a range of technologies for dealing with the

problem of sewage sludge, including: anaerobic digestion;

the cultivation of waste-eating microbes and algae; reverse

osmosis; and the deployment of solid/liquid separator.

ARTTs are applied in several sectors, including the

desalinisation, oil-water separation, and sewage treatment

markets. In all these sectors, the role played by the ARTTs is

crucial due to the tightening of regulations. The demand for

such solutions is also constantly increasing.

Company cases: Apateq (LU), Akvolution (DE), Watreco (SV),

Organica Water (HU), Bluetector (CH)

Energy harvesting (Case study 32)

Energy harvesting (EH) is the process by which minute

amounts of energy from one or more of naturally-occurring

energy sources are captured and stored. Energy types most

suited to EH include: mechanical energy (e.g. by recovering

excess pressure from water mains); thermal energy (e.g.waste energy from furnaces, heaters, and friction sources);

and light energy (e.g. captured from sunlight or room light

via photo sensors, photo diodes, or solar panels). The most

promising technologies for harvesting energy from these

sources are piezoelectric materials (for mechanical energy)

and thermoelectric/pyroelectric materials (for thermal

energy).

Energy harvesting technology rarely operates in isolation. A

bike dynamo does not provide much benefit without the

lamp it is connected to. The same goes for wireless

networks. Key components in such a system include an

energy converter (the harvester), a low-power energy

management controller, a sensor or other measurement

device, and an RF transmitter.

Company cases: Pavegen (UK), EnOcean (DE), Micropelt (DE),

Voltree (USA)

Customer experience

Neuro-marketing innovations (Case study 33)

Neuro-marketing draws on neuro-scientific technologies to

understand the subconscious reasoning and behaviour ofcustomers. It measures brain and body signals instead of, or

along with, traditional self-reporting tools like surveys or

interviews. It provides new ways to enhance traditional

marketing instruments by using new types of user-

interfaces, applications and software. These innovative

methods are leading to the creation of new types of user-

interfaces, applications and software that enable companies

to read the customers mind and tailor marketing practices,

products and services accordingly.

Company cases: Neurensics (NL), SensoMotoric Instruments

(DE), Neurosense (UK), Synetiq (HU), The Eye Tribe (DK) andEmotion Explorer Lab (ES).

Predictive analytics (Case study 34)

Predictive analytics review the data patterns of an array of

variables in order to make accurate forecasts. Although it

may not be able to predict future events with full certainty,

the exploitation of online data facilitates the digital profiling

of customers by projecting their future behaviour and needs.

This enables companies to offer targeted products or

services in real-time, along with timely customer support.

They also enable companies to uncover and exploit patterns

in historical data in order to identify both risks and

opportunities ahead. They allow companies to use data to


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improve their business performance by differentiating their

offerings, uncovering new opportunities and minimising their

risk exposure. Predictive analytics thus have the potential to

reshape marketing approaches, as they opens up an entirely

new way of interacting and engaging with the customer

Company cases: Rapid Miner (DE), Viscovery (AT), Big DataScoring (EE), FutureLytics (CZ) and Saberr (UK).

FutureLytics business architecture

Enhanced customer support (Case study 35)

Enhanced customer support refers to the customised

provision of support services, no matter the customer s

location of nor the time of day. The perceived quality of

support depends on the accessibility of companies, as well

as the immediacy and accuracy of their response.

With the shift from bricks to clicks, i.e. the transition from

physical shops with limited opening hours to websites that

are accessible 24/7, customers are now demanding

immediate and targeted support. To cope with this challenge,companies are developing services that promise fast and

cheap support directly to the customers couch, e.g. by

offering support in the form of live chats, mobile

applications or social media channels. In addition, enterprises

are adapting their escalation procedures by serving

customers first through FAQ webpages or moderated fora

and then, if necessary, pointing them in the direction of

personal support.

Company cases: Brainsins (ES), Qubit (UK), Inbenta (ES),

Deskero (UK), Brand Embassy (CZ) and Whisbi (ES).

Whisbis tool for video assistance

Customer incentives (Case study 36)

Customer incentives and involvement techniques are

increasingly being used to facilitate product development

and increase market adoption. Companies are incentivising

users to become involved in the development process of

their products by inviting them to test and experiencespecific innovative technologies. Through online communities

customers can share opinions on their use of a new

technology or service, rate products and put forward ideas

for improvement.

Involving customers in the development phase can also

facilitate the increased uptake of new products. By building

larger user bases, companies draw on customers to spread

products to other potential customers, resulting in viral

growth effects as referrals are a strong endorsement for

products. Incentivising and involving customers is thus about

fostering user loyalty and pro-activity in order to reduce the

cost per user acquisition (CPA) for new products and services.

Company cases: Adpoints (UK), EveKa (FR), KBHFF (DK),

Logograb (CH), Sampleo (FR), Staffino (SK).

2.2.

Examples of companies, innovativesolutions and success signals

EYekas online contest platform

Source: eYeka: case study 27

This section provides a selection of examples from case

study companies. The company eYeka is an example from

the Smart Factories trend. It enables manufacturers to

directly involve their customers into the design of new

products. The ideas are developed by a community of

250,000 creative consumers in 154 countries. Other

examples are described inTable 3 on page16.


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Table 3: Examples of solutions providing companies

Company Business innovation Signals of success

Smart Factories

Numeca (BE) A solution that allows for vast amounts ofhigh-speed virtual testing of manufacturingset-ups.

-

Numecasproducts and services are positively reviewed onmultiple websites, and they have excellent relations bothwith manufacturing companies that want to test newmanufacturing system layouts and with the academiccommunity that invites them to their research consortia.

Intelligent SensingAnywhere (PT)

Monitoring solutions that allow companies tominimise costs and maximise efficiencythroughout their distribution chain.

- ISA has established a high-class product portfolio that isaimed both at businesses that look to optimise the energyand materials costs of their plants and locations, and atutilities that with to optimise their logistical systems.

Quintiq (DE) Quintiqs unique value proposition lies inbundling all the components required to plan,schedule and optimise processes for anypotential business model on a single softwareplatform. The flexible core architectureenables users to solve their industry-specific

planning and optimisation issues.

- Company has expanded locations within Europe (9 offices)and outside Europe, from South-Korea to Australia, fromSingapore to the United States.

- The company is growing rapidly since its inception in 1997:more than 12,000 people in 80 countries use Quintiq on adaily basis.

-

The coming years the company is looking to double in size to1,400 employees.

Signavio (UK) The Signavio Process Editor allows users toshare process models and invite others tocomment on diagrams, by:Visualising, discussing and documenting

processes;Make process descriptions and related SOPsaccessible in a process portal;Integrating all employees in continuous

process improvement.

- Since the foundation in 2009, the company has served over400 customers from around the globe.

- International offices situated in Berlin, Singapore and theUnited States.

- Signavio is recognised by Gartner as Cool Vendor 2014 andregarded as industry leader in several markets.

Shapeways (NL) A printing marketplace and service start-upcompany. Users design and upload 3Dprintable files, and Shapeways prints the

objects for them or others. Users can haveobjects printed from a variety of materials,including food-safe ceramics, in a variety oflocations.

- Over 90 employees.- Spin-out of the lifestyle incubator of Royal Philips

Electronics.

-

A community of 300,000 members and three millionproducts in its online catalogue.- 10,000 shops selling designs and items. Each month, the

company receives prints and ships 60,000 orders tocustomers all over the world.

Hypios (FR) Hypios uses software that allows to findexperts for specific challenges on the worldwide web. This ensures that problems are notbroadcast to the entire world, but narrowcast

to relevant expertise in a pre-selected range ofscientific discipline. This helps maximize thenumber of relevant solutions by applyingintelligent crowdsourcing.

- Draws from a network of over 950,000 experts across theworld, to solve R&D problems for global companies since2008.

eYeka (FR) eYeka enables manufacturers to directlyinvolve their customers into the design of new

products. By leveraging creative ideasdeveloped by a community of 250,000creative individuals in 154 countries.

- 40 leading brands such as P&G, Kraft, Coca-Cola, Unilever,Nestle, Danone, Hyundai, Citroen and Microsoft are alreadytapping into eYekas community.

SheffieldForgemastersInternational Ltd (UK)

SFIL specialises in a broad range of heavysteel forgings and steel castings as well asstocking steel ingot and bar.

- Sheffield Forgemasters International Ltd (SFIL) is the largestindependently owned Forgemaster company and one of themain employers in South Yorkshire.

- Despite a steady decline in steel manufacture in the UK overthe past few decades, SFIL has continued to grow and is nowa world leader in heavy steel castings and steel forgings.

- Award-winning apprenticeship programme.


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Clean Technologies

Pectcof (NL) Unlock the potential of the coffee pulp as asource of bio based materials.

- Winner of the Dutch round of 2013 Venture Competition.- 2 GreenTEC Awards nominations.

-

Finalist in the Venture Challenge - Spring 2013.- Presented at TEDxBinnenhof 2014.- Visited in March 2013 by the Dutch Minister of Economy.

SecondLifElectronics(BG)

Collect, refurbish and reuse mobile phones,portable electronics and their accessories fromthe European markets to other markets.

- Starting partnership with one of the biggest Bulgarianelectronics retailers.

- Currently expanding in Romania, Albania, Italy, Spain, Turkeyand Greece.

Cycle4Green (FI) Developed an innovative method forprocessing silicone-coated waste papers. Itallows the removal of silicone from paperfibers and to reuse it in the production ofrecycled fine and specialty papers.

- Featured in Packaging Magazine Europe, in RecyclingMagazine.

- Major end-clients in the Consumer Packaged Goods (e.g.Nivea) across Europe (UK, Germany, Austria).

ALR Innovations (IE) Developed a state of the art recyclingtechnology which through a fully automated

process removes the hazardous wastematerials from LCD flat screen panels andmonitors.

- Young Entrepreneur of the Year 2010.- Frederick A Krehbiel II Innovation Medal 2010.

-

Outstanding Young Person of the Year 2011 for the CEO.- Best High Growth Company at InterTradeIreland 2011-2012.- Limerick Enterprise Acceleration Platform award 2012.

Alucha Technologies(ES)

Owns a unique technology that separatesaluminium from plastic. It recovers cleanaluminium that can be re-used. Further, plasticis also converted into fuels.

- Finalist in the BMW Innovations Award.- Finalist in the Barcelona Entrepreneurs Awards.- Most Innovative Initiative (Diputaci de Barcelona).- Cover page & lead article in "Recycling International".

Dutch aWEARness(NL)

Dutch aWEARness is a young and innovativetextile company guided by the principles ofsustainable entrepreneurship. It has developedenvironmentally friendly polyester for clothingmanufacturing and offers its clothingaccessibility based. The company.

- Part of the EcoProFabrics programme, a two-year pilotproject within the EU Eco Innovation programme. The EC hasinvested nearly 2 million in the project, which is initially

targeting the Netherlands, Belgium, France, Portugal,Germany and the UK.

- Almost 20 Dutch companies have expressed interest,including a Dutch refrigerator company.

Apateq (LU) Oil-water separation using membranes that donot clog rapidly.

-

Red Herring 2014 winner.- Visited by the Luxembourg Minister of the Economy.

Extensive media coverage.

Watreco (SW) Using biomimetic, the firm developed a vortexgenerator technology for water treatment.

- Cleantech Company of the Year 2009.- Extensive academic literature.- Used in famous hockey league such as KHL (Russia),

SHL(Sweden), FHL (Finland) and at the Ice Hockey WorldChampionship 2013.

Organica Water (HU) Build and operate biological wastewatertreatment plants, implementing its Fixed-BedBiofilm Activated Sludge (FBAS) technology.

- Named First Cleantech company in Europe and Israel in2013.

- Water and Energy Exchange (WEX) Innovation Award.- Worldwide customer base: Europe, Asia, America.- Successful Series B financing.

Customer experience

Neurosense (UK) FMRI and biometric measures as well as onlineresponse time tools that measuresubconscious or implicit customer reactions inless than a second.

- Large corporates, e.g. BBC, Coca Cola, Ford Motors, Johnson& Johnson, L'Oreal, McDonalds, Procter & Gamble, Unilever.

Synetiq (HU) Crowd sourced neuro-marketing platform,where international community of test personsis equipped with portable EEG headsets toanalyse their brain activity and reactions tomarketing stimuli.

- Participation at Startup Sauna accelerator programme (FI).

The Eye Tribe (DK) Low-cost eye-tracking device (USD 99) toregister eye movement. Software can be usedto analyse customers behaviour.

- EUR 1.3 million seed/angel funding and EUR 1.7 milliongrant from Danish National Advanced TechnologyFoundation. Voted most Innovative Company at SXSWAccelerator Competition.


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Rapid Miner (DE) Analytics platforms, e.g. for customersegmentation, credit ratings, resourceplanning, and asset maintenance.

- In 2014, positioned by Gartner in the Leaders quadrant ofGartner Magic Quadrant for Advanced Analytics Platforms.

Viscovery (AT) Platform for predictive modelling and

explorative data mining with focus onvisualising predictive models.

- In 2008, positioned by Gartner in the Magic Quadrant for

Customer Data-Mining Applications. Acquired in 2007 byBiomax Group.

Big Data Scoring (EE) Credit scoring solutions using data from socialmedia and other big data sources.

- Finalists at the CODE_n14 worlds largest IT trade showCeBIT 2014. Participants at the Web Summit 2013 as a partof the Alpha Program.

FutureLytics (CZ) Analytical platform using predictive analyticsto improve marketing campaigns.

- Media coverage: Forbes, Financial Times, CNN, TechCrunch.Cooperation with Gartner and Google.

BrainSins (ES) Plugin that improves cross- and up-selling,offering more personalised and customisablerecommendations.

- In 2014, awarded Gartner 'Cool Vendor' status. Receivedgovernment grants in Spain. Offices in Madrid, Barcelona,London and San Francisco.

Qubit (UK) Machine learning, statistical analysis and highperformance computing to optimise customerinsights and allow personalisation on e-

commerce websites.

- EUR 6.5 million venture capital, out of whichEUR 5.5 million from Balderton Capital in 2012.

Whisbi (ES) Video agent technology solution to help clientssell products and services via their website.

- In 2011, awarded Gartner 'Cool Vendor' status. Listed byWired Magazine as one of the hottest 100 European start-ups.

EyeKa (FR) Crowdsourcing platform connecting creativeindividuals with brands to boost their return onmarketing expenditure. Enables people toaccept a business challenge (animation,creative writing, video, graphic design, labeland packaging) and propose an innovativesolution to companies.

- Winner of 2012 Co-Creation Award.

Staffino (SK) Mobile application enabling consumers to givedirect feedbacks on the quality of the serviceoffered by companies employees.

- After 6 month business activity already entered multipleforeign markets.


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3.Key innovation drivers and obstaclesIn order to propose applicable policy options for scaling up

the successes of the trends, it is important to understand thevarious drivers and barriers faced by the trend-driving

companies and their clients.

3.1.

Smart factories

The most significant drivers identified in the case studies on

smart factories are listed inTable 4.

Table 4: Main drivers and obstacles for smart

factories

Smart Factories

Drivers

Smart ProcessApplication

Developments in ICT, connectivity and mobiledevices.Energy prices and environmental regulation.Shift toward sustainable manufacturing.

CapacityOptimisation

Connection to academics in the early stagesof the company.Early traction at world-class businesses.

CrowdsourcedManufacturing

Emergence of 3D-printing or additivemanufacturing.Growing use of social technologies.

Next Generation-

Forging

Complex of modelling software cater to

specific need of end-users.Continuous innovation is key to keep acompetitive edge.Market driven approach that goes beyond thetraditional boundaries of forging.

Obstacles

Smart ProcessApplication

Limited access to finance - especially forprototyping and early-market penetrationsstages.Difficulty in attracting skilled engineers.Waiting period attached to grant proposals.Bureaucracy too heavy for SMEs.

Capacity

Optimisation

Sourcing key technical talent.

Discrepancies in labour legislation across theEuropean Union.

CrowdsourcedManufacturing

Attracting and managing an onlinecommunity.Limits on traditional human resourcesactivities such as job training.Security of intellectual property.

Next Generation-Forging

Shortages in skills and competence deficits.Complex modelling software are more difficultto develop, employ and adjust.Access to globally competitive prices formaterials and energy.Access to finance for up-scaling.

3.2.

Clean technologiesThe most significant drivers identified in the case studies on

clean technologies are listed inTable 5.

Table 5: Main drivers and obstacles for clean

technologies

Clean Technologies

Drivers

Waste Management Directives on environment, packaging orelectronics are a catalyst.

Networking support of the KICs.

Circular SupplyChain

Scarcity of resources and rise of raw materialsprices.Worldwide societal changes (rise of middleclass, awareness toward climate change).

Reverse TreatmentTechnologies

Rising awareness of environmental issuesSupporting initiatives and collaboration.

Energy Harvesting Technical development like the Internet ofThings and Big Data.Increasing scarcity of resources and volatilemarkets.The rate of climate change and its impact onsociety.

Obstacles

Waste Management Outdated directives also hinder thedevelopment.Funding schemes too slow.Difficulty in finding the right workforce withthe relevant skillset (engineering & business).

Circular SupplyChain

Linear technology deeply rooted in theeconomy.Lack of sufficient differentiation betweenrecycling and reuse.

Reverse TreatmentTechnologies

Long-term projects with high working capitalConservative industry requires referencesportfolio.Requirements for public procurement areoften too tough for SMEs.Funding and grants support schemes:administrative burden and strategicconstraints.

Energy Harvesting Standards for interoperability between energyharvesters and application components.Not yet technically feasible for all applicationsdomains.


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3.3.

Customer experience

The most significant drivers identified in the case studies on

customer experience are listed inTable 6.

Table 6: Main drivers and obstacles for customer

experience

Costumer Experience

Drivers

Neuro MarketingInnovations

Deeper understanding of customers feelings.Cost saving opportunity compared to traditionalmarket research.

Predictive Analysis Legislation on data protection in EU can be acompetitive advantage.Development of Big data.

EnhancedCustomer Support

Ease to internationalise within EU.

CustomerIncentives

Business incubators supporting the growth ofSMEs.Emergence of a collaborative relationship:creation of online communities.

Obstacles

Neuro MarketingInnovations

Lack of credibility and controversy surroundingthis activity.Access to funding: transparency, banks tooconservative.Internationalisation: legal and tax challenges.

Costumer Experience

Predictive Analysis Difficult for EU start-ups to find earlyadopters.Access to finance too hard: SMEs prefer organicgrowth.Lack of time, skills and know-how to draft longgrants schemes reports.

Lack of skills for developing complex softwareand analyse large datasets.

EnhancedCustomer Support

Set-up of new enterprises was ratherburdensome and slow in some EU countries.Data protection law would not be up-to-date.Financing intangible assets and new businessmodels (banks are conservative, privateinvestors aim short-term profits.EU programmes: complicated to find theinformation.

CustomerIncentives

Definition of innovation too narrow.Financing gap for c

03 smart factories clean tech and customer experience

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