presentation done by elizabeth waelbroeck rocha
TRANSCRIPT
© BIPE 2010
December 2, 2010
Challenges from the environment and their effect on clusters
Élisabeth Waelbroeck-RochaPartner & Vice President, BIPE
2© BIPE 2010 - December 2, 2010
Challenges from the environment and their effect on clusters
This powerpoint document constitutes the visual support of the presentation made at the TCI Annual Conference in Delhi, in December 2010.
It cannot be quoted.
4© BIPE 2010 - December 2, 2010
Four main drivers will impact the futureof clusters
Demography Economy
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Four main drivers will impact the futureof clusters
Demography
Technology
Economy
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Four main drivers will impact the futureof clusters
Demography
Environment Technology
Economy
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These four drivers are interdependent
Demography
Environment Technology
Economy
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1. Demography, not only the economy, will change the way businesses operate
Demographic growth is highly variable across regions
Continued urbanisation
Reduced household size
Ageing
Demography
Environment Technology
Economy
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Change in population size, in millions
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By 2050, North America and Europe will merely represent 12,5% of the world’s population (down from 17% in 2000)
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Urbanisation will continue: this causes specific problems that have to be dealt with
By 2020, 60 cities will have more than 5 million inhabitants, and13 will have more than 10 million
Source : ONU – World Urbanization Prospects
Cities with more than 10 million inhabitants
Cities with more than 5 million inhabitants
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Other consequences of these demographic developments include:
Ageing in Europe, and a reduction in the population of working age, unless migration flows break from past trends
Strong rise in demand for food products, concentrated in certain regions that do not all have a high agricultural growth potential – or whose potential will be curtailed by climate change
Strong rise in energy consumption4 For heating and cooking4 For lighting4 For transportation
Ever increasing demand for clean water
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2. On the economic front, the recent crisis will have long lasting effects on the world economy
Volatility is there to stay
Diversification strategies of companies
Emphasis on flexibility
Reduced role of government
Demography
Environment Technology
Economy
Risks of bubbles
Risk aversion / difficult access to financing for SMEs
Continued strong competition
Business cycles will be deeper, creating market disruptions
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Why volatility ?
A result of:4The massive externalisation strategies
� Production / delivery volumes can be adjusted at short notice
4Zero stock policies4The strategies of dominant players on resources markets
� Dual markets will emerge, characterized by different prices depending on the client …
4Reduced government’ capacity to offset turnarounds in business cycles
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2. On the economic front, the recent crisis will have long lasting effects on the world economy
Volatility is there to stay
Diversification strategies of companies
Emphasis on flexibility
Reduced role of government
Demography
Environment Technology
Economy
Risks of bubbles
Risk aversion / difficult access to financing for SMEs
Continued strong competition
Business cycles will be deeper, creating market disruptions
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Demographic developments will impact the economy
Demography
Environment Technology
Economy
Development of complex markets
Growth in services sectors
è In addition to the above changes, there will be growing opposition between mature / growing markets
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3. On the technology front, several breakthrough innovations could change the way we work, produce and consume
New promising fields:
Biotechnologies
Nanotechnologies
Vehicle propulsion
Laser and optics
Etc …
Demography
Environment Technology
Economy
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The speed of change is evolving. Product innovation cycles are shorter and deeper
We are in a process innovation phase, with low product innovation
Product cycles
2010 ?
Demography
Environment Technology
Economy
Process cycles
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Demographic changes and the economy also impact the future of technology – and vice versa
Demography
Environment Technology
Economy
Innovation =new players
new processes
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4. Environmental changes are underway
New scarce resources:Raw materials, energyFoodSpaceTimeSilence / quietnessDarkness in urban areas(clean) WaterPrivacyComfort
Demography
Environment Technology
Economy
People will accept to pay higher prices to have access to the scarce resources
This will change the relative price of goods / services
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Demographic changes are speeding up changes in the environment
Demography
Environment Technology
Economy
Anthropic pressures on environment
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Between 2010 and 2030, world primary energy demand will grow by more than 40%
Source: IEA Energy Outlook 2010
Source: IEA Energy Outlook 2010
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Given the oil peak, coal fired electricity generation will have to grow – with major consequences on the environment – not on prices
Source: IEA Energy Outlook 2010
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Greenhouse gas emissions accelerate climate change and will have a major impact on agriculture
Source: European Commission, PESETA model results
Changes in average mean precipitation and temperature between 2011-2040, from the 1961-1990 period
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Again, economic factors and changes in the environment are linked
Demography
Environment Technology
Economy
Anthropic pressures on environment
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The same holds for technology
Demography
Environment Technology
Economy
Anthropic pressures on environment
Efficiency
search
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Impact on clusters
� Urbanisation
� Development of scarcity
� Emergence of complex markets
� Reduced role of government
� Increased competition, low price
� Localized pressures on resources� Cost increases� Internalization of external costs� Change in values
� New value chains, defined by market rather than by product
� Increased delegation, development of PPP
� New business models, new price setting mechanisms4Change in the firms’ scope of
activity, development of multiproduct companies
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Impact on clusters
� Urbanisation
� Development of scarcity
� Emergence of complex markets
� Reduced role of government
� Increased competition, low price
� Localized pressures on resources
� Cost increases� Internalization of external
costs� Change in values
� New business models, new pricing schemes
� New value chains, defined by market rather than by product
� Increased delegation, development of PPP
� New business models, new price setting mechanisms4Change in the firms’
scope of activity, development of multiproduct companies
� Location of clusters
� Ressouce efficiency of clusters
� Scarcity niches develop before scarcity spreads throughout the economy
� New borders of clusters
� New stakeholders in cluster
� Relocation closer to end client
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Impact on clusters
�Production starts after orders have been confirmed / paid
�Increasingly customized products
�Co-conception, value chains built from the end-market upwards, starting from the recycling stage
�Increasingly difficult financing of SMEs
�Zero stocks
�Need to reduce delivery time
�Involvement of the final consumer in the value chain
�Innovation in financial engineering
�New stakeholders in cluster, new cluster frontiers
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Impact on clusters
� Zero stocks
� Need to reduce delivery time
� Involvement of the final consumer in the value chain
� Innovation in financial engineering
� Internalization of external costs
� Change in values� New business
models, new pricing schemes
� Process optimisation
� Relocation
� Cluster = living lab� Innovation zones
� New stakeholders in cluster
� New frontiers for clusters
� Production starts after orders have been confirmed / paid
� Increasingly customized products
� Co-conception, value chains built from the end-market upwards, starting from the recycling stage
� Increasingly difficult financing of SMEs
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Consequences for cluster initiatives and cluster managers
Need to internalize environmental issues:4 Take into account local conditions (assets and weaknesses)4 Pay attention to the location of activities / relocate ?4 Adapt the cluster and companies’ organisation4 Choice of process4 Choice of market
(Continuously) Review the cluster’s frontiers4 Broaden the scope ?4 Prepare the « transformation » stage in the cluster life cycle4 Focus on services ?
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Consequences for cluster initiatives
Review the clusters’ stakeholders4 Open to new players of tomorrow (insurance, etc.)4 Review the roles and responsibilities of stakeholders in clusters
� Means of governments / regions will shrink� è find new leaders for the initiatives
Interact with individual consumers4 Reach outside the cluster to the final consumer – wherever
he/she is – in order to adapt to permanently evolving customer needs
4 Use local residents to create living labs