European Economic and Social Committee New trends in Globalisation in Shipbuilding and Marine Supplies - conclusions and recommendations - European Economic and Social Committee Brussels, 24 October 2017 DG GROW I4 Agnieszka Montoya-Iwanczuk

Problems identified => recommendations Framework conditions Markets Cooperation in the supply chain Innovation and RTD

Heterogenuos industry structure: few big, very many small companies Framework conditions Strengthen cluster structures and activities & involve industry associations Heterogenuos industry structure: few big, very many small companies

Use more European Structural Funds Framework conditions Use more European Structural Funds Improve alignment of RTD measures with the continuous development of regulations at IMO Access to finance

Framework conditions Reluctant political support Establish a strong maritime association as a partner and lobbyist Re-establish European Maritime Industries Forum, incl. European Maritime Co-ordinator Reluctant political support Accelerated strategic expansion of the Asian industry Increasing activities of strategic investors from North America and Asia Subsidies in competing countries

Harmonise framework conditions on all levels Comparably high requirements (e.g. environmental)

Markets Create and integrate maritime sectoral agreements in trade agreements with third countries Ensure transparency of regulations and government measures in third countries Concentration on some high-end market products creates weaknesses in flexibility and ability to serve other market segments

Trend towards standard vessels – less sophisticated equipment Markets Support activities in segments which could help EU players to become competitive again European repair/conversion shipyards and suppliers should team up for the development of tailored conversion solutions Concentration on some high-end market products creates weaknesses in flexibility and ability to serve other market segments Trend towards standard vessels – less sophisticated equipment

Form technically oriented joint industry groups on European level Markets Form technically oriented joint industry groups on European level Support system-building by strengthening supplier cooperation and management Concentration on some high-end market products creates weaknesses in flexibility and ability to serve other market segments Although good general market position, maritime products often have a minor importance in bigger industrial companies’ product portfolios Declining European shipbuilding industry will lead to further knowledge drain, development partners will disappear

Ensure market access and keep close contacts with the final customers Markets Support activities in segments which could help EU players to become competitive again Ensure market access and keep close contacts with the final customers European supplier market is very fragmented, especially in Southern Europe with many micro-firms Asian competitors (especially China) establish strategies to conquer also high-end shipbuilding markets European home markets continue to shrink for commodity ships, i.e. reference markets for marine supplies from Europe for those ships disappear

Markets Create and integrate maritime sectoral agreements in trade agreements with third countries Strongly oppose the possibilities for governments to introduce so-called local content requirements Ensure transparency of regulations and government measures in third countries Support activities in segments which could help EU players to become competitive again “One-of-a-kind” shipbuilding compared to series in Asia also provide negative scale effects for suppliers (1/2)

Form technically oriented joint industry groups on European level Markets Form technically oriented joint industry groups on European level Support system-building by strengthening of supplier cooperation and management European repair/conversion shipyards and suppliers should team up for the development of tailored conversion solutions Consolidate position in blue growth markets & establish strategic partnerships with their representatives “One-of-a-kind” shipbuilding compared to series in Asia also provide negative scale effects for suppliers (2/2)

Markets Create and integrate maritime sectoral agreements in trade agreements with third countries Strongly oppose the possibilities for governments to introduce so-called local content requirements Ensure transparency of regulations and government measures in third countries New protectionism in national policies may increase local content requirements as seen in Asian strategies or also in Brazil in the offshore sector

Cooperation in the supply chain Strengthen regional Industry 4.0 related capabilities Support and encourage active maritime clusters to be more active Use European Regional and Structural Development Fund No consequent supply–chain management

Cooperation in the supply chain Discuss programmes to improve the role of SMEs in the supply chain, for example by generating exit strategies and helping them participate in RTD by using SME funding regimes Use European Regional and Structural Development Fund Supply chain is fragmented and does not benefit from a coherent benchmarking regime

Innovation and RTD De-centralised RDI and comparable level of funding Open programmes to develop/improve smart skills and aspects of enabling technologies to maritime needs per se Elaborate better the potential of blue growth markets De-centralised RDI and comparable level of funding

Innovation and RTD De-centralised RDI and comparable level of funding Think about a European maritime research area, where also regional/structural funds could be employed Include maritime related strategic subjects in the 9th FP Rethink and redevelop the concept of a large PPP Improve integration between Horizon 2020 KET and the initiatives within the Transport programme De-centralised RDI and comparable level of funding Limited investment capital available for innovation and research Competing (Asian) countries begin to invest more heavily in RDI – technological leadership is challenged

Innovation and RTD Avoid re-focusing on low TRLs Support and enhance the role of first-movers and SMEs Create possibilities for cross-fertilisation between civil and military technologies Closer cooperation between academic work and industrial stakeholders Extend instruments like fast Track to Innovation Competing (Asian) countries begin to invest more heavily in RDI – technological leadership is challenged (3/4)

Innovation and RTD Focus on particular ship systems (e.g. propulsion systems based networks, HVAC systems, virtual and augmented realuty etc.) Strengthen particular research topics (e.g. deep sea mining, underwater technologies etc.) Product related research difficult, because one-off products (prototypes) and RDI must be synchronised with the very fast pace of delivery-time to the market

Engineering work not regarded as research as in other industries Innovation and RTD Dismiss the old image of shipbuilders by regarding them as system integrators Engineering work not regarded as research as in other industries

Risk averse behaviour of customers Innovation and RTD Consider building of digital maritime infrastructures, e.g. broadband communication coverage of major sea routes Risk averse behaviour of customers

Source: Wikimedia

Source: Lloyd's Register, Qinetiq and University of Strathclyde, 2013

Thank you for your attention! agnieszka.montoya-iwanczuk@ec.europa.eu DG for Internal Market, Industry, Entrepreneurship and SMEs Unit I4 – Defence, Aeronautic and Maritime Industries