1. Industrial Structures and the Role of Manufacturing Implications for measurement ONS - October 2014 Prof. Mike Gregory

2. Outline Changing industry structures Knowledge and value chains Emerging industries Implication for measurement

3. The full cycle from understanding markets and technologies through product and process design to operations, distribution, services and sustainability Industrial System

4. Changing Industry Structures Companies increasingly focus on particular stages of value chain Stages in the value chain may have different ‘owners’. Interfaces and interdependencies poorly understood. Implications for industrial competitiveness R&D DesignSupplyProduction Routes to Market After Sales Services

5. R&D - Plastic Logic ‘Power of electronics with pervasiveness of printing’ Enables new product concepts including displays & sensors. Potential to create new industry via radical change in economics of production

6. Design - Apple Team of engineers designed & built first iPod in less than year Relatively established technologies packaged for aesthetics & functionality Production completely outsourced

7. Production - GKN 40% of world market for constant velocity joints Leadership enabled by production capability linked to advanced design Close integration with customers Local production facilities worldwide

8. Distribution - Tesco Commissions designs Orchestrates production Distributes & sells Manages complex procurement & supply networks Activities co-ordinated globally

9. Service - Xerox Pioneered service based business models Service offering now includes business improvement Re-manufacturing a growing strength Example of product-service systems

10. So what about knowledge? Ensure take up of new knowledge Marshal research across value chain Support & capture “emerging industries” How can we help keep industrial systems healthy, efficient, competitive and evolving? R&D DesignSuppyProduction Routes to Market After Sales Servics

11. Identify Societal / Market Needs & define system requirements & barriers Develop Useful Insights from Fundamental Knowledge Integrate Fundamental Knowledge into Enabling Technology Research Systems Interacting research activities (E O’Sullivan: Adapted from NSF ERC Strategy Framework)

12. Research & Industrial Systems (Eoin O’Sullivan & Mike Gregory)

13. Linking research to industrial needs

14. Level of Funding Basic ResearchDevelopment / Scale-upCommercial OperationMature Industry Navigation of industrial emergence (barriers, enablers, inhibitors) depends on understanding of industry-level factors, e.g.: Industrial design Manufacturing strategy Production scale-up Supply networks Investment Regulation & standards Time Valley of Death Funding from public sector Private sector sales Emerging Industries New science ideas & technology opportunities into new industries, new jobs (Eoin O’Sullivan)

15. Level of Funding Time Emerging Industries Different value chain configuration for different emergence phase (Eoin O’Sullivan)

16. Level of Funding Time Emerging Industries Different research for different innovation needs Different research for different phases of emergence (Eoin O’Sullivan)

17. Level of Funding Emerging Industries (E O’Sullivan & L. Dodin) Science lab- grown human tissue Time Regenerative Medicine

18. Level of Funding Emerging Industries (E O’Sullivan & L. Dodin) Seeding of stem cells on engineered structures Science lab- grown human tissue Time Regenerative Medicine

19. Level of Funding Emerging Industries (E O’Sullivan & L. Dodin) Seeding of stem cells on engineered structures GMP manufacturing & automation processes Science lab- grown human tissue Time Regenerative Medicine

20. Level of Funding Emerging Industries (E O’Sullivan & L. Dodin) Seeding of stem cells on engineered structures GMP manufacturing & automation processes Advances in logistics & distribution technologies Science lab- grown human tissue Time Regenerative Medicine

21. Emergence map – CT Scanners (Eoin O’Sullivan)

22. What is an “Emerging Industry” anyway? Focus on emergence transitions… Mature ”emerged” market Specialist market Early adopter market Growth mass market External technologies Good science ideas (E. O’Sullivan – after H. Chesbrough)

23. Misalignment & leakage SCIENCE Dominated Emergence TECHNOLOGY Dominated Emergence APPLICATION Dominated Emergence MARKET Dominated Emergence Mature ”emerged” market PrecursorEmbryonicNurtureGrowth (E. O’Sullivan)

24. Implications for measurement Broad approach to industrial systems can capture the breadth and context of manufacturing Mapping of knowledge type to value chain can clarify sources of value and opportunity Managing industrial emergence a neglected area for manufacturing but vital for future value capture International evolution of industrial innovation and production ‘ecosystems’ a major challenge New breed of industrial systems ‘architects’ and ‘monitors’ needed!