03 Smart Factories Clean Tech and Customer Experience

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
Trend report
Smart 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 Commissions behalf may be held
responsible for the use which may be made of the information contained therein.
Table of Contents
Executive summary
1. Overview and context of three trends
1.1. Smart factories
1.2. Clean technologies
1.3. Customer experience
1.4. Conclusion
2. Case studies
11
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
19
19
20
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
29
30
31
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
List of figures
Figure 1: Criteria used for identification of trends and selection of case studies
Figure 2: EU manufacturing production and employment (2010=100)
Figure 3: Estimated Smart application processes market value (in EUR million)
Figure 4: Global venture and growth equity investment in cleantech companies, 2011-2013
Figure 5: Cleantech innovation performance
Figure 6: The material savings potential in European manufacturing per year
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
Table 2: Increases in revenues due to improved customer experience
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
Trend report
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, new
environmental 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 factories mesh business and production processes
with one another, draw on IT systems to optimize the use
and capacity of machines, react to production defects, and
minimize 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, during
and 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 emanating
from 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 many
successful 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 trendsspecific 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 could
support the scaling up of the successes of the business
innovation trends. Based on the case studies and the
Smart factories, clean tech and customer experience; how to scale-up the success of learning with users?
Trend report
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. In
all 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
recommendations:
are
formulated
into
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 concrete

recommendation 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.
concrete
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 the
innovation trends: a concrete recommendation is to
Trend report
1. Overview and context of three trends

The procedure for the identification of new trends and
relevant 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 topdown 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.
defined. This section provides some empirical background

information and evidence of three trends (Table 1) and their
societal and economic impact.
Table 1: Description of trends
Trend
Description
Smart
Factories
Smart factories mesh business and

production processes with one another, draw
on IT systems to optimise the use and
capacity of machines, react to production
defects, and minimise 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
optimisation.
Clean
Technologies
Clean technology, otherwise known as 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.
Customer
Experience
Customer Experience describes the idea of

placing customers at the centre of all
considerations prior, during and 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 emanating from consumers
online activity.
Figure 1: Criteria used for identification of trends and

selection of case studies
case-studies on
3 trends :
1.Smart factories
2.Clean tech
3.Customer
experience
Macro success
criteria :
significant and
relevant socioeconomic impacts
Micro success
criteria :
Innovative and
successful trend
driving / solutions
providing
companies
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

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
1
Own calculations using data from Eurostats Structural Business

Statistics.
Trend report
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. 2 As
stated in the Dutch Smart Industry report,3 business 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, 5 Europe is the
global leader in supplying advanced manufacturing solutions,
but it lags behind in using them. For scaling up the longterm, 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.
Cf. Mazarro, 2012

Smart Industry; Dutch industry fit for the future (FME et al. 2014,
p.14);
4
McKinsey Global Institute (2012).
5
'Advancing Manufacturing - Advancing Europe' - Report of the Task
Force on Advanced Manufacturing for Clean Production, SWD(2014)
120 final.
A smart process application is a new type of processcentric 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 create
content; 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 Compound
Annual Growth Rate of roughly 18% towards 2018 (Figure
3).
Figure 3: Estimated Smart application processes
market value (in EUR million)
Source: TechNavio 6
Next generation forging is 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, machine
distortion 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
Global Smart Process Application Market 2014-2018, TechNavio

(2013).
Trend report
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 are
especially used in the engineering and valve making
industries. Considering forgings, the European production
market collapsed in 2009 and has been recovering to a precrisis 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 manufacturers
will receive 75% of their consumer innovation and R&D
capabilities from crowdsourced solutions. According to the
research company Gartner,7 consumer 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 factorys 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.
http://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 enable
products 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 up
to 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.

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.8 In 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
Van der Slot, A., W. van den Berg (2012), Clean Economy, Living
Planet The Race to the Top of Global Clean Energy Technology
Manufacturing 2012, a report by Roland Berger Strategy
Consultants
for
WWF.
http://www.rolandberger.com/media/pdf/Roland_Berger_WWF_Cl
ean_Economy_20120606.pdf
Trend report
less than 5 billion in 2013.9 About 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
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 has triggered a shift from a
linear production model (Take, Make, Dispose) to a closedloop model (Cradle to Cradle).
The clean technologies applied in the closed-loop waste
management use extremely different techniques. As closedloop 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.
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
Israel
Finland
Sweden
Denmark
UK
Canada
Switzerland
Germany
Ireland
Netherlands
Japan
Norway
France
Austria
Belgium
Hungary
Portugal
Spain
Italy
Slovenia
Czech Republic
Turkey
Romania
Poland
Bulgaria
Greece
-2.0 -1.0 0.0
Change to 2012
1.0
2.0
3.0
4.0
5.0
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 2012.11 Similarly, 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.
Cleantech Innovation Index 2014
Source: Global Cleantech Innovation Index 2012, Global Cleantech

Innovation Index 2014
It is argued that repairable objects are becoming

unnecessary due to increased levels of recycling. However,
11
Parad, M., S. Henningsson, T.A. Currs, R. Youngman (2014), The

Global Cleantech Innovation Index 2014 Nurturing tomorrows
transformative entrepreneurs.
http://info.cleantech.com/CleantechIndex2014.html
10
Knowles, V., S. Henningsson, R. Youngman, A. Faulkner (2012),
Coming Clean: The Global Cleantech Innovation Index 2012.
http://info.cleantech.com/2012InnovationIndex.html
12
Eurostat, 2014, In 2012, 42% of treated municipal waste was

recycled
or
composted,
Available
at:
http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/8-25032014AP/EN/8-25032014-AP-EN.PDF [Accessed on 05 May 2014]
World Economic Forum, 2014, Towards the circular economy:
Accelerating the scale-up across global supply chains, Available
at:
http://reports.weforum.org/toward-the-circular-economyaccelerating-the-scale-up-across-global-supply-chains
[Accessed on 05 May 2014]
Trend report
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 the
intensity 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
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 wasteeating 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.
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 cleantechnologies, 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
http://www.mckinsey.com/features/circular_economy
at:
Energy harvesting (EH) is the clean tech process by which

minute amounts of energy from one or more naturallyoccurring 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
14
American Biogas Council, 2014, What is Anaerobic Digestion?,

Available at:
https://www.americanbiogascouncil.org/biogas_what.asp
[Accessed on 28 April 2014]
15
Michigan State University, 2011, Microbes generate electricity
while
cleaning
up
nuclear
waste,
Available
at:
http://msutoday.msu.edu/news/2011/microbes-generateelectricity-while-cleaning-up-nuclear-waste/ [Accessed on 28
April 2014]
Trend report
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 energy
harvesting 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.

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 consumers18 shows
that two-thirds of consumers are willing to spend at least
5% 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
16
Chesbrough, H. (2011). Open Services Innovation, Rethinking your

business to grow and compete in a new era, Published by
Jossey-Bass.
17
http://ec.europa.eu/consumers/consumer_evidence/consumer_score
boards/10_edition/index_en.htm
18
Echo (2012), 2012 Global Customer Service Barometer Findings
for the United States, a research report prepared for American
Express.
http://about.americanexpress.com/news/docs/2012x/axp_2012gc
sb_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 Group19 shows that by making
modest improvements in customer experience, a
hypothetical 100 billion company in the UK can gain
additional 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
EUR 7.5 billion industry by 2016. Thereby, such neuromarketing applications and services may create value for
19
Temkin, B. (2012), The ROI of Customer Experience Analysis

Shows High Correlation Between Customer Experience and
Loyalty, Temkin Group. www.oracle.com/us/solutions/customerexperience/roiofcx-temkingroup-1715500.pdf
20
Case study 34
21
Case study 35
22
http://issuu.com/researchshare/docs/grit-winter-2013.
Trend report
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 of
big 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)
According to Gartners estimations, in 2013, spending on

social software to support sales, marketing and customer
service
processes
exceeded
EUR 750,000 million
worldwide.27 Gartner 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 cloud
by another software provider. Gartner expects that figure to
grow to just over 50% by 2020,28 reaching a maximum of
80% to 85% by 2025. 29 One 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 with
customers 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 201232 demonstrates that 44% of adults
use the web to share grievances about products and 57% of
consumers prefer to search online to solve customer service
issues.
Figure 8: Ranking of online services capability to
influence customer behaviour
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-toconsumer (B2C) e-commerce purchases in 2013. Combined,
sales in North America, Asia-Pacific and Western Europe
account for 90% of the worldwide total. 25 The European ecommerce 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
Source: Technorati Media 2013 Digital Influence Report

27
http://www.gartner.com/newsroom/id/1541415.
http://www.crmsearch.com/crm-market.php.
29
https://www.gartner.com/doc/2679218/gartner-crm-vendor-guide
30
http://techcrunch.com/2014/05/16/zendesks-stellar-ipo-and-thecurrent-tech-ipo-climate.
31
http://www.crowdsourcing.org/editorial/eyekas-francois-petavyfive-predictions-for-crowdsourcing-in-2014/30116.
32
http://wallblog.co.uk/2012/03/16/the-confusing-rise-of-socialcustomer-service-infographic.
28
23
http://www.gartner.com/newsroom/id/2211115.
http://www.researchandmarkets.com/reports/2823026/advancedanalytics-market-big-data-analytics.
24
25
26
https://www.emarketer.com/Coverage/ConsumersEcommerce.aspx.
ecommerce-europe.eu.
10
Trend report
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
Figure 9: From passive exchange of value to cocreation of value
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-backloops 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 for
customers. 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. 35 Generating societal and economic impact
from enabling technologies requires value co-creation from
collaboration and learning with users (Figure 10).
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.
33
http://www.radicati.com/wp/wp-content/uploads/2012/05/SocialMedia-Market-2012-2016-Executive-Summary.pdf.
34
A Manufacturing Industry Vision 2025, European Commission
(Joint Research Centre) Foresight study (2013)
35
See Vargo, Maglio & Akaka (2008) on value co-creation
11
Trend report
2. Case studies
2.1. Description of case-studies and
companies
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 their
resources, 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 production
processes. 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 the

European 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, less
need for in-house R&D, shorter time to market.
12
Trend report
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 consumer
innovation and R&D capabilities from crowdsourced
solutions.
where the interests of entrepreneurs are in balance with

labour security is called for.
Company cases: Shapeways (NL, USA), Quirky (USA), Hypios

(FR), Vehicleforge.mil by General Electric (USA), eYeka (FR).
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.
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.
Company cases: Quintiq (DE), Signavio (UK), Metaio (NL),

Siemens Electronics Manufacturing (DE).
Clean Technologies
Closed-loop waste management (Case study 29)
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 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.
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 a
standard 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.
Company
cases:
Pectcof
(NL),
WornAgain
(UK),
SecondLifElectronics (BG), Cycle4Green (FI), ALR Innovations
(IE), Alucha Technologies (ES)
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 programme
although more a tenacious standardisation of labour laws
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
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.
13
Trend report
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 polyester
called Reternity. Worn out garments are collected, shredded
and turned into new yarns and new fabric without quality
loss
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)
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)
Neuro-marketing draws on neuro-scientific technologies to

understand the subconscious reasoning and behaviour of
customers. 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 userinterfaces, applications and software. These innovative
methods are leading to the creation of new types of userinterfaces, 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) and
Emotion 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
14
Trend report
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 Data
Scoring (EE), FutureLytics (CZ) and Saberr (UK).
FutureLytics business architecture
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 experience
specific 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.
Enhanced customer support (Case study 35)

Enhanced customer support refers to the customised
provision of support services, no matter the customers
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
Company cases: Adpoints (UK), EveKa (FR), KBHFF (DK),

Logograb (CH), Sampleo (FR), Staffino (SK).
2.2. Examples of companies, innovative

solutions 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 in Table 3 on page 16.
15
Trend report
Table 3: Examples of solutions providing companies

Company
Business innovation
Signals of success
Smart Factories
Numeca (BE)
A solution that allows for vast amounts of high-speed virtual testing of manufacturing
set-ups.
Numecas products and services are positively reviewed on

multiple websites, and they have excellent relations both
with manufacturing companies that want to test new
manufacturing system layouts and with the academic
community that invites them to their research consortia.
Intelligent Sensing
Anywhere (PT)
Monitoring solutions that allow companies to minimise costs and maximise efficiency
throughout their distribution chain.
ISA has established a high-class product portfolio that is

aimed both at businesses that look to optimise the energy
and materials costs of their plants and locations, and at
utilities that with to optimise their logistical systems.
Quintiq (DE)
Quintiqs unique value proposition lies in bundling all the components required to plan,
schedule and optimise processes for any
potential business model on a single software platform. The flexible core architecture
enables 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, from
Singapore 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 a
daily basis.
The coming years the company is looking to double in size to
1,400 employees.
Signavio (UK)
The Signavio Process Editor allows users to share process models and invite others to
comment on diagrams, by:
Visualising, discussing and documenting
processes;
Make process descriptions and related SOPs
accessible in a process portal;
Integrating all employees in continuous
process improvement.
Since the foundation in 2009, the company has served over

400 customers from around the globe.
International offices situated in Berlin, Singapore and the
United States.
Signavio is recognised by Gartner as Cool Vendor 2014 and
regarded as industry leader in several markets.
Shapeways (NL)
A printing marketplace and service start-up

company. Users design and upload 3D
printable files, and Shapeways prints the
objects for them or others. Users can have
objects printed from a variety of materials,
including food-safe ceramics, in a variety of
locations.
Over 90 employees.
Spin-out of the lifestyle incubator of Royal Philips
Electronics.
A community of 300,000 members and three million
products in its online catalogue.
10,000 shops selling designs and items. Each month, the
company receives prints and ships 60,000 orders to
customers all over the world.
Hypios (FR)
Hypios uses software that allows to find

experts for specific challenges on the world
wide web. This ensures that problems are not
broadcast to the entire world, but narrowcast
to relevant expertise in a pre-selected range of
scientific discipline. This helps maximize the
number of relevant solutions by applying
intelligent crowdsourcing.
Draws from a network of over 950,000 experts across the

world, to solve R&D problems for global companies since
2008.
eYeka (FR)
eYeka enables manufacturers to directly

involve their customers into the design of new
products. By leveraging creative ideas
developed by a community of 250,000
creative individuals in 154 countries.
40 leading brands such as P&G, Kraft, Coca-Cola, Unilever,

Nestle, Danone, Hyundai, Citroen and Microsoft are already
tapping into eYekas community.
Sheffield
Forgemasters
International Ltd (UK)
SFIL specialises in a broad range of heavy steel forgings and steel castings as well as
stocking steel ingot and bar.
-
Sheffield Forgemasters International Ltd (SFIL) is the largest

independently owned Forgemaster company and one of the
main employers in South Yorkshire.
Despite a steady decline in steel manufacture in the UK over
the past few decades, SFIL has continued to grow and is now
a world leader in heavy steel castings and steel forgings.
Award-winning apprenticeship programme.
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Trend report
Company
Business innovation
Signals of success
Clean Technologies
Pectcof (NL)
Unlock the potential of the coffee pulp as a source 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 from
the European markets to other markets.
-
Starting partnership with one of the biggest Bulgarian

electronics retailers.
Currently expanding in Romania, Albania, Italy, Spain, Turkey
and Greece.
Cycle4Green (FI)
Developed an innovative method for processing silicone-coated waste papers. It

allows the removal of silicone from paper fibers and to reuse it in the production of
recycled fine and specialty papers.
Featured in Packaging Magazine Europe, in Recycling

Magazine.
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 recycling

technology which through a fully automated
process removes the hazardous waste
materials from LCD flat screen panels and
monitors.
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 separates

aluminium from plastic. It recovers clean
aluminium that can be re-used. Further, plastic
is 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 innovative

textile company guided by the principles of
sustainable entrepreneurship. It has developed
environmentally friendly polyester for clothing
manufacturing and offers its clothing
accessibility based. The company.
Part of the EcoProFabrics programme, a two-year pilot

project within the EU Eco Innovation programme. The EC has
invested 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 do not 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 vortex generator 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 World
Championship 2013.
Organica Water (HU)
Build and operate biological wastewater treatment plants, implementing its Fixed-Bed
Biofilm Activated Sludge (FBAS) technology.
-
Named First Cleantech company in Europe and Israel in

2013.
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 online

response
time
tools
that
measure
subconscious or implicit customer reactions in
less 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 persons
is equipped with portable EEG headsets to
analyse their brain activity and reactions to
marketing stimuli.
Participation at Startup Sauna accelerator programme (FI).
The Eye Tribe (DK)
Low-cost eye-tracking device (USD 99) to

register eye movement. Software can be used
to analyse customers behaviour.
EUR 1.3 million seed/angel funding and EUR 1.7 million

grant from Danish National Advanced Technology
Foundation. Voted most Innovative Company at SXSW
Accelerator Competition.
17
Trend report
Company
Business innovation
Signals of success
Rapid Miner (DE)
Analytics platforms, e.g. for

segmentation,
credit
ratings,
planning, and asset maintenance.
customer
resource
In 2014, positioned by Gartner in the Leaders quadrant of

Gartner Magic Quadrant for Advanced Analytics Platforms.
Viscovery (AT)
Platform for predictive modelling and

explorative data mining with focus on
visualising predictive models.
In 2008, positioned by Gartner in the Magic Quadrant for

Customer Data-Mining Applications. Acquired in 2007 by
Biomax Group.
Big Data Scoring (EE)
Credit scoring solutions using data from social

media and other big data sources.
Finalists at the CODE_n14 worlds largest IT trade show

CeBIT 2014. Participants at the Web Summit 2013 as a part
of the Alpha Program.
FutureLytics (CZ)
Analytical platform using predictive analytics

to 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 customisable
recommendations.
In 2014, awarded Gartner 'Cool Vendor' status. Received

government grants in Spain. Offices in Madrid, Barcelona,
London and San Francisco.
Qubit (UK)
Machine learning, statistical analysis and high

performance computing to optimise customer
insights and allow personalisation on ecommerce websites.
EUR 6.5 million

venture
capital,
out
of
EUR 5.5 million from Balderton Capital in 2012.
Whisbi (ES)
Video agent technology solution to help clients

sell products and services via their website.
In 2011, awarded Gartner 'Cool Vendor' status. Listed by

Wired Magazine as one of the hottest 100 European startups.
EyeKa (FR)
Crowdsourcing platform connecting creative

individuals with brands to boost their return on
marketing expenditure. Enables people to
accept a business challenge (animation,
creative writing, video, graphic design, label
and packaging) and propose an innovative
solution to companies.
Winner of 2012 Co-Creation Award.
Staffino (SK)
Mobile application enabling consumers to give

direct feedbacks on the quality of the service
offered by companies employees.
After 6 month business activity already entered multiple

foreign markets.
which
18
Trend report
3. Key innovation drivers and obstacles

In order to propose applicable policy options for scaling up
the successes of the trends, it is important to understand the
various drivers and barriers faced by the trend-driving
companies and their clients.

The most significant drivers identified in the case studies on
smart factories are listed in Table 4.
Table 4: Main drivers and obstacles for smart
factories
Smart Factories
Drivers
Smart Process
Application
Developments in ICT, connectivity and mobile

devices.
Energy prices and environmental regulation.
Shift toward sustainable manufacturing.
Capacity
Optimisation
Connection to academics in the early stages

of the company.
Early traction at world-class businesses.
Crowdsourced
Manufacturing
Emergence of 3D-printing or
manufacturing.
Growing use of social technologies.
Next GenerationForging
Complex of modelling software cater to

specific need of end-users.
Continuous innovation is key to keep a
competitive edge.
Market driven approach that goes beyond the
traditional boundaries of forging.
Limited access to finance - especially for

prototyping and early-market penetrations
stages.
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 the
European Union.
Crowdsourced
Manufacturing
Attracting
and
managing an online
community.
Limits on traditional human resources
activities such as job training.
Security of intellectual property.
Next GenerationForging

clean technologies are listed in Table 5.
Table 5: Main drivers and obstacles for clean
technologies
Clean Technologies
Drivers
Waste Management Directives on environment, packaging or
electronics are a catalyst.
Networking support of the KICs.
Circular
Chain
Supply Scarcity of resources and rise of raw materials

prices.
Worldwide societal changes (rise of middle
class, awareness toward climate change).
Reverse Treatment Rising awareness of environmental issues

Technologies
Supporting initiatives and collaboration.
Energy Harvesting
additive
Obstacles
Smart Process
Application
Shortages in skills and competence deficits.

Complex modelling software are more difficult
to develop, employ and adjust.
Access to globally competitive prices for
materials and energy.
Access to finance for up-scaling.
Technical development like the Internet of

Things and Big Data.
Increasing scarcity of resources and volatile
markets.
The rate of climate change and its impact on
society.
Obstacles
Waste Management Outdated directives also hinder the

development.
Funding schemes too slow.
Difficulty in finding the right workforce with
the relevant skillset (engineering & business).
Circular
Chain
Supply Linear technology deeply rooted in the

economy.
Lack of sufficient differentiation between
recycling and reuse.
Reverse Treatment Long-term projects with high working capital

Technologies
Conservative industry requires references
portfolio.
Requirements for public procurement are
often too tough for SMEs.
Funding and grants support schemes:
administrative
burden
and
strategic
constraints.
Energy Harvesting
Standards for interoperability between energy

harvesters and application components.
Not yet technically feasible for all applications
domains.
19
Trend report

customer experience are listed in Table 6.
Table 6: Main drivers and obstacles for customer
experience
Costumer Experience
Drivers
Neuro Marketing Deeper understanding of customers feelings.
Innovations
Cost saving opportunity compared to traditional
market research.
Predictive Analysis Legislation on data protection in EU can be a
competitive advantage.
Development of Big data.
Enhanced
Ease to internationalise within EU.
Customer Support
Customer
Incentives
Business incubators supporting the growth of

SMEs.
Emergence of a collaborative relationship:
creation of online communities.
Costumer Experience
Predictive Analysis Difficult for EU start-ups to find early
adopters.
Access to finance too hard: SMEs prefer organic
growth.
Lack of time, skills and know-how to draft long
grants schemes reports.
Lack of skills for developing complex software
and analyse large datasets.
Enhanced
Set-up of new enterprises was rather
Customer Support burdensome and slow in some EU countries.
Data protection law would not be up-to-date.
Financing intangible assets and new business
models (banks are conservative, private
investors aim short-term profits.
EU programmes: complicated to find the
information.
Customer
Incentives
Definition of innovation too narrow.

Financing gap for companies that are growing
but are not yet profitable.
Inefficient communication between support
scheme providers and SMEs.
Lack of partnerships with public institutions.
Lack of talented people in web marketing.
Obstacles
Neuro Marketing Lack of credibility and controversy surrounding
Innovations
this activity.
Access to funding: transparency, banks too
conservative.
Internationalisation: legal and tax challenges.
20
Trend report
4. Policy context and policy challenges:

policies, regulations and instruments
affecting the trends
The trends call for certain adjustment of existing policy

support and framework conditions. This section, first
discusses a selection of relevant existing policies and
framework conditions (section 4.1). Subsequently, section 4.3
elaborates on the policy context per trend and section 4.3
discusses identified policy challenges per trend.
4.1. Policy context

The EU policies constitute the most significant factor
affecting the trend both in terms of RDI policy framework,
notably through the Innovation Union Flagship Initiative (a
strategy for RDI) and as they set the overall regulatory
framework in which EU enterprises, SMEs and start-ups
operate.
Innovation Union policy priorities

The main policy initiative in this area is the "Innovation
Union" which constitutes a new strategic approach to
innovation. It is part of the Europe 2020 strategy which
aims at improving the framework conditions and access to
finance for research and innovation so as to ensure that
innovative ideas can be turned into products and services
that create growth and jobs.36 European regional policies
contribute to the objectives by using the regional funding to
promote
research
and
development,
education,
entrepreneurship or information and communication
technologies.
In the context of the present report, EU priorities related to
Single Market, integrated industrial policy and the Digital
agenda for Europe can be considered the most relevant.
Concrete policy initiatives concerning the priority given to the
single market for the 21st century,37 include: a simplification
of company law (bankruptcy procedures, private company
statute, etc.), strengthening their ability and confidence to
buy goods and services cross-border, in particular on-line.
Notable are actions proposed as regards adapting EU and
national legislation to the digital era so as to promote the
circulation of content with high level of trust for consumers
and companies. This requires updating rules on liability,
warranties, delivery and dispute resolution. The recent state
36
37
COM (2010) 2020.

COM(2007) 724 final.
of progress report38 indicated that: fragmentation and

inefficiencies in the Single Market undermine business
investments in R&I in particular in high tech areas such as
ICT, including in digital networks, content and services, and
healthcare. () major innovations need to be anticipated with
the development of Single Market frameworks that enable
wide scale commercial uptake.39 Full implementation of the
single market for services, which accounts for 60% of the EU
economy, would have a strong impact on innovation, in
particular on non-technological innovation, such as the
development of new business models and services design. In
addition, regulatory frameworks need to foster the
commercial use of new knowledge and facilitate the entry of
new firms.
In the context of Europe 2020 Flagship Initiative: "A
Digital Agenda for Europe", 40 the Commission has
pledged to create a true single market for online content and
services i.e. borderless and safe EU web services and digital
content markets, with high levels of trust and confidence, a
balanced regulatory framework with clear rights regimes, the
fostering of multi-territorial licences, adequate protection
and remuneration for rights holders and active support for
the digitisation of Europe's rich cultural heritage, and to
shape the global governance of the internet.
Instruments of Innovation policy

The main instrument is the EU Framework Programme for
Research and Innovation, Horizon 2020 and the COSME
programme for Innovation in SMEs.
Horizon 2020 supports innovation in SMEs via the SME
instrument and diverse SME support actions that are
complementary. Collaboration with COSME and ESIF is
(partially) foreseen and encouraged. The SME instrument
shall provide staged and seamless support covering the
whole innovation cycle. It shall be provided for all types of
innovation, including service, non-technological and social
innovations, provided that each activity has a clear European
added-value. The aim is to develop and capitalise on the
innovation potential of SMEs by filling the gap in funding for
38
Research and innovation as sources of renewed growth COM(2014) 339 final.

39
For example, the new markets in advanced biofuels, waste and
recycling, renewable energy and environmental technologies where
the EU has innovation strengths.
40
COM (2010) 2020 final.
21
Trend report
early stage high risk research and innovation, stimulating

innovations and increasing private-sector commercialisation
of research results.
COSME is the EU programme for the Competitiveness of
Enterprises and Small and Medium-sized Enterprises (SMEs)
running from 2014 to 2020 with a planned budget of
2.3bn. COSME will support SMEs in the following areas:
-
Improving access to finance for SMEs in the form of

equity and debt;
Improving access to markets, particularly inside the
Union but also at global level;
Improving
framework
conditions
for
the
competitiveness and sustainability of Union;
Enterprises, particularly SMEs;
Promoting entrepreneurship and entrepreneurial culture.
A large share of the budget, 60% minimum over the period,

will be allocated to the financial instruments implemented
through EIF and disbursed through financial intermediaries.
These funds include: the COSME Loan Guarantee Facility
(LGF) and the Equity Facility for Growth (EFG).
COSME actions will also seek to optimise synergies with the
European Structural and Investment Funds (ESIF), in
particular as regards entrepreneurship, the economic
exploitation of new ideas, the creation of new firms, new
business models, advanced capacities for product and
service development, the capacity of SMEs to engage in
growth in regional, national and international markets,
developing ICT products and services, e-commerce, e-skills,
investment in innovation and research, technology transfer,
networking, clusters and Key Enabling Technologies. The ESIF
will invest in the period 2014-2020 up to 90 billion in SME
competitiveness, as well as innovation, research, ICT and low
carbon economy, much of which will also benefit SMEs. This
will increasingly be delivered through financial instruments,
but also includes SME service provision, public procurement
and direct aid to firms.
The Enterprise Europe Network provides business support
services with a trans-national dimension directly to SMEs
and shall catalyse the transfer of better practices in business
support to the region.
The Connecting Europe Facility is specifically designed to
promote growth, jobs and competitiveness through targeted
infrastructure investment at European level. It aims to
Facilitate the deployment and operation of trans-European
digital services, e.g. for public procurement.41
Wider EU policy framework

The other policies affecting the trend are mainly the policies
that regulate the functioning of the EU Internal Market, the
41
http://ec.europa.eu/digital-agenda/en/connecting-europe-facility
rules related to the four freedoms, the sectoral rules as

well as competition rules. Given the nature of the trend
based on innovation and knowledge of particular importance
are the rules related to Intellectual properties, copyright,
patenting, etc. Also of importance given the proactive role
that procurement may play in fostering innovation, are EU
Public Procurement rules.
It should be noted that the EU is involved in the definition of
the main framework conditions related to the trend, in
particular as regards regulatory production. Also important
are the taxation systems which remain largely the
responsibility of the national authorities and which are only
loosely coordinated. In fact, most financial incentives are
provided through tax incentives (reliefs and credits) at
national level, with limited or no coordination between
countries. In this context, the EU's role is to oversee
governments' national tax rules and decisions on tax rates.
Competition policy and especially state aid control have a
large effect on research policy. The objective of State aid
control, as laid down in the founding Treaties of the
European Communities, is to ensure that government
interventions do not distort competition and intra-community
trade. However, national aids for regional development or
small and medium-sized enterprises is allowed under
specific rules. On May 8th this year, the European
Commission adopted a Communication on state aid
modernisation. The Communication set out the objectives of
a reform package which will include revising state aid rules
for research and innovation.
Other more specific policy areas have influence on the three
identified trends, such as Entrepreneurship policy and Small
Business Act in support of SMEs, Data protection Regulation,
ICT policies and instruments, and Consumer policy42.
Financing for Innovation in the EU

A number of financial instruments have been put in place by
the EU and Member States, in order to stimulate
entrepreneurship and innovation as well as access to
finance. Public funding is provided through national funds or
through a combination with Structural Funds.
EIB Group (composed of the European Investment Bank (EIB)
and European Investment Fund (EIF)), as the financing
institution of the European Union, has set objectives for
boosting economic development in the EU via support for the
growth and strengthening of SMEs. The existing financial
instruments targeted at SMEs vary from loans, innovative
financing options (guarantees, structured finance), research,
development and innovation support, capital injection
(venture capital and private equity funds), microfinance to
energy efficiency investments channelled under different
joint instruments with EC, such as RSSF, JASPERS, JESSICA,
42
http://ec.europa.eu/consumers/index_en.htm
22
Trend report
JEREMIE, NER 300, etc. EIF or EIB does not normally provide
direct financial support to SMEs under different financial
instruments launched together with EC, but instead distribute
through selected financial intermediaries at national level.
As identified within the scope of the EU annual SME
Performance Review,43 there is a lack of awareness among
SME stakeholders on the presence and working mechanism
of these instruments so that most of them are not really
accessible by the SMEs at the national level. There is a need
to raise the awareness on existing EU financial instruments
including the implementation of JEREMIE at national level.
Credit incentives constitute a common instrument in EU
countries to facilitate the access of SMEs, start-up and
innovative companies to credit and lower the related costs.
In most cases public funds are set aside to subsidize loans
and agreements or contracts (following a competitive
selection process) are established with public or private
credit institutions to lower the loan rate compared to normal
market conditions. Loans, bank credit guarantees and other
forms of credit incentives for SMEs are put into place
through national strategies, finance support programmes or
at regional level through Structural Funds.
Tax incentives for R&D take the form of tax deductions or
credits. They are often foreseen in the national tax codes
and relative amendments and/or in annual budget laws or
Finance Acts. Provisions normally concern: eligible
expenditures, recipients, maximum expenditure authorisation,
definition of relevant taxable periods, and the application
procedure. Most common tax deductions include: tax
deductions for R&D investments to the domestic companies:
Denmark (150% tax deduction scheme), France (Crdit Impt
Recherche, Research Tax Credit), the Netherlands (WBSO:
Research and Development (Promotion) Act), and the United
Kingdom (R&D tax credit). Many countries have tax
deductions for costs related to R&D personnel (Italy,
Belgium, Denmark, Malta and the Netherlands). Luxembourg
has tax incentives for IPR expenditures. There are also tax
deductions for researchers to attract skilled labour (FR, IT,
DK) and reverse brain drain. Tax deductions for venture
capital Mutual Funds for Innovation exist in France44 and the
UK.
The EU and certain Member States have developed public
instruments to support the intervention of private equity and
venture capital into RDI. Actions put into place include:
establishing a fund of funds, tax incentives and loan
guarantees, public contribution into private funds. Measures
related to venture capital, angels, support to start up, etc.
exist in various EU countries.
43
Annual Report on European SMEs 2013/2014 A Partial and

Fragile Recovery, Final Report - July 2014, SME Performance Review
2013/2014, European Commission.
44
Mutual Funds for Innovation (Fonds Communs de Placement dans

lInnovation (FCPI))
Examples of investment funds in EU countries include:

Finland Finnish Industry Investment Ltd (FII); Netherlands
Technostarter fund, the National Danish Investment Fund
(Vkstfonden). In Finland, VIGO Accelerator Programme
(VIGO Kiihdyttm) and the Funding scheme for young
innovative companies. France, Technological Fund of Funds
(Fonds de fonds technologique (FFT). Germany High-Tech
Start-Up Fund (High-tech Grnderfonds) Ireland, Innovation
Fund Ireland and Seed and Venture Capital Programme, both
managed by Innovation Ireland. Netherlands, the SEED
Capital scheme (SME+ Innovation Fund) and the SEED
Capital regeling (Innovatiefonds MKB+). In Poland,
GO_GLOBAL.PL and the Support to risk capital funds
(Wspieranie funduszy kapital podwyzszonego ryzyka). In
Portugal, the Innovation Support system - Entrepreneurship
Projects (Sistema de Incentivos Inovao Empreendedorismo Qualificado). In Slovakia, the Fund of
Funds (the former Seed Capital Company). 45 The abovementioned Investment Funds function according the
following model: the funds, rather than directly investing,
provide (co)-financing capital and select a mandated
managing organisation that may provide additional capital.
The mandated manager is often an investment firm rather
than a public body. They will also be soliciting investment
from third-party investors in order to reach the investment
target.
As with EIF funds, the public money at national level,
possibly also involving additional co-financing from EU
sources like Structural Funds, in fact will not be directly
available to beneficiaries but through financial
intermediaries which are selected and accredited in each
country.
4.2. Policy context per trend

Customer experience
While innovation in services is not mentioned specifically
among the priorities set for the Innovation Union 2020 and
Horizon 2020 programme, the recent Communication on
Industrial Policy goes in the direction of encouraging all
types of innovation, not just innovation related to goods and
products but also to services and organisational innovation.
Innovation in services notably is at the centre of the smart
growth approach and digital society dimension that the EU
has adopted through its Europe 2020 strategy. Funding for
this trend may be available under the various access-tofinance facilities put into place through COSME, EIF and/or
ESIF.
The EU Multiannual Consumer Programme 2014-2020 has a
planned budget of 188 million EUR. It will support actions
that ensure a high level of consumer protection, that
empower consumers and that place the consumer at the
45
Source ERAWATCH
23
Trend report
heart of the internal market. In this respect the 10th edition

of the Consumer Markets Scoreboard Making markets work
for consumers (2014) tracks the performance of 52
consumer markets, based on indicators concerning
comparability, trust, problems and complaints, overall
satisfaction, choice and switching. The Scoreboard data
allows European and national policymakers and stakeholders
to tailor policy measures to the sectors that perform poorly
for consumers.
In July 2014, the Commission adopted the Communication
on the data-driven economy,46 which focused on the digital
economy, innovation and services as drivers for growth and
jobs and called for EU action to provide the right framework
conditions for a single market for big data and cloud
computing. This Communication describes the features of
the data-driven economy of the future and sets out
operational conclusions to support and accelerate the
transition towards it. It also sets out current and future
activities in the field of cloud computing.
The July 2014 Communication contains also proposals
related to: data protection and consumer protection; data
mining; security, and; ownership/transfer of data. The
accompanying Staff Working Document47 outlines actions for
a data-driven EU economy including, copyright aspects,
including patents and trademark aspects related to cloud
computing; taxation of digital economy; model contract
terms for cloud computing, etc.
The trend may also be affected by developments concerning
data protection and online services Directives. The Data
Protection Reform, which was adopted in the beginning of
2014, aims at harmonisation of rules applied in the EU
concerning data protection and the creation of a one-stopshop. Companies based outside of Europe will have to apply
the same rules to operate their services within the EU. For
enterprises, notably SMEs, it introduces measures of
administrative simplification and flexibility.
Online Services Directives: the Electronic Commerce
Directive, adopted in 2000, sets up an Internal Market
framework for electronic commerce. The most recent
political initiative in this sector, related to the Digital Agenda
strategy, is the e-commerce action plan 2012-2015. In
2012, the Commission put forward proposals to remove
further obstacles to the digital single market, payments,
delivery, and removal of illegal content.
Clean technologies
At EU level, several regulations and policies affect the clean
technologies trend. Notable Regulations include the Waste
Framework Directive48 and the Regulation on shipment of
46
COM (2014) 442 final

SWD (2014) 214 final
48
Waste Framework Directive 2008/98/EC
47
waste. 49 The Communication on the Circular economy 50

establishes a common and coherent EU framework to
promote the circular economy. The Commission also adopted
a legislative proposal51 to review recycling and other wasterelated targets in the EU.
The proposal aims to: increase recycling/re-use of municipal
waste to 70% in 2030; increase packaging waste
recycling/re-use to 80% in 2030; phase out landfilling by
2025 for recyclable (including plastics, paper, metals, glass
and bio-waste) waste in non-hazardous waste landfills
corresponding to a maximum landfilling rate of 25%; reduce
food waste generation by 30% by 2025; introduce an early
warning system to anticipate and avoid possible compliance
difficulties; ensure full traceability of hazardous waste;
increase the cost-effectiveness of Extended Producer
Responsibility schemes by defining minimum conditions;
simplify the reporting obligations and lighten obligations
affecting SMEs; harmonise and streamline the calculation of
the targets and improve the reliability of key statistics;
improve the overall coherence by aligning definitions and
removing obsolete legal requirements.
The Water Framework Directive 52 does not include any
specific provision concerning innovative or clean
technologies. However, it establishes clear objectives as
regards water quality and quantity. As such, these objectives
are quite demanding and require the introduction of
innovative processes in order to meet them (e.g. as regards
recycling used waters after depuration). The Directive is
foreseen to be revised in 2019 and on this occasion
reflection may be given to the introduction of measures
which will further encourage the introduction of clean
technologies. In practice, many EU countries have included
priorities related to innovation in the environment sector in
their national plans or strategies for RDI (e.g. Germanys
High-Tech Strategy 2020, Slovenia, Malta, France National
Strategy for Research and Innovation (SNRI), Estonia, Malta,
Denmark, Finland, Luxembourg, Greece, etc.).
An example of national measures is the system for collecting
of energy from the environment (EKAS) (Lithuania).53 The
main idea of the eco-innovation is to utilise energy collected
from the environment without a need to use any other
energy sources. This alternative technology is a system for
energy generation which does not require fuel consumption:
a heat collector, a load assembler, a freezer, heat and
electric capacities, and the control part are connected to
common energy collection system from the environment.
49
Regulation (EC) No 1013/2006 of the European Parliament and of

the Council of 14 June 2006 on shipments of waste
50
Towards a circular economy: A zero waste programme for Europe
COM/2014/0398 final
51
COM/2014/0397 final
52
Water Framework Directive (Directive 2000/60/EC) and
subsequent amending Acts as well as the rest of the Water
protection and management Acquis.
53
http://spin-project.eu/
24
Trend report
Smart Factories
The overall strategy for EU industrial policy in the context of
Europe 2020 is based on 2010 Industrial Policy
Communication 54 followed up by the 2012 and 2014
Industrial Policy Communications.
The 2010 Communication includes a strategy that aims to
boost growth and jobs by maintaining and supporting a
strong, diversified and competitive industrial base in Europe
offering well-paid jobs while becoming more resource
efficient.
Support is established through the Flagship Initiative within
the Europe 2020 strategy: "An integrated industrial policy for
the globalisation era". At EU level, the Commission will work
notably to:
Establish an industrial policy creating the best

environment to maintain and develop a strong,
competitive and diversified industrial base in
Europe as well as supporting the transition of
manufacturing sectors to greater energy and
resource efficiency;
Develop a horizontal approach to industrial policy
combining different policy instruments (e.g. "smart"
regulation, modernised public procurement,
competition rules and standard setting); (...)
Promote technologies and production methods that
reduce natural resource use, and increase
investment in the EU's existing natural assets.
promoting the internationalisation of EU SMEs around the

world, reaching 25% (from 13%) in the medium term.
Access to finance and capitals to improve lending to the
real economy by better mobilising and targeting public
resources, including those of the EIB which should allocate
between EUR 10 and 15 billion in additional lending for SMEs
- and of the Structural Funds, and by unlocking private funds
through the elimination of remaining obstacles for venture
capital funds and the facilitation of cross-border operations
by smaller companies.
Human capital and skills promote cooperation of employers,
workers and relevant authorities through the creation of
European Sector Skills Councils and of Knowledge and
Sectors Skills Alliances.
The 2014 EU IPC56 includes a number of key priorities:
mainstreaming of industrial competitiveness in other policy
areas; maximising the potential of the internal market; use
the instruments of regional development with national and
EU instruments (Smart Specialisations and ESIF) in support
of innovation, skills, and entrepreneurship; to encourage
investment, businesses require access to critical inputs;
further facilitate the integration of EU firms in global value
chains; the endorsement of the reindustrialisation efforts in
line with the Commissions aspiration of raising the
contribution of industry to GDP to as much as 20% by 2020.
On 10 October 2012, the Commission adopted an Update of

the Industrial Policy flagship initiative.55 The Communication,
in order to favour a recovery of industrial investments and a
reversal of manufacturing's share in EU GDP, launched a
new partnership between the EU, Member States and
industry. The set of proposals in order to tackle the
abovementioned challenges and to reinforce the industrial
policy can be listed as below:
The EU Task Force on Advanced Manufacturing co-ordinates

Unions efforts to increase the competitiveness of the EU's
manufacturing industry by fostering the development and
speeding up the uptake of advanced manufacturing
technologies by European industry. The Task Force Report,57
published in March 2014, foresees in particular: (i)
accelerating the dissemination and commercialisation of
advanced manufacturing technologies; (ii) boosting the
demand for advanced manufacturing technologies; (iii)
reducing skills shortages and competence deficits.
Investments in innovation on key industry sectors with high

growth and job prospects in six priority areas that are:
advanced manufacturing technologies for clean production,
sustainable industrial and construction policy and raw
materials, clean vehicles, bio-based products, key enabling
technologies, and smart grids. Member States are supposed
to prioritize their own investments in these six areas.
The main instruments to implement the EU IPCs and AMP

priorities are the Horizon 2020 programme (AMP
programme) and the Public Private Partnerships
implemented through open calls under Horizon 2020,
notably Factories of the Future 1.15 billion and SPIRE
(Sustainable Process Industry through Resource Efficiency)
with a 0.9 billion budget over the period 2014-2020.
Better market conditions improving the Internal Market for

goods, fostering entrepreneurship with regards to the digital
single market which is expected to grow by 10% a year up to
2016, protecting intellectual property rights and further
The Public Private Partnership Factories of the Future (FoF)

was established as a EUR 1.2 billion programme over the
period 2014-2020, in which the European Commission and
industry are collaborating in research to support the
development and innovation of new enabling technologies
54
56
European Commission Communication on Industrial policy An

integrated industrial policy for the globalisation era, COM(2010) 614
55
European Commission Communication on Industrial policy, A
Stronger European Industry for Growth and Economic Recovery,
COM/2012/0582 final
European Commission Communication on Industrial policy For a

European Industrial Renaissance, COM/2014/014 final
57
Commission Staff Working Document, 'Advancing Manufacturing Advancing Europe' - Report of the Task Force on Advanced
Manufacturing for Clean Production, SWD(2014) 120 final.
25
Trend report
for the EU manufacturing sector. The initiative is helping EU

manufacturing enterprises, especially SMEs, to adapt to
global competitive pressures by improving the technological
base of EU manufacturing systems.58
In addition, there are other PPPs which may be relevant for
this sector in the area of Robotics, Photonics, Energy
efficiency in Building (EeB) and the European Green Vehicles
Initiative (EGVI).
The Horizon 2020 work programme for the years 2014-15
for KETS NMP programme, include 16,000,000 to be
allocated to AMP programme. The Broad lines of the
activities of the programme include:
Technologies for Factories of the Future

Technologies enabling Energy-efficient buildings
Sustainable and low-carbon technologies in
energy-intensive process industries
New sustainable business models
In the context of the preparation of their regional Smart

Specialisation Strategies for RDI, which are conditional to the
allocation of Structural Funds at regional level, 57 EU
regions from 14 EU countries have identified Advanced
Manufacturing Systems as a strategic priority on which they
concentrate efforts to stimulate growth and regional
development.59
existing alliances and coordination organizations are

fragmented and cannot effectively drive the reform that the
sector development would require.
Clean technologies
A recent survey on circular economy in SMEs indicated that
regulation was one of the main issues for SMEs (12.4%) and
that the concept could be made more relevant for small
businesses by establishing specific incentives for them to
adopt it (17%). They would consider the circular economy
model if there were incentives to help them make changes
and they would like to know more about how to fund a
change in model. However, case studies, webinars or peer to
peer learning were considered as the measures least likely to
drive action.61
Customer experience
Combination of customer value-in-use and their status as
co-creators of value should be acknowledged in consumer
protection regulations and possibly in trademark and
intellectual ownership rules.
The policy challenges identified through the case studies are
outlined in Table 7 on page 27.
Other policy areas that may influence the trend concern

regulatory requirements concerning health, hygiene and
safety at work, notably the health and safety of workers:
conditions applicable to the workplace,60 and environment
regulations in the areas of water and soil protection as well
as air and noise pollution.
4.3. Policy challenges

Smart Factories
Creating the demand for innovative skills and developing
novel curricula are viewed as critical elements in an
advanced manufacturing strategy. The development of
wider manufacturing communities is called for in order to
shorten the time from research to application of
technologies. There is a perceived lack of updated and
transversal skills, especially in SMEs and across EU.
Moreover, access to finance and participation to EU
programmes is perceived as challenging for many
stakeholders in the sector. The overflow and scalability of
new technologies is also critical and is due to poor
interoperability and lack of standards in the sector. Also
58
http://ec.europa.eu/research/industrial_technologies/innovation-inmanufacturing_en.html
59
IPTS, S3 platform, accessed July 2014.
60
Council Directive 89/654/EEC of 30 November 1989 concerning
the minimum safety and health requirements for the workplace
(first individual Directive within the meaning of Article 16(1) of
Directive 89/391/EEC), and successive amending Acts
61
Fusion Observatory Report: February 2014 What do Europe's

Small and Medium sized businesses think about the Circular
Economy
26
Trend report
Table 7: Case-study policy challenges

Case-study
Policy challenges
Smart Factories
Smart process
applications
As environmental regulations become stricter and the prices of energy rise, manufacturers have increasing
incentives to adopt smart manufacturing processes and to deploy Smart Process Applications.
Some of the companies in this case study mentioned that their limited access to finance poses a barrier to
their development. Especially for prototyping and early-market penetrations stages, a mixture of riskbearing and non-risk-bearing capital is needed, but both bank loans and post-angle capital is hard to come
by.
The waiting period attached to grant proposals sometimes does not fit this agile outlook, limiting the extent
to which these companies can rapidly engage market demand.
Companies involved in the development of Smart Process Applications find it hard to attract the university
graduates and PhDs in the very specific technology fields in which they operate.
An ICT skills mismatch has been observed by the Task Force on Advanced Manufacturing for Clean
Production, who state that the demand for ICT practitioners grows by 3% per year, while the number of ICT
graduates in the labour market actually decreases.
Some of the small technology companies in this case study lament the time, energy and man power they
need to spend on red tape produced by their national governments, which directly affects their productivity.
Next generation Shortages in skills and competence deficits. Most companies struggle with finding highly skilled and
specialised employees, especially highly skilled engineers.
forging
In order for the EU forging industry to be competitive, producers need access to energy and materials at
competitive prices. Specific examples include challenges in access to scrap metal, which have forced
European producers to switch from scrap material to ores and concentrates.
Crowdsourced
manufacturing
Differences in labour law across Europe should be addressed.

Standards for sharing open data are needed.
Promote early linkages with academia and collaboration in commercialisation
Capacity
optimisation
Sourcing key technical talent is crucial but not an easy task. Most companies indicated that they try to
search for the right skills locally as much as they can but they are also looking in places like the United
States and emerging economies for talent. Moreover, hiring key talent in several countries of the European
countries, in particular Southern Europe, comes with more administrative challenges compared to Northern
Europe. Unequal hiring policies and legal protection of employees creates an uncertain position for the
employer with respect to being able to let go of employees that do not perform.
The highly competitive market requires highly innovative solutions, which puts considerable pressure on
R&D activities. However, the critical moments for funding occur when companies want to up-scale their
technology. Manufacturing facilities are expensive, and so are testing new forging technologies. Further upscaling new forging technologies requires considerable capital investments, which in practice are out of
reach for SMEs.
Clean tech
Closed-loop
waste
management
For many SMEs, finding skilled labour is a real challenge. This is even more the case for the waste
management sector where companies need employees that understand the process behind their solution.
Thus, they are required to have a good mixed background in business processes or management and
engineering, as SME employees are asked to take part to diverse tasks.
The main point of improvement for EU funding relies in the speed of delivery of capital, i.e. time lapse too
long from submission to validation.
Lack of transparency and the limited focus of available funds. First, the myriad of rules and regulations
makes it complicated for companies to understand where and how to apply. Secondly, it appears that
structural funds have a rather limited focus in some countries.
The transformation from waste to resources is not clearly understandable by customs and tax
administrations among others. The products that companies are handling do not fit the definition of waste,
but still have to follow waste regulations.
Another waste management directive created difficulties for one of the showcased companies. The directive
considers thermal treatment processes such as pyrolysis to be in the same category as incineration. The
permitting procedures to install an incineration plant are extremely long, often taking up to a year or two,
with multiple points of contacts. It represents a real slowing factor to company development.
Energy
harvesting
Develop policy tools to support launching customers and pilot projects.

The lack of public awareness should be addressed, since not many people have heard about thermal or
energy harvesting.
Standardisation for interoperability between energy harvesters and application components is important
and governments should think of ways to promote it.
27
Trend report
Advanced
reverse
treatment
technologies
Access to finance is regularly identified as a major challenge for SMEs to blossom. In the clean
technologies, and more particularly in the water treatment, this issue is even worse. Indeed, the specificities
of the sector make it capital intensive. Before achieving any revenue, heavy early investment are required
especially in R&D and to create a prototype. In many cases, it drains the initial capital just to achieve the
proof of concept.
The need for references could be overcome by revisions to public procurement policy. However, the
requirements for public procurement are often too tough for SMEs. Most of the SMEs avoid entering into
procurement procedures due to the time spent, the requirements.
Reverse treatment technologies do not face the same rules and regulations in all the European countries.
For example, the laws concerning sludge differ heavily between Germany and the Netherlands. Thus, most
of the sludge from the Netherlands is sent to Germany, where the legislation even differs between Lnder.
The current funding and grants support schemes in Europe have also been criticised for their administrative
burden and strategic constraints. In the case of the former, burdensome paperwork means that SMEs can
either hire a full-time employee or outsource the task to external consultants. No matter the decision, both
choices represent the inefficient allocation of financial and human resources to administration.
Circular supply
chains
Lack of sufficient differentiation between recycling and reuse at an institutional level.

Customer experience
Neuromarketing
innovations
Neuro-marketing companies struggle to properly integrate the research emphasis in EU funding into their
activities.
Facilitate the set-up on new enterprises. Despite some improvement, support still differs in Member States.
Reduce tax burden during early phase of companies activities and foster on enterprises growth.
Improve the overall communication on accessible EU funds, i.e. goals, eligibility or reporting standards.
Facilitate the access to finance policy area, i.e. shorter time between submission and validation of
applications.
De-risk entrepreneurship. Not only focusing on young entrepreneurs, but also on experienced over 30
entrepreneurs, including female founders/entrepreneurs.
Improve the internationalisation by creating standards allowing enterprises to build mixed international
models, i.e. be partially owned by EU and US funds.
Predictive
analytics
Access to finance is one of the most critical challenges faced by European start-ups. Hence it was
unsurprising that all enterprises interviewed for this case study expressed the difficulties they encountered
in securing funding for their activities. And as such, most interviewed entrepreneurs were forced to rely on
their own funds and forego the receipt of a steady income.
Most successful European enterprises consider engaging US venture capitalists. As a consequence of this,
European enterprises often relocate their headquarters to the US, as they prefer to work and invest in the
environment more conducive to their financing needs and growth aspirations.
Interviewed SMEs considered the European data protection as a barrier for their business. The wider
adoption of predictive analytics comes with new risks for customers privacy rights. As a result, enterprises
like Big Data Scoring tend to avoid markets that are more sensitive to data protection (e.g. France, Spain, or
Germany) in favour of Scandinavian and Eastern European countries, where they find a better acceptance
for their business model.
Europe is facing a shortage of skilled labour and despite the awareness of the issue the gap appears to be
increasing.
Enhanced
customer
support
Experience in the set-up of new enterprises was rather burdensome and slow in Southern Europe. In
comparison, the overall complexity of registering a new business was much easier, quicker and cheaper in
the UK compared to Italy respectively Spain.
European data protection law would not be up-to-date, as it misinterprets activities happening in social
networks.
Banks were generally considered as being too conservative to lend to the interviewed start-ups, as the
services provided by enhanced customer support enterprises are rather based on a philosophy then on
touchable products, making their business models different. Local bodies governing own or European
funds often lack sufficient funding, language skills and proper business understanding to adequately
support enterprises in their business and internationalisation activities.
Customer
incentives &
involvement
Increase the skilled labour in web-marketing, as EU SMEs find difficult to hire skilled people to create and
manage a firms online marketing strategy, while maintaining a good client-company relationship.
Improve the overall communication on accessible EU funds, i.e. goals, eligibility or reporting standards.
28
Trend report
5. Good policy practices

This chapter discusses good policy practices per trend. This
includes policy practices suggested in the case-studies, the
literature and the workshop.

At national level, the High Value Manufacturing Catapult
(UK)62 is a good policy example concerning Smart Factories.
Established in 2011, the High Value Manufacturing Catapult
is a strategic UK initiative that aims to revitalise the
manufacturing industry. The HVM Catapults network
consists of seven technology and innovation centres,
overseen by the Technology Strategy Board, with over 200
million of government investment. Catapults are not-forprofit, independent physical centres, which connect
businesses with the UKs research and academic
communities. The centres support innovation across all high
value manufacturing areas, from raw materials and highintegrity product assembly processes to scaling-up and
proving-out processes and supply chain networks. The HVM
Catapult has engaged with over 1,500 businesses since its
inception. Recently, the government has announced new
funding for the development of new high-tech aerospace
technology at the Manufacturing Technology Centre (MTC) in
Coventry. It is planned that the government will provide 30
million in funding, which will be matched by the industry.
The Made Different programme (BE) is part of the new
industrial policy of Flanders. It is run by Sirris (an association
of ADMT experts who support companies) in collaboration
with Agoria (the technology sector business association with
1600 members that brings technology in manufacturing
companies). This project has various schemes to reach out to
firms and support them to make steps in preparing their
factories for the future. They have developed a scan to
assess the factories readiness for the future and support
them in making steps. The target is to reach a step in 500
companies, and to finish all steps in 50 projects. Partners are
FTMC, a research institute on mechatronics, and Flanders
Drive the automotive cluster organisation, but many more
partners have joined the initiative.
Manufacturing Advances Through Training Engineering
Researchers (MATTER)63 was launched in October 2011 for a
period of four years to provide doctoral level research in
advanced manufacturing across the themes of aerospace,
automotive and packaging which are considered to be critical
62
63
https://hvm.catapult.org.uk
http://www.swansea.ac.uk/engineering/research/centres-andprojects/matter
areas for the UK economy. Overall this initiative will support

26 students over the next four years through a bursary of up
to 16,500 per annum and payment of all fees. It is also
important to note that projects are industry led with
industrial and academic supervisors. Research engineers will
be expected to spend at least 50 per cent of their time
working with their industrial sponsor.64
The Region of Aquitaine has initiated an ambitious action
plan for strengthening industrial productivity (Factory of the
Future Region of Aquitaine). In a nutshell, this plan aims at
improving companies productivity by undertaking actions in
the
following
areas:
the
production
processes
(modernisation, equipment, automation, integration of
information technology and communication); industrial
organisation (productivity, quality and flexibility); staff
training and improved working conditions (versatility,
ergonomics, employee engagement and management). This
plan is aimed at improving the productivity and will be
complemented by a series of joint research programmes.
At regional level, the most common types of policy measures
are dedicated grants funding which are often co-financed
through Structural and Cohesion Funds. 65 An example of a
regional programme from an innovation agency is the
LimburgMakers programme, which shows that some existing
tools, such as vouchers, are still relevant in a policy-mix of
instruments.
Platforms, clusters and public-private partnerships have also
been developed at regional level. Examples of regional PPPs
include Penrose - joint research programme (TNO-ITRI) in
South Netherlands; FIMECC Programmes (Tampere);
Technology Centre for Advanced Manufacturing PRODINTEC
(Asturias).
Examples of clusters include: Regional Cluster on Intelligent
Factory (AFIL-Associazione Fabbrica Intelligente Lombardia);
FIMA-Forum for Intelligent Machines (Tampere); Solliance
research cluster (South NL). The region of BadenWrttemberg has three main clusters in the field of
advanced manufacturing (Manufuture BW, Mechatronic
clusters and Future Aerospace Network). 66
64
http://www.swansea.ac.uk/engineering/research/centres-andprojects/matter
65
A smart specialisation platform for advanced
Manufacturing, Scoping paper, 30 May 2014, Technopolis.
66
Policies and Perspectives of Advanced Manufacturing across EU
regions. Scoping Paper for the RIM Plus, Workshop Regions, industry
and advanced manufacturing (Brussels, 18 March 2014)
29
Trend report
Regional measures and initiatives on Advanced

Manufacturing have been mapped by a recent RIM paper
which identified 5 main sectors of intervention:
-
Figure 11: Actors involved in policy promoting smart

and clean production
Regional policy measures focusing on resource

efficiency and sustainability in manufacturing;
Materials and key technologies for Advanced
Manufacturing Processes;
Measures targeting broadly the development of new
technologies through R&D and innovation;
Measures in support of networking for advanced
manufacturing;
Approaching Advanced Manufacturing through support
to capacity upgrading and competitiveness.
A relevant example of a horizontal transfer between regions

is the Vanguard Initiative67 for New Growth through Smart
Specialisation. Several regions (18) which have included
advanced manufacturing priorities in their RIS3 strategy
have joined forces, and started to work together towards an
inter-regional Smart Specialisation strategy for Advanced
Manufacturing. In this context, participating regions have
now established 3 pilot lines of activity to develop pan-EU
projects of scale, concerning:
Advanced
Manufacturing
for
Energy
Related
Applications in Harsh Environments (Scotland);
Efficient and Sustainable Manufacturing (ESM)
(Catalonia and Lombardy);
High Performance Production with 3D Printing
(Flanders/South Netherlands/Norte).
EPCC is a centre of excellence in advanced research,
technology transfer and the provision of high-performance
computing services to academia and industry, based at the
University of Edinburgh in Scotland. EPCC is coordinator of
the FORTISSIMO project, one of the projects of the EU
programme I4MS- ICT for Manufacturing SMEs. One of the
relevant services is providing expertise and access to
facilities on super-computing for companies, including SMEs.
They also run a programme in cooperation with the Scottish
Enterprise, which is the agency of the Scottish government.
One of the lessons from the Regional Innovation Monitor
Plus workshop held in July 2014 was that various
organisations are often involved in implementing Smart
Factory policies at regional level. Organisations at the
supply-side of advanced manufacturing technologies
(universities and technology centres) focus on excellence,
while organisations on the demand-side (agencies and
associations) focus more on the relevance for regional SMEs.
Many good policy practices involve collaboration between
such organisations on the supply- and demand-side of Smart
Factory innovations (Figure 11).
Needs of
society and
markets
science
Enabling
(I)Technology
See http://www.s3vanguardinitiative.eu/
smart &
clean
production
tech centres
Societal and
economic
impact
associations
Trend driving
companies

REMake 68 was a project based on a public-private
partnership for resource efficiency in the manufacturing
sector. Since 2009, REMake has been designing and testing
policy instruments and practical tools to support ecoinnovation in manufacturing across Europe. With the support
of REMake experts, manufacturing companies assessed their
savings potential and discovered how resource efficiency
and life-cycle approaches can increase their profitability.
REMake partners tested a comprehensive set of consultancy
tools in a two-stage voucher schemes with European
manufacturing SMEs in France, Germany, Italy, Spain and the
UK. They also produced a resource efficiency selfassessment tool, a database on relevant standards, a guide
to
resource
efficiency
in
manufacturing
and
recommendations for policy makers. The project has not
been renewed
Another example which could be transposed to the cleantech
sector is the Innovative Medicine Initiative (IMI) 69 which is a
joint undertaking between the European Union and the
pharmaceutical industry association EFPIA. IMI is the world's
biggest public-private partnership (PPP) in the life sciences.
IMI has a budget of 3.3 billion for the period 2014-2024.
Half of IMI's budget (1.638 billion) comes from Horizon
2020, the EU's framework programme for research and
innovation. This will match 1.425 billion committed to the
programme by EFPIA companies, plus up to 213 million
that could be committed by other life science industries or
organisations. The funding is used to speed up the
68
67
agencies
69
http://www.greenovate-europe.eu/completed-projects/remake
http://www.imi.europa.eu/content/home
30
Trend report
development of, and patient access to, innovative medicines,

particularly in areas where there is an unmet medical or
social need. It also facilitates collaboration between the key
players involved in healthcare research, including
universities, the pharmaceutical and other industries, small
and medium-sized enterprises (SMEs), patient organisations,
and medicines regulators. Some of the mechanisms
developed in IMI could serve as a model for develop a
similar system for facilitating collaborations and finance
development and take up for clean technologies.
The United Kingdom's Waste & Resources Action Programme
website provides guidance on enhancing resource efficiency
for local authorities, individuals and businesses.70
The Global Footprint Network offers to assist businesses in
the utilisation of Ecological Footprint measures in order to
derive benchmarks, quantitative targets as well as
evaluations of future activities and strategies that can feed
into strategic decision-making frameworks.71
ADEME (French Environment and Energy Management
Agency): ADEME provides training, information, networking,
advice and financial assistance to companies that want to
improve their efficiency and their ecological track record.72
The Centre for Sustainable Design (UK) offers consultancy
services, designs training programmes, facilitates expert
workshops, and provides informational resources in different
areas concerned with the sustainability of products. 73
The UNEP/SETAC Life Cycle Initiative provides a series of
training materials on life cycle management. They enable
the assessment of an innovations environmental, social and
economic impacts considering the entire life cycle of an
existing product.74
UNIDO (United Nations Industrial Development Organization)
helps companies in developing countries to move to clean
technologies and to adopt more sustainable methods of
production. National Cleaner Production Centres in 43
countries support companies that want to move to green
technologies by disseminating information, creating
awareness, training professionals as well as by offering
plant assessments and practical demonstrations.75
The LiMaS project (Life Cycle Innovation & Management for
SMEs) has developed a free and user-friendly web-based
tool that facilitates the eco-innovation developments by
technicians in SMEs.76
70
www.wrap.org.uk
www.footprintnetwork.org/en/index.php/GFN/page/footprint_for_bu
siness/
72
www2.ademe.fr
73
cfsd.org.uk/
74
www.unep.fr/scp/lcinitiative
75
www.unido.org
76
www.limas-eup.eu
The MePPS (Methodology for Product Service Systems) webtool assists organisations in creating new product-service
offerings. 77
The National Industrial Symbiosis Programme (NISP) in the
UK assists member companies with 12 regional teams of
industrial symbiosis practitioners who work closely with NISP
members to enhance their resource efficiency. Membership
is free.78

Limited policy cases were identified concerning customer
experience. However, in some cases possible assistance or
support may be filled under the innovation in services
heading within the national innovation programmes.
For instance in Lithuania, the National Innovation
Development Programme for 2014-2020, which replaced
the Lithuanian Innovation Strategy for 2010-2020, includes
possible support for innovation in services. The strategic aim
of the programme is to promote Lithuanias global
competitiveness by establishing an effective innovation
system. The programme sets four specific objectives: (i) to
educate innovative society by developing new knowledge
and its application; the main goal is to properly use the
intellectual potential and to promote researchers; (ii) to
increase business innovation potential by promoting business
R&D investment; (iii) to promote science-business
collaboration, clusters development and global cooperation;
(iv) to establish an effective innovation policy and to foster
public sector innovations. 79
Another relevant policy tool could be vouchers which can be
used by SMEs to enhance e-commerce and ICT capabilities.
The European Commission has announced in 2014 that it
will hand out such vouchers worth up to 10,000 to
stimulate SMEs using digital technologies. Currently, there is
a pilot project running in the Spanish regions of Murcia and
Extremadura. It showed that small businesses using digital
services grow twice as fast, export twice as much, and create
twice as many new jobs. Since vouchers allow the SMEs
quite some flexibility in their choice on how to use the
vouchers, they can also be used to scale up the trend of
using digital technologies in enhancing customer
experience80.
Tools such as the EU Consumer Scoreboards, which monitor
how the single market is performing for EU consumers, are
relevant for identifying potential problems, for instance
concerning comparability, trust, complaints, overall
satisfaction, choice and switching.
71
77
www.mepss.nl
www.nisp.org.uk
79
http://erawatch.jrc.ec.europa.eu/erawatch/opencms/information/cou
ntry_pages/lt/highlights/highlight_0002)
80
http://www.ecommerce-europe.eu/news/2013/europeancommission-to-fund-smes-to-go-digital
78
31
Trend report
6. Policy recommendations
This chapter provides recommendations at various policy
levels with the aim of promoting the three trends addressed
in this report. After summarising the recommendations from
the case studies per trend, a second paragraph synthesises
the recommendations including those which resulted from
the workshop, and formulates concrete proposals for
scaling-up existing good practices, or developing new policy
approaches.
6.1. Recommendations from the case

studies per trend
We first draw on the recommendations provided by the
people interviewed in the case studies (See Annex table B for
a compilation).
Smart factories
For smart process applications, shortening decision times
on EU funding applications should be pursued further. In
addition, as smart process application developers require
high skills, improving the number of ICT graduates with a
focus on smart manufacturing could benefit the companies
in the sector, for instance through EU-wide targeted skills
programmes that focus on specific technology areas. Also a
green fund to help manufacturers implement large-scale
energy efficiency projects should be established.
The reduction of the bureaucratic burden that small
technology companies engaged in Smart Process Application
development experience should continue and here the
implementation of the Small Business Act plays an
important role. Finally, since a large share of the market for
Smart Process Applications in manufacturing environments
are not yet fully convinced of the added value and benefits
of deploying Smart Process Applications, show-casing efforts
which display and disseminate instances in which factories
have evidently become more successful through the
implementation of Smart Process Applications, could benefit
the solution providers and the up-take by the market.
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 programme
although a more tenacious standardisation of labour laws
(where the interests of entrepreneurs are in balance with
labour security) is called for. In addition, project funding
through large European tenders is less easy to get access to
and less transparent for small companies compared to
experienced companies. This potentially blocks small

companies from participating in research tenders.
In addition, investment in technical education would benefit
the uptake of capacity optimisation since it is based on
technical disciplines. Within the Key Enabling Technologies
programme, advanced manufacturing is identified as a
crosscutting technology. The European Commission has
recognised the importance of investing in science and R&D in
this area, which could fit in with building up talent for
securing the development and deployment of nextgeneration technologies for capacity optimisation.
In the area of next generation forging, three main policy
recommendations have been put forward: firstly, the
(potential) skills gap should be addressed by stimulating
companies to develop apprenticeship programmes. Secondly,
an environment of multi-disciplinarity should be promoted,
especially between software engineering and manufacturing.
Thirdly, policies should be considered that promote better
access to materials and energy at competitive prices.
In order to facilitate and stimulate the growth of
crowdsourced manufacturing, governments have a role to
play. Crowdsourced manufacturing is redefining the labour
relationships between the crowd as labour force and
platforms and manufacturers as employers. This might
require a new regulatory framework for flexible labour
contracts in order to become sustainable. Moreover,
governments can help develop standards for sharing open
data. From a client side, further adoption could be increase
by R&D tax breaks for users. And it is also recommended
that
governments
participate
in
crowdsourced
manufacturing. The U.S. has acknowledged this a couple of
years ago, and Europe has to follow in order to catch up.
Clean technologies
Concerning the models used in closed-loop waste
management, there is a need to break from the old linear
organisational model, which tends to be too restrictive. For
example, the metrics currently used to assess a company are
still based on the old model, and solely focus on the
economics. Moreover, new measurement models need to be
developed to assess the wider societal impact of a firms
activity. The economics of the company is one of the
dimensions, along with solid measurements for social and
environmental impact.
Moreover, this new model should measure the actual impact
of the activity along the whole supply chain. In addition,
there is a need to better understand the circular economy
32
Trend report
and the closed-loop model. Awareness should be raised

among businesses and policy-makers. Forward thinkers with
innovative ideas should be engaged in order to drive
systemic change. Other recommendations include reaching
critical mass and updating the existing regulations with
relevant objectives.
Policy recommendations towards circular supply chains
focus on macro level measures like a change in economic
indicators, a shift towards integrated reporting by companies
and taxation breaks for labour, which enable circularity to
prevail over linearity.
The role of utilities in the advanced reverse treatment
technologies could be improved as they have the potential
to support innovative technologies. Moreover, tightening the
standards to lower the energy consumption of treatment
facilities and to lessen the use of chemicals could be
incentives in new regulations. Changes in public procurement
could also boost the advanced reverse treatment
technologies: firstly, a share of public procurement could be
specifically dedicated to invest in innovative solutions.
Secondly, the process should be eased by developing the use
of e-procurement. Some countries are still lagging behind on
this aspect, creating big disparities within Europe depending
on the country.
In the case of energy harvesting, policymakers can play a
vital role in the market adoption of these solutions for
wireless networks. By establishing minimum safety and
quality standards for application of energy harvesting
solutions, and by acting as a launching customer,
governments can generate strong signalling effects towards
consumers and companies. Simultaneously, heavier taxation
of non-renewable energy resources would make energy
harvesting more interesting from a commercial perspective.
Customer Experience
For the trend of neuro-marketing innovations and customer
incentives and involvement, policy gaps could be addressed
by improving the access to finance, i.e. shortening the time
between the submission and validation of applications.
Governments could facilitate access by reforming their tax
system in order to further promote innovation. The
harmonisation of rules in the internationalisation area by
creating standards would allow enterprises to build mixed
international models, i.e. to be partially owned by EU and US
funds.
Another potential area of improvement would be to de-risk
entrepreneurship by not only focusing on young
entrepreneurs, but also on experienced entrepreneurs over
30 as well as female founders/entrepreneurs.
Despite some improvement, support to facilitate the set-up
of new enterprises still differs between Member States. A
common suggestion observed by showcased companies is
the reduction of the tax burden during the early phase of

company activities in order to foster enterprise growth. The
implementation of one-stop-shops would also help
understanding the available EU support and provide
legal/administrative support to ensure SMEs and start-ups
receive sufficient information. Finally, an improvement on
the overall communication on accessible EU funds would
benefit SMEs.
6.2. Synthesis of recommendations

resulting from the workshop
Facilitate the development and diffusion
of knowledge to scale up the trends
There is a need across the trends investigated in this report
to be supported by developing and diffusing specialised
knowledge, notably across and between sectors. There are
many solutions available, but they are developed in silos for
one sector, which makes it difficult to offer them to other
sectors. The knowledge should be standardised faster in
order to increase interoperability between industries of
application. The pace of innovation calls for cross sector IPR
agreements and licensing of new technologies. Example
license contracts are needed, e.g. on how to agree to use the
application in another industry, but agree not to sell it in the
former industry.
In order to test new ideas, proof concepts and diffuse the
results there is a need to support the development of
testbeds, a Proof of Concept fund, and large scale
demonstrators.
Finally, a culture of continuous collaborative relations among
SMEs and research should be fostered which could help
overcome some of the existing barriers.

innovation trends
A common policy challenge involves the question how to
promote learning: how can public intervention promote
interactive learning between those who offer solutions and
those who need and apply these solutions.
Not only the business models of many companies which
drive these trends are clearly based on learning by using
and learning by interacting, also the good policy practices
are based on the same principle. Pilot plants and 3D-printing
centres for example, which are set up by technology centres
increase their expertise by involving regional SMEs which
provide the concerning centre of excellence with new ideas
and feedback (for free).81 It is also important to learn with
81
See also RimPlus workshop & scoping paper (Wintjes 2014)

https://webgate.ec.europa.eu/ENTR/rim_cp/sites/default/files/repo
33
Trend report
students which are the future users. Therefore, at for

instance the Aachen Center for 3D printing also students
experiment with the available machines, since future
engineers need to be trained in a totally new way of
engineering and designing which is needed to benefit from
the opportunities of additive manufacturing.
There is a perceived view that existing EU policies concerning
education and training are not adapted to the challenges and
the speed of innovation. Education policies should support an
EU common view on training on the job (e.g. industrial
doctorate). Mentorship programs with industry should be
supported on an EU scale.
There is a lack of coordination between the different national
and regional education policies. Some degree of EU
homogenous standard concerning professionalisms and
university training could be developed, in particular for the
concerning trends. Coordinated innovation education
strategies should be linked to the smart specialization
approach of regions. More generally, the regional and to
some extend national innovation systems should be
governed and developed taking into account the triple-helix
model.82 But besides collaboration between government,
universities and companies, also the users should be
involved as a fourth player in the partnerships.
Develop stable regulatory frameworks

The need for a stable regulatory framework can be felt
across the various sectors. Stakeholders, especially for SMEs,
are concerned about regulatory uncertainties that further
complicate their tasks in bringing about innovative solutions.
Policy makers should become more attentive to this impact
of their activities and consider ways to establish a degree of
predictability in the introduction of new regulations. Obstacle
oriented forums to solve regulatory issues can play an
important role. They can improve policy planning, and design
of support actions and regulation. Such coordinated
collaboration between a variety of players, allows
stakeholders to plan their actions and investments
accordingly.
It should also be considered that regulation can become a
driver in the adoption of innovative solutions (e.g. in the
sector of waste and recycling). Regulation activity should be
seen as an enabler that gives investors certainty.
rt/Supporting%20advanced%20manufacturing%20activities%2
0at%20the%20regional%20level.pdf
82
Triple Helix systems: an analytical framework for innovation policy
and practice in the Knowledge Society, Marina Ranga and Henry
Etzkowitz, INDUSTRY & HIGHER EDUCATION, Vol 27, No 3, August
2013, pp 237262
One of the main reasons that lead to changes in the existing

regulations is the need to adapt them to new developments
be they societal, economic or technological. Therefore
designing policies and regulations affecting the trends
should be a collaborative undertaking, which should be
carefully planned and possibly taking into account foresight
studies and impact assessments. To the extent possible,
policy decisions should be future-proofed. In any case more
attention should be given to the longer term effect of public
policies, also in a constructive view of supporting take-up of
innovation through gradual and planned introduction of
regulation affecting specific sectors. This could be
considered an opportunity as in certain sectors, such as
cleantech, regulations and business models allowing scaling
up of the business are yet not defined.
Apply new models to measure socioeconomic impact

In certain sectors, notably cleantech, there is a need to
reevaluate the costs and benefits of the introduction of new
innovative approaches for the community. Reflection should
be given to the real value of resources and how to regulate
their use, taking into account the real costs for the
community of the consequences of the usage. Also social
costs and benefits, and environmental costs and benefits
should be considered, as well as customer satisfaction.
Correctly covering these aspects is certainly a challenging
task. However, if these measures could be taken, it would be
possible to devise much more precise measures of
intervention to support the introduction and up-take of
innovative processes, which maintain manufacturing jobs in
Europe, discourage pollution and increase customer
satisfaction.
In particular, the main policy instrument which is used to
incentivize or discourage the adoption of innovative solutions
is often taxation. As such, it should be used to incentivize
companies providing circular economy solutions (through tax
breaks, etc.) and for instance to raise the taxes on waste.
There is also a need to coordinate between the Member
States the possible effects of these measures, in order to
avoid that the adoptions of different measures leads to
counterproductive effects of inequality between companies
in various countries and tax competition.
Develop collaborative platforms

How can we develop effective collaborations to increase the
uptake of these smart, sustainable and inclusive business
innovations? The challenge for innovation uptake is mainly
the speed of value creation. The existing collaborative
frames cannot keep up and there is a need to devise new
models to bring the players together. This includes users and
34
Trend report
producers of solutions, but also regulators, investors and

teachers.
There is a need to engage the stakeholders at the right level
and to motivate their participation. New forms of
collaborations may include online community platforms; to
launch open challenges for collaborative participation;
combining different types of stakeholders around challenges
or topics; to establish processes based on reward for
stakeholders participation in the form of recognition or even
in material form. Trade or sector organisations can play a
key role as honest brokers.
Collaborations should be structured around existing value
chains, geographically located, and around sector related
clusters. They should help to engage big and small
companies (B2B Multinationals 2 SMEs) as well as academia
and Business.
Public Private Partnerships can also play an important role,
where private innovative stakeholders set the R&D priorities
and the larger companies can provide funding and structures
for developing innovative sectors and products, while the
public sector plays a role as facilitator or regulator and can
provide additional funding. The aim would be to better define
the respective role of the players and to establish trust in the
emerging sectors that would help to attract further financing
and to foster development.
Bottlenecks that may prevent the establishing of effective
collaborations include: insufficient financing; changes in the
regulatory framework; the pressure from conservative
sectors; the perception that IP regulations prevent
innovation; lack of appropriate skills; etc.
Useful examples also include experiences from project take

it up.eu83 where several instruments have been collected
and developed to facilitate technology transfer and
innovation support. The project consists of an online
repository of novel tools and services for innovation support.
Promote novel approaches to financing

innovation
As access to finance remain the main barrier for innovative
SMEs, further though should be new approaches to support
innovation.
EU RDI support through Horizon 2020 programme should
further be provided to support actual implementation of
innovative solutions. Funds should be provided for proof of
concept,
patenting,
feasibility
studies,
technology
demonstration and deployment etc. Focus should also be put
on business model innovation and scalability. Financial
support should also be provided to cover marketing expenses
for SMEs (also post-demonstration), mentoring, training on
IPR, etc.
Policies and frameworks should be developed to provide
standardisation of procedures covering crowdfunding. These
procedures should encourage in particular big companies to
crowdsource R&D and product development provided by
SMEs.
Possible solutions to support effective collaborations include:

-
Events/platforms that foster collaboration between

big and small companies on an equal footing,
Focus more precisely on specific sub-topics and
bring stakeholders together also with policy
makers, into forums that are focus or challenge
based.
It would also be useful in this context to involve
the financial sector or at least the investors that
are more likely to be attracted to the sector, such
as for instance the VC arms of the Multinational
companies that are active in the sector.
For instance, concerning cleantech there are 26
subsectors, which could be the object of dedicated
events for matching and/or partnering. An example
of the possible format is the Multinational
companies meets innovators events, which have
been organized in the UK by BP and MITIE
83
http://takeitup.eu/
35
Trend report
7. Conclusions
Without Smart Factories Europe will continue to lose more
jobs, without clean tech we will continue to produce more
waste, and without improving customer experience,
companies will lose clients. The three trends analysed in this
report showcase that visions on a future with more jobs, less
waste and more satisfied customers are real. Many
successful solutions already exist today but the trends
should be scaled up in order to increase their socio-economic
impact.
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
analysed as independently, they are emerging in a common
context. The increasing scarcity of resources and the
increasing demand for customised (experience from)
products and services, call for the development and
deployment of new production technologies, organisational
changes and 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, production
processes and marketing.
A commonality in the three trends is that they represent a
more sustainable and systemic view with circular feed-backloops compared to the traditional, linear, short term view on
passive market-transactions. In all 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 and customer experience continue the value
creation process through, for example, the use of technology
centres which have set up pilot plants and learning or living
labs where regional SMEs and students are supported in
experimenting with new technology solutions, increase their
expertise as the SME and students provide the concerning
centre of excellence with new ideas and feedback (for free)
on how to better satisfy the needs of users. Generating
societal and economic impact from enabling technologies
requires value co-creation from collaboration and learning
with users.
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.

innovation 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 concrete

recommendation 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.
Based on the case studies and the workshop the following

recommendations are formulated:
36
Trend report
8. Literature
American Biogas Council, 2014, What is Anaerobic
Digestion?,
Available
at:
https://www.americanbiogascouncil.org/biogas_what.asp
Chesbrough, H. (2010) Business Model Innovation:
Opportunities and Barriers, Long Range Planning, Volume 43,
Issues 23, AprilJune 2010, Pages 354-363
Chesbrough, H. (2011). Open Services Innovation, Rethinking
your business to grow and compete in a new era, Published
by Jossey-Bass.
IDC (2012) Manufacturing Insights: The Factory and
Supply Chain of the Future.
EFFRA (2013). Factories of the future. Multi annual roadmap
for the contractual PPP under Horizon 2020, www.effra.eu
European Commission (2014) Advancing Manufacturing Advancing Europe' - Report of the Task Force on Advanced
Manufacturing for Clean Production. SWD(2014) 120; 19-32014
European Commission (2014) Communication For a
European Industrial Renaissance, COM(2014) 14/2,
http://ec.europa.eu/DocsRoom/documents/4108/attachments/
1/translations/en/renditions/native
European Commission (2014) Staff Working Paper: State
of the industry, sectorial overview and implementation of
the
EU
industrial
policy, SWD(2014)
14/3,
http://ec.europa.eu/DocsRoom/documents/4109/attachments/
1/translations/en/renditions/native
Knowles, V., S. Henningsson, R. Youngman, A. Faulkner
(2012), Coming Clean: The Global Cleantech Innovation Index
2012. http://info.cleantech.com/2012InnovationIndex.html
Mazarro, T (2012). Manufacturing matters: why it is
important for an economy to have a manufacturing base.
theconversation.com
Michigan State University (2011) Microbes generate

electricity while cleaning up nuclear waste, Available at:
http://msutoday.msu.edu/news/2011/microbes-generateelectricity-while-cleaning-up-nuclear-waste/
McKinsey. (2012) Manufacturing the future: the next era of
global growth and innovation. November 2012.
McKinsey (2013), Circular Economy, Available
http://www.mckinsey.com/features/circular_economy
at:
Parad, M., S. Henningsson, T.A. Currs, R. Youngman (2014),

The Global Cleantech Innovation Index 2014 Nurturing
tomorrows transformative entrepreneurs. Available at:
http://info.cleantech.com/CleantechIndex2014.html
Reid, A & M. Miedzinski; Technopolis Group (2014) A smart
specialisation platform for advanced manufacturing; Scoping
paper Prepared at the request of the European Commission,
Directorate General for Regional and Urban Policy (Contract
number 2014CE160AT020)
Smart Industry committee, FME (2014) Smart Industry;
Dutch industry fit for the future. www.smartindustry.nl
Van der Slot, A., W. van den Berg (2012), Clean Economy,
Living Planet The Race to the Top of Global Clean Energy
Technology Manufacturing 2012, a report by Roland Berger
Strategy
Consultants
for
WWF.
http://www.rolandberger.com/media/pdf/Roland_Berger_WWF
_Clean_Economy_20120606.pdf
Vargo, S.L., P. Maglio & M. Akaka (2008), On value and value
co-creation: A service systems and service logic perspective.
European management Journal (2008) 26, 145-152
Wintjes, R.J.M. (2014) Supporting advanced manufacturing
activities at the regional level. RimPlus scoping paper.
Available
at:
https://webgate.ec.europa.eu/ENTR/rim_cp/sites/default/files/r
eport/Supporting%20advanced%20manufacturing%20activit
ies%20at%20the%20regional%20level.pdf
37
Trend report
9. Annexes
Table A: Existing policies the companies benefitted from
Trends
Smart Factories
Smart process
applications
Next generation forging
Crowdsourced
manufacturing
Capacity optimisation
Solution providers in the field of Smart Process Applications partner with educational institutions to organize
apprenticeships wherein students are offered classes by the educational institution and obtain practical skills and
knowledge within a company.
There are credit facilities offered by the European Investment Bank, but some companies report to have no contact
and little knowledge of the EIB, while others think interventions such as the Jessica programme are too complicated
for them to work with.
Research grants to co-fund development activities.
EU-funded projects such as the REForCh project funded by 7th Framework Programme.
European legislation on eco-efficiency, which in addition to energy efficiency, provides the incentive to emit less
CO2 emissions.
Environmental regulation in place (e.g. REACH legislation) which helps the uptake of advanced forging technologies
that address environmental concerns.
A company benefited from government funding for the development of an apprenticeship programme addressed to
young people aged between 16 and 24 years old who are trained theForgemasters way.
SMEs opportunities to work together with large companies to jointly develop solutions financed by EU funding
programmes.
Companies can benefit from governments direct engagement in crowdsourced manufacturing such as in the case
of the US Department of Defense Research Agency, DARPA.
The German federal government has set aside approximately EUR 200 million to help industry associations,
research institutes, and companies develop an implementation strategy for smarter future production facilities.
Companies benefit from participation in joint research projects with national institutions and/or with EU-sponsored
research projects.
A company received a national grant, which the founders used to bootstrap their enterprise.
The Innovation Union, a Europe 2020 initiative, has launched a European Innovation Partnerships project to remove
barriers in the chain between research and bringing innovation to the market.
Clean technologies
Closed-loop waste
management
A good share of the companies in this case study have benefitted from the networking support offered by the
Knowledge and Innovation Communities; and the role played by directives to foster the industry.
Circular supply chains
The interviewed companies indicate that cooperation with grassroot groups and partnering up with companies that
produce e.g. spare parts helped to develop their business.
Advanced Reverse
Treatment Technologies
This sector benefited for example from sharing experiences with partners and clients from US.
Energy harvesting
The interviewed companies benefited from building strategy alliances and support for experimental sales.
Customer Experience
Neuro-marketing
innovations
EU funds most of all Horizon 2020 as the biggest EU Research and Innovation programme were a very relevant
source of funding.
Predictive Analytics
Strong legislation on data protection in the EU, which guarantees security for the companies interested in
integrating their predictive analytics into they business strategy. However, data protection also discourage firms
from basing in the EU as they face less rigorous data protection regulations elsewhere.
Companies interviewed benefited from the EU Intellectual Property legislation.
Enhanced customers
support
Interviewed companies observed that most processes and regulations to expand business to other EU countries are
relatively well aligned.
Companies benefited from administrative simplifications such as submitting documentation online.
Some companies profited from start-up accelerator programmes and support from Business Angels and Incubators.
In some cases, companies gained support from national and regional funds.
Customers incentives
Companies showcased have largely been financially-backed by business angels and private funds.
38
Trend report
Table B: Recommendations
Trends
Recommendations
Smart Factories
Smart process
applications
Next generation
forging
Crowdsourced
manufacturing
Capacity optimisation
Need to shorten decision time on EU funding applications.

Need to improve the labour market supply of highly specialised engineers.
Establishment of a green fund to help manufacturers implement large-scale energy efficiency projects. Such a fund
would finance initial implementation, and recoup the financed amount through the financial savings the
manufacturer generates on reduced energy expenditure.
Reduce the bureaucratic burden that small technology companies engaged in Smart Process Application
development experience.
Consider standardisation and showcasing initiatives that display and disseminate instances in which factories have
evidently become smarter and more efficient through the implementation of Smart Process Applications.
Address the (potential) skills gap by stimulating companies to develop apprenticeship programmes.
Development of EU-wide targeted skills programmes that focus on specific technology areas to improve the
availability of qualified human capital needed to drive the (further) development of technologies of the future.
Promote an environment of multi-disciplinarity, particularly of manufacturing engineers and ICT professionals.
Consider policies that promote better access to materials and energy at competitive prices.
European funding efforts for the forging industry could be focused on alternative materials and resource-efficient
forging solutions.
New regulatory framework for flexible labour contracts.
The European Commission might need to identify and assess market failures and provide a regulatory framework
for crowdsourced labour.
Governments can help develop standards for sharing open data.
Further adoption could be increased by tax breaks for users. In several interviews, companies representatives
offering crowdsourcing platforms suggested to offer users R&D tax breaks for using their platforms.
Governments can participate in crowdsourced manufacturing.
Harmonisation of the labour legislation to facilitate the development of SMEs.
Make the tender process for EU research funding projects more efficient.
Invest in technical education.
Create an environment where start-ups and entrepreneurship are rewarded, including supporting IPOs in Europe.
Clean technologies
Closed-loop waste
management
Replacing the old linear model with a new one.

Developing new measurement models.
Developing better understanding of the circular economy and the closed-loop model.
Reaching critical mass.
Updating the existing regulations with relevant objectives.
Clean supply chains
Changing economic indicators.

Use of an integrated reporting by companies.
Taxation breaks for labour. which enable circularity to prevail over linearity.
Advanced Reverse
Treatment
Technologies
Enhancing the role of utilities.

Introducing green regulations.
Providing grants and support in specific sectors.
Improving public procurement processes.
Energy harvesting
Increased taxing of non-renewable energy sources.

Facilitating standardisation processes for energy harvesting and storage processes.
Support for launching pilot projects and acting as a launch customer.
Increasing public awareness and industrial use through education.
Customer Experience
Neuro-marketing
solutions
Facilitating the set-up of new enterprises. Despite some improvement, support still differs in Member States.
De-risk entrepreneurship by better differentiating his image of entrepreneurs by less focusing on young male
persons in their early twenties and better including female and/or entrepreneurs that are older than 30 years.
Improve communication on all available EU funds (goals, eligibility, requirements).
Improve the access to finance policy area, i.e. shorter time between submission and validation of applications; reduce
administrative burdens fostering on lesser documentation efforts.
Improve the internationalisation by creating new standards allowing enterprises to build mixed international models,
i.e. in order to be partially owned by EU and US funds.
Predictive Analytics
Lack of skilled scientist. Policy makers should ensure EU universities train more data scientists.
Strengthen the industry-university interaction. It is important also that universities and school engage in industrial
partnership when developing high-tech skillsets. Public institutions could create (and co-finance with local
authorities) plans for continuous training and launch information campaigns to promote the need of data scientists.
Improving the access to finance for SMEs at early stage of development.
Improve the public sectors support in internationalising companies.
39
Trend report
Shorten and make more readable the EU legislation on data protection in the form of an information booklet.
Enhanced customers
support
Enhance customer support in public institutions, i.e. Europe Direct could use Sekeros software to integrate request
from different channels; Inbetnas language-based semantic search engine for matching citizensqueries, etc.
Enhance the existence of single contact points, through which companies could obtain information on administrative
formalities
Better support enterprises in their networking activities through, i.e., connecting innovative SMEs with larger
corporates.
Improve the harmonization of the common market, especially towards administrative procedures and taxes, which
would diminish costs for enterprises to understand the different procedures.
Foster on support for internationalisation, e.g. on legal aspects of setting and branch abroad or adapt a business
model to foreign contexts.
Customers incentives
Improve communication on all available EU funds (goals, eligibility, requirements). Facilitate the understanding
through systematic implementations of one-stop-shops.
Encourage the creation f technology hubs
40

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Business Innovation Observatory

Smart factories, clean tech

Business Innovation Observatory

European Union, October 2014

1. Overview and context of three trends

1.1. Smart factories

1.2. Clean technologies

1.3. Customer experience

2.1. Description of case-studies and companies

2.2. Examples of companies, innovative solutions and success signals

3. Key innovation drivers and obstacles

3.1. Smart factories

3.2. Clean technologies

3.3. Customer experience

4.1. Policy context

4.2. Policy context per trend

4.3. Policy challenges

5. Good policy practices

5.1. Smart factories

5.2. Clean technologies

5.3. Customer experience

6.1. Recommendations from the case studies per trend

6.2. Synthesis of recommendations resulting from the workshop

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

Figure 5: Cleantech innovation performance

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

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

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

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

Figure 10: Co-creation of societal and economic impact

Table 2: Increases in revenues due to improved customer experience

Table 3: Examples of solutions providing companies

Table 4: Main drivers and obstacles for smart factories

Table 5: Main drivers and obstacles for clean technologies

Table 6: Main drivers and obstacles for customer experience

Table 7: Case-study policy challenges

internet penetration rates provide enterprises with a new

workshop, recommendations have been formulated in

promote pilot plants and learning lab environments

Develop stable regulatory frameworks: a concrete

Apply new models to measure socio-economic

Promote new collaborative approaches: Develop

Facilitate the development and diffusion of

1. Overview and context of three trends

defined. This section provides some empirical background

Smart factories mesh business and

Clean technology, otherwise known as clean

Customer Experience describes the idea of

Figure 1: Criteria used for identification of trends and

1.1. Smart factories

Own calculations using data from Eurostats Structural Business

been declining over time due to increased competition from

Source: European Competitiveness Report 2013

However, manufacturing still has one of the highest

Cf. Mazarro, 2012

Next generation forging is another smart factories trend.

Global Smart Process Application Market 2014-2018, TechNavio

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

Experts agree that future production facilities will be much

1.2. Clean technologies

less than 5 billion in 2013.9 About half of cleantech venture

Closed-loop waste management refers to the process by

Source: Global Cleantech Innovation Index 2014

Innovation performance at country level is measured by the