Projekt

Economic foresight study on industrial trends and the research needed to support the competitiveness of European industry around 2025 (NMP-Foresight)

NMP technologies have the potential to contribute significantly to the move of Europe from a resource-intensive economy to a knowledge-intensive economy in the future. They will lead to new applications, new business models, new products, new production patterns, new services, new processes and other outcomes.

Against this background the study “Economic foresight study on industrial trends and the research needed to support the competitiveness of European industry around 2025” aims at elaborating and presenting qualitative and quantitative prospective scenarios considering the expected positioning and potential of the European industry in the field relevant for research in nanotechnologies, materials and production technologies (NMP).

The main objectives of this study are to

  1. Identify the key factors which influenced positively or negatively economic competitiveness during the last 20 years. 

  2. Elaborate and use a quantitative model based on the main past quantitative and qualitative key factors and derive different future scenarios around 2025.

  3. Analyse the influence of key factors and trends on crucial economic and NMP-specific aspects to assess the role of NMP under this framework around 2025. 

  4. Assess the European position and critical parameters likely to affect the competitiveness of EU industry around 2025 in order to derive recommendations on technologies, research and policies needed to maintain or improve the European position. 

Past and future NMP trends and key factors for competitiveness can be identified in the following fields or categories:

Resources: There has been an exploitive use of natural resources in the past and shortages, more difficult access and/or increasing materials as well as energy prices are expected in the future. NMP has the potential to increase resource efficiency by reducing the use of (critical) resources (e. g. by nano), substitute (critical) material (e. g. limited, toxic) and re-use strategic relevant resources e.g. by means of closed-loop production (life cycle, recycling) in the future. Especially high value materials are needed in particular in the chemicals sector. Also, the electronics and photonics sectors make use of strategic materials like Indium (e. g. as ITO in display technology or thin film CIGS in photovoltaics). Especially, if there is a need for a large amount of resources and the access to them might be critical (e. g. rare earth elements in China, Cobalt for lithium-ion batteries in the Congo, etc.), alternative technologies with substitute materials will gain importance (e. g. graphene to substitute the ITO conductive coating). According to expert assessments NMP may also contribute significantly to an increase in energy efficiency in some energy intensive sectors in the future (e. g. chemicals). With respect to human resources, in the past there has been a decline of researchers specialising in key areas directly linked to NMP. Therefore, human capital could be a restricting factor to the NMP development in the future and will likely gain importance.

Innovation: International competitiveness in NMP-technologies is decisive to gain the related economic benefits. This requires a strong research base fueling the innovative ideas of tomorrow. Europe has been strong in NMP-funding, built-up of R&D networks clusters, and platforms in the past. In terms of NMP patents, Europe has a global share of around 40%. These shares are varying from sector to sector, in machinery, photonics/instruments and automotive they reach even around 50%. The patent analyses over time indicate that, whereas in all analysed sectors the number of NMP patents has increased since the late 1990s, there has been a world wide stagnation and downturn in recent years. For all sectors a peak can be observed in the dynamics with a decline in strength of patent applications beginning with 2000 or later (depending on the specific sector). The overall interpretation is, that there is a cyclical long-term behaviour of NMP, as has been observed, for example, for the case of nanotechnology already (Schmoch/ Thielmann 2012). For the future, a new increase of patent activities would be expected, related to maturing NMP technologies and accompanied commercialisation of NMP-products in the different sectors.

Commercialisation: However, for early NMP applications there is still a gap in Europe between basic knowledge generation, innovative R&D and the subsequent production and commercialisation of the knowledge in marketable and requested products across sectors. This is reflected by often still moderate firm creation (e.g. compared to the USA), underdeveloped NMP production infrastructures like pilot lines or production facilities for upscaling from laboratory levels to the industrial scale. Moreover, there is a need for stronger integration of related (partly new or still unformed) value chains. Regarding economic impact, NMP applications and products may substitute existing products and value chains but also new markets may be created, which extend the total demand in the economy. Unsurprisingly, there is a great variation between the various NMP applications. Altogether, there is potential for Europe especially in high-tech related and high-knowledge intensive production processes in the future.

Demand: There is an increasing demand of the consumer and society for safe and environmental friendly technologies, which often correlates with the need for substitution of (critical or toxic) materials in chemicals as well as electronics and photonics. This finally impacts the machinery and automotive sectors. However, potential impacts of nanotechnology on environment, health, safety (EHS) have been discussed widely, since there is a wide-spread concern of potential negative effects from nanotechnology. In some sectors (e. g. chemicals or the bio and pharma sector) there is a more pronounced sensibility, when using the term nanotechnology, as an early mishap associated with nanotechnology could eventually terminate technology funding and demand abruptly.

In order to assess the economic impact related to NMP technologies quantitatively, we elaborate an econometric model for the last 15-25 years. We use the estimated structural equations based on quantitative data for the past 15-25 years (by separate countries as well as by separate sectors and the whole manufacturing sector) to simulate the potential future developments in three different scenarios (optimistic, neutral, pessimistic) regarding the deployment of NMP on value added, export shares and employment. The scenario assumptions are based on expert assessments and proved consistence with the qualitative NMP trends.

In all sectors considered the employment and value added would increase in the optimistic scenario compared to the business-as-usual scenario, only the net effects on export shares are less clear. We put forward the following interpretation of our results.

  • NMP technologies affect the economy via a number of impact mechanisms and may have significant positive impact across many industrial sectors in the future. These results point to the importance of actions, which take into account the whole innovation system across sectors and do not focus on single sectors or single activities only (such as R&D).

  • NMP patents affect the majority of sectors and countries positively, partially also a positive impact of international spillovers[1] can be observed. As patents can be interpreted as a proxy indicator for output of applied research and development activities, these results may imply that keeping and even increasing the level of NMP-related R&D activities and related support measures would be beneficial also from an economic perspective.

  • The increase of capital stock is the most important factor to realise the economic potential of NMP. Hence, activities to raise capital investments in Europe are decisive. The determinants for investments in a given country are usually manifold. Respective policy measures should address the specific weakness of the innovation system.

  • Increasing material and energy efficiency tends to result in economic growth and jobs. Hence, efforts to improve resource efficiency via NMP technologies are not only positive for the environment, but may most likely also for the economy. An efficient use of resources will be more and more important for industrial competitiveness.

While some of these conclusions may appear intuitively, the potential merit of this study is that they have been derived on a well-founded quantitative empirical basis here. Moreover, the findings of the qualitative analyses on NMP trends and signals are in line and fit very good with the outcomes of the economic model: There is an increasing need for material and energy efficient technologies, for better commercialisation and built up of production in critical industries as well as for demand oriented “green” products for the society/consumers within Europe. In particular, the indications of a cyclical long term behaviour of NMP patents with a double boom calls for further support of innovation policy, despite the decline of patenting. The focus may shift to overcome potentials valley-of-deaths and backing commercialisation activities. Similarly, in the economic model, especially capital investments (e.g. for production infrastructures) but also material and energy efficiency in industrial sectors have been shown by the model to positively influence employment, value added and hence the European competitiveness.

This provides additional justification for policy actions and even points out more concretely the system weaknesses, on which policy should concentrate. Among others, key issues are the capabilities and the needed focus to commercially exploit technological knowledge in NMP, the lack of demand for innovative (sometimes more costly) NMP products, or the uncertainty of stable access to resources. Hence, to realise the economic potential of NMP and to contribute to other societal needs (“Grand Challenges”), strategic actions of the stakeholders across the innovation chain are needed.

While international competitiveness can only be achieved by industry itself, policy may provide adequate support. It is these support measures, where we particularly focus on. These actions are not all directly linked to the Common Strategic Framework (CSF) but address a wider set of policies. We propose a mixed policy approach with mostly cross-cutting issues for NMP and some measures, which are specified on a sectoral or value chain level. The proposed policy measures encompass issues of availability of resources, innovative capabilities, commercialisation of innovation, demand for innovative products and regulation and are in line and consistent with our findings in the quantitative and qualitative analyses. In specific we recommend the following policy actions:

  • Develop a natural resources policy

  • Ensure availability of adequate skills in NMP

  • Rebalance R&D-programmes to “innovation funding”

  • Work out redefinition of R&D on the basis of new criteria

  • Consider feedback loops between R&D and demand/societal challenges

  • Support stronger integration of value chains

  • Intensify exploitation of research results within the EU

  • Development strategies for participation in global value chains

  • Consider redefinition of state aid

  • Foster regional clusters

  • Foster demand-side policies

  • Set up dialogue about chances and risks of nanotechnology-based applications and products

International spillovers indicate that the exploitation of the global knowledge base is important for the domestic economic development. This highlights the need for close links to the global knowledge base.

Duration

04.11.2010-03.04.2012

Client

  • European Commisson, DG Research

Partners

  • Fraunhofer ISC,

  • Fraunhofer-Alliance Nano FNT,

  • Prof. André Jungmittag, University of Applied Sciences, Frankfurt/Main