SMART INDUSTRIES A report by BCG for Choose France 2020 - International Business Summit 20.01.2020 Versailles
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SMART INDUSTRIES
A report by BCG for Choose France 2020
International Business Summit
20.01.2020 Versailles
About this report
Looking to position France and
Europe at the core of the global
industrial landscape in the years
to come, it is important to imagine
what industries will look like at the
end of this decade. This report is
not about the digitization of existing
industries, already well covered in
many Industry 4.0 reports. It is about
exploring the future of industries
and analyzing the enablers of their
successful development.
This report focuses on industries
that rely on tangible assets. Services
such as Finance and Insurance
are not covered in this document,
although they are undertaking
profound transformation as well.
For Further Contact
If you would like to discuss this report,
please contact one of the authors.
François Candelon
Managing Director and Senior Partner
candelon.francois@bcg.com
Pascal Cotte
Managing Director and Senior Partner
cotte.pascal@bcg.com
Olivier Scalabre
Managing Director and Senior Partner
scalabre.olivier@bcg.com
Mikaël Le Mouëllic
Managing Director and Partner
lemouellic.mikael@bcg.com
Ali Kchia
Project Leader
kchia.ali@bcg.com
Contact presse
Claire Lebret
lebret.claire@bcg.com
© Boston Consulting Group 2020.
All rights reserved. 01/20
For information or permission to reprint, please
contact BCG at permissions@bcg.com. To find the
latest BCG content and register to receive e-alerts
on this topic or others, please visit bcg.com.
Smart Industries, Choose France 2020 | 1
Executive summary
Entering the Smart Industries era
Smart Industries will emerge through the combination of Industrial assets — Unlike the digital revolution, whose leverage to accelerate the development of Smart Industries: Leading deep tech and industrial assets — Europe must
breakthrough technologies and innovative business models. digital applications came first, Smart Industries rely on both its leading edge existing technological assets (including continue to invest in emerging technologies and create the
These Smart Industries will profoundly reshape the world of digital capabilities and vertical industry expertise with its IP and talent pool) and its strong industrial background right conditions to transform fundamental research into
tomorrow and change competitive dynamics and the rules physical assets and infrastructure. There is no separation built upon a diversified and historical network of industries. commercial and industrial applications. Europe should:
of doing business in Health, Food, Mobility, Energy, Things, between offline and online anymore, but a total integration. Furthermore, Europe is leading the charge to tackle our
5. Implement innovation-enabling regulatory framework
Security & Safety and Cities. societies’ most imminent challenges (such as climate
These technological and industrial assets evolve in a — Create nurturing regulation with long term visibility
change) that Smart Industries aim to solve.
They will help solve the increasingly pressing challenges fragmented world due to high geographical, industrial and (for efficient use of data, real-life testing and trust).
that our societies are facing. For example, Smart Mobility functional disparity. They involve cross-sector and cross- To play its role in the next wave of Smart Industries, 6. Enable funding — Create an environment that enables
should reduce traffic congestion and pollution in cities when geography players that need to overcome the challenge of Europe should achieve market scale (One Europe) and set private funding (from corporate and also VC funds) and
it reaches maturity (e.g. through a reduction in number of accessing these technological and industrial assets, and the right conditions for Smart Ecosystems orchestrators provide ambitious and focused public investments.
personal vehicles and an increase in greener transportation). that need to be brought together. to emerge, while continuing to strengthen its deep tech
7. Educate citizens — Develop awareness and reskilling
and industrial assets.
They will represent tremendous opportunities for increased A new governance model based on smart ecosystems of programs about technologies for users and workers
growth and employment. By 2030, they will represent a universities and R&D centers, corporations (from start- One Europe — European countries must join efforts to (not just top talent).
sizable share of global industries (e.g. Smart Mobility will ups to large players), incubators and innovation centers, overcome political, economic and social fragmentation to
This coordinated and results-driven approach is Win-Win-Win:
account for ~15% of the global mobility market). investors and governments is required to enable the reach critical mass. They should:
rapid acquisition and sharing of resources. In order to be • Win for local governments, which can foster job creation
Therefore, enabling and investing in the development of 1. Think impact at European scale — Stop promoting
impactful, these ecosystems need to be orchestrated by a with the new Smart Industries.
these industries is imperative to capturing the societal and fragmented pilot projects in each country and
few leading large players who can leverage strong existing • Win for industry players, which will benefit from Europe's
economic potential they offer. collectively focus on building two or three competing
assets and market position. assets and market scale to experiment and develop new
Smart Ecosystems for each Smart Industry. European
products and services. This will also reinforce the network
These Smart Ecosystems will enable to: governments will have to accept that favoring their own
New Smart Industries, national champions will not always result in the best
of their ecosystems. For an orchestrator, this is the core
new Smart Ecosystems • Share and acquire new capabilities (e.g. knowledge asset to beat competition in the 2020s. And smaller
outcome for the local economy.
and technological assets, industrial capabilities, data) companies can benefit from the ecosystems' resources.
2. Set standards — Intensify efforts to establish common
The digital revolution has initiated a shift in the way we • Secure substantial funding • Win for our societies, for which Smart Industries aim to
norms and standards to simplify ways of doing business,
organize businesses — from static, evolutionary, vertical solve the most pressing challenges.
• Scale fast to achieve critical mass (e.g. market access unify markets and give long term visibility.
and company-centric ways of working, to a more horizontal,
and network effect) and share risks Smart Ecosystems orchestrators — Europe must enable
disruptive and collaborative model leveraging digital All European countries should work together to embrace
ecosystems, and where platforms have thrived. • Get the flexibility and resilience needed to adapt to fast- the emergence of leading orchestrators for each Smart change and accelerate the development of the Smart
changing environments where consumer needs can be Ecosystem to embark everyone on the journey towards Smart Industries. In Choose France, we choose Europe as a
Smart Industries will take this shift to the next level and unpredictable and technological trajectories Industries — not only European companies, but also U.S., leading innovation force for the world.
create a new business organization model around Smart are uncertain. Asian, and any other company that can positively contribute
Ecosystems. They differentiate from well-known digital to the development of Smart Industries. The absence of
ecosystems through two characteristics: These ecosystems can only thrive if regulators set the right
orchestrators is the recipe for failure as this role is critical
conditions — those that allow for efficient use of data and
to steer impactful ecosystems. To do so, Europe should:
Deep tech assets — Smart Industries rely on breakthrough real-life testing while building and reinforcing trust.
technologies with strong IP assets, high barriers to entry and 3. Develop industrial strategy — Set common, focused
require substantial funding and time to develop (and not only industrial plans that allow leading players to compete on
digital capabilities). We see seven areas of emerging R&D Europe has a critical role to play in the orchestrator roles and take risks. When no natural
technology that are the most promising active fields and that accelerating the development of leader is able to fill this role, Europe should proactively
will accelerate the development of these industries: artificial Smart Industries help orchestrators to emerge as it recently did in the
intelligence, advanced materials, quantum computing, gene battery sector.
engineering, generative design, augmented and virtual reality, So far, the U.S. and China have led the digital revolution
4. Adapt long term incentives — Favor long term
robotics and drones (in addition to technologies already at and are betting on the industrial potential of emerging
investment and support orchestrators in creating an
scale such as connectivity and cloud computing). technologies. Yet Europe has tremendous capabilities to
attractive economic environment.
2 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 3When technology meets innovative business models
Smart Industries will emerge through the combination of nourish and nurture our bodies, how we get around, how
breakthrough technologies and innovative business models. we produce and consume energy, how we interact with the
These Smart Industries will reshape the world of tomorrow world around us, how we organize our cities.
and bring drastic changes to our lifestyles — in how we
Emerging smart industries
Illustrative – not exhaustive
Smart Mobility Smart Health
• AI & algorithms (e.g. precision medicine)
• Electric/Connected/Automated vehicles
• Consumer-driven digital health
• Shared and on-demand mobility • Diagnostics (e.g. NextGen sequencing)
Mo round
• Drones
r b re
ies
• Advanced drug delivery
• Traffic management
ou urtu
ve
od
• Cell and gene therapies
a
/g
N
Org
et
a
citi nize o sh
uri es Smart Food
e
Smart Cities soc s and ur No bodi
iet r
ou
• Digital agriculture (robots, drones, etc)
• Green building ies
• New food consumption patterns (organic,
• Recycling alternative proteins, traceability, etc)
• Smart Ticketing/Parking
• Smart Governance
• Smart Education Entertain Protect
ourselves ourselve Smart Safety
s
• Smart monitoring for buildings safety &
security
Pr viro
• Smart public safety & security
rse te
en
ot n
s
ou duca
lve
Interact with
• Cybersecurity
ec me
people and
the world
to n
Smart Things
E
ur t
• Connected devices (e.g. smartphones, Smart Energy
Entering the Smart
voice assistants, home appliances,
sensors) • Smart grid/Smart metering
• Power electronics
Industries era
• Smart energy storage
Physiological Social Safety and security
Illustration in mobility
New ways of doing business
Smart Mobility is reshaping the value chain, with new influencers,
When they emerge, these new Smart Industries disrupt new comers, new suppliers from other industries that play a
crucial role across key technologies
current markets and reshuffle competitive dynamics.
In Mobility for example, digital platforms and integrators New Natively integrate services
influencer and capture customer interface
offer new services and solutions to end users. They
increasingly disintermediate the traditional car manufacturers
Cities Digital
and capture the customer interface. With the prevalence integrators
End user
of electronics and software in modern vehicles, suppliers
from other industries have entered the mobility space and
compete directly with tier 1 incumbents on key technologies. On-demand Shared Public
New
offer
(car, bike, scooter) Transport
Platforms
OEMs
Risk of losing
customer
interface
Newcomers from
Suppliers other industries
(e.g. electronics,
software)
Traditional players Industry today New players Future shift
4 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 5Smart Industries for better societies platforms, electric powertrains and autonomous vehicles,
coupled with on-demand shared mobility, is paving the way
Our societies are facing increasingly pressing challenges, for new services to thrive, e.g. self-driving autonomous taxis
from climate change and resource scarcity, to densification and shared electric cars, bikes and scooters. Ultimately,
of urbanization and demographical changes. Smart these new ways of moving will help reduce the number of
Industries will bring new solutions to the market to solve personal cars in cities, reducing traffic congestion and
these challenges. As an example, the rise of connected carbon footprint.
Illustration in Mobility
Innovation in technology… …and innovation in business models…
Not exhaustive Not exhaustive
On-demand Mobility Shared Mobility Mobility-as-a-Service
Connected Electric Autonomous
Mobility Mobility Mobility
…solve key mobility challenges
Urbanization
Traffic congestion Pollution Densification Accessibility
Opportunities to capture
The Smart Industries are the next industrial revolution and ~17% of the global mobility market in 2030. Smart Energy
represent tremendous opportunities for increased growth will comprise ~8% of global energy consumption.
and employment. In the next 10 years, we estimate the
It is critical that countries and companies build and develop
global smart markets to range from ~$0.9Tn to ~$2.3Tn.
enablers that will foster the development of these industries in
Smart Industries will represent a sizable share of global
order to capture the societal and economic potential they offer.
industries. As an example, Smart Mobility will account for
Smart Industries expected market size in 2030
2.3 $Tn 1.4 $Tn 2.2 $Tn 0.9 $Tn
~13% ~17%
of global health of global mobility
expenditure market
Smart Health Smart Food Smart Cities Smart Mobility
1.7 $Tn 1.0 $Tn 1.5 $Tn
~8%
of global energy
consumption
Smart Things Smart Safety Smart Energy
Source: BCG analysis
6 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 7Smart Health
What the future could look like
Towards better quality: Toward better coverage: Global market size ($B)
Cell & Gene Therapies consumer-driven digital health
Lymphocytes re-engineered in a lab Tele healthcare, especially for regions facing ~x3
to target & kill cancer cells lower physicians to patient ratio ~2,270
Get to know the
55 45
140 140
~x4 175
Smart Industries
175
~710
12
85
85
? 1,850
~160 515 515
Lymphocytes Lymphocytes mHealth Health analytics to 2018 2025 2030
extracted from infused back into e.g. medical foster early stage
patient's body the patient's or fitness app treatment 2% 6% 13%
body
of global health spending
Cell and gene therapies
Artificial intelligence and algorithms
Quantum computing may Digital health systems
allow faster drug e.g. electronic health Diagnostics
discovery and improved records, e-prescription Advanced drug delivery
diagnostic capability
Consumer-driven digital health
Source
Smart Food
What the future could look like
Smart farming Organic food
Global market size ($B)
Drone major applications
• crop supervision ~x2
• spraying Agriculture respectful of land ~1,370
• irrigation • Food grown free of chemicals
~x2
95
• soil and land assessment • Crops that do not require
pesticides 280
• Non abusive exploitation of soil ~900 175
39
Livestock monitoring & 197
management
~470 996
668
2017 2025 2030
Precision crop farming Protein alternative sources
using field sensors to gather data for nutrition such as plants, algae and
insects to reduce meat consumption Smart farming
Organic food
Engineered food1
1. Incl. functional, encapsulated and genetically modified food
Smart Cities
What the future could look like
Smart water Global market size ($B)
management
Data for real-time
action
with smart meters
& use and flow sensing
~x3
~2,220
368
Smart ~x3 140
175 570
maintenance 24/7
of equipment condition ~840 598
monitoring 123
HVAC 251
Interconnectivity Fans, variable air ~270 210 684
!33
& communication volume, air quality 255
2019 2025 2030
Access and security badge
Smart Governance
Lighting occupancy sensing in, cameras, integration
Smart Buildings
for efficient consumption perimeter, doors2
Smart Ticketing/Parking
of energy1
Smart Education
Focus on Smart Buildings
1. Excluded from sizing, part of other Smart Industries resp. Energy for Lighting occupancy and Security & Safety for Access and security means.
8 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 9Smart Mobility Smart Energy
What the future could look like What the future could look like
Global market size ($B) Global market size ($B)
Dynamic traffic
~x2 Wind power plant Houses
management
~870 ~x3 ~1470
90
New modes of 140
90 277
~x4
130
(shared) transport, 130
175
e.g., air taxis ~500 Solar power plant SMART GRID
Easy intermodal
connections
50
70
330
330 ~x3 526
Factories ~530
170 !
138
Centralized charging & ~110 515
320 320 664
maintenance for AV fleets 205 Water power plant ~160 190
203
Seamless user 2017 2025 2030
2019 2025 2030
experience 3% 11% 17%
2% 4% 8%
Nuclear power plant Storage system to improve utilization rates Offices !of global energy consumption
Data and Connectivity
by Smart Energy storage
AV and BEV components
New • storing the excessive solar/wind power Power Electronics
Autonomous New car sales (BEV) and releasing it when necessary
delivery Smart Grid
On-demand mobility • stabilizing power output
systems electric mobility
Smart Things
What the future could look like
Retail Industry Global market size ($B)
Personalized services / promotions
based on customer preferences and
~x4 ~1,750
286
localization
Smart inventory management
based on real time inventory
~x4
581
tracking and order automation
Smart inventory management ~440
using digital tags, beacons, 68 880
store shelf sensors and video ~120 96
monitoring Self-optimizing production thanks 280
!89
to real-time adjustment of
production processes and sensors 2020 2025 2030
on machines / environment
Natural resources
Self-checkout Predictive maintenance Retail
with automatic basket price calculation for malfunction prediction and Industry
and digital payment technologies servicing optimizat. of costly/
critical equipment
!Excluding Cities, Buildings and Home,
Mobility, Healthcare already covered in
dedicated smart industry
-
Smart Safety
What the future could look like
Cybersecurity Buildings / Public Safety & Security Global market size ($B)
~x2 ~1,010
203
140
175
New AI-driven tools to provide
response to greater cyber
In-house sensor networks allow
security enhancement, accident
~x3 390
vulnerability amplified by IoT, prediction and faster intervention ~490
cloud, social media and digitization from concerned services 97
149
~190 413
245
118
2018 2025 2030
Connected camera networks
combine with image analysis help
More prevalent regulation reduce criminality Public Safety and Security
especially through data privacy laws • Facial recognition at scale Buildings Safety and Security
• Public place screening (train Cybersecurity
stations, airports)
10 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 11Typical innovation S-curve
Illustrative shape
Today, we are in the acceleration phase, where the capacity to innovate is critical to enabling the development of Smart Industries.
Current focus to win
the battle of Smart Industries Maturity
Maturity
From digital revolution to
Smart Industries ow
th
wt
h Gr Next tech
o
Gr
Copyright © 2019 by Boston Consulting Group. All rights reserved.
breakthrough
The digital revolution has initiated a shift Conception
Traditional Conception
in the way we organize businesses — from industries & Development
& Development
static, evolutionary, vertical and company- Conception & development
centric ways of working, to a more Transition Acceleration phase (~5 years) Scale & compete (~10 years) Transition
2. A pool of early-adopters keen to test/adopt new
horizontal, disruptive and collaborative 1. Setup smart ecosystems to enable a rapid
acquisition, transfer and sharing of resources that products/services
model leveraging digital ecosystems are driven by 3. A robust infrastructure to support the deployment
• Deep tech assets
4. A qualified and competitive workforce and
(notably built by GAFAs but also by several • Industrial assets
affordable energy (also factoring indirect
In a fragmented world due to high geographical,
other tech giants), and where platforms industrial and functional disparity.
environment costs)
5. Funding for large scale deployment
have thrived.
Note: X axis = time, Y axis = global market size
Smart Industries will take this shift to
the next level and create a new business
organization model around Smart
Ecosystems. They differentiate from well- Industrial assets — Unlike the digital revolution, whose These technological and industrial assets evolve in a
known digital ecosystems through two digital applications came first, Smart industries rely both on fragmented world due to high geographical, industrial and
characteristics: digital capabilities and vertical industry expertise with its functional disparity. They involve cross-sector and cross-
Deep tech assets — Smart Industries physical assets and infrastructure. There is no separation geography players that need to overcome the challenge of
between offline and online anymore, but a total integration. accessing these technological and industrial assets, and
New Smart rely on R&D intensive technologies and
not only digital capabilities. We see seven Furthermore, all Smart Industries rely on the availability that need to be brought together.
Industries, areas of emerging R&D technology that of fast and secure connectivity. The deployment of 5G
network, for example, is imperative to supporting all
are the most promising active fields and
new Smart will accelerate the development of these Smart Industries.
Ecosystems industries: artificial intelligence, advanced
materials, quantum computing, gene
engineering, generative design, augmented
and virtual reality, robotics and drones Mature and Deep technologies supporting Smart Industries
(in addition to technologies already at
Emerging techs:
scale such as connectivity and cloud Mature techs Emerging techs: short term
medium/long term
computing). Level of relevance
of technology:
Low Middle High
While these technologies have different Connectivity /
5G
Cloud
computing Sensors AR/VR
Drones
& robotics
Generative
design
AI
& algo
Gene
engineering
Advanced
materials
Quantum
computing
maturity and market-readiness, they Smart Health Healthcare
all have enormous potential to disrupt Food & Beverage
Smart Food
markets and create new ones. To name Agriculture
a few of the foreseen disruptions, 3D Smart Cities
Construction
printing and generative design in the Waste & water
Automotive &
automotive industry are expected to bring Smart Mobility
transportation
Aerospace & airline
a 75% reduction in materials, allowing for services
Retail/Consumer
lower emissions, lower car weight and a products
reduction in inventories. Gene engineering Smart Things Mobile / Telecom
will enable the design of seeds that don’t Industrial goods
require fertilizers while maximizing the Smart Safety Software
yield of cereal fields. Smart Energy Energy and utilities
Source: BCG analysis
These emerging technologies are
significant breakthroughs and their IP is
hardly accessible. They require a long time
and substantial capital to develop and to
reach real-life applications.
12 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 13Smart Ecosystems These ecosystems are complex and require coordinated
governance, orchestrated by a few leading large players. On
A new governance model based on smart ecosystems of the one hand, everyone in the ecosystem will benefit from
universities and R&D centers, corporations (from start-ups to the orchestrators' strong existing assets. On the other hand,
large players), incubators and innovation centers, investors orchestrators will have access to ecosystem resources as
and governments is required to enable a rapid acquisition, they cannot only rely on their internal capabilities to cope
transfer and sharing of resources to build not only individual with the pace and the breadth of innovation. Interactions
products but the complete, innovative solutions of tomorrow. become dynamic and co-evolutionary.
These Smart Ecosystems serve that purpose by bringing
The right regulatory conditions
together skills, knowledge, expertise, data, market access,
relationships, funding and tangible assets. This exchange Regulators must create the right conditions for these Smart
of resources open new areas of possibilities and set-up a Industries to become a reality. For example, aviation regulators
conducive environment to build the products and services around the world have adopted different approaches for testing
of tomorrow. drones. While the U.S. granted Amazon permission to test
delivery drones only in 2019, the Civil Aviation Administration
1. Sharing and acquiring new capabilities that can be
of China gave JD.com permission first in 2016. The Chinese
too expensive or time-consuming to build internally
e-retailer had a head start and now possesses the world’s
(e.g. knowledge and technological assets, industrial
largest drone delivery system, infrastructure and capabilities.
capabilities, data).
Also, data is a critical element for Smart Industries, and
2. Substantial funding to support all the phases of regulators will need to create the right conditions for data
development, from early research to commercial use and access while protecting users’ rights and privacy.
application.
3. Ability to scale fast to achieve critical mass (e.g. market User buy-in is crucial for the development of the Smart
access and business guidance, network effect) and Industries. Regulators need to adopt a cautious step-by-
share risks. step approach to build citizen trust, ensure their safety and
respect key principles such as privacy, data protection, data
4. Flexibility & resilience to enable high variety, capacity
access and ethics (e.g. human genome editing). Those
to evolve and improve adaptation to fast-changing
principles are also fundamental in B2B relations as trust is
environments where consumer needs can be unpredictable
critical in ecosystems.
and technological trajectories are uncertain.
Corporations
Illustration of
Smart Ecosystem
interactions
Large players
Suppliers Startups
Universities &
Investors
Research Centers
Incubators /
Governments
Innovation centers
Main flows
1 Share and acquire new capabilities 2 3 Ability to scale fast 4 Flexibility & resilience
!Knowledge & !Industrial !Substantial !Market access !Network & !Agility &
!Data !Experimentation
tech assets capabilities & assets funding & expertise relationships speed
Note: data exchanges involving all players – not displayed for simplicity
14 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 15Europe and its assets One Europe — European countries must join efforts to
overcome political, economic and social fragmentation, to
So far, the U.S. and China have led the digital revolution ensure seamless access to the entire European market in
and are betting on the industrial potential of emerging order to achieve scale and reach critical mass. They should:
technologies. Yet Europe has tremendous capabilities to
leverage to accelerate the development of Smart Industries. 1. Think impact at European scale — Stop promoting
fragmented pilot projects in each country and collectively
Europe has leading edge existing technological assets. It focus on building two or three competing Smart
is a land of choice for innovation. Along with its historical Ecosystems for each Smart Industry. As an example,
cultural radiance, Europeans have tremendous scientific while the US, China or India have or plan to have a limited
background and talent. For example, Europe is the number number of hubs of excellence (2-3 maximum per sector,
one region when it comes to the absolute number of AI as co-location is proven as a recipe for success), Europe
talent, and out of the top 40 universities in AI research, at has announced more than 200 hubs, and the number
least one-third are European. continues to grow. European governments will have to
accept that favoring their own national champions will not
Historical industrial revolutions have started in Europe
always result in the best outcome for the local economy.
03
and the continent has a strong industrial background built
upon a diversified and historical network of industries. 2. Set standards — Intensify efforts to establish common
Furthermore, Europe is leading the charge to tackle our norms and standards to simplify ways of doing business,
societies' most imminent challenges (such as climate unify market and give long term visibility. As an example,
change) that Smart Industries aim to solve. GSM as a technological standard was critical for the
Europe has a development of telcos in Europe.
critical role to play A critical role to play
in accelerating the To play its role in the next wave of Smart Industries,
development of Europe should achieve market scale (One Europe) and set
the right conditions for Smart Ecosystems orchestrators to
Smart Industries emerge, while continuing to strengthen its deep tech and
industrial assets.
Illustration: European battery industry
Europe is joining forces to create … and implement projects
its own battery industry… orchestrated by industry leaders
Project example
7 countries will provide 3.2B in public
funding to support a consortium
of 17 companies that will share capabilities
to master full battery value chain from raw
material extraction to recycling
PSA & SAFT are orchestrating the
construction of 2 production sites
in France & Germany by 2022
~3k jobs will be generated
Source: European Commission, Press Search
16 | Smart Industries, Choose France 2020 Smart Industries, Choose France 2020 | 17Smart Ecosystems orchestrators — Europe must enable
the emergence of leading orchestrators for each Smart
7. Educate citizens — Develop reskilling and awareness
programs about technologies for workers and users (not
Focus on France
Ecosystem to embark everyone on the journey towards Smart just top talent). On the one hand, a large part of the labor
Industries — not only European companies, but also U.S., market already need to be retrained or obtain new skills
Asian, and any other company that can positively contribute - 54% of the working population by 2022 according to Large and attractive talent pool
to the development of Smart Industries. The absence of WEF. And this should accelerate with Smart Industries.
orchestrators is the recipe for failure as this role is critical On the other hand, it is important to increase users’
to steer impactful ecosystems. To do so, Europe should: practical understanding of new technologies to foster
their adoption. For instance, the Finnish Government has
3. Develop industrial strategy — Set common, focused launched a free online course on AI with the support of
industrial plans that allow leading players to compete on private companies that aims to teach European citizens
the orchestrator roles and take risks. When no natural the basics of AI.
leader is able to fill this role, Europe should proactively
help orchestrators to emerge as it recently did in the
battery sector. A Win-Win-Win approach
4. Adapt long term incentives — Favor long term investment Engineers in France – highest Rate of researchers per 1k of Most popular destination with
and support orchestrators in creating an attractive economic This requires a results-driven and coordinated plan at the number in Europe with Germany - working people – ahead of US, ~250k international students
environment (e.g. ready-to-use implementation sites pre- European level. This joint approach is Win-Win-Win: and ~40K new engineers graduate Germany & UK each year
cleared from paperwork, tax credit to incentivize R&D). each year
• Win for local governments, which can foster job creation
Leading deep tech and industrial assets — Europe must with the new Smart Industries.
continue to invest in emerging technologies and create the • Win for industry players, which will benefit from Europe's Strong assets in Tech
right conditions to transform fundamental research into assets and market scale to experiment and develop new
commercial and industrial applications. products and services. This will also reinforce the network
of their ecosystems. For an orchestrator, this is the core
5. Implement innovation-enabling regulatory framework
asset to beat competition in the 2020s. And smaller
— Create nurturing regulation with long term visibility.
companies can benefit from the ecosystems' resources.
First, Europe must allow real-life testing to validate proof An environment of Tech innovation Illustration in Artificial Intelligence
• Win for our societies, for which Smart Industries aim to
of concepts while ensuring high safety (refer to JD.com
solve the most pressing challenges. • ~300 incubators and ~50 accelerators incl. Station F • ¼ of AI startups in Europe located in France while
drones example highlighted in the previous section).
world's biggest startup campus (~1k start-ups) Europe is #1 Region in the absolute number of AI talent
Similarly, Europe needs to set the right conditions for
All European countries should work together to embrace • ~€3.6Bn raised from investors in 2018 for 9.4k • 3 French universities / institutes in the European
efficient use of data (e.g. privacy, protection and access
change and accelerate the development of the Smart French Tech startups top 5 in AI
rights) and respect of ethics (e.g. human genome editing
Industries. In Choose France, we choose Europe as a
for reproductive purposes).
leading innovation force for the world.
6. Enable funding — Create an environment that enables
private funding (from corporate and also VC funds) and Global influence
provide ambitious and focused public investments for
priority industries to fund the startup and scaling phase
that can be recouped only once the ecosystem is fully
established — and be ready to fail. A recent study by the
BCG Henderson Institute found that fewer than 15% of the
57 ecosystems investigated were sustainable in the long
run. Knowing when to recognize failure is key.
French politicians with high radiance within Europe International innovation summit
• Thierry Breton, European Commissioner for • with 3,3k investors, 13k startups and
Internal Market 124k visitors in 2019
• Christine Lagarde, President of the European
Central Bank
Source: Conférence des Directeurs des Ecoles Françaises d'Ingénieurs, UNESCO, Dealroom, Vivatech, BCG analysis
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