Global innovation Lars Goldschmidt 10.dec. 13 Global innovation policies Bundling and competiveness...

Global innovationLars Goldschmidt 10. dec. 13

Global innovation policiesBundling and competiveness

Lars GoldschmidtDI Confederation of Danish Industry

Global innovation 10. dec. 13Lars Goldschmidt

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Content• Confederation of Danish Industries• Value creation in Denmark• Innovate or die• Location of value chain elements• Bundling• Implications for industry policy


Confederation of Danish Industry

• 10.000 large, medium and small companies

• Collective bargaining

• All business related policy areas


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Broad range of members

Manufacturing 40 percent

Knowledge services 17

percent

Trading 14 percent

Transport 13 percent

Services 7 percent

Energy supply 4 percent

Others 5 percent

Membership by industry sector


55

Small and big companies with much in common

80 percent less than 50 employees

20 percent more than 50 employees

Employees totals in member companies


Vision

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DI’s vision is an open and prosperous society that features both growth and balance.

The result of which recognises Denmark as the world's most attractive country for business to work in and from.


Major Challenges• Very high cost base, when operating in Denmark

• 800.000 outside the labor market

• Low growth on our European markets

• Future supply of qualified workforce

• Decrease in private research and development spending in Denmark

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R&D spending pct. of GDP

8

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

0.5

1

1.5

2

2.5

Pro

cent

Private

Public


Ofshoring of development spending

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2007-2010 2008-2011 Prognose 2012-20140

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Pro

cent


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Future Danish products and services

•Denmark competes on the global market by delivering solutions and services to upper middle markets

•The end user customer demand moves towards uniqueness, identity and experience

•The B to B and B to C demand moves towards more holistic solutions that solve more complex problems covering the full functionality triangle.

•The financial and economic crises has shifted market strength towards Asia and market preferences towards price


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The value triangle:

Technical functionality

Social functionality and acceptability

Esthetic quality and individual identity signal


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Location and competitive strategy

Competitive Force = Cunning * Financial Strength * Framework Conditions

Total Costs

Relocatable business processes will be located where the competitive force has a maximum

Processes located in Denmark will be knowledge intensive either because they are difficult or because they have a high innovation content


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Radical changes and unsolved global problemsincrease demand for innovation• Financial crises• Global change in political

and economical power from Europe and USA to Asia and emergent economies

• Global changes in customer preferences

• Dramatic increase in available knowledge

• Population growth• Mega Cities• Climate change• Hunger• Environmental degradation• Unstable states and other

conflicts• Ageing / immortality


Consequence•More for less•Innovate or die•Value in the eye of the different other

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The innovation triangle:

Technical possibility

Competition drive

User need and demand


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0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5

LuxembourgItaly

DenmarkBelgiumMexico

SpainSwitzerland

NorwayNew Zealand

CanadaFrance

NetherlandsGermany

United KingdomIsrael

AustraliaPortugal

AustriaJapan

SwedenFinlandGreece

United StatesIcelandIreland

HungaryPoland

Czech RepublicKorea

Slovak Republic

Source: OECD and Confederation of Danish Industy

Productivity growthGrowth in Labour productivity 2000-2010


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PharmaceuticalIdeaLab WorkTest Small scale production designTestAuthority interactionApprovalLarge scale process designPilot plantProduction facility constructionEtc.

Value chains

ManufacturingIdea ConceptDesignPrototypeTest SeriesMass customerisationLow cost mass productionBottom of the pyramid production

ConstructionIdeaDrawingDetailed designConstructionTransferOperationDe commissioning


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Value chain location• Location in Denmark member survay• Positive drivers

Knowledge intensityInterdependency between links in the value chain - bundlingBenefit from local resources costumers, knowledge institutions, business ecosystemAffordable cost structure

• Negative driversHigh wages, taxes, etc.Limited markedLimited access to qualified employes

Wage cost >= 12%


Bundling• Development – Production• Development – Costumers• Development – Knowledge institutions • Development – Business ecosystems• Production – Raw materials• Production – Production competence• Production – Transport convience

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Innovation policy • Demand side

• Demanding public customers, health sector, energy, water, education

• Regulation creating demanding private customers, housing, environment

• Facilitating regulation

• Free trade, deregulation• visa policy• Tax incentives for research spending and visiting staff

• Public reseach

• High quality research in relevant areas• Access to statistical data and clinical research• Access to wold class research infrastructure ESS, MAXIV, XFEL• Innovation as a part of education


Relevant research ?

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Land TEK NAT TEK+NAT

Danmark 14,4 21,6 36

Sverige 22 18 40

Holland 21,5 20,5 42

Tyskland 22,9 37 59,9

Tjekkiet 21,9 45,4 67,3


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Innovation competence• The ability to see and seek out differences in needs and

opportunities• The ability to search for solutions in an open solution

space• The ability to transcend and combine in a professionally

competent manner• The ability to introduce the new in an organization• Confidence in the competence to meet new challenges,

not in the status quo• Wildness and enthusiasm• Excited multicultural empathy

Global innovation Lars Goldschmidt 10.dec. 13 Global innovation policies Bundling and competiveness...

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