03 probst day 2_ecc 2012
- 1. www.pwc.com What are today’s mega- trends in industrial transformation and how to spot them Vienna, 19 April 2012 Laurent Probst Erica Monfardini Laurent Frideres
- 2. Case study: Maritime and renewable energies (1/3) The emergence of a new technology 1990s In a climate of increasing awareness of the global need for research and development in renewable energy, research begins on marine turbines to generate renewable energy from tidal streams 2005 OpenHydro is formed after negotiation of world rights to the Open-Centre technology • Design and manufacture of turbines for deployment in tidal farms throughout the world's oceans • Sale of turbines with turnkey installation and maintenance services providing developers with an end to end solution 2006 Testing of the Open-Centre Turbine begins at the European Marine Energy Centre (EMEC) in Orkney, Scotland What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 2
- 3. Case study: Maritime and renewable energies (2/3) DCNS and the Port of Cherbourg 1700s DCNS is a naval defence company based in France and one of Europe’s leading shipbuilders, 1900s a company involved in both traditional and new activities 1990s The Port of Cherbourg, highly dependent on the naval defence industry and the construction of nuclear submarines, enters a crisis after the end of the Cold War 1996 1700 jobs are lost at the shipyard of Cherbourg 2000s The reconversion of the port and the shipyard presents an ongoing challenge Attempts are made to identify new opportunities for the port and to diversify the local economy What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 3
- 4. Case study: Maritime and renewable energies (3/3) Development of a new industrial segment 2007 DCNS acquires Sirehna, a specialist engineering Acquisition company focused on the creation of key technologies for the naval, offshore and energy sectors 2011 DCNS buys an 11% stake in OpenHydro Test case 2012 DCNS and OpenHydro win the Cleantech 2012 Award for the best investment in an innovative start-up by a New major corporate group manufacturing process 2012 A pilot project with four turbines is underway off Paimpol-Bréhat in Brittany 2014 Planned start of operations of a new manufacturing plant for tidal turbines at Cherbourg 2018 Production of 100 turbines annually expected at the new facility in Cherbourg creating 2-300 new jobs What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 4
- 5. New emerging industries Characteristics • Usually formed on the basis of a new product, service or idea and come into being when consumer needs change, new technologies replace older ones, or when new socio-economic conditions emerge • Most often driven by key enabling technologies (KETs), new business models such as innovative service concepts, and by societal challenges that industry must address as a matter of survival • Tend to be research and knowledge intensive industries, as their emergence and development usually results from applied creativity and disruptive innovation • Typically nurture entrepreneurship and an innovative spirit What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 5
- 6. New emerging industries Value chains are being reconfigured • New emerging industries use some or part of the value chains of traditional industries • They consist of either entirely new activity sectors or of restructured sectors that transform, evolve or merge into new industries • Service innovation is a key factor in these transformations • Traditional sectors undergo a reconfiguration into new emerging industries with transformations usually occurring at the design and engineering phases • New emerging industries have some key technologies-based services in common, which include ICT, business services and engineering What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 6
- 7. New emerging industries Value chains are being reconfigured Production Traditional R&D Engineering Production Distribution Market industry Adapted Production Market Emerging R&D Engineering Production Distribution Market industry What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 7
- 8. Industrial transformations New paradigms requiring new policies Markets Industry R&D Traditional Key Emerging Industries Internationalisation New demands industries and globalisation of R&D Consumerism Explosion of global Social change R&D capacity Environmental Emergence of the change knowledge –based economy New Models Reorganisation Key Emerging Industries What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 8
- 9. 2 signals to identify Emerging Industries : Equity Investment and M&A What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 9
- 10. Identifying and classifying emerging industries Our methodology Focus on financial deals: mergers and acquisitions and equity investments mergers & acquisitions mergers & Traditional acquisitions industry Emerging Traditional industry Traditional industry Emerging industry industry mergers & acquisitions New equity industry & Finance technology investments What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 10
- 11. Identifying and classifying emerging industries From sectors to key emerging industries Candidate emerging Sectoral classification Key emerging industries industries Agriculture Analysis Selection Key emerging Manufacturing of cross- of the most industry sectoral active, linkages significant based on and M&A and Candidate relevant equity emerging Information & data emerging industry industries communication Financial activities Database on M&A and equity investments including over 10,000 deals What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 11
- 12. New emerging industries List of industries identified and numbers of deals Number of M&A deals Number of equity deals Business and Management Services 1,526 3,633 Construction 2,472 5,694 Creative Industries 2,308 5,283 Eco Industries 1,452 4,517 Experience Industries 1,710 3,351 Finance 1,613 4,363 Food 1,165 2,030 ICT & Mobile Services 2,542 6,722 Maritime 1,196 2,821 Mobility 2,249 4,744 New Materials 768 2,727 Personalised Medicine 2,221 6,587 What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 12
- 13. New industry configurations Identified based on financial transactions between firms Transport Construction Recovery & Recycling Energy Maritime Civil Engineering Manufacturing Eco New industries Materials Publishing Business Services R&D in Biotechnology Creative ICT & Mobile Services industries Media What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 13
- 14. Key emerging industries (KEI) Employment, turnover and value added Value added (EUR million) Turnover (EUR million) 5.000 Mobility 4.500 500 1,000 1,500 4.000 Construction 3.500 ICT & Mobile Services Food 3.000 Eco industries 2.500 Experience Maritime Industries* 2.000 New Creative industries Materials Personalised 1.500 Medicine* Management & Business Source: Eurostat (2009) services 1.000 Finance* * The figures significantly underestimate the sizes of these industries due to partial data availability 500 5 10 15 20 25 30 35 Employment (millions) What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 14
- 15. Spatial distribution of activities Maritime Employment (2010) Number of employees (2010) in the maritime key emerging industry < 2,500 15,000...20,000 2,500...5,000 20,000...30,000 5,000...7,500 30,000...40,000 7,500...10,000 40,000...50,000 10,000...15,000 > 50,000 Figures aggregated at the NUTS 2 level from firm-level employment data Data source: Amadeus - A database of comparable financial information for public and private companies across Europe containing comprehensive information on 19 million companies What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 15
- 16. Spatial distribution of activities Maritime Change in employment 2006-2010 Change in employment (2006-10) in the maritime key emerging industry < - 5,000 1,000...2,500 -5,000...-2,500 2,500...5,000 -2,500...-1,000 5,000...10,000 -1,000...0 10,000...15,000 0...1,000 > 15,000 Figures aggregated at the NUTS 2 level from firm-level employment data Data source: Amadeus - A database of comparable financial information for public and private companies across Europe containing comprehensive information on 19 million companies What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 16
- 17. Spatial distribution of activities New materials Turnover (2010) Turnover in million EUR (2010) in the new materials key emerging industry < 250 2,500...5,000 250...500 5,000...7,500 500...750 7,500...10,000 750...1,000 10,000...20,000 1,000...2,500 > 20,000 Figures aggregated at the NUTS 2 level from firm-level turnover data Data source: Amadeus - A database of comparable financial information for public and private companies across Europe containing comprehensive information on 19 million companies What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 17
- 18. Spatial distribution of activities New materials Change in turnover 2006-2010 Change in turnover (2006-10) in million EUR in the new materials key emerging industry < - 2,000 0...250 -2,000...-1,000 250...500 -1,000...-500 500...1,000 -500...-250 1,000...2,000 -guatda.com/cmx.p250...0 > 2,000 Figures aggregated at the NUTS 2 level from firm-level turnover data Data source: Amadeus - A database of comparable financial information for public and private companies across Europe containing comprehensive information on 19 million companies What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 18
- 19. Final remarks Relevance and significance • Service innovation is key for the growth of these emerging industries • Acquisitions from and between existing industries provide early signals of a new emerging industry • Emerging industries represent a sizeable part of the economy and impact significantly on regional competitiveness and long- term industrial development • Policy and regulatory frameworks need to be frequently reviewed and adapted to encourage and accelerate the growth of emerging industries Key Emerging Industries What are today’s mega-trends in industrial transformation and how to spot them 19 April 2012 PwC 19
- 20. Thank you for your attention! This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers S.à r.l., its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2012 PricewaterhouseCoopers S.à r.l.. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers S.à r.l. Luxembourg which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
- 21. Contact details Laurent Probst laurent.probst@lu.pwc.com Partner PwC Erica Monfardini erica.monfardini@lu.pwc.com Director PwC Laurent Frideres laurent.frideres@lu.pwc.com © 2012 PricewaterhouseCoopers S.à r.l.. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers S.à r.l. Luxembourg which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.