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Industrie du futur : prêts, partez ! (Industry of the Future: Ready, Steady, Go!)

BLOG - 28 September 2018

On Thursday 20 September during a conference, Edouard Philippe shared the government’s action plan to transform the French industry through digital innovation. 

According to the Prime Minister, France suffers from two persisting structural weaknesses industrial employment is too vulnerable and the country’s export industry is not competitive enough. The industrial employment’s decline has been contained, but it should nonetheless be reinforced. Regarding the second issue, the balance of trade in goods continues to deteriorate. The French industry is sensible to the international environment and to the Euro’s evolution. 

The Prime Minister's first priority appears to be the improvement of French cost competitiveness by switching the CICE (a tax credit) on sustainable contribution reductions at the minimum wage level. His second priority is to correct issues created by lack of skills, the productive system’s poor quality or the weak link between suppliers and customers. 

In his action plan, Edouard Philippe announced the creation of approximately 100 showcase enterprises in order to share good practices with those that need it. This open house can help 30,000 companies to improve their practices. 

For companies that are already willing to change, Edouard Philippe announced the creation of at least 20 local acceleration centers to boost their projects, as proposed by Institut Montaigne in the Industrie du futur, prêts, partez ! report. The French industry will be able to overcome the challenges the fourth industrial revolution involves thanks to the use of new technologies and data.

What is the current state of progress of the French industry?

The weight of the industry has been on a downward trend in developed economies overall. Indicators are showing a decline in French competitivity to export and in the country’s capacity to invest for innovation. 

The French industry lost 20% of its weight in GDP in the last 15 years

According to our report Industrie du futur, prêts, partez !, the French industry lost 20% of its weight in GDP in the last 15 years, as well as 1.4 million jobs in the last 25 years because of relocations. In February 2018, the National Institute of Statistics and Economic Studies (Insee) emphasized the French industrial decline since 2006. France lost 27,300 establishments (- 18%) and 530,000 employees (- 16%) between 2006 and 2015. In 2016, the French manufacturing industry accounts for 10.2% of GDP against 14.4% in the European Union. 

Since the 2008 financial crisis, developed economies have faced weaker productivity dynamics that have affected the industrial sector. 

Countries that will not shift to the industry of the future paradigm in time - i.e. adapt their training and their productive systems - will be disadvantaged in this revolution, in both economic (loss of competitiveness) and employment matters (disappearance of production sites). Very few countries are taking active measures to adapt to the industry of the future. What are the good practices in other industrial countries?

Germany

Many initiatives have been launched in Germany. The public initiative Plattform Industrie 4.0 was created to help German industry stay on the cutting edge of technology, increase its productivity, create standards and standardize good practices. Several representatives from firms, associations, standards bodies and trade unions work under the leadership of the Federal Government of the Economy and the Federal Ministry of Education and Research.

This initiative has several activities:

  • The platform organizes thematic taskforces to discuss and find practical solutions to issues regarding standardization, networked systems security, legal conditions, research and training. 
  • Within the platform, initiatives are launched to speed up the standardization of solutions. One of these networks, Labs Network Industry 4.0, should for example facilitate companies’ transition towards Industry 4.0 by allowing SMEs to test new technologies.
  • International partnerships are one of the platform’s crucial goals. Partnerships have been signed with the Chinese Ministry of Industry and Information Technology, the US Industrial Internet Consortium, the Japanese Ministry of Economy, Trade and Industry and with France. The goal is to agree on standards and interoperability systems across global value chains. 

Singapore

Similar initiatives can be found in Singapore, which is a renowned hub for high-value manufacturing. The Singaporean answer has been to create the Singapore Smart Industry Readiness Index as an attempt to address these challenges. Created in partnership with the global testing, inspection, certification and training company TÜV SÜD and validated by an advisory panel of industry and academic experts, the Index has been designed as a comprehensive tool for all companies, regardless of their size or industry. 

The Index aims to:

  • Learn the industry of the future’s key concept
  • Evaluate the current state of their facilities
  • Design a comprehensive roadmap
  • Deliver and sustain transformation initiatives

The United States

The United States is also a leader in global innovation policies. Manufacturing USA was established in 2014 and gathers industry, academia and federal partners within a network of manufacturing institutes. It aims to increase competitiveness in US industry and to promote R&D infrastructures through public-private partnerships. The network consists of 14 institutes that work both independently and together in a number of advanced technology fields. 

One of these institutes is the Advanced Functional Fabrics of America (AFFOA). The AFFOA is led by the Massachusetts Institute of Technology. It gathers 32 universities, 16 industries, 72 manufacturing entities, and 26 startup incubators. Corporate members include various American apparel companies such as shoes firm or medical device manufacturers. The AFFOA is expected to conduct research in the Internet of Things and wearable computing.

Wichita State University Innovation Center is another example which can illustrate global innovation policies in the United States. Wichita State University’s Innovation Campus is an interconnected community of partnership buildings where organizations conduct operations and uses universities’ important resources. Laboratories give students access to real-world applications and to the training needed to join the workforce. 

This center is accessible to all American companies, and its funding is entirely private. These funds are mainly used for the purchase of equipment and the center’s construction.

The equipment is at the cutting edge of technology: the site is one of 10 in the country capable of making 3D printing big-box, and is the biggest "virtual reality cellar in the world".

Conclusion

Developed economies are adapting to the 4th industrial revolution. Public authorities have already been launching initiatives with a clear vision and through partnerships between private companies and universities. These initiatives create innovation hubs that enhance the industry’s attractiveness. Institut Montaigne's proposition to create regional acceleration centers is an innovative approach, as are the initiatives previously described. 

It is important to launch a real reflection at the European level around the development of the industry of the future. This could result in the inclusion of foreign suppliers to the ecosystem of acceleration centers, under the leadership of the main industrialists of the sector. A twinning mechanism between existing centers in Europe could also be envisaged.

Written by Victor Poirier and Tennessee Petitjean

 

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