ASSESSMENT OF IMPACTS OF NMP TECHNOLOGIES AND CHANGING INDUSTRIAL PATTERNS ON SKILLS AND HUMAN RESOURCES FINAL REPORT

Client

European Commission, DG Research Directorate G – Industrial technologies

Dr. A. Gelderblom, M. Collewet, J.M. de Jong, N. de Jong, Dr. F.A. van der Zee (SEOR)

Dr. C. Enzing, Dr. T. Åström, dr. D.J. Fikkers, S. Vermeulen (Technopolis)

Rotterdam, 9 January 2012

ASSESSMENT OF IMPACTS OF NMP TECHNOLOGIES AND CHANGING INDUSTRIAL PATTERNS ON SKILLS AND HUMAN RESOURCES FINAL REPORT

Contact person Dr. A. Gelderblom

Address

SEOR, Erasmus University Rotterdam P.O. Box 1738 3000 DR ROTTERDAM, THE NETHERLANDS

Telephone +31-10-4082175

Fax +31-10-4089650 (SEOR)

E-mail Gelderblom@ese.eur.nl

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TABLE OF CONTENTS

Executive summary 1

1 Introduction 9

1.1 Background and context of the study 9

1.2 Objectives of the study 10

1.3 Research questions and study methodology 11

1.4 Content of this report 13

2 Literature review 15

2.1 What is NMP? 15

2.2 NMP – use and applications by sector 17

2.3 NMP, jobs and skills 20

2.4 New technologies and skills – China and India 29

2.5 Conclusions 32

3 Sector studies 34

3.1 Introduction to the sector studies 34

3.2 Automotive sector 36

3.2.1 NMP-based industrial development and innovation in Europe 36

3.2.2 NMP skills and jobs 43 3.2.3 NMP education and training 44 3.2.4 Conclusions 45

3.3 The textile sector 47

3.3.1 NMP-based industrial development and innovation in Europe 47 3.3.2 NMP skills and jobs 54

3.3.3 NMP education and training 57 3.3.4 Conclusions 59

3.4 The chemicals sector 60

3.4.1 NMP-based industrial development and innovation in Europe 60 3.4.2 NMP skills and jobs 69 3.4.3 NMP education and training 72

3.4.4 Conclusions 76

3.5 The machinery and equipment sector 77

3.5.1 NMP-based industrial development and innovation 77 3.5.2 NMP skills and jobs 89 3.5.3 NMP education and training 92

3.5.4 Conclusions 93

3.6 The paper sector 95

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3.6.1 NMP-based industrial development and innovation in Europe 95

3.6.2 NMP skills and jobs 104 3.6.3 NMP education and training 106 3.6.4 Conclusions 108

3.7 Conclusions 109

4 The company’s point of view: a survey 112

4.1 Introduction 112

4.2 Description of the survey method 112

4.3 Importance of NMP and perception of European position 117

4.4 Impact on skills 120

4.5 Skills shortages, recruitment problems 129

4.6 Adequacy of the education system 133

4.7 Conclusions 139

5 The educational practitioner’s point of view: a survey 141

5.1 Introduction 141

5.2 Research methodology 141

5.2.1 Identification of respondents for our survey among Higher Education Institutions 141

5.2.2 Structure of the survey 143 5.2.3 Interviews among institutions for Vocational Education and

Training 143

5.3 NMP education and training in Higher Education Institutions 145

5.3.1 Characteristics of the responding organisations 145 5.3.2 NMP skills addressed in higher education 145

5.3.3 Capacity and developments in students outputs 147 5.3.4 Contribution of extra-EU students to student outputs in the

upcoming five years 148

5.3.5 Lifelong Learning 150 5.3.6 Future plans of the HEIs 150 5.3.7 Industry-HEI cooperation 152 5.3.8 Post HEI careers 154 5.3.9 Expected skills shortages 155

5.3.10 Suggestions for EU policy makers 156

5.4 Vocational Education and Training 156

5.5 Conclusions 158

6 Conclusions and recommendations 160

6.1 NMP versus N, M and/or P 160

6.2 Skills demands and gaps 161

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6.3 NMP education and training 162

6.4 Cooperation between HEI and industry 164

6.5 Recommendations 164

References 168

Annexes 174

A1. Sampling company survey 174

A2. Response company survey and clustering categories 178

A3. Surveys and semi-structured interview guide 184

Company survey 184

Higher Education Institutes Survey 196

Example of semi-structured interview guide 206

A4. Answers for some open questions for improvement of the higher education system 211

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Acknowledgements

The report was prepared under contract to the European Commission, Directorate-General for Research and Innovation (DG RTD), in response to tender no. RTD-NMP-2009-Skills. The report was prepared by:

Arie Gelderblom, Matthijs de Jong, Niek de Jong and Frans van der Zee1 (SEOR) Christien Enzing, Tomas Åström, Derek Jan Fikkers and Sara Vermeulen (Technopolis)

From the side of DG RTD, the Directorate on Industrial Technologies was in charge of managing the study. The first responsible was Jesús Alquézar Sabadie.

The study was monitored by a group consisting of:

Jesús Alquézar Sabadie European Commission, DG RTD Agnieszka Bielska European Commission, DG EMPL George Chryssolouris Laboratory for Manufacturing Systems and Automation,

University of Patras, Greece Lucie Davoine European Commission, DG EAC Nicholas Deliyanakis European Commission, DG RTD Ulrich Genschel European Commission, DG RTD Elsa Henriques Instituto Superior Técnico, Portugal Adeline Kroll European Commission, DG RTD Misa Labarile European Commission, DG EMPL Michael Matlosz Ecole nationale supérieure des industries chimiques de

Nancy and Agence Nationale de la Recherche, France Nathalie van Neck European Commission, DG RTD Augusta Maria Paci Consiglio Nazionale delle Ricerche, Italy Michel Poireau European Commission, DG RTD Natalia Popova International Labour Organisation Roderick Sant European Commission, DG MARE Peter Szovics Cedefop Sophie Villanueva European Commission, DG MARE

We would like to thank them for their valuable comments and suggestions.

Evelien Knoops and Connie Sintnicolaas assisted in editing the English text. We are also grateful to many others who contributed to this study, including the respondents to our in-depth interviews and on-line surveys.

The views expressed in the report are not necessarily those of the European Commission.

1 Currently working at TNO.

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EXECUTIVE SUMMARY

Introduction

Nanotechnologies, material technologies and production technologies (NMP) represent a group of pervasive technologies with innovative impacts (new products, processes) in specific parts of a wide range of industrial sectors. The development and innovative implementations of NMP will help to improve the competitiveness of European industry and generate the knowledge needed to transform it from a resource-intensive to a knowledge-intensive industry. The current and future developments in NMP put new demands on both educational institutions and companies. Educational institutions have to train the future workers in these industries. Companies in the industries have to express and specify the future skills needs, not only for the education system but also for their human resources development such as in-company training.

This study focuses on the impact of new developments in NMP on current and future skills needs and skills gaps. The study is based on the central assumption that new developments in NMP offer strong potential for contributing to a knowledge-based European economy that is sustainable, while maintaining or possibly increasing Europe’s global competitiveness. The goal of the study is to provide insight in the possible current and future skills gaps in the field of NMP between what companies in Europe need and what the education and training system offers. Based on this insight recommendations have been formulated as to what are the necessary measures that have to be taken in order to close the gaps between supply and demand on the NMP ‘skills market’ on time.

Based on this goal, the two objectives of this study have been formulated as follows:

1. Identifying the impact of NMP and new industrial patterns on current and future skills and competences needed at research, engineering and manufacturing levels.

2. Recommending on education, training and other measures to be implemented to fill potential skill gaps.

The main research questions of the study through which the objectives have been operationalized include:

− What are the potential impacts of the developments in NMP on the knowledge and skills required from the workforce (including those working in company labs, engineers, technical staff, qualified workers, clerks, etc.)?

− What are the already identified expected skills mismatches and gaps between existing skills, knowledge and competences to implement these technologies and tackle the challenges linked with the profound changes they will bring in industry and services?

− Which strategies, changes or reforms would be necessary to adapt education institutions to the knowledge economy and new industry patters?

Methods of the study

The set of methods that has been used to answer these questions is a combination of desk research, interviews and surveys. First of all, a general and broad overview of NMP and skills gaps was made based on a literature review (Chapter 2). This overview includes the industrial sectors where new NMP developments have the most impact and the time by which these impacts could happen. In addition, two different but complementary studies have been done. The first focuses on five specific industrial sectors in which first of all NMP technologies are expected to have an impact and secondly that represent different parts of the value chain (Chapter 3). These sectors are: automotive, chemicals, machinery

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& equipment, paper and textiles. Interviews with representatives of companies, education and research institutes, industry associations and labour unions in combination with desk research have been used to collect the information for the sector studies. The sector studies approach was chosen because it can provide in-depth insights in the skills needs and gaps of a selected number of sectors from the perspective of the most important stakeholders.

The second part focuses on the views of the two key actors in the domain of the study: companies (Chapter 4) and educational institutions (Chapter 5). This key actors approach aimed at getting a European broad overview and understanding of current and expected future skills needs and skills gaps detected or assessed from the perspective of both educational institutions (supply side) and industry (demand side). Here large-scale surveys were used. The two studies were subsequent: the results of the sector studies provided input for formulating the specific questions to the questionnaires used in the surveys. The samples for the two surveys were constructed in such a way that especially companies and higher education institutes involved in NMP were included.

NMP NMP represents a wide range of industrial technologies that have strong potential to generate new production processes, new products and other applications that will affect various segments of the industrial value chain. This varies from R&D to manufacturing and assembling, delivery and maintenance, and the related services. The pace of diffusion of such industrial technologies and of the associated impact in industry differs from sector to sector. It will affect both large companies and SMEs in various roles ranging from suppliers of new materials and processes to producers of new products and services. For nanotechnology, the main industrial sectors (development, production, application) include chemical industry, electronics, energy, medicine, optics and downstream industries such as automotive, construction, environment, public security and textiles. New materials and new production technologies can be applied in almost all industries.

The five sector studies describe in more detail what NMP developments mean for economic activities in the sectors. Each sector has its specific characteristics concerning the importance of NMP for new products and processes, now and in the near future. In the chemical sector new developments in NMP are rather pervasive and deal with a large variety of new products and new processes. The impact of NMP in the chemical sector also touches on other - downstream - sectors as these use the new chemical products (such as new types of nano-materials) in their products: automotive, pulp and paper and textiles are three of these downstream sectors that are included in this study. In the automotive industry the most relevant developments of NMP for the automotive Original Equipment Manufacturers (OEMs) themselves deal with lightweight engineering materials and lightweight design, as well as the associated production processes in order to meet the requirements on reduced CO2 emissions. Within the paper and pulp industry NMP can contribute to increase the variety of products from wood (such as high-tech paper), to provide a better and more efficient use of raw materials and to increase the sustainability of production (bio-processing). In the textile industry new developments in NMP seem to be limited to a relatively small number of front-runner companies especially in the technical textiles segment (smart materials, intelligent textiles). In the machinery industry new production technologies are mainly ICT-driven. Some of these production processes use nano-electronics for process and control equipment (sensors).

Most companies in the survey involved in NMP expect that the application of NMP will lead to new/improved products for their company within 5 years. Companies are quite optimistic about the future position of the EU in terms of production and R&D based on current and future NMP-technologies. In order to have a more clear idea that this is also a realistic future perspective we have paid specific attention to China and India. To what

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extent can they be considered as important future competitors in upfront technologies, e.g. NMP technologies? China has invested heavily in nanotechnology. However, there are still important thresholds in further development of their position as there are large quality differences between institutes, there is a lack of “softer” skills of Chinese engineers (interdisciplinary and creative thinking and English language skills). There is also a large gap between research and outcomes in terms of commercial products. India has a slower growth of science and technology students compared to China and also has substantial quality problems. All in all there is much potential in these Asian countries, but it remains to be seen whether they will become a strong future leader in this area as they have become in other parts of manufacturing. The “skills issue” is a critical factor. For Europe, responsiveness to developing skill needs related to NMP is therefore crucial for maintaining and developing a certain comparative advantage.

Skills needs All research results (based on literature review, interviews, surveys) point towards an increasing employment demand related to NMP developments. Most studies that are covered in the literature review predict quite a substantial number of new experts in the field of nanotechnology that is required on the labour market, but the estimations vary. These studies mainly focus on academic levels. The few studies that focus on new materials and production technologies show a more or less similar pattern as they all address the need for university level professionals for key positions in R&D, product development and production. Also here little attention is paid to other levels as at these levels skills problems seem far less pressing.

The fact that most important changes in employment due to new NMP developments and implementations are expected at university level is confirmed by the results from the company survey. An increase is expected most for the function groups ‘R&D’ and ‘engineering/design’. Especially the first group is also mentioned in the interviews. The interviewees differ in their perception of the pace and importance of the technological changes, confirming the existing uncertainty about skills consequences of NMP.

In the survey most companies involved in NMP expect a limited growth in employment related to new technological developments. The expected increase in employment is highest for the sectors energy & environment, software, R&D and optics & electronics. The expected growth is somewhat lower when the company is only involved in the “M” component of NMP. The growth expectations are highest when the company applies a combination of these new types of industrial technologies: the most innovative companies seem to grow the fastest.

With respect to the qualitative skills needs related to new NMP developments, also here most studies focus on nanotechnology and very few on M or P. The studies on skills needs related to nanotechnology point to a very broad spectrum of relevant areas in science and technology disciplines (e.g. material sciences), production (e.g. sol-gel and lithography), analysis (e.g. scanning microscopy), R&D and project management and several personal skills such as ability to work in a (multidisciplinary) team. The issue of inter- or multidisciplinarity is mentioned not only in N-related studies but also in the few on M and P.

The results of the company survey confirm that this broad spectrum of both technical and personal skills will become more important. Among the technical skills material science, nanotechnology and process engineering are mentioned relatively often.

The importance of interdisciplinarity and personal skills are interrelated. Both the literature review and the company survey show the importance of personal skills, such as creativity, team working, communication and problem solving skills in the context of new industrial technologies. Employees dealing with new technological developments often

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work in multidisciplinary teams, but also cooperate across the borders of sectors and countries. The personal skills mentioned are vital for functioning properly in such multidisciplinary and cross-sector contexts. In order to prepare future employees for this kind of work, some educationalists stress the need for changes in education in the direction of more active and problem-based learning with assignments from the “real world”. Risk taking and creativity should be stimulated. However, current trends in education of increased standardization and accountability work in the opposite direction.

The results of the company survey show that there are differences in skill requirements between companies using different elements of NMP. Companies combining N, M and P mention the largest changes in skills in qualitative terms. Companies involved in N and M stress the growing importance of material science and chemistry, while companies involved in P, relatively often mention process and mechanical engineering and IT. The importance of personal skills is most stressed by companies involved in N: they advocate attention for personal skills in education more often than the other companies in the survey. The sectors studies show some specific needs by sector, which include: knowledge of composites (automotive), interdisciplinary skills (technical textiles, machine building), health and safety aspects of nano-materials (chemical industry).

Both literature and the interviews for the sector studies indicate that the NMP-related change in skills needs for production or assembly-line workers is less important. This indicates that the quantitative and qualitative changes due to new NMP developments at this level are less strong. There is one study that explicitly pays quite a lot of attention to this level: it mentions skills gaps, although they seem to be weaker compared to the academic level. Skills needs at this level are relatively strong for areas like material sciences, engineering/machine building, health and safety, working in a team and English (language). The company survey confirms that both quantitative and qualitative changes related to new technological developments are relatively small for the function groups ‘production workers’ and ‘maintenance and service workers’.

Most companies in the survey experience skill gaps and recruitment problems as a result of new technological developments in general. However, most companies rate these problems at the moment as “limited”, but these problems are expected to increase in the future. Both the literature reviews and the interviews confirm expected increasing problems and link these to decreasing interest of students in science and technology studies. Although the absolute numbers are still increasing, the relative numbers of students at academic level choosing for studies within the field Mathematics, Science and Technology (MST) is decreasing. A limited growth in expected future numbers of students in the survey among Higher Education Institutes (HEIs) fits within this picture.

Skill supply: education and training Companies use various strategies to deal with skills gaps and shortages: most popular are recruiting young people from the education system and training them on the job. This strategy underlines the crucial importance companies attach to the initial education system in bringing in new skills and knowledge.

The interviews and the survey among HEIs show that education and training institutes are rather active to meet these expectations of companies. In most chemical curricula nanotechnology and new materials are part of the basics that are being taught. New (bio)chemical production technologies are part of curricula in technical universities and in institutes for higher vocational educations that educate chemical, mechanical and other engineers. More specific applications of for instance the use of new (nano) materials in the textile and paper industry are addressed by local or regional institutes for higher education that work closely together with these industries.

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Most respondents participating in the HEI survey represent departments that teach subjects that are directly related to NMP, such as nanosciences and materials sciences. For about 50% of the responding organisations, these courses are compulsory for students. NMP skills - especially nanotechnology and new materials - are taught most intensively at the PhD level, followed by MSc and BSc levels. New production technologies are taught less intensively by these respondents. Development of new educational programmes is substantial: four out of ten institutes will set up new NMP curricula in the upcoming two years. Most HEIs indicate that they have contacts with industry and the majority considers them important or very important. Most contacts with industry deal with research collaborations. Less frequently they deal with traineeships, exchange of information, and alumni contacts. Even though contacts with the industry are intense, relatively many HEI alumni remain in higher education, either as a researcher or as a teacher. Those that go to industry, most often go to companies in the chemical, electronic, energy and engineering industries.

There is a discrepancy between the positive perceptions of the HEIs on their contacts with companies and those expressed by the companies in the survey. Companies (especially those in the UK and Southern and Eastern Europe) are rather critical about the education system in their country, mostly because of the lack of cooperation of HEIs and vocational education and training (VET) with companies. Apparently the world of school and work are still separate worlds in spite of the efforts taken. In the literature review one of the reasons mentioned for this divide is the incentive system in HEIs that does not favour cooperation with industry: there are limited incentives in schools to go out and meet the industry. Companies also advocate for more PhD programs and for improvement of international cooperation (both were more often mentioned by Eastern European companies). Demands on the education systems are strongest from companies that apply a combination of N, M and P and lowest for companies that are not involved in any of these technologies.

There is an ongoing discussion on how curricula should be organized to meet the need for interdisciplinarity and on the right moment to offer specific tracks for new areas such as nanotechnology. Regarding the latter, in the literature there is a slight preference for first a degree in a discipline, before entering a specific nanotechnology track. This idea of rather late specialisation is supported in the interviews. Companies need researchers and engineers (chemical, mechanical) with a good basic training in a discipline; the company specific knowledge and technologies will be learned ‘on the job’. More specialization versus more generic curricula is not a pressing issue for the companies involved in the company survey. Both options are not that much chosen as factors to improve education and they score evenly. All in all there is little immediate cause to initiate great changes in the current situation by changing more general curricula in the direction of more specialisation.

The interviews with representatives in the field of VET confirm the indications from the literature review that the consequences of recent NMP-developments are hardly an issue at this education level. VET is a system for vocational training with large practical components (including internships in a number of countries). There is a less direct link because new developments in NMP are simply too ‘fundamentally-scientific’ and too ‘strategic’ to teach in a system that is meant to teach practical skills. However, also these more practical skills should be developed properly to contribute to the company performance. The dissatisfaction towards the VET system (which is larger than the dissatisfaction towards the HEI-system) indicates that the preparatory role for these more practical skills of this type of education should not be forgotten. Referring to VET, companies want stronger cooperation (68%), an improvement to employ apprentices (38%), more attention for personal skills (38%), more international cooperation (31%) and improvement of the theoretical level (25%). Only in a few countries (Germany,

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Finland) initiatives have been started to think of the consequences for curricula at this level when NMP gradually moves further from the stage of development to application.

Lifelong learning in the sense of ‘off the job’ training for professionals seems not to have high priority in alleviating skills gaps and shortages. The most important company strategies still are recruiting young people from the education system and on the job training. The survey among educational institutes confirms that the role of lifelong-training courses is quite limited compared to initial education. In the light of the continuing processes of ageing and changing skill requirements, this is an attention point for companies and policy makers.

Recommendations Some of the main conclusions of this study are the following. Future shortages and skills gaps related to NMP are expected to increase. This refers mainly to high level graduates in the fields of Science and Technology (S&T). At the same time there is still quite a lot of uncertainty about future development of demand and supply. Skills demands in both quantitative and qualitative terms differ according to sector and the type of technology applied. Besides various types of technical skills, personal skills like creativity and ability to work in an interdisciplinary context are considered very important. Another important outcome of our study is that companies and HEIs have such different perceptions about their mutual cooperation. HEIs state that they are very active in cooperating with companies, while companies argue that this is still very limited and they are also critical about it. Finally, the field of VET (including lifelong learning) does not get much attention related to NMP skills needs. In the following of this section we give our recommendations linked to these conclusions (Chapter 6).

One of the main results of this study is that future shortages for certain high level specialists in science and engineering are expected to increase and this is a very important problem for many industrial sectors. Therefore, our recommendations first of all address the need for monitoring new skills demands. Monitoring of quantitative needs of industry concerning the pace and size of extra demands resulting from new developments in industrial technologies will help to increase a sense of urgency within HEIs and help them in adjusting their supply to industry needs. The availability of information about future skills needs is a more general issue in a broader context than just NMP-related skills. At the European level there is clearly room for improvement in this field. The European Commission is monitoring the supply of MST-graduates, but there is no indicator that relates this supply to future demand and to the discrepancies that can be expected. Current attempts of Cedefop for more detailed analyses of future labour market developments and better information on the match between supply and demand should be supported.

A more day-to-day monitoring of the current situation is better developed. The European Vacancy Monitor gives, for example, several indicators of labour shortages by occupation. However, even these types of classifications are on a rather high aggregation level. More detailed information on, for example, the extent of hard to fill vacancies by specific categories of engineers and technicians can only be collected by specific surveys among the companies concerned. Another way of collecting relevant detailed information would be to follow recent graduates in relevant fields in their labour market career, as is being done in some EU-countries. In the first case sector organisations are the logical initiator for this kind of monitoring. In the second case, the education institutes should be involved.

The second recommendation also deals with the shortage of sciences and engineering students in Europe. Interest in S&T should be stimulated at a young age (preferably in primary schools). Companies could play an important role in teaching young people what

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technology is by offering internships, company visits to (young) pupils/students, assignments in cooperation with companies, offering student jobs, etc.. Also companies and HEIs should explore new ways of giving students more opportunities to learn what industrial practices in their disciplines look like. Because upfront technologies and their potential for consumers can especially raise the interest of young people, NMP-developments are very suitable to be used in these strategies. The Swiss “Nano-cube” (Box 2.2) is a practical example of such an application. The confrontation and involvement at a relative young age with more practical day to day problems and developments of companies is also important to develop and stimulate personal skills such as creativity and critical thinking which are crucial in a context of continuous learning and innovation.

Governments should be reluctant in limiting the inflow of foreign students for budgetary reasons as these students can become valuable knowledge workers and meet some of the companies’ needs. Information should become available on their stay (in the US such information is collected on their foreign engineers) and what could be done to influence this.

Another striking outcome of our study is that companies and HEIs have such different perceptions about their mutual cooperation. The third set of recommendations is related to this and concerns the interaction between companies and educational institutions. It is recommended that this interaction should be organised at the member state level, since labour market structures, and industry-HEI relationships differ between member states. ‘Europe’ can help alleviating skills shortages in regions with the strongest shortages by facilitating labour market mobility over national borders. On the sectoral level, European industry organisations could initiate more elaborated efforts to bring industry and HEIs together thereby going a step further in specifying needs and also exchanging best practices within Europe. Within educational institutions the incentive systems could be focused more on the training of students. In academia the reward system is aimed at publications with high impact factors; there are hardly any incentives to be a qualified trainer and ‘go out and meet the industry’ in order to learn to know the future labour market of their students. The management of careers within academia could use a review in this respect. If the curriculum of students contains more internships and assignments (including PhDs) in and with companies, both sides have a more institutionalised incentive to cooperate.

Although companies clearly identify the need for personal skills, their expectations from HEI to address these skills in their curricula are not that high (in contrast to VET). Apparently, companies foresee that their own role to improve these skills is the most important. Our fourth recommendation is that companies should further develop this role by a well-developed personnel policy in terms of internal function mobility, specific training and regular feedback. In principle, this is the responsibility of the individual company itself. However, our survey results show that policy instruments such as off the job training and internal mobility are only used by a part of the responding companies. Especially smaller companies use these kinds of instruments less often. At the sectoral level facilities should be developed to help companies in this respect, for example by industrial organisations giving advice and stimulating the exchange of good practices.

With the increasing skills gaps and shortages to be expected in the near future and a further ageing of the workforce, more attention for lifelong learning is needed. Policy makers at various levels should raise the awareness of companies in this direction. This could be supported by offering companies financial facilities to enhance training. For example, in some countries sectors have chosen for a levy out of which training support and infrastructure is financed. Raising awareness is also an issue for the supply side of education institutes. They train only limited numbers in this area compared to initial

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education. To better develop this market of lifelong learning, a customer-friendly approach is needed with flexibility in curricula, training times, starting moments, etc. The educational approach for these kinds of target groups should be different. For example: a connection with the day-to-day activities of the professionals is very important to see the relevance of the training. Obvious subjects to develop in these training courses are skills that are expected to change strongly because of NMP-developments; this can be both in the technical field (such as material sciences) and in the direction of personal and methodological skills (like project management and communication skills).

Finally, it is recommended that policy makers in VET institutions pay more attention to the impact of new technologies for skills. An example of best practice is Germany where recently a project has started that assesses the consequences of all types of new technologies, including NMP, for professions in the “dual system”. There are indications that new demands show up in technical fields, as well as in personal skills and health and safety. When NMP-developments evolve to further stages of application, the demands for the VET level will become clearer.

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1 INTRODUCTION

1.1 BACKGROUND AND CONTEXT OF THE STUDY

New developments in nanotechnologies, material technologies and production technologies (NMP) will benefit high-tech industries but also medium- and low-tech industries. NMP is developed and will be applied in specific parts of a wide range of industrial sectors (such as: automobiles, chemical, medical, defence, water, energy, environment). Its products will be applied in other sectors, such as the textile sector, when advanced materials are used for specific final uses (sport, medical care, etc.), the personal care sector (such as cosmetics, anti-sunburn, socks), or public health care (such as new biomaterials, scaffolds, artificial bones) (Enzing & Van Kasteren, 2006). In the automotive industry new production technologies are developed and implemented on a continuous base, while at the same time this industry applies technological innovations that have been developed in other sectors such as from the chemical industry, such as nanomaterials for water resistance windows; biomass-based materials for bumpers and dash boards, and biofuels. New developments in NMP will continue to emerge; it is a group of pervasive technologies with innovative impacts (new products, processes) in many industrial sectors.

The core objective of the European FP7 Research theme “Nano-sciences, Nano-technologies, Materials and New Production Technologies" (also referred to as ‘Industrial technologies’) is to improve the competitiveness of European industry and generate the knowledge needed to transform it from a resource-intensive to a knowledge-intensive industry2. Strengthening this competitiveness is aimed for by generating ‘step changes’ in a wide range of sectors that can profit from these technologies and by implementing decisive knowledge into new product and process innovations. These new developments in N, M and P put new demands on both educational institutions that have to train the future workers in these industries, and on these industries themselves, as they have to express and specify the future skills needs, not only for specifying demands to the education system but also for human resources development such as in-company training.

This study focuses on the impact of new developments in NMP on future skills needs and skills gaps. Mapping this for Europe and providing policy recommendations on how the two - supply and demand of skills - can effectively interact and what education and training measures have to be taken in time in order to facilitate innovation in European NMP industries as best as possible, is one of the main challenges of this study. The study should provide an important input in the process of developing policies to increase the link in the knowledge triangle (including Research, Innovation and Education) between education and innovation. Education and training is of great importance in the knowledge-based economy of today; without it, innovation, but also research and development would not function at all. For that reason there is a growing awareness of the importance of investigating and addressing the potential skills gaps in this part of the knowledge triangle, also outside Europe3.

2 http://cordis.europa.eu/fp7/cooperation/nanotechnology_en.html 3 We refer to the OECD project ‘Indicators on skills, mobility and job quality and the

adaptability of labour market policy’. The project aims at providing OECD Members with a statistical tool for better understanding the relationship between skills, mobility and job quality at the local level.

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1.2 OBJECTIVES OF THE STUDY

The study is based on the central assumption that NMP technologies offer strong potential for sustainable economic development in Europe, while maintaining or possibly increasing Europe’s external (‘global’) competitiveness.

Following this assumption, the further development and deployment of NMP technologies is expected to have an impact in terms of business and industrial change in Europe and across various segments of the value chain. NMP technologies are expected to enable new processes and production patterns as well as new products and applications, leading to new business and industrial models based on a more sustainable production-consumption chain (from design to end of life, comprising physical production, sources of energy, maintenance of products, recycling, etc.).

The basic premise underlying the prospective hypothesis on which this study is based4 is that Europe is facing a double challenge:

− It must maintain, or even increase, its competitiveness, as expressed by the Lisbon Strategy. This is a basic requirement in the current globalised environment and under the current demographic threat (i.e. aging population).

− It must fight the environmental issues (e.g. climate change, environmental degradation), through a sustainable model of production and consumption.

In essence the hypothesis relates to translating the anticipated changes in industry as a result of a further uptake and use of NMP technologies into consequences for future skills and human resources.

Because of their pervasiveness, the NMP technologies have the potential to generate new processes and production patterns, new products and applications, new business models, etc. in many different sectors. The pace of diffusion of such technologies and of the associated impact to large parts of industry is expected to differ from one sector to the other, but it will affect large companies as well as SMEs and micro-enterprises (e.g. start-ups) in various roles ranging from suppliers of new materials and processes to producers of new products and services. Science and research (both public and private) will together with industry play a key role in future developments.

NMP technologies will affect various segments of the value chains in these sectors, from manufacturing and assembling to delivery and maintenance, and also to related services and to the customers' specific needs and behaviours. They will consequently, influence the design, production and maintenance of products throughout their whole lifecycle (including recovery, reuse and recycling). These developments will imply new skills, which will be needed by researchers, engineers, managers, production workers and others.

NMP technologies offer the potential for new sectors to emerge (e.g. recovery, recycling, new energy), and of already existing ones to transform and, likewise, for new jobs and new skills for existing jobs to emerge. At the same time, in order to enable the further development and implementation of NMP technologies and to realize the economic potential, new skills and competences are needed, now and in the years to come. Current mismatches therefore need to be addressed, apart from viable ideas on how to address labour market needs in the near future.

4 See Terms of reference, Contract procedure nr S 171 - 246101

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The goal of the study is to provide insight in the current and future skills mismatches in the field of NMP between what companies in Europe need and what the education and training system offers and to recommend as to what are the necessary measures that have to be taken in order to close the gaps between supply and demand on the NMP skills ‘market’ on time.

On the basis of this goal, the two objectives of this study have been formulated as follows:

1. Identifying the impact of NMP and new industrial patterns on current and future skills and competences needed at research, engineering and manufacturing levels.

2. Recommending on education, training and other measures to be implemented to fill potential skill gaps.

The results of the study aim to provide knowledge for action, by helping the European Commission and the Member States:

− to identify and disseminate to industry, policy-makers and opinion-formers relevant and evidence-based information on potential future skill needs in the field of NMP;

− to develop policy recommendations in terms of education, training and re-skilling schemes;

− to develop and implement enhanced initiatives with relevant stakeholders in the fields of research, education and training (different DGs, Member State partners, education and training institutions, etc...).

1.3 RESEARCH QUESTIONS AND STUDY METHODOLOGY

The study is based on the prospective hypothesis described above in which competitiveness, sustainability and the evolution from a resource-based to a knowledge-based economy are key elements.

The main research questions of the study through which the objectives have been operationalised include:

− What are the potential impacts of the developments in NMP on the knowledge and skills required from the workforce (including those working in company labs, engineers, technical staff, qualified workers, clerks, etc.)?

− What are the already identified expected skills mismatches and gaps between existing skills, knowledge and competences to implement these technologies and tackle the challenges linked with the profound changes they will bring in industry and services?

− Which strategies, changes or reforms would be necessary to adapt education institutions to the knowledge economy and new industry patters?

The research strategy developed to answer these questions is as follows. First of all a general and broad overview of NMP and skills gaps was made based on a literature review. One of the aims of this review was also to monitor and analyse the degree of consensus about the industrial activities or sectors likely to be most affected by the diffusion of advanced technologies and the time by which these impacts will or could happen. Subsequently, a two-track approach has been followed leading to two different but complementary studies. The first study focused on a number of specific sectors in which NMP technologies are expected to have an important impact and that represent the different parts of the value chain. The selection of sectors was one of the outcomes of the literature study. The second study focuses on the views of the two groups of key actors in the domain of the study: companies and educational institutions. This study aimed at

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understanding current and expected future skills needs and skill gaps detected or assessed from the perspective of both educational institutions5 (i.e. the supply side) and industry (i.e. the demand side).

The key issues addressed in the interviews with companies in the five sectors and in the European wide survey under companies include:

− Trends in NMP and their impact on occupational profiles; new skill needs due to development and implementation of NMP;

− Skills shortages6 and gaps7 (if any) in relevant functions (such as R&D, production managers and workers, post-production services such as maintenance);

− Human resources strategies (such as training, collaboration with research centres, universities or VET institutions, new recruitments, etc.) to reduce skill gaps or to enhance research skills.

The key issues in the interviews with representatives of institutions that educate and train students for the sector studies and in the European survey under institutions for higher education active in NMP include:

− Skills demands of new students (technical skills, personal skills) to be delivered to the labour market for functions in NMP-related R&D, production and other functions in industry;

− Implementation of programmes to enhance these skills; − Barriers/limitation (such as infrastructures, materials, funding, teacher's training

and competences, curricula, etc.) to train professionals and researchers with skills that suit industry demand;

− Collaboration with companies involved in NMP (such as exchanges of information, traineeships, research collaborations agreements, etc.);

− Career guidance system for students (efficiency) and the parts of industry where students go (related of not to the study).

The sector studies approach has been chosen as it can provides in-depth insights in the skills needs and gaps; the main method used here are interviews with a number of different stakeholders in the five sectors that have been selected. The interviews focused on the key issues mentioned above.

The key actors approach aimed at getting a European broad overview of skills gaps and mismatches as perceived by the main stakeholders: companies and educational institution. Here a large-scale survey was used. The two studies were subsequent: the results of the sector studies provided input for formulating the specific questions to the questionnaires used in the surveys. One example was the fact that many respondents from companies were unaware of the term “NMP”, which complicated the interviews. Therefore, we

5 Post-secondary general educational institutions include universities (ISCED 4 to 6) and

vocational schools and initiatives (i.e. initial and continuing vocational education and training, including apprenticeships) involved in advanced industrial technologies (especially NMP).

6 Skills shortages refer to a situation where firms cannot obtain in the labour market sufficient supply of the required skills. A skill shortage arises when an employer has a vacancy that is hard-to-fill because applicants lack the necessary skills, qualifications or experience.

7 Skills gaps refer to the qualitative mismatch between the supply or availability of human resources and the requirements of the labour market. Skills gaps exist when workers have inadequate skill types/levels to meet their employers’ objectives or when new entrants to the labour market are apparently trained and qualified for occupations but still lack some of the skills required (Strietska-Ilina, 2008).

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included in the surveys questions on the consequences of new technological developments in general instead of referring to the term NMP. As we had some specific questions about the companies’ activities in NMP we knew about their involvement in each of the three industrial technologies.

For a systematic analysis of current and future skills needs, a list of categories of skills was made. A distinction was made between personal (more soft or generic) skills8 and technical skills9.

1.4 CONTENT OF THIS REPORT

The research design comprises a number of research activities, including desk research, interviews and surveys among education institutes and companies. This report brings all together, structured as follows:

− Chapter 2 concerns a literature review. In this literature review the concept of NMP is highlighted including its use and applications by sector. Moreover, the literature review focuses on consequences of NMP in terms of skills and jobs, education and training using results from earlier research on the topic. Finally, there is a separate section on NMP and skills in China and India, to have an idea about the state of play in these countries which are by some considered as countries with an enormous competitive potential for the future;

− Chapter 3 concerns five individual sector studies which are meant as a more qualitative in depth analysis to better understand what NMP developments mean for economic activities and how this translates into skill needs First of all, the current state of play and notable developments are described, both from economic and NMP point of view, followed by two rudimentary scenarios which formed the basic input for an interview phase. This part is followed by two more specific sections on NMP skills and jobs, and education and training, respectively;

− Chapter 4 focuses on the results of the survey among companies and therefore gives a view from the “demand side” for skills, based on a broader basis.

− Chapter 5 deals with the survey among Higher Education Institutes and also gives attention to the field of VET in relation to NMP. So this chapter gives a more broad –based “supply side” view on production of relevant skills.

− The final Chapter 6 is answering the research questions by giving the most important conclusions of the study and translates the outcomes in a number of recommendations.

− A more elaborate discussion of the way of sampling for the company survey is separately discussed in Annex 1. This annex goes more into detail about some of the problems encountered, solutions implemented, and their impact on interpretation of the results.

8 Personal skills, referring to attitudes, behaviours and values like communication, creativity,

problem-solving, etc. Compared to technical skills, personal skills are more stable and predictable.

9 Technical skills, related to knowledge in scientific fields like nanosciences, chemistry and their specific branches linked with NMP. Technical skills include also methodological competences or the ability to handle with technical processes. Anticipation of technical skills needs in a 20-year time frame is a hazardous and complex task, taking into account that technologies evolve very quickly, with development paths often being erratic and not easily predictable.

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− Annex 2 contains a more elaborate discussion of the distribution of the response to the company survey.

− Annex 3 contains the content of the surveys and an example of a semi-structured questionnaire for the interviews (there are variants depending on target group).

− Annex 4 contains the answers given in two open questions about the improvement of Higher Education.

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2 LITERATURE REVIEW

When answering the research questions, optimal use has to be made of available information. For that reason the literature review was the first task in the project activities. This chapter provides the results of this review. First we elaborate on the concept of “NMP” (Section 2.1) and the applications of NMP in industrial sectors (Section 2.2). The next section presents the available information about the link between new developments in NMP and new skills demands, both in quantitative and qualitative terms (Section 2.3). In the latter section we also give spend attention to the debate on the extent to which education and training systems are adjusting properly to these new skills demands. Finally we make an excursion to the situation in China and India as these countries might become strong future competitors in the NMP field (Section 2.4).

2.1 WHAT IS NMP?

Nanosciences, nanotechnologies, new materials and production technologies (NMP), can be seen as an important subset of the set of advanced industrial technologies.

NMP technologies are part of the so-called ‘key enabling technologies’ and include10:

− Nanosciences and nanotechnologies (N) – i.e. studying phenomena and manipulation of matter at the nanoscale and developing nanotechnologies leading to the manufacturing of new products and services.

− Materials (M) – i.e. knowledge-based multifunctional materials, using the knowledge of nanotechnologies and biotechnologies for new products and processes.

− New production processes and devices (P) – i.e. creating conditions for continuous innovation and for developing generic production 'assets' (technologies, organisation and production facilities as well as human resources), while meeting safety and environmental requirements.

More in particular, nanotechnologies can be defined as all methods and processes connected with the design, characterisation, production and application of structures, devices and systems by controlling shape and size at the nanometre scale, i.e. with dimensions of 1 to 100 nanometers. Similarly, nanosciences refer to the study of phenomena and manipulation of materials at atomic, molecular and macromolecular scales, where properties differ significantly from those at a larger scale. On the nano-scale both size and shape matter, with a dramatic impact on and fundamental changes in physical, chemical and biological material properties compared to the above-nano-scale level. Self-assembly - described as a set of technologies aimed to exploit the interactions between molecules the way nature does - is just one example of what nanotech entails.

The impact of nanosciences and nanotechnologies on the development of and application in new materials and new production technologies is vast, ranging from nano-energy materials, functional (bio) nanomaterials to nano tools, nano-photonics, and nano-toxicology. Nanomedicine, nanobiotechnology, nanoelectronics, and other development and application areas each hold great expectations, with futures in productive and consumptive use that are still hard to imagine, and each of them having the capacity and potential to bring along sweeping change.

10 Communication "Preparing for our future: Developing a common strategy for key enabling

technologies in the EU" COM(2009)512

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Nanosciences and nanotechnologies are important in developing new (nano)materials for industrial applications, such as:

− Carbon-based materials (e.g. nanotubes), metal-based-materials (e.g. nanogold, nanosilver, titanium oxide) dendrimers (nanoscale polymers) and nanocomposites (combining nanoparticles with lager, conventional-scale materials)

− Ultra-lightweight, high-strength, precision-formed materials, nano-composite polymers for structural and electronic applications; membranes and filters for desalinization of water; thermal and optical barriers; inkjet materials; high efficiency and novel catalysts;

− Smart and multifunctional packaging concepts utilizing nanotechnology/from renewable biogenic resources; multifunctional ceramic materials; modelling of ultrafast dynamics in materials; superconducting materials for electro-technical applications.

New materials refer to new types of material groups. It is also closely linked to manufacturing methods, with breakthroughs coming from new materials and new ways of processing and new approaches with green chemistry. Usually materials technology is a supporting technology, used in process engineering, machines and engineering structures, transportation and aeronautics equipment. In process engineering, materials technology is applied together with process technology, automation and machine technology to create competitive reliable solutions.

The role of materials technology has increased because of the increasing focus on life cycle management of processes and limitations set by existing engineering materials. New, high knowledge-content materials, providing new functionalities and improved performance that are under development include new material groups (e.g. nanostructured materials, biomaterials, metal matrix composites, multimaterials structures, functionally graded materials, smart/active materials), new manufacturing methods (e.g., multimaterials structures, spray deposition, new coatings, joining and castings methods, powder metallurgical methods, composite materials) and hybrid material systems (novel use of advanced high performance materials together with commodity materials in multimaterial structures) (Roadmap EUMAT). New materials are to be applied in a large diversity of sectors, including automotive/transport, textile, construction, health, energy, mining, aerospace.

New production technologies include a very wide range of different technologies, conceptual approaches, methods and devices that all deal with the making of products on an industrial scale (which varies from small pilot to large scale plants, from batch to continuous processes, from vast to fluid processes, etc.) and that take place in a wide range of industrial sectors. When only focusing on new technological developments and more particular those that are addressed in European Technology Platforms (ETP’s), the development in the field of sustainable chemistry (SUSCHEM: industrial & materials technology, reaction & process design), robotics (EUROP), photonics (Photonics21), but also those on transport (ERTRAC), building & construction (ECTP) are relevant in this respect.

One of the more dominant developments in process technology related to nanotechnology is the miniaturisation of manufactured devices and components (‘beyond Moore’). Size reduction is being pursued from two converging directions: top-down scaling of macro-manufacturing technologies to handle ever-smaller dimensions and higher tolerances, and bottom-up exploitation of the phenomenon of self-assembly at the atomic level.

Where the convergence (or integration) of nanotechnology with biotechnology, ICT and cognitive sciences (NBIC) has as its main focus on human enhancement applications, the

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convergence of N, M and P technologies mainly concerns applications in industrial production processes. For example, new materials (coatings) in car glass or textile production processes, nano-electronics in optics or the robotics industry, bioprocessing of nano-materials (Van Lieshout et al, 2006; Van Est et al, 2006; Enzing et al, 2008).

‘NMP’ as concept has a particular European connotation. It is a label that is widely used within the EU policy context especially in the domain of research and technology policy, but hardly outside Europe. Yet obviously its three ‘constituent elements’ N, M and P at their own also get considerable attention, both in terms of investment by science and industry and in terms of policy support, in Europe, but also in other parts of the world, in developed as well as emerging economies. The development of NMP therefore cannot be analysed in isolation, and neither can the skills and competence aspects of it. For instance student and job mobility, especially in the higher education segments, is not restricted to the national or EU level. The focus of the study is primarily on the European Union. It focuses on skill and competence needs, gaps and mismatches in relation to NMP-related functions in R&D and production in European industries and, consequently, the educational and training needs to target and where needed readjust these.

2.2 NMP – USE AND APPLICATIONS BY SECTOR

NMP technologies have strong potential to generate new processes and production patterns, new products and applications, along with new business models. They will affect various segments of the value chain from manufacturing and assembling to delivery and maintenance, and also to related services and to the customers' specific needs and behaviours. They will consequently, step-by-step influence the design, production and maintenance of products throughout their whole lifecycle (including recovery, reuse and recycling). The pace of diffusion of such technologies and of the associated impact to large parts of industry is expected to differ from one sector to the other, but it will affect large companies as well as SMEs and micro-enterprises (e.g. start-ups) in various roles ranging from suppliers of new materials and processes to producers of new products and services.

Applications of NMP technologies can be found in high-tech sectors including electronics, automotive, chemical and optics, and in more traditional branches of industry such as construction, pulp and paper and textiles. The number of sectors in which NMP could potentially play a role is vast. Yet, only small parts of technological activities in these industrial sectors can be attributed to NMP as companies in these sectors mostly apply a larger set of technologies. Only in few companies, most of which are small high-tech firms, can NMP activities be assessed to account for up to 100% of total activity. Moreover, the exploitation of newly developed NMP products and processes within industry are taking place along a rather extended time horizon. In many cases we are only at the beginning of an industrialisation process in which the new NMP developments of today are key; profiting from these results of NMP hence remains a major challenge.

In order to prepare the selection of sectors for the second part of this study, an overview was made of the sectors that develop and apply NMP technologies.

Nanotechnology has been highlighted as a potential growth area for many different industrial sectors (Enzing & Van Kasteren, 2006). By 2015, it is expected that the world market for nanotechnology will have reached a 1,000 to up to 2,600 billion USD, according to different forecasts (see e.g. Hullman, 2006).

Table 2.1 gives an indicative overview of what nanotechnologies - broadly defined - might bring us in the oncoming years, categorised by different sectors. The table is only illustrative; new developments in the oncoming years may overtake current one and bring new market and application potentials.

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The overview in Table 2.1 shows that there is also a wide range of nanotechnologies and nano-materials that are being used: nano-particles, nanostructured materials, nano-scale analytical tools, nano-scale production processes, etc. Apart from the chemical industry - that is the main sector developing and producing new high performance materials - there are a large number of downstream sectors that use these materials in the products they make. Examples of these downstream sectors are the automotive, construction, energy, environmental and textile industries.

The main sectors for nanotechnology (based on Table 2.1) include:

− Automotive (use parts such as window screens, exhausts, tires delivered by suppliers, integrated nanoparticles in the products; application of nanostructured technologies)

− Chemical industry (produces nanoparticles, develops and uses nano-analytical tools)

− Construction (mainly: use of nano-particles in coatings, paints, concrete, etc) − Electronics (development and use of nano-technologies for nano-devices) − Energy (products that work on nanostructured processes, use of nano-particles) − Environment (use of nanotechnologies) − Optics (development and use of nano-technologies for nano-devices) − Medicines (development and use of nano-technologies for bionano-devices and -

materials) − Public security (use of nanoparticles, application of nano-analytical tools) − Textiles (use of nanoparticles).

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Table 2.1 Overview of potential nanotechnology developments over time

Source: VDI TZ (In: nano.DE-Report 2009)

With respect to the sectors that develop and apply materials technology, the Materials ETP Roadmap (EUROMAT) states that materials technology is an enabling technology and a technology catalyst for innovation in other areas. Rather than listing these sectors (which would be all sectors that use ‘materials’) the Roadmap mentions the trends within

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industry that are a main driver in the development and application of new materials technology. These include:

− Reduction of life cycle costs, for instance due to corrosion, − Increase energy efficiency, − Environment, − Higher efficiency of production processes, − New products demands.

For production technology the same more or less applies as for the materials and materials technology as all industrial process are producing products and thus are applying production processes. Theoretically this would imply that all industrial sectors are to be included. However the selection of sectors for this study could be based on those sectors where ETP’s are addressing sustainable production processes, such as the chemical industry (SUSCHEM).

2.3 NMP, JOBS AND SKILLS

In this section, we focus on the available literature with regard to the consequences of NMP for skill needs, both in quantitative and qualitative terms, and the education and training infrastructure to meet these skill needs.

The majority of reports and articles published thus far on skills, human resources and NMP technologies concentrates on nanosciences and nanotechnologies, i.e. on the N of NMP rather than on M (new materials) or P (new production processes). Also literature focuses mostly on the impacts on these technologies on high-skilled functions in R&D and production, as these are most directly affected by these new technological developments.

Existing literature estimates the need of qualified nanotechnology workers in Europe to up to half a million in the coming years: Roco (2001) predicts that there will be a need for 300,000 to 400,000 multidisciplinary trained people to form the nanotechnology workforce in Europe, basing his estimations on instrument purchases; ATSE (2002) estimates that 0.3 to 0.4 million persons will be needed in nanotechnology research in Europe by 2010-2015 (cited in Monk & Rachamim, 2005); Donoval (2007) concludes that the estimations made at the workshop ‘Skill needs in emerging technologies: nanotechnology’ converge towards a half a million new experts within the next ten years; Edwards (2003) estimates the number of experts needed in nanobiotechnology to 160,000 worldwide by 2015 (cited in Abicht et al., 2006). German companies in a survey among companies involved in nanotechnology, expect an increase in employment in the period of 2008-2013 of about 60% (Abicht, 2008). According to OECD (2010), the expected growth in employment is strongest among higher level workers in R&D and production related activities and less in activities related to commercialisation (such as marketing, Intellectual property rights, imports/experts etc.).

The potential lack of skilled workers in the nanotechnology sector is perceived as an important problem in studies that address the issue. Two thirds of the respondents to the open consultation on the European Strategy for Nanotechnology expected a shortage of personnel trained in nanotechnology within 5 or 10 years (Malsch & Oud, 2004). According to the survey conducted by ENA (2005), two thirds of the employers dealing with nanotechnologies have difficulties recruiting personnel with the right skills, and the lack of skilled staff is considered one of the main obstacle to the development of nanotechnologies. Some 42 percent of the respondents to the ‘Nanotechnology Skills and Training Survey’ indicated that they had human resources problems, an important part of

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which was linked to the difficulty to find people with the appropriate technical knowledge (Singh & Dunn 2007).

However, a study by Stephan et al. (2007) in the USA shows that the number of positions for high skilled nanotechnology workers advertised in a number of prominent sources represented less than 0.1 percent of all individuals holding a PhD in physics, chemistry, material science and electrical engineering in the US. They notice a growing trend in the academic world, but not in industry. At the workshop ‘Research training in nanosciences and nanotechnologies’, held in Brussels in 2005, it was concluded that there seemed to be a shortage of researchers in France and the UK, and a surplus in Sweden and Greece, which means that mobility within Europe should be fostered; another conclusion was that the number of positions available to nanosciences graduates, or that the positions offered do not match with the graduates’ skills (Monk & Rachamim, 2005). However, Malsch (2007) concludes: ‘It appears that the main drivers for nanotechnology education are US and EU officials responsible for funding nanotechnology RTD. Little information is available on the actual or perceived needs of potential employers of nanoscientists, engineers and technicians.’ However, more recently more evidence on recruitment problems has become available (e.g. OECD, 2010). This study mentions specific recruitment problems in R&D for the groups of engineers with specialised knowledge in nanotechnology related areas and in specialists and generalists who can coordinate multidisciplinary teams.

Although no studies have been done aiming at quantifying and qualifying the skills needs in M and P technologies, the roadmaps and strategic research agendas that have been published in these fields all address skills needs and gaps, some more specific than others. Future shortages for science and technology specialists are also signaled by BUSINESSEUROPE (2011) as a serious threat for the future. The EuroMat roadmap (2006) notes that materials technology has been facing problems of young talent not entering materials technology. It is a long term trend which may have negative effects not just on materials technology but also on downstream industrial sectors depending on materials technology innovations. The roadmap indicates that advanced materials technology industry and related manufacturing industry needs university level professionals in key functions of R&D, product development and manufacture, due to its research intensive nature. The roadmap recommends to improve the attractiveness of materials science and technology among young students. In the P-field the ‘ManuFuture 2020 Visions’ report (ManuFuture, 2006) notes that manufacturing in 2015 to 2020 will be called upon to provide solutions meeting new societal needs and the demands of an increasingly ageing public. At the level of labour supply, the manufacturing and research sectors will be confronted with the retirement of large groups, while innovation will require completely new sets of skills – the availability of which, in both manufacturing and research, could become a critical factor. The Photonics21 (2010) states that in the next ten years, Europe will need 80 000 new and qualified experts in photonics to cope with rapid industry growth and the retirement of skilled workers. Efforts, both in the European and the national level, joint efforts of public authorities and the photonics community should focus on the development of a workforce with the skills needed to meet the challenges of the future. If photonics is to thrive in Europe, then there is no alternative.

Job functions and job profiles

Most of the existing literature on nanotech skills concentrates on general descriptions of the skills needed. The study by Abicht et al. (2006) is the only one which develops new qualification profiles which are likely to be needed in the future. They focus on the intermediate skill level. Cluster-embracing profiles which they name are: nanoanalyst; specialist in nanosurface treatment; specialist in documentation in nanotechnology;

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product adviser for nanotechnology applications. They also developed, for each qualification profile, a list of the different skills needed, differentiating among others between technical skills, methodological competences and social competences (see for a detailed description of each profile Abicht et al., 2005).

It is not surprising that all studies addressing skills needs in nanotechnology consider that graduates in natural sciences and applied sciences (chemistry, biology, engineering, physics, material science) constitute the pool from which nanotechnology has to recruit.

Box 2.1 Developments in the number of students in the cluster of Maths, Science and Technology (MST)

A crucial pool for skilled workers in NMP are those with a background at tertiairy level (higher education) in the cluster of subjects in the field of Maths, Science and Technology (MST). In the framework of Europe 2010 a benchmark has been formulated to increase the number of MST graduates by at least 15% in the period 2000-2010. Eurostat has been monitoring this benchmark. Eurostat uses a definition of MST which is based on the international ISCED classification. MST includes life sciences, physical sciences, mathematics and statistics, computing, engineering, manufacturing and processing, and architecture and building. Eurostat (Mejer et al., 2011) reports about results related to the benchmark mentioned. They report that the benchmark was easily reached, because actual growth was nearly 40% in the period 2000-2009. However, they give a number of remarks to put these results into perspective. First, in this period many European countries introduced the bachelor/master structure resulting in shorter degree structures and therefore more graduates per reference period. Second, they compared the growth of MST graduates to other fields of study, which were higher. At more than 50%, the average percentage change for all fields of study was substantially higher than the MST growth rate. This means that the relative share of MST graduates is decreasing. In another publication of Eurostat (2010a), the same conclusion is drawn on the share of MST in total enrolled students: in the period 2002 – 2007 the total number for MST students has increased annually by around 1%, while this is around 2% for other studies, leading to a lower relative share of MST students. The exact figures for the share of MST students at ISCED level 5-6 in total enrolled students at these levels are as follows:

Students at ISCED levels 5-6 enrolled in the following fields: science, mathematics, computing, engineering, manufacturing, construction – as % of all enrolled students

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

26.2 26.2 26.1 26.1 25.9 25.5 25.2 24.9 24.7 24.5

Source: Eurostat

Eurostat also publishes the underlying figures for individual countries and the trend differs per country. In some countries, the downward trend has even been much stronger,such as the UK, Ireland, Belgium, Sweden and Romania. For other countries the share has been quite stable over 2000 – 2009, such as Germany, Austria, Spain and Italy. For some of these countries, the share first increased, but decreased in the second half of the period observed. For a few countries, there is even an upward trend, especially at the beginning of the period, like Poland and Portugal. In the technical comments, Eurostat states that comparability over time of these figures is not hampered by important problems. Changes in definitions influencing comparisons over time had very little impact.

Overall, we can say that MST-students are increasing in absolute numbers, but decreasing in relative numbers, showing a decline in interest in MST-subjects. The same conclusion was also already drawn by an earlier OECD report (OECD, 2008), reflecting on older figures for the period 1993-2003. If future cohorts of young people will become smaller because of demographic developments, even absolute numbers of MST-students could decrease in the future.

A number of authors express a concern that there is a decreasing trend in the number of graduates in these subjects. Monk & Rachamim (2005) address the decrease in the number of graduates in physical and engineering sciences. Donoval (2007) regrets the lack of interest of the young generation in technical studies in general. Luther (2007)

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notes that in Germany, a shortage of skilled personnel in technical occupations is predicted, and in general a shortage of graduates in mathematics, IT, natural sciences and technology. Box 2.1 gives some figures about the – relative – decline in interest in MST (Maths, Sciences and Technology) studies.

Similar conclusions can be drawn from the Strategic Research Agenda of the Photonics21 Technology Platform. Development in this field heavily relies on education in physics and mathematics: it is argued that - as the demand for specialists in photonics is greater than ever -, education providers at all levels have to strike a balance between industry’s short-term requirements and the need to provide students with a strong grounding in physical science and mathematics. Most national curricula include some elementary optics and photonics, but the widespread uses and applications of photonics are not presented to students, often because teachers themselves are unaware of them. It is recommended to launch awareness-raising campaigns at primary and secondary levels, install optics courses at undergraduate levels, and support transnational PhD programs in photonics (Photonics21, SRA, 2010).

Skills and competence needs Only a very limited number of studies focus on specific technical NMP skills. Singh & Dunn (2007) report on the basis of the ‘Nanotechnology Skills and Training Survey’ which the respondents consider to be the most important competencies in a number of domains. Among natural science competencies, material science, nano-biology interface and nanoscale effects are rated as most important; lithography, sol-gel and bottom-up assembly are most important in fabrication and synthesis knowledge; scanning electron microscopy, atomic force microscopy, scanning tunneling microscopy and transmission electron microscopy are the preferred characterization tools. Finally, among ‘other technical skills’, knowledge of new materials, design methodology for product development and technical communication are rated highest. The US Center for National Nanotechnology Applications and Career Knowledge (NACK) also lists a number of technical skills which a nano-technician should possess. This includes foundation skills such as block co-polymer techniques, optical, e-beam and ion lithography; fabrication skills such as self-assembly, catalyzed nano-wire growth, colloidal chemistry, etching, deposition, materials modification; characterization skills such as optical, scanning probe, and electron microscopy (NACK, 2009).

Abicht (2008) has given an extensive overview of the areas that are considered important for re-training of the employed (lifelong learning) in German nano-related companies. In general the results confirm the need for a broad spectrum of training needs, including, for example, for academics a high score on material sciences as well as more social competences such as R&D and project management. For the skilled workers the scores are in general somewhat lower, which indicates that the need for training is somewhat less high. However, in some areas, such as material sciences, machine building and engineering sciences, health and safety at work, English and working in a team score rather high. This pattern is in some respects somewhat different from the relative high scores for academics.

The need for having a good insight in skills needs and gaps is also experienced for M and P fields. In case of the chemical sector, there is a growing need to develop and implement more sustainable production processes, which implies that new disciplines such as microbiology/biotechnology have to get integrated into the current curriculum of chemistry students which is dominated by chemical disciplines. The SusChem platform (2005) concludes that investment in in-service training and relevant life-long learning opportunities is needed, in order to develop these skills at all levels within companies; with the aging workforce, the role of in-service training becomes increasingly important in the future. The SusChem report mentions that although skills foresight exercises have

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shown that it is difficult to find detailed information about future skills needs for specific technology areas, such information is crucial for the development of new education and training programmes in the field of sustainable chemistry (covering industrial technologies, materials technology and reaction and process design).

Similar recommendations are included in the Photonics21 (2010): “public authorities [should] conduct a survey of the European universities’ and offer optics- or photonics-related courses and quantify the number of graduates they expect to produce and conduct a survey of photonics-related industries to explore new and missing skills and thus develop new education and training opportunities”.

With respect to new developments in new materials, the European Technology Platform for Advanced Engineering Materials and Technologies (EuMaT) was launched in order to assure optimal involvement of industry and other important stakeholders in the process of establishing R&D priorities in the area of advanced engineering materials and technologies. In the EuMaT, Roadmap modelling is mentioned as an indispensable tool for production engineers as models relate to materials composition with structure, process parameters, ending up with product performance and design. Training of material engineers is recommended in the EuMaT Roadmap (EuMaT, 2006) so they are better able to specify the models they need and also demand for better material models. In addition, training scientists in developing these models is needed. In the Roadmap a number of different instruments for education and dissemination of knowledge about material science and engineering application is mentioned, including courses, workshops, seminars, conferences and training. The production of educational support material for enhancing the quality of teaching and assuring the continuous updating of new knowledge in material science and engineering to be used in university courses and higher education seminars is necessary. Training is especially recommended for those working in R&D functions: “a stage by a research laboratory of researchers of another organization in order to make experience of some scientific and/or technological matter where the hosting organization as a recognized excellence level. In particular this could be of interest for PhD students and young research fellows” (p. 45).

The ManuFuture Technology Platform that represents the European manufacturing industry aims at supporting the transformation process of this sector into a knowledge-based sector capable of competing successfully in the globalised marketplace. Education and training belong to one of the five priority pillars of actions that have to be implemented in order to meet all the challenges within this sector. A transformation of the existing RTD and educational infrastructures - fostering researcher mobility, multidisciplinarity and lifelong learning - is needed in order to get to a European world-class manufacturing sector (ManuFuture, 2006).

In general, the existing studies and roadmaps overwhelmingly focus on the importance of interdisciplinarity skills. In the case of robotics, it is observed that robotics skills are often taught with a focus on either mechanical-, electrical-, computer-, or systems engineering. However, skills are required in not only one of the areas of robotics, but across all. A solid interdisciplinary background with additional knowledge in design and in specific applications is needed, and for this a new generation of engineers and systems designers has to be educated that have a sufficient broad perspective to undertake the development of the system platform and its integration into applications (Robotics SRA, 2006).

More than 60 percent of the respondents to the open consultation on the European Strategy for Nanotechnology consider interdisciplinarity a crucial skill (Malsch & Oud 2004). It is further named by Donoval (2007), Luther (2007), Freikamp & Schumann (2007), Dworschak (2007), Monk & Rachamim (2005) and Malsch (2007). Voves (2007) emphasizes the need for people who can ‘think out of the box’, because of the multi-disciplinary character of nanotechnology.

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The emphasis on interdisciplinarity goes together with a focus on personal skills such as communicative skills, and ability to work in a team (OECD, 2010; Voves, 2007; Dworschak, 2007; Hung & Leon, 2005; NACK, 2009). Interdisciplinarity is often addressed when working in multi-disciplinary teams, for which the demands for those leading these teams are high in terms of combining specialist and general knowledge (OECD, 2010). Team members from different disciplines have to find “the same language” (OECD, 2010). Freikamp & Schumann (2007) add language and intercultural skills, and the NACK also names report writing and presentation skills. Singh & Dunn (2007) find that skills as team working, lateral thinking, verbal communication and people friendliness are highly valued by the organisations which participated in the ‘Nanotechnology Skills and Training Survey’.

This focus on the importance of personal, soft skills is a more general issue to be found in the literature on innovations and business development. For example, Wilenius (2008) stresses the importance for companies to continuously adapt to expected future developments. The management of this process is not so much a matter of direct leadership and decision making, as of providing the conditions and circumstances for creativity and innovativeness. Visions for the future are important. But in order for individual observations into future opportunities to be heard, communication within the company is crucial. Everyone should be involved in the “big picture” of where the organization is going (Hargreaves, 2007). One way to achieve this is to work in overlapping, heterogeneous and flexible teams. Other elements considered important for innovativeness by Wilenius are job mobility and a culture in which employees dare to make mistakes. Also Sahlberg (2009) perceives flexibility, risk-taking and creativity to become more important in a continuously changing competitive business environment.

Managerial skills are also named. Dworschak (2007) emphasizes the need for entrepreneurship skills. The NACK also identifies project management as an important skill. Singh & Dunn (2007) find that project management, R&D management, product innovation and technology strategy were considered most important among commercial, management and societal knowledge competencies by the respondents of the ‘Nanotechnology Skills and Training Survey’. Abicht (2008) confirms the importance (Nano-)companies attach to project management and R&D management. A more general recent survey in the chemical sector of Cefic (2010a) rate these two skills highest among most important “business skills” for engineers.

A number of sources name skills related to health and safety and risk management (Dworschak, 2007; NACK, 2009), quality control (Voves, 2007; Dworschak, 2007) and awareness of ethical, societal issues and public outreach (Monk & Rachamim, 2005). Risk assessment and management, environment and sustainability and ethics are also taken up in the ‘Nanotechnology Skills and Training Survey’, and valued by respondents, be it to a lesser extent than managerial skills (Singh & Dunn, 2007).

Finally, personality characteristics are also emphasized by some authors: Abicht & Schumann (2006) name self-motivation, sense of responsibility, high flexibility, working conscientiously (Abicht & Schuman, 2006). Donoval (2007) describes which personal skills are required depending on the size and type of the company; Freikamp & Schumann (2007) name self management and analytical and critical thinking.

At the moment, attention is focussed on the need for researchers and experts, people who are able to develop nanotechnologies and nanoproducts. It is, however, important to note that the need for workers with nanotechnology-related skills will also extend to the intermediate level as nanotechnologies become more widespread. Abicht & Schuman (2006, 2007) predict that there will be more use for the intermediate qualification level in nanotechnologies as automation will progress, and that nano-related skills will become necessary also in production, quality assurance, documentation, marketing and

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distribution. Spath & Buck (2007) argue in favour of linking early identification of skills needs to technology monitoring and predict that nano-related skills will also be needed in sales and services in the future. According to Light Feather & Cockerill (2005), ‘current workforce studies estimate that 15 technicians will be needed for every scientist in nano-manufacturing by 2015’.

Finally, one critical observation from Wilenius (2008) is that companies need to anticipate and predict their customers’ needs as well as their own needs for skills and competencies. However, they argue that this is not in fact happening in today’s business world. Most companies continue to live and breathe production. The development of products and services is informed by the perspective of production rather than by a consideration of how changes in customers’ immediate needs or in society in general should be taken into account.

Training and education The literature related to nanotechnology also addresses the question as to what one should do to ensure that enough people are trained to be able to work with nanosciences and nanotechnologies. Abicht et al. (2006) and Kulik & Fidelius (2007) differentiate between undergraduate university courses, graduate university courses and short courses providing knowledge and skills in the field of nanosciences and nanotechnologies.

Most attention is devoted to the university level, which is logical at the moment since nanoscience and nanotechnology are mostly relevant for R&D processes. The recommendations made are closely linked to the identified skills needs. A number of sources plead in favour of the introduction of interdisciplinary curricula (Donoval, 2007; Luther, 2007), or for the joint supervision of students by scholars from different departments (Monk & Rachamim, 2005). There is, however, an ongoing discussion on the question as to whether universities should offer interdisciplinary first degrees to their students, or whether they should get a basic/bachelor degree in one science and widen their focus towards nanotechnologies in a master’s degree. Kulik & Fidelius (2007) consider that offering a nano-related curriculum at undergraduate level is ‘too early’ and assume that this happens for ‘mercantile reasons’, to attract students. A survey by ENA (2005) shows that only 10 percent of the respondents consider that graduates with a first degree in nanotechnology would be most useful to their company, whereas 22 percent preferred a first degree in a scientific discipline, and 34 percent a first degree in a scientific discipline with a master’s degree in nanotechnology (Abicht et al., 2006). In the Nanotechnology Skills and Training Surveys, 21 percent of respondents had a preference for a single-discipline master’s degree, and 18.3 percent for an interdisciplinary master’s degree (Singh & Dunn, 2007). The preference for candidates holding a PhD is dominant in both studies, with 34 percent of respondents indicating that this is the preferred qualification in both surveys. Stephan et al. (2007) explain the slow development of university curricula in the field of nanoscience and nanotechnology by the fact that nano-courses do not provide students with in-depth expertise, and are rather add-ons than substitutes for other courses. A number of authors argue in favour of the development of modular training (Abicht et al. 2006, Ozolina & Zukersteinova, 2007, Monk & Rachamim, 2005), so as to enhance flexibility in the curricula and adaptability to skills needs.

A number of authors also show results that are in favour of the development of poles of excellence (Voves, 2007; Monk & Rachamim, 2005), of benchmarking and the creation of pan-European standards for nano-related curricula (Monk & Rachamim, 2005), and of the fostering of mobility of researchers between sectors and across Europe and the improvement of the cooperation between universities and industry (Monk & Rachamim 2005).

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The latter is labelled as a “challenge” in OECD (2010). The interviewed companies sometimes find it difficult to identify commercially relevant university research, and interdisciplinarity collaboration may be further complicated if it also spans organizational borders. University researchers are typically influenced by different incentives (reputation, publications) from those of companies (royalties, proprietary patents). These clashes of incentives may be accentuated in the case of nanotechnology as an emerging field at the forefront of scientific research, where the race to publish new discoveries is especially intense.

There is also increasing attention in the literature for education at other levels than the university level. Luther (2007) and Donoval (2007) stress the importance of the development of vocational training in nanotechnology. Malsch (2007) remarks that this is still at the very beginning in Europe, and that the most advanced country in this respect is Germany.

More generally, a number of authors emphasize the need to inform the public and school pupils so as to attract more people towards nanoscience and nanotechnology (Luther, 2007; Freikamp & Schumann, 2007; Dworschak, 2007). Box 2.2 gives an example of the way how in Switzerland students’ interest in nanotechnology is raised.

Box 2.2 “Swiss Nano-cube” to raise interest in nanotechnology and engineering of students in various types of education

"Swiss Nano-Cube" is a new interactive knowledge and education platform for micro and nanotechnology. It aims to spark interest in nanotechnology and engineering among students and young professionals. It is addressed to teachers and students of vocational schools, secondary schools as well as higher professional schools. The web-based learning platform has been developed by the Innovation Society St.Gallen and the Swiss Federal Institute for Vocational Education and Training (SFIVET) with the support of several Swiss Federal Offices and private organisations. “Swiss Nano-Cube" is a knowledge and education platform providing information knowledge on diverse areas of knowledge. Playing the interactive Nanorama game, you can discover everyday nanoproducts. The NanoTeachBox offers didactic material for teaching and learning, video clips, presentations and much more to be used in classrooms. With regards to the Year of Chemistry in 2011 and the support of Metrohm Foundation, a nano chemistry module has been developed. It contains detailed instructions on how to perform illustrating nanotechnology-related experiments particularly for chemistry classes. Further modules are being developed. In addition, "Swiss Nano-Cube" offers a broad spectrum of background information on basic mechanisms and effects in the nano world and on economic, social and technical issues of nanotechnologies, as well as practical information useful for the professional life. Simultaneously, "Swiss Nano-Cube" offers TeachNano courses for the advanced training of teachers. "Swiss Nano-Cube" is supported by private organisations and several Swiss Federal Offices (OPET, FOEN, FOAG). With their commitments, the Swiss public authorities follow the existing national strategy for the promotion of young talents in technical and scientific jobs and actively contribute to increase public communication on the opportunities and risks of nanotechnologies as it is mentioned in the Swiss Action Plan on Nanotechnologies. The platform will be evaluated by the end of 2011 and further developed with the help of experts from the fields of economy, science and education. Thus, "Swiss Nano-Cube" as a pathbreaking educational platform emphasises the pioneering role of Switzerland in education and technology.

Source: http://www.nanotech-now.com/news.cgi?story_id=41007

The need to develop interdisciplinary and problem-based learning below university level is stressed (Monk & Rachamim, 2005), and a number of authors even argue that this should start as early as at primary school (Voves, 2007; Freikamp & Schumann, 2007; Light Feather & Cockerill, 2005).

This plea for more active, problem-based learning, fits with the view of a number of educationalists of what is necessary in a dynamic society with innovations. Sahlberg

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(2009) advocates that education should focus not only on the transmission of information, but also on the construction and transformation of knowledge, which are fundamental processes in knowledge-intensive and innovation-rich societies. Murgatroyd (2010) goes deeper into the question how students can develop the right skills for innovation and comes to similar conclusions. He stresses the power of more “open” learning situations, by giving room for designing solutions to real world challenges and authentic audiences. In this model, the role of teachers shifts from instructor to a role of coach, guide and mentor who engage their students in a process of discovery which is rooted in the need to master the core skills requirements of a jurisdiction.

In an earlier publication, Sahlberg (2006) focuses on the prerequisites for schools to contribute to economic competiveness and innovations. He stresses the role of school-business partnerships, a focus on both individual and team learning, attention for interpersonal skills, creativity and risk taking, flexibility and choice in school curriculum and increasing financing of research and development. However, he concludes that developments in education policies are partly in an opposite direction. There is an increasing trend towards standardization, for example in curricula, and towards accountability, which could limit creativity and risk-taking by teachers and students (see also Murgatroyd, 2010). The same opinion is expressed regarding standardization. Sahlberg has his doubts about the value of the PISA-tests of the OECD, arguing that there is no clear correlation between countries scoring high on economic competitiveness and the PISA-test. However, he gives attention to one interesting phenomenon of the PISA test scores, which is the high position of Finland. Both Sahlberg (2006) and Grek (2009) discuss a number of studies dealing with the causes of this success. Crucial factors contributing to the success are the flexibility of the curriculum, the high professional level of teachers, but especially the freedom for both students and teachers, which stimulates motivation, creativity and risk-taking. Sahlberg stresses the importance of the fact that Finnish schools are almost totally test-free and external reviews of teacher’s performance was abolished in early 1990’s. This “safe” environment stimulates creativity and risk-taking.

A similar view is expressed by Seddon (2008) in the area of VET. A good preparation for innovation in school is limited by scripted pedagogies which are controlled by detailed accountabilities. He advocates a system which is more self-regulating by close ties to the environment. Close ties with those working in the professions (“communities of practice”) and using good practices are key elements in this view.

The views expressed above by educationalists on the need to develop personal skills and creativity for innovation fits with the importance attached to these skills by companies involved in innovations. At the same time, educationalists stress the importance of school-business links for the content of problem-based education challenges and participation in “communities of practice”.

Lifelong learning

A crucial way to prevent skill shortages in the field of nanoscience and nanotechnology is to develop life-long learning in this field. The Nanotechnology Skills and Training Surveys shows that 53 percent of responding organizations have no training programme to offer to graduates or post-graduates entering the organization (Singh & Dunn 2007). This indicates that there is a need to develop continuous training and life-long learning in the field of nanoscience and nanotechnology (Voves, 2007; Donoval, 2007; Luther, 2007; Freikamp & Schumann, 2007; Monk & Rachamim, 2005). Light Feather & Cockerill (2005) argued for instance in favour of retraining engineers previously working on semi-conductors towards nanotechnologies.

The earlier mentioned survey on continuing training in companies with nanotechnology in Germany (Abicht, 2008) confirms the presence of bottlenecks in the area of lifelong

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learning. When asked for specific problems hindering participation, more than 40% of the companies indicate that the existing supply of courses does not match with their needs. 37% indicates that the quality of the supply of courses is not transparent. When companies make use of training courses in the Nano-area, nearly two thirds are rather critical about this; only 37 percent is positive.

Conclusions

Table 2.2 presents some of the main conclusions of this section.

Table 2.2 Overview of some main conclusions in the literature regarding skills issues related to NMP

Subject Main conclusions

Skills (quantitative demand) More information for “N” than for “M” and “P” Extra demands in high qualified workers with a background in sciences and engineering (PhD, MSc) Estimations of size of extra demands (N) differ

Skills (qualitative demand) More information for “N” than for “M” and “P” Skill gaps higher in area of higher education than VET Impact on a broad field of technical skills Personal skills, including ability to work in an interdisciplinary environment are important in a context of innovations

Education (general) Some educationalists stress that for developing these personal skills, education should reform in the direction of more active, problem-based learning

Higher education Decreasing trend in relative number of students in sciences and engineering Preference in literature for specialization in a rather late stage

VET (including lifelong learning, LLL)

Some authors plea for more attention for the role of VET (which is still quite limited) Limited attention for LLL. Some authors identify clear bottlenecks in this area

2.4 NEW TECHNOLOGIES AND SKILLS – CHINA AND INDIA

In recent decades many industrial activities in Europe have been delocated to Asia, especially China and India. One of the answers in Europe has been to concentrate more and more on “knowledge-intensive” activities, for which high-level skills are more crucial instead of on lower wages. Further development of NMP fits within that strategy. However, China and India are also trying to get a grip on more high-tech activities. This section goes deeper into this process and also gives attention to conditions in terms of the availability of required skills in these countries, which are crucial for further development in this area. This analysis will give a better idea as to what extent Europe will be confronted by increasing competitive power in the high-skilled area.

These countries have been in a process in which large populations from rural areas have come available for working in manufacturing in services. Manufacturing in China and, for example, the ICT-sector in India has grown dramatically. However, the ambition of these countries is also to reach a strong position in high-tech industries. Illustrative in this respect is a statement of the Chinese president Jiang Zemin in 2006: “The development of nanotechnology and new materials should be regarded as an important task of the development and innovation in Science & Technology. The development and application of nanomaterials and nanotechnology is of strategic significance to the development of high technology and national economy” (Cited in Appelbaum et al, 2011). It also fits into a strategy to prolong a wage growth which was much stronger in China than in other

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regions in recent years: Real wages in China grew about 12% a year in the period 2007-2010 (ILO, Global wage report 2010/2011).

China is among the few countries that started with nanotechnology in the early 1990s. By the year 2000, it set up the National Steering Council on Nanotechnology. Along the way China has invested heavily on nanotechnology, patenting about 12% of the total number of international patents in nanoscience and nanotechnology (behind the US and Japan). Estimations for China’s governmental spending on nanotechnology differ, but Appelbaum and others (2011) state that this spending, although much smaller than in the US in absolute terms, may not be far off when adjusted for difference in labour and infrastructure costs. Moreover, APCCTT (2010) identifies China as the country with the highest share in scientific publications on Nanotechnology. However, at the same time various studies mention a number of problems, even speaking of “a developmental stage”. A dominant problem is that most efforts are put into basic research and there is a problem in switching to marketable applications (Appelbaum et al, 2010).

Another problem is that nanotechnology research in China is still not of a high technological standard in nature. It is dominated by nanomaterials, metallic and organic materials, which is among the low end in technology sophistication in the area. China appears to be reproducing its historic role. Rather than “leapfrogging development” to assume a technology driven leadership role in global production networks, Chinese nanotech firms remain low-cost suppliers to foreign multinationals (Appelbaum et al, 2011). The more advanced research in nanodevices and applications is still behind the US and Japan. The Chinese government in its efforts to further develop the nanotechnology industry has started to focus on nanodevices and marketable applications to keep up with technological development.

India has also taken interest in nanotechnology (Energy and Resource Institute, 2009). The Indian government has, over the years, created different agencies to deal with nanotechnology, one of which is Nanoscience and Technology Mission (NSTM). The Indian nanotechnology sector is dominated by basic research activities. These researches are done mainly through public funding from the government. Given the high investment required in this new sector, together with the unknown profitability make SMEs unable to flourish in the nanotechnology sector in India. Therefore, it is still mainly managed by government. One of the more fundamental problems with the development of nanotechnology in India is the lack of trained engineers and technicians (Malsch, 2007). Here we come to a more broad problem of both India and China in their process of technological upgrading. Some even speak of “Asia’s skills crisis” (see for example Park, 2008).

Skills in China and India Park (2008) describes the results of two surveys which stress the importance of skills: the Asian Business Outlook Survey by the Economic Intelligence Unit and the World Bank Enterprise Surveys. In the first source, shortage of qualified staff is rated highest among 13 issues in top business concerns in China, and fourth in India. The World Bank surveys also show that skills and education is more of an issue in China with nearly 30% of the manufacturing enterprises perceiving this as a severe or major obstacle. In services this is even higher (in 2002). In India this is around 12% in manufacturing in 2002, but this has risen to about 15% in 2005. For both countries, staff shortages are highest in middle management. Park (2008) mentions a number of specific professions for which imbalances are large, including engineers, scientists and software specialists.

These skill problems occur despite a rapid increase of higher educated workers. To illustrate: in China between 1998 an 2009 participation in higher education increased

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more than five-fold. By 2002 some 1.34 million graduated and 6.1 million in 200911. Already in 2003 the number of doctorates in Science and technology was nearly half of the US and even bigger for the number of engineers12. Bachelor graduates in engineering and technology in China rose from 150.000 in 1995 to nearly 600.000 in 2006. In engineering in the same period the number of masters increased eightfold (Gereffi and others, 2008). The education level in India is lower. To illustrate: The average number of attained schooling years in China is 8.36 in 2010, compared to 5.13 in India (Lee & Francisco, 2010).

But the strong increase in education levels, especially in China, has not prevented increasing shortage and skill problems. On the one hand this illustrates the strong increased demand for higher level skills. However, on the other hand there is also a problem of quality. An indication of these quality problems, is that unemployment rates are not inversely correlated with education levels, like in many western countries. Gereffi et al. (2008) cite a Chinese engineering professor who states that 30% of his students would be unable to find full employment after graduation. Wadwa et al. (2007) were surprised that companies experienced more problems in finding adequately skilled engineers in China than in India, despite much stronger growth rates of graduates in China. These problems turned out to be related to quality issues. The disadvantages of hiring Chinese engineers included inadequate communication skills, lack of loyalty, cultural differences, intellectual property concerns and a limited “big picture” mindset. The latter criticism to Chinese engineers also comes back in Gereffi et al. (2008). Many Chinese engineers are characterized as solid trained technicians, but lack experience to apply this knowledge to other domains. Leading innovation, working in teams and working across international borders are often less developed. Zaharim et al. (2009) confirm the importance of developing better generic skills such as communication skills, problem solving and interpersonal skills for engineers in Asian countries. Gereffi et al. (2008) also cite a survey of McKinsey Global Institute among 83 companies working over the world. Respondents stated that 81 percent of US engineers were employable, while this is only 10 percent for Chinese engineers and 25 percent for Indian engineers. Gereffi et al. (2008) stress there is a big difference in quality within China. The majority of multinational companies target a listing of about 10 to 15 Chinese universities. Beyond this list, recruiters stated, the quality of engineering education drops drastically. With regard to India they state that quality also differs strongly. About 75% percent of universities and colleges offering engineering and IT degrees are private and quality among those institutes differs strongly. There is a strong mobility of instructors towards business, because of better prospects, which makes it more difficult to guarantee good quality education.

Also in the field of vocational education and training there are various bottlenecks. A report of the Asian development Bank (2009) mentions some weaknesses of the Chinese Technical and Vocational Education system. Much attention is going to the higher education system and less to VET. The system functions quite separately from companies, both in terms of contributions, as in responding to labour market demands. With regard to lifelong learning the earlier cited DG Employment study mentions that the take-up is low. Responsibilities in this area are not clear. This is clearly a weak point because the need for lifelong learning is high for especially low educated migrants who need upskilling. Moreover, China is an ageing society, which also increases the need for lifelong learning.

11 DG Employment, Social Affairs and Equal Opportunities / The Institute of Population and

Labor Economics (2010). 12 http://www.nsf.gov/statistics/nsf07319/content.cfm?pub_id=1874&id=2

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In all studies good qualified engineers are considered crucial for innovations. In comparing the availability of these engineers between countries, one of the issues is the mobility of graduates over country borders. For example in the US, 40% of master degrees in engineering is achieved by foreign nationals (Gereffi et al., 2008). Crucial is what they do afterwards. Gereffi et al. (2008) cite research by others stating that the number of Chinese and Indian nationals who received science and engineering doctorates from US universities who were still in the US after five years was quite high – 90 percent for Chinese and 86 percent for Indian graduates in 2003. However, they are concerned that the rapid ascent of Chinese and Indian economies and US visa policies will limit future capacity to retain exceptional individuals from abroad once they graduate. To be upfront in high technology, countries will also compete against each other in attracting high-skilled workers.

We can conclude that China and to a somewhat lesser extent also India, are strongly investing in getting more upfront in high-tech developments. Examples for China are high investments in nanotechnology and in high-skilled technical (engineering) education. However, to what extent and in what pace these enormous investments do actually lead to a large shift of high-tech activities to this region, is still uncertain. China is having problems in commercialization of the investments and a large share of the engineers are considered of lower quality in terms of multidisciplinary and communication skills. These skills are crucial for innovations.

2.5 CONCLUSIONS

N, M and P represent a wide range of technologies; new developments in these technological domains have strong potential to generate new processes and production patterns, new products and applications. They will affect various segments of the value chain from R&D to manufacturing and assembling to delivery and maintenance, and also the related services. The pace of diffusion of such technologies and of the associated impact to large parts of industry will vary from sector to sector, but will affect both large companies and SMEs in various roles ranging from suppliers of new materials and processes to producers of new products and services. For nanotechnology, the main industrial sectors (development, production, application) include the chemical industry, electronics, energy, medicine, optics and downstream industries such as automotive, construction, environment, public security and textiles. New materials and new production technology can be used/applied in almost all industries.

Most of the literature available on skills needs and gaps in NMP predicts quite a substantial number of required new experts related to nanotechnology. However, the numbers in these estimations vary. Existing surveys also show that lack of skilled staff is considered an important obstacle for the development of nanotechnologies. Most attention in these studies is given to the academic level. A number of authors express the concern that there is a decreasing trend in the number of students choosing those subjects that are important for nanotechnology (chemistry, engineering, physics, material science), which increases future recruitment problems. Although there is awareness that companies active in nanotechnology also make use of skilled workers, less attention is paid to labour market needs at this level. Results of studies which focus more on the M and P fields show a more or less similar pattern and focus on the need for university level professionals for key functions in R&D, product development and production.

With regard to skill needs related NMP, it shows that most studies focus on nanotechnology and very few on M or P. Existing studies for nanotechnology show a very broad spectrum of areas in science and technology disciplines (e.g. material sciences), production (e.g. sol-gel and lithography), analysis (e.g. scanning microscopy), R&D and project management and several personal skills such as ability to work in a

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(multidisciplinary) team. The issue of interdisciplinarity is an element continuously coming back and is also stressed in studies related to other new technological developments more related to M and P. In more P-related areas, this can for example concern the use of skills of various types of engineering disciplines. In relation to M, the need to integrate new disciplines such as microbiology and biotechnology is stressed. Skill needs studies for skilled worker level are more scarce. As far as they exist they also show existing skill gaps, although they seem to be weaker compared to the academic level. Skill needs are relatively strong for areas such as material science, team working, health and safety and English (language).

The education and training systems play a crucial role in meeting these skill demands. However, there is an ongoing discussion how curricula should be organized to meet the need for interdisciplinarity and the right moment to offer specific tracks for new areas such as nanotechnology. Regarding the latter, there is a tendency that in surveys companies prefer a degree in a specific discipline, before entering a specific nanotechnological track. In initial vocational education, there still seems to be little interest in changing curricula for new developments such as nanotechnology, except for countries such as Germany which pays more attention to this.

Some educationalists have more fundamental criticism on the way the education process is organized. In the light of the need for continuous innovation in the economy and the need for learning to learn they think the education process should move in the direction of more active and open learning processes, giving more room for creative and critical thinking of students and leaving more freedom for the teacher as a professional. School-business partnerships are important for relevant content and contexts of this more problem based learning. However, the trend in education is partly in the opposite direction, putting more emphasis on accountability and standardization.

A number of studies show the need for training (lifelong learning), but infrastructure both within companies and externally seems to be lacking or poor, even in a country such as Germany which has definitely paid attention to this point.

A specific section of this study focuses on the situation in China and India. These are considered important future competitors in the area of upfront technologies, e.g. NMP technologies. China, for example, has invested heavily in nanotechnology and already scores high on several key indicators in this area, such as scientific publications. However, there are still important thresholds in further development of their position. First, there is a large gap in China between research and outcomes in terms of commercial products. Second, although science and technology education have strongly increased, quality differences among institutes are strong and there is criticism on lacking “softer” skills of Chinese engineers, such as interdisciplinary and creative thinking and English language skills. For India growth of Science and Technology students is slower compared to China. Besides that, India has substantial quality problems, especially in the substantial private education sector, which has to compete with the growing industry for good teachers. So there is still much potential in Asia, but it is not certain they will succeed in becoming as strong a leader in this area as they are in other parts in manufacturing.

The literature on China and India confirms that the “skills issue” will be a critical factor. So if Europe wants to maintain and develop a comparative advantage in the field of new industrial technologies, the skills dimension must be optimally used. Compared to China and India, European skills problems seem to be less urgent in qualitative terms but could become more urgent in quantitative terms. In the literature a certain fear is expressed of increasing future shortages of high level specialists in areas like chemistry and material science. In the next section, we come back on the issue of skills shortages and gaps by using a survey among European companies.

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3 SECTOR STUDIES

3.1 INTRODUCTION TO THE SECTOR STUDIES

The contours of the new developments in the field of NMP technologies that are currently taking place and especially their impact on our economy and society at large are promising but still rather abstract, and are mainly defined in rather broad and generic, than in very concrete terms. This also applies for the new skills that relate to these developments. Moreover, because of their cross-cutting and also cross-sectoral nature, few specific or in-depth studies on new skill needs due to new developments in NMP have been found in literature. Nevertheless, skills related to NMP are often quoted in policy papers - see for instance the Strategic Research Agenda’s of Technology Platforms - as crucial and an issue that asks for specific attention, but this is done on more general terms. Therefore in this study, the choice was made to focus on a restricted number of sectors and investigate the specific issues mentioned.

The overview of industrial sectors where NMP technologies are being applied (Section 2.2) shows that in the end all industrial sectors are included. However, it should be realised that although new developments in NMP technologies are pervasive and to be found in almost all industrial sectors, at the same time they represent only a fraction of what will make up the (future) sector practices. ‘Traditional’ production processes along proven technological paths – that in an incremental manner include step-by-step new technological developments – tend to characterise the innovation process in the majority of the sectors.

Giving these considerations, the selection of the five sectors was based on the following criteria:

− the sector’s potential contribution in addressing the sustainability and competitiveness challenges (viz. the main prospective hypothesis, or framed in Europe 2020 terms the potential contribution to ‘smart, sustainable and inclusive growth’);

− the strategic importance of the sector for Europe and its ‘vitality’ in terms of size (value added, number of employees), competitive strength, linkages with other sectors, etc;

− the extent/degree to which NMP are produced and/or used by the sector and the attributed importance of applying them to the sector;

− the position of the sector in the value chain.

Based on a long-list of sectors that was proposed to the client (Table 3.1), the final selection was made (bold).

The selected sectors include the chemical industry (in which all three new industrial technologies are being developed and applied), the automotive sector (with strategic importance for Europe, a strong position in new P technologies and an upstream user of N and M developments), machinery and equipment (supplier of P) and textile and paper (two downstream sectors that mainly apply N and M developments made upstream sectors).

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Table 3.1 List of sectors (in bold the selected sectors)

Aerospace Electrical and optical equipment / medical equipment

Automotive Machinery / Equipment

Chemical industry Medicine / biomaterials

Energy Paper industry

Construction Textiles industry

Most industrial sectors consist of various sub-sectors that are sometimes intrinsically related but often not or only partly. The width and the breadth of the field hence required further focus; it was decided to give special attention to the cutting-edge / cross-section of one sector with other sectors. This meant in practice searching for the commonalities between chemicals (new materials) and textiles, which is in practice defined as the smart textiles field. Similarly, in principle the same held for chemicals and automotive; chemicals and paper, etc.

The methodology used in the sector study is a combination of desk study and interviews. As to the latter, basic formats for interviews were developed (see further Annex 3) and – as far as possible - deployed in the interview phase, for industry representatives (i.e. companies and associations), worker representatives (i.e. labour unions and similar organisations), educational practitioners and research institutes. In total 68 interviews were carried out. An overview of the interviews is given in Table 3.2.

Table 3.2 Overview of interviews

Sector Companies

and industry associations

Education and training

institutions

Research Institutes

Workers representatives

M&E 10 4 Chemicals 7 4 2 1 Paper 8 2 1 2 Automotive 7 2 1 1 Textile 9 4 1 1 General 1

In the desk research phase of the sector studies, two scenarios were formulated that served as a basic point of departure for the interviewer on the role of NMP in future development of the sector and impacts for skills

This chapter holds five sections, each of which deals with a separate sector, starting with the automotive and ending with the paper sector. The sections have a common structure enabling transparency throughout as well as comparability. First of all, the current state of play and notable developments are described, both from the economic and the NMP point of view, followed by two rather generic sector scenarios. Two more specific parts follow: on NMP skills and jobs, and education and training, respectively. They contain the main highlights of the interview findings in combination with results from desk research. The reader should keep in mind that the sections do provide an in-depth, but not a representative description of current and future skills demands and gaps and how

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education is addressing them, as the number of interviews is rather limited although interviews have been done with representatives of relevant companies and educational institutions in countries that are the most active in the respective sectors. However, idiosyncrasies that deal with the specifics of the interviewees might occur.

3.2 AUTOMOTIVE SECTOR

3.2.1 NMP-BASED INDUSTRIAL DEVELOPMENT AND INNOVATION IN EUROPE

Definition of the sector and the value chain

The automotive sector consists of three subsectors (34 NACE rev 1.1). The first subsector is the manufacture of motor vehicles. This includes passenger car, commercial vehicles, such as vans, tractors, lorries and busses, but also the engines. These producers are usually referred to as original equipment manufacturers (OEM). The second subsector is the manufacture of bodies, trailers and semi trailers. The third subsector is the manufacture of parts and accessories for motor vehicles and their engines.

The suppliers of parts to the original equipment manufacturers can be divided into tier 1 and tier 2 suppliers. This is shown in the value chain figure below.

Figure 3.1 Overview of the automotive value chain

End user

Generalists Specialists Trucks OEM

ComponentsTier 2

Components

Components

ComponentsComponents

Components

Systems Tier 1Systems Systems Systems

Basic metals

Machinery and

equipment

Rubber and plastics

Electrical and optical

equipment

End user

Generalists Specialists Trucks OEMGeneralists Specialists Trucks OEM

ComponentsTier 2

Components

Components

ComponentsComponents

ComponentsComponentsTier 2

Components

Components

ComponentsComponents

Components

Systems Tier 1Systems Systems SystemsSystems Tier 1Systems Systems Systems

Basic metals

Machinery and

equipment

Rubber and plastics

Electrical and optical

equipment

Source SEOR, Technopolis

The value chain is organized hierarchically. The manufacturers of components supply to the systems suppliers. A systems supplier produces a specific system for a vehicle, such as braking systems, drive trains. These systems are then assembled by the OEM’s and distributed through dealers to the end users.

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Production, value added and employment within Europe

The automotive sector is responsible for 8.6 percent of value added in Europe (EU27). Since 2000 value added grew 4.6% yearly on average. Around 2.3 million people are employed in the sector. Employment however grew only 0.5%, which indicates a rise in productivity.

Table 3.3 Production, value added and employment (EU level)

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 114164 122100 118255 127308 134000 132000 143992 155396 4.6%

Share value added 7.4% 8.0% 8.0% 8.3% 8.4% 8.1% 8.4% 8.6% 2.1%

Employment (1000) 21735 21684 21634 21800 22600 22500 22348 22544 0.5%

Apparent productivity (€ 1000 per person) 52.4 56.2 54.5 58.6 59.2 58.9 64.43 68.93 4.1%

Source: Eurostat structural business statistics

The crisis has had a great impact on the automotive sector. From 2004 to 2007 World car production grew 4.8 yearly on average (OICA, 2010). In 2008, however car production decreased by 3.7% and in 2009 by almost 13%. In 2009 Romania, Slovenia and Czech Republic were the only countries that experienced growth. Especially in China, Taiwan and India and to a lesser extent Iran, experienced growth. China’s production grew 48%, Taiwan 24%, India 13% and Iran 10%. Romania’s production grew 21%, Slovenia 8% and Czech Republic3%. The rest of the world car producing countries experienced a decline. In 2008 Indonesia, Malaysia, Poland, Hungary, Serbia and Uzbekistan still had growth rates (well) above 10%. Over the years, some small production countries have experienced strong growth, such as Finland, Egypt, Uzbekistan (OICA, 2010).

The automotive sector is built around larger companies: 5.3% of the companies are larger companies that provide 84% of value added and 75% of employment (Eurostat 2010b). The sector contains a limited number of small firms. Especially in terms of value added and employment, the influence of small companies in the sector is small.

The fact that OEM are large firms with a high impact on value added and employment and most systems manufacturers are also larger firms is reflected in the share of enterprises and value added and employment in the different subsectors. The manufacturers of motor vehicles have a small share in the number of enterprise, but a large share in employment en especially in value added. The manufacture of part has almost half of the enterprises in the sector and around 40% of employment. They produce 31% percent of value added. The manufacture of bodies and trailers contribute 6% to value added with 9% of the employment in 40% of the enterprises.

International trade and competition

Up to 2005 the USA produced most cars, followed by Japan. In 2006 Japan took over this position, up to 2008. In this year China became the second largest producer. In 2009 however, China became the biggest car producer in the world with a share of 22% in cars and 25% in commercial vehicles. Japan produced 14% of world car production and 8% of commercial vehicle production. The USA is still the largest commercial vehicle producer

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with a market share of 25% (slightly above China), but produced only 5% of world car production. Germany is the fourth world car producer in 2009 with a share of 10% in cars and 1.8 in commercial vehicles. Other major producers in the EU are Spain (3.5%), France (3.3%) and the UK (1.8%). The EU has a market share of 29.3% in cars and 9.5% in commercial vehicles. This is higher than the share in 2008 for cars, but lower than the share of commercial vehicles. However, in 2004 both shares were significantly higher. In 2004 the share of Europe was 37% in cars and 29% in commercial vehicles (OICA, 2010). This means that a quite dramatic shift has taken place.

Europe exports more cars and parts than it imports. In 2007 automotive exports were €129.8 billion, while imports were less than half (€59.7 billion). Most exports are between member states. Outside the EU the main trading partners are the United States (around 25%), China (7%) the Russian federation (7%) and Turkey and Switzerland (5% and 4% respectively). Europe imports around 30 % from the United States, 20% from Japan, 11% from South Korea, 10% from Turkey and 5% from China (Eurostat 2010b).

In the European automotive markets competition is intense. A significant decline in real prices for new motor vehicles over the recent years, successful new entries, significant fluctuations in market shares, increased consumer choice within the various market segments combined with shortening of model life-cycles are evidence of a generally dynamic competitive environment.

Technology and innovation

The automotive sector revolves around the OEM’s. Since the 1990’s these OEM’s have focused on assembly of cars, subcontracting parts of the cars to the tier 1 suppliers, or system suppliers. These suppliers subcontract to the tier 2 component suppliers. In order to manage this process there is close cooperation between the OEM’s and the tier 1 suppliers. This also goes for innovation. Innovation comes mainly form the systems and component manufacturers, as the OEM’s more or less simply assemble the vehicles. Many manufacturers are already co-operating in both production and R&D (e.g. in form of automotive clusters), which logically could provide a platform for further restructuring or consolidation in the industry. About 50% of R&D investment comes from automotive suppliers, as do the majority of the patents.

Table 3.4 R&D expenditure and personnel

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Number of R&D personnel 111590 112848 121697 123433 136919 142237 122757 128390 2.3%

R&D expenditure (€ million) 14876 15620 18096 21466 21072 22000 21678 22790 6.5%

Share R&D expenditure in VA 13.0% 12.8% 15.3% 16.9% 15.7% 16.7% 15.1% 14.7% 2.1%

Share R&D personnel 5.1% 5.2% 5.6% 5.7% 6.1% 6.3% 5.5% 5.7% 1.7%

Source: Eurostat structural business statistics

European companies in the automotive sector spent more than twice the average manufacturing share of their value added on R&D. This share grew form 13% to almost

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15% in the period 2000 to 2007, although the share declined when compared to 2002 to 2006. On average, however the share grew around 2% annually. Globally, the US dominates in automotive R&D expenditure. Private expenditure on R&D in Europe is similar to the US. However, public spending on automotive R&D was around €1.7 billion, compared to €340 million in Europe. Public expenditure in Japan is limited to €77 million and private expenditure was less than half of EU spending in 2007. Public expenditure in automotive R&D was around €123 million in India and €213 million in China in 2007. Private spending in both India and China is limited compared to other regions (EAGAR, 2010).

European automotive firms are leaders in some transitional drive-train and fuel technologies and are investing in ground-breaking technologies, such as battery-powered hybrid vehicles, electric vehicles and hydrogen. As products are becoming increasingly complex from a technological point of view (e.g. the role of electronics), the industry is focusing increasingly on advanced, high technology products which necessarily rely on a highly skilled workforce.

Front-runners: specialization, productivity and innovation

Germany is the absolute leader in the automotive sector, in terms of employment, share in value added and productivity. Also the OEM’s with the highest R&D investment are German. In terms of investment in R&D, France also has a major position. Most specialized countries in Europe are Slovakia, Czech Republic, Hungary and Sweden. Countries with the highest employment are Germany, France and Italy, followed by the United Kingdom and Spain. The most productive countries are The Netherlands, Austria, Germany, the United Kingdom and Sweden.

Table 3.5 Country rankings of share of value added, employment and productivity in 2007

Country Share in manufacturing value added

Country Employment

Country Productivity (€ 1000 per person)

1 Slovakia 15.3% Germany 847925 Netherlands 126.2

2 Germany 15.1% France 254916 Austria 95.2

3 Czech Republic 14.5% Italy 169217 Germany 86.4

4 Hungary 14.4% United Kingdom 165946 United Kingdom 79.5

5 Sweden 10.8% Spain 155057 Sweden 72.7

Source: Eurostat structural business statistics

Current situation - NMP -relevant issues and developments Legislation adopted by the European Parliament and the Council in 2009 puts severe restrictions of CO2 emissions from passenger vehicles sold in Europe. A first step is enforced in 2012, which gradually becomes tougher in the years to 2015. A second, even more demanding step is to be enforced in 2020.13 Furthermore, the European Commission’s Europe 2020 strategy advocates smart growth (developing an economy based on knowledge and innovation) and sustainable growth (promoting a more resource efficient, greener and more competitive economy) (European Commission, 2010c).

13 “Reduction of CO2 emissions from light-duty vehicles: emission performance standards for

new passenger cars (repeal. Decision No 1753/2000/EC)”, COD/2007/0297.

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Among several targets set for 2020 to achieve sustainable growth are to “reduce greenhouse gas emissions by at least 20% compared to 1990 levels” and to achieve “a 20% increase in energy efficiency”. The strategy thus launches the Flagship Initiative “Resource efficient Europe” aiming “to support the shift towards a resource efficient and low-carbon economy” stating that the Commission will work to “modernise and decarbonise the transport sector thereby contributing to increased competitiveness”. Mastering the design and research and development (R&D) of new and improved materials, as well as the corollary production methods, will remain key for achieving the goals in agreement with the Europe 2020 strategy. Materials and production R&D relevant to the transport sector is to a significant extent funded by the 7th Framework Programme (such as ‘ICT for Green Cars’-2010: the € 20 million Cooperation Programme launched in 2009). These sustainability-based political initiatives, assisted by ever-increasing fuel prices and growing customer awareness, result in a need for a complete cultural change for Europe’s automobile industry.

Production of automobiles entails an immensely wide spectrum of materials and processes, and it is therefore in this sector report not possible to provide a comprehensive treatment in either of these respects. However, given that this report focuses on the impacts of NMP developments on automotive OEMs, rather than their suppliers, and that the report is to focus on materials and production aspects, the scope may be narrowed somewhat. Specialisation in the automotive sector has progressed to the extent that the major automotive OEMs have all outsourced significant portions of development, engineering and production of systems and sub-assemblies to their tier-1suppliers, while the OEMs largely concentrate on design, systems integration, assembly, sales and marketing. This means that the main impacts of NMP developments on the automotive OEMs themselves arguably may be the greatest in respect to the responsibilities they retain in house, chiefly the so-called body in white (BiW), which is the structural body of the car before moving parts, engine, sub-assemblies and trim have been added, and prior to painting. Given the requirements on reduced CO2 emissions, weight reductions are key whatever the drive train (combustion, electric, hydrogen, hybrid etc.). This study therefore focuses on lightweight engineering materials and lightweight design, as well as the associated production processes, which is fully in line with the European Road Transport Research Advisory Council’s Strategic Research Agenda (ERTRAC, 2010). The SRA sets objectives for decarbonisation, reliability and safety, and in accomplishing these objectives simultaneously aims at securing global competitiveness for the European automobile industry. In terms of materials and production processes for vehicles, the SRA highlights needs to further develop:

− Alternative engineering materials from abundant and environmentally friendly resources, particularly to achieve lightweight structures.

− Recycling techniques to maximise efficient materials use. − Flexible and effective production and supply networks responding to the

concurrent challenges of generating ample vehicle concepts, adapting to changing volumes and competing effectively in global markets.

More focused on engineering details, ERTRAC (2004) highlights additional development needs in terms of:

− Enabling technologies such as lightweight materials to reduce vehicle weight, emissions and noise levels.

− Engineering materials and models of their behaviour and production process requirements.

− Highly flexible, autonomous and configurable production systems to allow variable assembly and small batch production.

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− Advanced materials for faster final assembly, such as lightweight composite materials and other material blends.

− Techniques for simulation and validation of product design, material selection, and production processes.

− Techniques for net shape engineering, including topologic/structural optimisation tools, to optimise use of engineered materials with advanced functional integration and reducing costs for advanced lightweight material processing.

Future outlook – two scenarios

Automotive industry stakeholders argue that there is little doubt that lower-end (cheaper and simpler) automobiles in future will be manufactured in countries where wages are lower, meaning that such production mainly will take place outside Europe. This is further emphasised by a recent consultancy report (Roland Berger Strategy Consultants, 2011) that forecasts that in the next 15 years “300 000 jobs in Europe will be at risk”. Given that the loss of European jobs is seen as an all-but universally accepted inevitable development, two main scenarios may be envisioned:

− In the first scenario, Europe retains an automobile industry that develops, designs, procures, sells and markets a full range of automobile models, while more or less all vehicle assembly is carried out by subsidiaries or subcontractors elsewhere, which mainly rely on local suppliers. In this scenario, European OEMs will have little or no vehicle assembly in Europe and few European automotive suppliers will survive.

− In the second scenario, the previous scenario still applies to lower-end automobile models, whereas the entire chain from development to marketing remains in Europe for premium models, also meaning that parts of the European supplier base will remain. Powerful arguments for this scenario, which is proposed by all interviewees, are the importance of proximity between development and design on the one hand and production and assembly on the other hand, as well as the importance of closeness to the market.

Interviewees unanimously argue that it is inevitable that passenger cars will have to become much lighter than they currently are to comply with CO2 legislation, regardless of fuel and drivetrain principle. However, it is further argued that weight reductions are even more valued with alternative (non-combustion) drivetrains, e.g. to increase range (or payload) or to decrease battery requirements of electrical vehicles. In principle, lighter weight can be achieved through both lightweight design and lightweight materials, but most efficiently through a combination of the two. Today’s vehicles have BiWs largely made of metals, with sheet steel being by far the most common material. The OEMs have over the years made great advances with lightweight steel design, and the raw material as such has undergone notable property improvements. Some OEMs, notably Audi, have made great use of aluminium in some models. However, while aluminium is considerably lighter than steel, it is also much more expensive, more difficult to work with and less crashworthy than steel. Magnesium is used on rare instances and in exclusive cars, but is not seen as realistic for extensive use in mass production. Fibre-reinforced polymer composites (reinforced plastics) have become more common in luxury cars, and have in some cases also made it into mass production of vehicles produced in short to medium series. In the former case, it has usually been high-performance carbon-fibre–reinforced polymer (CFRP) composites, and in the latter commodity-type glass-fibre–reinforced polymer (GFRP) composites. Composites are extensively used in both commercial and military aircraft, mainly to save weight and to allow production of geometrically complex components. The main reason for the saved weight is that composites have significantly higher specific strength and stiffness than metals (i.e. higher strength and stiffness per kilogram), and the gain is the greatest with carbon fibres. The main drawbacks of

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composites are the high raw material cost (mainly the carbon fibres) and the fact that it is quite challenging and thus costly to manufacture complex geometries.

In practice, there is no such thing as a mono-material vehicle, and the structural parts of a modern passenger car consists of a combination of – at least – several types of steel, aluminium, glass, rubber, plastics and composites. This means that assembly, and notably joining of dissimilar materials, is a key challenge and a field of active R&D efforts. Another major challenge with dissimilar materials is painting, which traditionally relies on the material being conductive, which GFRP is not and CFRP is only to a limited degree. In terms of production techniques, compression moulding massively dominates for both sheet metals and GFRPs, although casting is also commonly used to produce geometrically complex metal components. So far, CFRPs have mostly been produced with aerospace methods involving a substantial amount of labour-intensive craftsman-like work.

Interviewees agree that the automobile industry’s talk of weight reductions over at least a couple of decades finally has become genuine, or in the words of one interviewee: “finally we can get around to making cars lighter after all these years of talking!” The main driving force behind this development is the aforementioned CO2 legislation that, to put it mildly, has gained the OEMs’ attention. “It is incredibly important to reduce weight both to reduce fuel consumption and to increase payload; it is for real now,” echoes an OEM representative, and explains “that it is both due to legislation and customer demands”.

Although interviewees agree that it is too soon to count out sheet steel as the dominating engineering material for OEMs, they equally agree that composites have a natural place in the materials toolbox also for automobiles produced in longer series. Interestingly, the old “truth” that CFRPs for cost reasons could only be used in exclusive sports cars gradually has withered away, since reduced carbon fibre costs and improved production techniques together with an increased value of each saved kilogram have altered the equation. Now several OEMs are pursuing mass-produced CFRPs in future automobile models.

Through its “Project i”, BMW so far appears to have pursued this development the furthest and in 2013 plans to start selling its all-electric Megacity Vehicle (MCV) which makes extensive use of CFRP. To enable this development, BMW has teamed up with a carbon fibre manufacturer so as to secure a steady supply of (relatively) cheap carbon fibres. While the fibre precursor is to be produced in Japan and the carbon fibre in the US, weaving of fabrics and production of composite components is planned to take place in BMW plants in Germany. At the Qatar Motor Show in January 2011, Volkswagen unveiled its XL1 which has a complete CRFP body structure weighing just 230 kg. Audi, a composites pioneer (in sports cars), and Daimler Benz (Mercedes) of course do not want to be left behind and thus announced in 2011 that they have similarly established joint ventures with French and Japanese composites companies. It may be argued that this is current state of the art, but so far production has not yet commenced even for BMW (the other German OEMs are further behind), so we would like to propose that what we are now seeing is a glimpse of the (near) future. Arguably, the use of composites is likely to spread rapidly assuming that BMW and its colleagues do not run into major materials- or production-related difficulties with their new models.

While mass-produced GFRP components for automotive applications are usually compression moulded (in much the same way as sheet metal and with similar machinery), the CFRP production technique that the OEMs now seem to favour is resin transfer moulding (RTM). In RTM, a liquid resin (plastic) is injected under pressure into a closed matching mould containing the carbon fibre reinforcement, typically in the form of fabrics, where it solidifies through a chemical reaction. In the composites industry, RTM

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is a well-established technique, but in the automotive industry it is a relative novelty. A corollary advantage of RTM over compression moulding of metals is that more geometrically complex and integrated components may be produced. There is however a limitation as to how far such integration may be pursued, since aftermarket issues, including insurance companies, set limits (heavily integrated components are expensive to replace following an accident, which pushes insurance premiums up, thus potentially deterring car buyers). Moreover, for productivity reasons the RTM process has to be further developed to achieve much shorter cycle times than the composites industry is typically used to, since series tend to be much longer in the automotive industry.

With the projected increased use of composites, additional complications will arise. The fact that there are challenges associated with joining of dissimilar materials has already been mentioned, but such joining also introduces new demands on the vehicle assembly line. Additionally, techniques to design for disassembly, recycling and reuse must also be developed.

3.2.2 NMP SKILLS AND JOBS From the OEMs’ point of view, there are two broad categories of employees that are of primary relevance when it comes to materials and production: engineers and assembly-line workers. By and large, supply in most cases currently meets demand in both categories, but in some cases supply of engineers is said to be a limitation to development and in some cases to expansion; some companies argue that there are plainly too few good candidates to hire. Engineers also tend to have insufficient understanding for the requirements imposed by composites and the opportunities they offer, since their education and training generally have focused on metals. Some interviewees concede that assembly-line workers are in short supply and they often move on to another job too soon, “just when they have become the most productive”. Assembly-line workers are traditionally mostly trained on the job, but production of premium vehicles tends to require more qualified workers. This does not necessarily mean that they have to have a more advanced formal education, but they typically need to be more experienced than in production of lower-end vehicles.

There will be an increasing demand for mechanical engineers with dedicated knowledge of the requirements imposed by composites and the possibilities they offer. While metals, the traditional engineering materials, are isotropic (same properties in all directions), composites are anisotropic (different properties in all directions). Although anisotropy may sound like an undesired complication, it is actually the main advantage of composites, as long as engineers are trained in how to effectively design with composites and – critically important – design composite components that are straightforward to produce. The polymer (plastic) that binds the carbon, glass or other fibres together to form a composite component may either be a thermoset (that solidifies though chemical reaction) or a thermoplastic (that solidifies though cooling). Both polymer types are used in the automotive industry, but the RTM process that has recently become the industry favourite in practice requires thermosets. To fully understand the material science aspects of composites production requires a profound understanding of polymer chemistry and physics, not least since composite properties (appearance, stiffness, strength, etc.) strongly depend on the processing conditions used. Such requirements would suggest an increased need for chemical engineers specialised in polymer material science. In essence, there is a need for interdisciplinary collaboration between mechanical and chemical engineers, and a joint focus on manufacturability. Composites history is namely full of examples of wonderful designs that later proved far too expensive or even impossible to produce even by clever craftsmen. With the automobile industry’s need for mass production, the manufacturability issue is more important than ever.

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In contrast to yesteryear’s idea that all development work should take place within the OEM’s organisation, there is now a worldwide trend towards outsourcing R&D work (e.g. to universities, research institutes and engineering consultancies), and to utilise openly available knowledge (e.g. the academic literature) in in-house development work. This modus operandi has clearly been adopted by European OEMs, as is evidenced for example by the fact that several OEMs have formed joint ventures with other companies to secure supply of cheap carbon fibre and capacity to produce CFRPs. This more open way of working, often referred to as “open innovation” (Chesbrough, 2003), requires quite sufficient “absorptive capacity” within the OEM, both to be able to procure and participate in external R&D and to understand and absorb externally produced R&D results. In practice, this translates into a greater need for trained researchers, i.e. PhDs, within the OEM’s own organisation. An important aspect of the development towards open innovation is that a good deal of the NMP-related skills requirements will be “pushed down” onto the OEMs’ tier-1 suppliers.

Not too long ago, there was no need for much formal education and experience to work on the assembly line, and it was not even necessarily an absolute requirement to be able to read well. Now the barriers to entry have become higher, particularly in assembly of premium vehicles, and these developments are predicted to continue. These developments are not primarily due to new materials or even new productions techniques, but rather reflect an increasingly complex work environment where differences between vehicles are becoming even greater than today leading to increased “information intensity”, which requires workers that are computer literate and that have an understanding of quality issues and the “greater picture”, as well as for example statistics.

A natural consequence of the future scenario favoured by the interviewees, that European OEMs will retain production of premium vehicles in Europe but will be forced to move production of lower-end vehicles to countries with lower labour costs, is that factories will have to be scaled down or closed down and assembly-line workers laid off. Some interviewees argue that this particularly applies to OEMs that have not yet significantly trimmed their own workforces, notably in Germany and France. In this scenario, employment in design and development should not be significantly affected by the move of production of lower-end vehicles to other countries. However, it is also argued that some European OEMs will go out of business completely, resulting in loss of jobs for all categories of employees.

3.2.3 NMP EDUCATION AND TRAINING Engineering education is generally seen as more or less adequate, but there is still room for improvement as further elaborated on in the next section. There are nevertheless complaints that new MSc graduates are of little use to begin with, since they have insufficient experience of practicalities and industrial realities; an OEM needs to invest at least a year in a newly employed MSc before he/she can contribute in earnest. On the same note, university-trained researchers (PhDs) are at times also seen as requiring too much on-the-job training before they become truly useful. The ones that during their graduate studies have worked in industry-related projects, preferable in active collaboration with industry, are highly valued and can be put to use more or less at once when they are employed, but the PhDs that have worked in curiosity-driven projects are much less employable.

For assembly-line workers, who often have little formal education after elementary school, it appears as if the current situation is largely satisfactory from the OEMs’ point of view. Most of the training they need is supplied in-house.

Interviewees agree that the future outlook is problematic regarding the supply of engineers, both in terms of quantity and quality. The problem starts in upper-secondary

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schools where too few young students pursue S&T careers, meaning that the universities’ recruitment pool is becoming insufficient, again both in terms of quantity and quality. This means that too few engineers are being produced and that quality suffers due to lack of competition. Given the ageing engineering staff employed by many OEMs, there may in several countries soon be a severe shortage. When it comes to university-trained researchers, OEM representatives wish that mobility from academia to industry could be enhanced without draining the universities of all their talents.

Interviewees from both industry and academia describe a need for a more systemic approach in university education, partly of interdisciplinary nature; a systems understanding is required in students before it is meaningful for them to delve into specialised knowledge. Although there is agreement that there is a need for improvement in this respect, it is also said to be an area where engineers from several European countries excel over engineers from many other countries, notably some Asian.

Some industry interviewees argue that the universities are too slow, and sometimes unwilling, to react to evolving market (OEM) needs: “the university system is more elephant than gazelle”, in the words of an OEM representative. Part of this complaint refers to a need for cross-fertilisation between traditional disciplines, but more often to the aforementioned inadequate experience of practicalities and industrial realities in new graduates. University representatives respond that they are aware of industry needs, but point out that changes in university curricula take time. Once needs have been identified, course material has to be developed, teachers have to be hired, the course/new curriculum has to be marketed, students have to apply etc., meaning that it takes several years for students to graduate and in the meantime industry’s needs have evolved further; the university representatives lament that they are aiming for a moving target. Moreover, they argue that if industry were to decide curricula to fully suit their needs, the resulting engineers would be far too one-track minded, so it is a good thing that they don’t.

More specifically, industry would like for engineers to leave university with a more profound understanding of industrial production in a broader sense, including simulation, automation, logistics etc. as well as of knowledge of design and manufacturing with anisotropic materials. There is clearly a need for both mechanical and chemical engineers to solve complex challenges together, but there is also a need for mechanical engineers to gain a good understanding of polymers (traditionally the domain of chemical engineers) so that they can avoid the more common pitfalls without having to consult a chemical engineer. As mentioned above, there is a perceived need of engineering students to get more practical experience of industrial realities as part of their education, such as through internships (more than is already required) so as to avoid an overly theoretical view of things and a long period of on-the-job training.

Given that requirements on assembly-line workers are increasing, it seems reasonable to assume that formal education will be required to a greater extent. This would indicate a demand for the upper-secondary school system to provide students with a blend of theoretical knowledge and practical experience similar to that described for engineers above, but naturally on more basic level and with more emphasis on practical experience and industrial realities.

3.2.4 CONCLUSIONS Production of automobiles entails an immensely wide spectrum of materials and processes. However, as this study focuses on the impacts of NMP developments on automotive OEMs rather than on their suppliers, and because the OEMs outsource significant portions of development, engineering and production of systems and sub-assemblies to their tier-1 suppliers, the OEMs largely concentrate on design, systems integration, assembly, sales and marketing. This means that the main impacts of NMP

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developments on the automotive OEMs themselves are the greatest in respect to the responsibilities they retain in house, chiefly the so-called body in white (BiW), which is the structural body of the car before moving parts, engine, sub-assemblies and trim have been added, and prior to painting. Given the requirements on reduced CO2 emissions, weight reductions are key; therefore the study focuses on lightweight engineering materials and lightweight design, as well as the associated production processes.

Especially developments in the field of new materials are relevant. These include enabling technologies such as lightweight materials to reduce vehicle weight, emissions and noise levels, advanced materials for faster final assembly, such as lightweight composite materials and other material blends and engineering materials and models of their behaviour and production process requirements. New productions technologies that are needed include highly flexible, autonomous and configurable production systems to allow variable assembly and small batch production, techniques for simulation and validation of product design, material selection, and production processes and for net shape engineering to optimise use of engineered materials with advanced functional integration and reducing costs for advanced lightweight material processing.

For two broad categories of employees, new developments in materials and production technologies are relevant: engineers and assembly-line workers. Supply in most cases currently meets demand in both categories. In some cases supply of engineers is said to be a limitation to development and in some cases to expansion; some companies argue that there are too few good candidates to hire. In other cases assembly-line workers are mentioned as in short supply. They are mostly trained on the job, but production of premium vehicles tends to require more qualified workers. This is not primarily due to new materials or new productions techniques, but reflect the increasingly complex work environment which requires workers that are computer literate and that have an understanding of quality issues and the “greater picture”, as well as for example statistics. Also there will be an increasing demand for mechanical engineers with dedicated knowledge of the requirements imposed by composites and the possibilities they offer. While metals, the traditional engineering materials, are isotropic (same properties in all directions), composites are anisotropic (different properties in all directions). Due to the trend of more open innovation in this industry, those working in R&D are requested to be able to participate in external R&D and to understand and absorb externally produced R&D results. This implies a greater need for trained researchers, i.e. PhDs, within the OEM’s own organisation. However, also a good deal of the NMP-related skills requirements will be “pushed down” onto the OEMs’ tier-1 suppliers.

Engineering education (MSc, PhD) is more or less adequate. For all levels, additional on-the job training is necessary as new MSc graduates but also PhD’s have insufficient experience of practicalities and industrial realities and need at least a year on the job training for industry-production specific knowledge and skills. So there is a need for engineers that leave university with a more profound understanding of industrial production, including simulation, automation, logistics etc. as well as of knowledge of design and manufacturing with anisotropic materials. Mechanical engineers also should have a good understanding of polymers (traditionally the domain of chemical engineers). For assembly-line workers, who often have little formal education after elementary school, the current situation is largely satisfactory. Also here most of the training they need is supplied in-house. A general problem is the future supply of (mechanical, chemical) engineers due to shortages of students in these disciplines.

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3.3 THE TEXTILE SECTOR

3.3.1 NMP-BASED INDUSTRIAL DEVELOPMENT AND INNOVATION IN EUROPE

Definition of the sector and the value chain

The sector includes, according to NACE rev 1.1 (NACE division 17), the preparation and spinning of textile fibres, threads as well as textile weaving, finishing (bleaching, dyeing and printing, dressing, drying, steaming, shrinking, mending, sanforizing, mercerizing) of textiles and wearing apparel, manufacture of made-up textile articles, except apparel (e.g. household linen, blankets, rugs, cordage, etc.) and manufacture of knitted and crocheted fabrics and articles thereof (e.g. socks and pullovers). The textile sector is the largest sector within the clothing, leather and textiles sector. See Figure 3.2 for an overview of the textile value chain.

Textiles production begins with the production of yarn from spinning natural or manmade fibres, followed by the production of fabrics by weaving or knitting. These fabrics are mainly used for apparel but also for furniture, drapes and other home textiles. Moreover, the production of industrial textiles for use in the automobile industry and particularly in construction, health services, agriculture or packaging is an important segment of textiles production. This market segment is known as ‘specialty textiles’ and has become the most innovative and rapidly growing part of the textile industry.

Figure 3.2 Overview of the textile value chain

Other business

ChemicalsAgriculture

Textile articles Clothing and apparel

Machinery and equipment

Design companies

Wholesale and retail

End user

Spinning weaving Finishing

Other business

ChemicalsAgriculture

Textile articles Clothing and apparel

Machinery and equipment

Design companies

Wholesale and retail

End user

Spinning weaving FinishingSpinning weaving Finishing

Source: SEOR, Technopolis

The raw materials used for textiles are cotton, wool, silk and other natural fibres (coco, corn, hemp etc.) or man-made fibres such as polyester, nylon, acryl, or cellulose. Among the natural fibres the majority of textiles are made from cotton. Most of the man-made fibres are based on polyester mainly made from fossil oil. Both yarn and fabrics can be further treated by dyeing, printing, softening and other processes.

Textiles production is highly capital intensive and requires a relative small amount of human labour. Production processes have to be supervised and controlled continuously. This requires knowledge of material attitudes, machinery and organisation rather than

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craft-related production techniques. Production is navigated by textiles engineers, designers and business professionals (Vogler-Ludwig & Valente 2009).

Globally, the cost and price structures of the sector are characterised by high profits from innovation, marketing and retail but low profits from sourcing, production, assembly, finishing, packaging and logistics. This is reflected in the retail prices of clothing: only 15 to 35 percent of the retail price is paid to manufacturers.

Production, value added and employment Since the 1990’s production and value added have declined in favour of low cost countries. In the period 2000-2007, the value added decreased 3.9% yearly on average with almost €23 billion in 2000 to €18 billion in 2007 (see Table 3.6). Employment decreased in a similar way: from 1.3 million employees in 200 to 1.0 million employees in 2007 (average of 3.8%). The share of value added in the total manufacturing is limited: in 2007 the sector made up one percent of manufacturing value added.

Table 3.6 Production, value added and employment (EU level)

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 23929 23488 22224 19057 18783 17400 18200 17851 -3.9%

Share value added 1.6% 1.5% 1.5% 1.2% 1.2% 1.1% 1.1% 1.0% -6.2%

Employment (1000) 1331 1293 1244 1170 1200 1140 1060 1010 -3.8%

Apparent productivity (€ 1000 per person) 32 29 27 24 25 26 29 29 -1.4%

Source: Eurostat structural business statistics

Most companies in the textile sector are small: 87% percent of them have 1 to 19 employees (representing 20% of value added and almost 25% of employment). Large companies (more than 250 employees) represent 0.6 % of the total number of companies in the sector, but produce 22% of value added and employ 22% of the people in the sector (ibid).

The largest share of companies is active in the subsector ‘Manufacture of made-up textile articles’ (32%) followed by ‘Other textile manufacturers’ (22%) and ‘Manufacture of knitted and crocheted articles’ (15%). The rest of the companies is active in: ‘Preparation and spinning of textile fibres’ (7%), ‘Textile weaving’ (8%), ‘Finishing of textiles’ (11%) and ‘Manufacture of knitted and crocheted fabrics’ (6%). The share of value added and employment is largest in the manufacture of other textiles. This sector includes the specialty textiles (ibid).

International trade and competition

Over the years the textile and clothing (TCL) industry has lost a great deal of production to low cost economies. China is the main competitor and dominates the world market. The shift to low cost economies is seen all over the world. Especially the United States and Japan experienced a decline in value added (6.6% and 7 percent respectively in the period 1997-2003). This was almost twice the rate of the EU27 countries (Vogler-Ludwig and Valente 2009). China was able to achieve an extraordinary growth of 13.5% per annum during this period; the Chinese TCL industries even grew more rapidly than

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manufacturing in total (ibid). Europe’s position on the world market in textiles is weak. In 2009, textile exports were €30.4 billion, while import was €74.9 billion. The share of global textile exports in 2009 was around 3.6%. In contrast the share of China in export is around 25%. Moreover, while China was at the lower price segment, their exports are moving up in the price spectrum (Eurostat, 2010b).

The biggest markets for EU textile exports in 2009 are Switzerland, Russia, USA, Turkey and Tunisia. The weakened position of Europe internationally is also due to the pashing out of the ‘Agreement on Textiles and Clothing’, which terminated two hundred EU import quotas by 1 January 2005. Imports from China exploded (import of pullovers increased by 500%) since the abolishment. The response to this was the re-introduction of import quotas in 2005. These, however, were not able to stop imports from China, at least not in 2005: imports of apparel products grew by 45% and textiles by 22% in 2005 (Vogler-Ludwig & Valente 2009).

In order to withstand competition European textile companies relocate production to low cost countries, or vertically differentiate their products, moving to high value products. Especially Italy used this strategy. In most countries production activities were subcontracted in low-cost countries. This process was facilitated by the emergence of big retail distributors. These control the value chain and the design, quality control, and marketing. Even high-value brands are produced in low-wage countries under the strict control of the leading companies (ibid). This was accompanied by the use of “trend scouts” to detect the most recent preferences of consumers, the shortening of the “time to market” with frequent changes of fashion patterns, and the establishment of real-time IT networks to observe both sales and production.

Consumer markets are strongly price-sensitive, a driver which enforces global competition and increases the importance of global distribution chains. This is demonstrated by the fact that even though individualisation is a strong driver, the clothing companies that are the most successful, are big retail companies that provide low cost mass products. “Time to market” is becoming a key competitive factor. International brands emerge fostering the disappearance of regional fashion.

Technology and innovation

Current European textile enterprises seem to be as “innovative” and “R&D-engaged” as manufacturing enterprises in general. This is surprising considering the usual ranking of innovative sectors. It also means that the transition of the European textile industries towards a knowledge-based industry is already underway. Around 35-50% of textile enterprises are engaged in product and process innovation (Vogler-Ludwig & Valente 2009).

Between 2000 and 2007, R&D spending in this industry has grown annually 7.5% on average (see table below), as the same applies for the number of R&D personnel. However, R&D expenditure and the number of R&D personnel is still low compared to manufacturing average (5% expenditure and 2% personnel in 2007).

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Table 3.7 R&D expenditure and personnel

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Number of R&D personnel 3676 4344 3495 3549 3143 4776 5034 5346 7.5%

R&D expenditure (€ million) 210 264 242 258 267 304 334 342 7.6%

Share R&D expenditure in VA 0.9% 1.1% 1.1% 1.4% 1.4% 1.7% 1.8% 1.9% 12.4%

Share R&D personnel 0.3% 0.3% 0.3% 0.3% 0.3% 0.4% 0.5% 0.5% 12.1%

Source: Eurostat structural business statistics

Technological change will be an important driver of the companies in this sector as formulated by the European Technology Platform (EURATEX, 2006). Important developments include the change from commodities to specialty products and with that the change from mass production to customisation. Also, and this is especially true for specialty textiles, new textile applications are becoming more important. Most innovation takes place in specialty textiles; these include textiles for application in construction and medical technologies. This is the beginning of a process in which companies in this specialties textiles segment transform into providers of technical solutions rather than producers of textiles. The drivers of these innovative developments are not necessarily textile companies but entrants from other disciplines like chemistry, material science, engineering or electronics. In the rest of the textile sector, innovation is driven by the machine and equipment sector and designers.

Front-runners: specialization, productivity and innovation

There is a clear distinction between new European member states and EU15 when it comes to employment in the textile sector (see Table 3.8). In Western European countries the sector is more capital intensive and often production workers are low educated. Eastern European countries were able to maintain production levels and employ higher educated people. This is reflected in the specialisation rates of these groups of countries (the percentage value added in total manufacturing value added). In Bulgaria, Romania, Lithuania and Estonia, but also Portugal the share of value added the sector is highest in Europe. Italy employs most people in this sector, followed by again Romania, Portugal and Bulgaria, but also Poland. Productivity was highest in Western European and Scandinavian countries, with Luxembourg in first position.

Table 3.8 Country rankings of share of value added, employment and productivity in 2007

Country Share in manufacturing value added

Country Employment

Country Productivity (€ 1000 per person)

1 Bulgaria 11.8% Italy 458168 Luxembourg 134.2

2 Portugal 11.2% Romania 288870 Denmark 55.4

3 Romania 9.3% Poland 236146 Netherlands 54.2

4 Lithuania 9.1% Portugal 180335 Belgium 49.3

5 Estonia 7.2% Bulgaria 168798 Sweden 47.3

Source: Eurostat structural business statistics

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Current situation - NMP -relevant issues and developments The pace of diffusion of new NMP technologies and its impact on industry differs from one sector to the other, but it will affect large companies as well as SMEs and micro-enterprises (e.g. start-ups) in various roles ranging from suppliers of new materials and processes to producers of new products and services. In case of the textile sector, the most relevant new technological developments in NMP can be summarised under the term ‘ smart materials’. Smart materials make use of new fibres, often based on findings in nanotechnology, biotechnology or chemistry. They can adapt to changes in temperature, are flame or water-resistant, have protective features, provide more convenience or are simply more fun in day-to-day use. Smart materials have the potential to not only add new features, but to also replace existing fibres, due to the fact that they are easier to handle or cheaper in production (EMCC, 2008). These new fibres can be man-made fibres (fossil fuels based, or biomass based) as well as specially treated natural fibres.

In the textile sector nanotechnology and new materials technology play the most important role in the technical textile segment, for the production of new fibres and fabrics, in finishing and coating and in the use of (nano)electronics in textile (smart/intelligent textile). Intelligent textiles can conduct electric current or light, accumulate energy, store information, or receive and transfer radio wave to control, alert, inform, relax or entertain the wearer. These textiles often integrate non-textiles technologies to add additional features; mostly these inputs come from information and communication technologies and electrical engineering (Keenan et al., 2004).

New developments in material and nanotechnology relevant for the textile sector include the following (Zahradnik & Weber, 2010):

− Nanoparticles in or on the fibre provide a textile with antimicrobial functionality or increase its UV protection;

− Nanotreated fabrics can be spill resistant, stain proof, wrinkle resistant and static proof.

− Microcapsule or nanocapsule systems that can be applied to the finished textile for wellness and medical applications. Rubbing during wear causes the incorporated active substances to be released;

− Nanoscale repository structures of cyclodextrins are capable of binding odour molecules by absorbing and releasing them again in the next wash;

− Phase change materials take advantage of latent heat that can be stored or released from a material on a narrow temperature range. Applications of phase change textiles include apparel, blankets, medical textiles, insulation and protective clothing;

− Using a sol-gel approach, nanosols improves the stab resistance of bulletproof vests;

− Self-ironing suits are being developed using nanomaterials that respond to heat. A heat source, such as a blow dryer, is applied to the wrinkled area. After reaching a specific temperature the nanomaterial is thermally activated—removing the creases;

− Nanotechnologists are working on nanocoatings that could possibly have the ability to self heal. The textile surfaces which can remove surface scratches and scuff marks; repel insects; and decolorize red wine spills are under development;

− Carbon nanotubes are being developed that allow body protectors such as helmets and hip protectors absorb the energy of a shock during an impact and keep the reaction force under a certain critical value beyond which injuries may occur, while keeping a low weight for an optimum comfort. Also they might play a role in relation to high-strength or semi-conductor-like fibres.

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During the last five years, nanotechnology has developed from a technological field applied only in high tech sectors to a promising scientific and industrial enterprise with application in the textile sector. However, taking the small-scale production of nanostructures from the laboratory to an industrial scale is not without challenges: some scientists have expressed concerns over possible pollution. Nanoparticles released from coatings could become a new type of chemical pollution. Several initiatives across Europe have been taken to investigate the health and safety risks of nanoparticles (Zahradnik & Weber, 2010).

New production technologies improve manufacturing quality and speed and also offer more flexible production methods. Advanced production methods can reduce the amount of energy and natural resources needed, minimize the impact on the environment, and abolish substances harmful to employees and consumers. Other measures that can be taken include the more efficient use or reuse of fibres, the replacement of oil-based fibres by natural fibres, the reduction of the amount of water and energy needed in the fibre production, and changes in colouring and bleaching procedures. Example include the production of polyester fleece from recycled PET bottles textile fibres made from non-traditional natural sources such as corn, and the reuse of waste produced during cotton cleaning, which still contains about 50% good fibres, as a secondary raw material (ibid).

The use of advanced textiles for non-clothing applications is growing as they can replace other materials in areas such as transportation, construction, agriculture and packaging (EMCC, 2008). Textiles fibres are often used as reinforcement in composite materials, for example in glass, kevlar or carbon strands; these applications are in highly specialized niches.

There is large potential in applying new technological developments in the textile sector. There are numerous products that are already commercially available and limitless products that could be developed. For the moment technological advances will mostly be used in the high-value added segments of the textile sector, such as the defence, health. It is expected that while the demand in these markets will increase, intelligent textiles and smart materials will have an increasing role in the textile for customer products (leisure and sports clothing).

The use of NMP has had some impact on the textiles industry, but the interviews with company representatives show that that the use of NMP has not caused any major changes: changes have been limited to a relatively small number of front-runner companies. The adaption of NMP in most companies in the textile sector in Europe is limited. This is not because of a lack of innovative ideas; it is a general lack of resources necessary to move quickly and effectively from idea to marketable product (EURATEX, 2006). As we have show above the average EU textile is rather small; most companies do not have the necessary technical, human, managerial and financial resources to carry out research, development and innovation. The more sporadic radical innovation processes are in most cases initiated by changing requirements of a dominant customer or process innovation to cut costs in the face of competitive pressures than internally controlled and strategically planned (ibid).

R&D in the field of NMP for the textiles industry is most advanced in the United States and Japan; however, the pace of recent developments in China is indicated as impressive. For the moment, technological developments in the field of NMP for the textile industry in the EU seem to be concentrated in public research institutes. They are mainly situated in major Member States, especially France and Germany. Important institutes are the Hohenstein Institute in Bönnigheim, the Deutschen Institute für Textil- und Faserforschung in Denkendorf, CITEVE in Portugal, and l’Institut Français du textile et de l'habillement (IFTH) in France.

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Future outlook – two scenarios Although, the basic techniques in the textile sector are changing rather slowly over time, new technological developments will influence the future developments of the textile sector. The integration of these new technologies, often based on findings made outside the sector, is an important driver of change in the sector. Cross-fertilization with other sectors and co-operation with companies in other sectors is also of growing importance. The ongoing technological changes concern products and production processes. The interplay of some or all of these new technologies with demand side drivers will lead to new products and markets.

There are two main developments that currently influence the future development of the European textile sector. These are the transition from a labour-intensive low-technology sector to a knowledge-intensive industry, and the ongoing relocation of production out of Europe. Various user industries depend on a competitive textiles sector and emerging textile technologies can potentially help solve economic, environmental and social challenges.

New technological opportunities are the main driver for the first development. Most important technological developments for the textile sector are intelligent clothing and smart materials. Materials made of advanced fibres (developed by the chemical industry) offer a variety of new properties and applications for textile products. Developments in nanotechnology and ICT are increasingly incorporated into textile and clothing products. New production methods enable the sector to reduce the share of rather low-skilled manual labour, reduce the amount of energy and raw materials used, and increase the flexibility and quality of production processes. The new products and production methods are complemented by the more frequent use of E-Commerce and other interactive technologies, offering a wide range of new business models. On the demand side, changes in consumer behaviour are driven by demographic changes, an increasing consumer awareness of factors affecting health and sustainability, and consumers’ attitudes towards counterfeit goods.

The two scenarios that will be used for exploring the future development of the European textile industry (and more specific that of technical textile) and the role of the availability of skills are the evolutionary scenario and the breakthrough scenario. In both scenarios the integration of new technologies plays an important role; the other dimensions used are the existence and type of user industries and markets and the competitive situation.

In the “Evolutionary” scenario, a rather incremental integration of new technologies acts in combination with an emphasis on product development rather than completely new applications. Europe remains at the competitive edge. In this scenario there is competition with employers in other sectors for the skilled workers needed.

In the “Breakthrough” scenario there is a rather disruptive development of the utilized technologies in combination with a strong user sector in Europe and a growing demand for new textile fibres and applications, Europe becomes a world market leader. The technical textiles industry is an attractive sector for the high-skilled workers needed.

The interviews show that Europe is faced with severe competition from outside. Many respondents believe that NMP R&D, related to the textiles industry, is most advanced in the United States and Japan. However, the pace of recent developments in China is impressive.

The main developments with respect to the future development and application of NMP in the textile sector, to be expected are:

1. An increase in mass customisation. The use of NMP and other new technologies in the textiles sector will increase the combination of processes of mass production on

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the one hand and individual customisations on the other hand. Examples of such technologies are automatic body measurement system and inkjet printing for textile painting. Digital printing makes it even possible to produce several meters of a printed textile. The combination of the two processes is referred to as mass customisation. The consequence is the ability to combine low costs per unit with individual customisation. Start-ups, small companies, or spin-offs from companies mostly develop new technologies driving mass customisation.

2. New functionalities in the textiles sector. Even though it is hard to say what developments can be expected, new functionalities will emerge due to innovations in the field of NMP. Performance, protection and comfort in garment will become more important through parameters such as UV protection, weather resistance, etc. New clothes, home textiles and medical textiles will be developed.

3. Intra-sector increase of sustainability. The production of textiles will develop towards a more sustainable way. One respondent indicates that about 30% of the €70 billion apparel turnover is spent on waste (e.g. producing a t-shirt requires 100 litres of fresh water). This is expected to decrease dramatically. Another respondent expects that energy and clean water consumption will decrease with 60% due to implementation of NMP.

4. Extra-sectoral increase of sustainability. Increased implementation of NMP in textiles will also have an indirect effect on sustainability. A clear example is the development of carbon fibres and other light materials that are increasingly used in airplanes and aerospace, but soon will also be adopted in the automotive industry.

5. Transfer of conventional EU production to new entrants. Traditional clothing, according to some respondents will disappear from Europe, mainly to China, but possibly also to other new entrants such as Turkey, Tunisia and Egypt. That opens the possibility for Asian competitors to compete with low prices. Smart textiles will partly replace this evaporating production in Europe. The production of these textiles is relatively sophisticated, yet production volumes will be limited.

6. Restructuring of the textiles value chain. It is expected that due to the introduction of NMP the number of steps in the textile production chain will decrease. An example is the production of synthetic turf blades. There used to be seven functions in the chain and it is expected that at the end only two to three will remain leading to increase in cost-efficiency and economic sustainability.

These developments are both technical and institutional. Technical changes include the increased use of polymers, smart textiles, etcetera. The institutional changes include the disappearance of conventional production to new market entrants and the restructuring of the textiles business model and the textiles value chain. However, these changes will not happen over-night and will only affect parts of the textile sector. Even though opinions on the exact pace and timing differ among the interviewees, they agree that within four to five years from now no major changes should be expected; and as these changes occur it will only be in an incremental way.

3.3.2 NMP SKILLS AND JOBS In recent years, there has been a growing shortage of qualified human resources (ISCED 5 & 6). This is most acute in the field of higher education graduates in engineering and sciences in general, but also in specific textiles curricula. This problem is urgent in most industrial sectors in Europe. The interviewees do not expect substantial improvements because there is a structural shortage of scientists, engineers and ageing processes. Skills mismatches in the textile industry are substantial according to many respondents; they are

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most prominent in the field of natural sciences and engineering, on respectively the ISCED 6, and 5 level. On the lower levels (3&4) no skills mismatches are reported.

Also the European Platform for Textile and Clothing has designated the human skills issue (EURATEX, 2006) as a key issues and created a Horizontal Task Group on Education that has formulated ten strategic objectives (see the box below).

Strategic objectives of the EURATEX Horizontal Task Group on Education

• To establish educational programmes at undergraduate and postgraduate level that will produce graduates of high calibre, with knowledge and expertise relevant to the research and innovation needs of the textiles and clothing sector.

• To establish educational provision that enables graduates to research at various disciplinary interfaces, such as design/technology, materials/technology, design/management, etc

• To produce graduates for industry, research institutes and universities capable of carrying out high-quality research.

• To establish funding models to support: undergraduate students, students following taught Masters’ courses and students following research degrees

• To develop processes by which colleges and universities can establish coherent progressive educational provision that is pan-European

• To develop a mechanism for meaningful interaction with the working groups of the Technology Platform in identifying educational needs and developing appropriate educational strategies

• To encourage collaboration and facilitate staff exchanges between industry and education providers

• To develop a programme of continuing professional development for industry personnel

• To establish financial support for the development of flexible learning materials.

• To develop a strategy that gives the educational programmes and textile and clothing industries a vibrant and forward-looking image. Such a strategy will be an important element of the overall publicity strategy of the Technology Platform

The table below presents our interviewees assessments concerning current and future skills gaps for natural sciences, engineering, and specific textile studies (specified at two levels: ISCED 3&4 and ISCED 5&6).

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Table 3.9 Assessments concerning current and future skills gaps for natural sciences, engineering, and specific textile studies

General sciences Engineering Textile specific

ISCED 5&6

Purpose: R&D (e.g. in the field of NMP) Shortage of skilled personnel, especially on level 6. (R&D) Shortage of students; Effects will be noticed in the specific NMP fields between 4-8 years. Focus on research centres and large companies

Purpose: process techniques, applied sciences Shortage of skilled personnel, especially on level 5 (advanced process techniques) Shortage of students Focus on large companies and large SMEs

Purpose: process techniques, applied sciences Shortage of skilled personnel Actions are taken by universities active in textile education Despite qualitative good examples, limited effect in quantitative terms Focus on research centres and large companies

ISCED 3&4

No shortage noticed so far; No shortage expected, due to more labour efficient processes and the replacement of ISCED 3 & 4 by ISCED 5 and the loss of industry to new market entrants (such as in China)

No shortage noticed so far; No shortage expected, due to more labour efficient processes and the replacement of ISCED 3& 4 by ISCED 5, and the loss of industry to new market entrants

On ISCED level 3 & 4 no shortages are noticed or expected. Due to new market entries, and more labour efficient production processes, the need for ISCED level 3&4 is expected to decrease substantially in the near future and be partly replaced by ISCED 5 with a specific focus on engineering and textiles. Engineers will be needed now and in the future (ISCED 5). Employees with qualifications on the ISCED 6 level especially those qualified in the natural sciences will be needed more and more, especially in research institutes. Company representatives (especially those from larger companies) mention the shortage of qualified MSc students with a background in natural sciences. With respect to NMP–related skills for the textile industry it was mentioned that, as most companies in the sector are relatively small, they hardly employ any scientists and for them the issue of NMP-related skills is less relevant.

With respect to specific sub-sectors in the textile industry, it was not easy for the interviewees to indicate which skills will be needed for specific sub-sectors as this strongly depends on the new techniques and products which will appear. As one interviewee said: “We are currently working with techniques which we could not even imagine five years ago”. In practice, firms try to find an answer to their skills needs by themselves, by training or retraining their employees. In this context, it is also very difficult to name new professions or new functions, they do not really exist any longer, because everything is so dependent on the changes in technologies and products. Some technological changes also appear in relation with new demands in terms of working conditions (protection against dust, or high temperatures, etc.); new production technologies might lead to improvement in working conditions, but their introduction can also be fostered by demands concerning labour conditions.

Besides technical skill, the interviewees also addressed the so-called soft skills. This relates to management skills (for managing R&D of developments departments within a company) or communication skills (when discussing research issues with research centres, universities and other stakeholders) that have been addressed also in the previous chapter. For instance, in companies that produce garments for sports, the person who is in charge of development must be skilled to discuss with athletes, their performance and understand biomechanics simultaneously and on the basis of that develop new products.

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Especially senior staff needs specific skills (such as management of interdisciplinary research teams) to combine several technical disciplines. As one interviewee indicated: an important skill is the ability to work at a more detailed and integrated level instead of simply adding layers of chemicals to fabrics. Except for developments in nanotechnology and new materials, digital techniques play a crucial role in this.

Also new production technologies might affect the organisation of work as one interviewee indicated, as all workers are much more skilled than compared to 10 to 15 years ago (e.g. even a warehouseman today has to be able to work with a computer). This means that people want to have their say in the organisation of work, so that hierarchy is put into question. This confirms what was also found in the literature review: that a company that wants to be innovative must use all available capabilities, including those from workers that have specific ideas on industrial organisations and how innovation processes can best be organised within the company. Also, new technological developments lead to changes in the structure of employment. Due to new technologies, some enterprises may have a much higher turnover, and see their personnel needs decrease at the same time (non-woven fabric requires less personnel than woven fabric). On the other hand, some activities and products appear, linked to these new technologies, which did not exist before (e.g. automotive parts).

According to most interviewees, skills gaps will be growing both qualitatively and quantitatively. Quantitative skills gaps grow because of a shortage of students in the natural sciences. The need for such students has increased and will further increase. With respect to qualitative gaps our interviewees agree that scientists and in-company researchers must have a combination of skills, not only technical skills. Textiles companies need people who can innovate and understand what is happening in other sectors, and communicate with those sectors.

Especially for technical textiles the ability to cooperate with other sectors (such as building and construction, or defence) will become more and more important. This is illustrated in the interview with a representative of a national centre for education and training of technicians and operators in the textile and clothing sector who indicated that: “Change in skills needed occurs in the technical textiles, where it meets evolutions in a wide range of other sectors including automotive, aviation, construction, public works, etc. Examples are non-woven textiles and composite textiles. In the case of non-woven textiles, some techniques are already well-known, but new skills are required for melted edges. In the case of composite textiles, the techniques used are a mix from the textile and the plastic sector. These new products and techniques have implications for skills requirements at all levels, not only for engineers and R&D, but also for the lower skilled functions. For these lower functions, part of the traditional skills from the cotton mills can still be used, but part of the skills have to be renewed”.

3.3.3 NMP EDUCATION AND TRAINING For as far as NMP education and training is concerned, opinions differ between companies and educational institutions. In general, interviewees from educational institutions in the field of textile education and training are convinced of the importance of educating students in the field of NMP. They also have the opinion that NMP-related skills still are not addressed sufficiently in all levels of education (from ISCED 3a to 6b). The major consequence that this is not the case is - according to these interviewees - that educational institutes and universities are no longer the front-runners when it comes to applying R&D in NMP to textile applications. This has as a consequence that companies in the sector are forced to take over that role. This hampers innovation, since companies are not suited to do this themselves.

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The companies that have been interviewed are less convinced of the need of NMP-related education and training of students in institutions of (higher) education. Most companies are small or medium-sized enterprises, with limited resources. Besides that, not all companies are convinced of the importance of such specialized skills: they need process engineers, and cannot afford scientists. Companies indicated that it is essential to give people a broad skill base, to which more specific skills can be added depending on the needs of the firm and the products. At present, in the textile industry, the same machines are being used in all branches of manufacturing (textile, metallurgy, chemistry, plastic, paper, etc.). It is therefore important to give students generic qualifications, which can be used in a wide range of industries afterwards.

The need for a broad and more generic skill base exists at all qualification levels, not only for low-skilled jobs, but also for engineers. This broad base also makes it easier for employees to adapt to the specific technological change within their enterprise, or to find another job in another firm or another sector. But interviewees indicate that it is difficult to convince others that this broad base is important. Young students and their parents still think in terms of traditional categories and functions and public employment services redirect young students towards specific education and training, instead of giving them a broad base to be employable in a range of sectors.

In many European countries (such as Belgium, France, Germany, Italy) there are institutes for higher vocational education that have a long history of textiles education. Such institutes can be found in many regions that traditionally have a strong textile industry (in some countries – for instance in the Netherlands - they have disappeared). These institutes have a long history in teaching textile engineering. Many of them have set up management trainings as well. They have traditionally tight relations with the regional textile companies, in particular the smaller firms. They often have committees in place that consist of representatives from textile businesses and manufacturers that meet on a regular base and discuss the implication of developments in their sector for education and training. NMP is not an important part of their curricula.

In France traditional vocational qualifications are being re-designed to better answer the needs of industry and offer a broader skill base to future employees. Educational programmes are developed which are split in different modules (‘parcours modulaires qualifiants’). Before an employee gets trained, one first checks which skills he already has, and which ones need to be reinforced. This makes it possible to reduce the length of an educational programme / training from 600-800 hours to 50-90 hours. To renew the skills of their employees, firms can contact training centres for specific training modules or organize their own training in the firm itself. They can make use of training modules accredited by the French Ministry of Education, or have modules developed ‘à la carte’, for their specific needs. This makes it possible to respond rather directly to the training needs that come with the development of new technologies.

An example of university education in the textile sector is the E-Team Masters programme that addresses the gaps specifically dealing with textiles skills at the ISCED 5 and 6 levels, and which has been initiated and is now also coordinated by Gent University. “The E-TEAM programme is a two-year Master programme in the field of textile engineering. (…) E-TEAM builds an international and highly advanced programme in which the latest developments in the textile field are incorporated. The programme aims at stemming the tide of the continuous lack of interest for textile education among young people. To this purpose, textile education is presented in a multidisciplinary modus and the strengths of the most renowned experts in the domain of textiles in Europe are brought together. The programme ensures that the demands of an industry continuously striving for technological innovation, creativity, quality and an

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excellent performing management are fulfilled.” There are 24 European universities offering textile education that participate in the programme.

With respect to life-long learning programmes of universities, it was found that hardly any students are enrolled in such programmes as companies show little interest, according to interviewees from universities and institutes of higher vocational education.

3.3.4 CONCLUSIONS Worldwide, R&D in NMP for the textiles industry is most advanced in Japan, and in the United States. Recent Chinese developments, on the other hand, have also been impressive. Where, extra-EU R&D seems to take place in private research institutes and within the industry, EU-R&D seems to be mainly concentrated in public research organisations. Within Europe these research institutes are situated in the major member states, in particular France and Germany.

New developments in NMP technologies already have had some impact on the textiles industry, but the interviews with company representatives show that that it has not caused any major changes in the sector. In most companies in the textile sector in Europe adoption of NMP is rather limited. The changes apply for a relatively small number of front-runner companies: the use of NMP mainly affects the technical textiles segment of the sector. Smart materials are the main contributions of NMP to this sector. They are used for the production of new fibres and fabrics and are also applied in finishing and coating in combination with the use of (nano)electronics (intelligent textiles).

Skills gaps in the textile sector are expected to grow both qualitatively and quantitatively. At the lower education level no shortages are noticed or expected. Due to new market entries mostly in East-Asian countries), and more labour efficient production processes, the need for low-skilled labour is expected to decrease substantially in the near future in Europe. This low-skilled labour force will partly be replaced by higher skilled employees with a specific focus on textile engineers. For the technical textiles segment, the ability to cooperate with other sectors (such as building and construction, or defence) will become more and more important.

Engineers will be needed now and in the future. Employees with an academic background (MSc and PhD) especially those qualified in the natural sciences will be needed more and more, especially in research positions. Also in this sector there is problem felt in the availability of higher education graduates in engineering and sciences in general, but also in specific textiles curricula. Companies demand a broad scientific basis for the new engineers that enter the company: they will get company-specific training on the job.

In many European countries (such as Belgium, France, Germany, Italy) there are institutes for higher vocational education with a long history in textiles education. Traditionally they have tight relations with the regional industry, in particular the smaller companies. Life-long learning is hardly practised in this sector; companies show little interest.

Besides technical skill, also so-called soft skills such as management skills (for managing R&D-departments within a company), entrepreneurial skills or communication skills are relevant in the textile sector. A good example of a university programme that tries to tackle this broad set of skills in the textile sector is the E-Team Masters programme that addresses the gaps specifically dealing with textiles skills at the higher education levels, and which has been initiated and is now also coordinated by Gent University.

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3.4 THE CHEMICALS SECTOR

3.4.1 NMP-BASED INDUSTRIAL DEVELOPMENT AND INNOVATION IN EUROPE

Definition of the sector and the value chain in Europe

The chemical sector transforms raw materials, such as oil, natural gas, air, water, metals, and minerals into a very diverse range of intermediate and final products. Basic chemicals are bulk chemicals, produced in large quantities that serve as inputs for various sectors downstream in the chemicals sector and other sectors of the economy; examples include petrochemicals, industrial gasses, dyes, pigments and fertilizers, as well as primary forms of plastics and synthetic rubber. Fine chemicals include specialty and consumer chemicals. Around 70% of chemical products are sold as intermediate products to various industries. Major industrial customers include the rubber and plastic products sector; agriculture; textiles and clothing; construction, automotive and pulp and paper.

Figure 3.3 Overview of the Chemical value chain

Rubber and Plastic products

Agriculture

Machinery and

equipment

Energy

Other sectors

End users

Basic chemicals

Agro-chemical products

Metals Oil, gas coal

Paints, varnishes coatings

man-made fibres

other chemical products

Soap, detergents,

cleaning preparations

Pharma-ceuticals, medicinal chemicals

Rubber and Plastic products

Agriculture

Machinery and

equipment

Energy

Other sectors

End users

Basic chemicals

Agro-chemical products

Metals Oil, gas coal

Paints, varnishes coatings

man-made fibres

other chemical products

Soap, detergents,

cleaning preparations

Pharma-ceuticals, medicinal chemicals

Source: SEOR, Technopolis

The chemical industry is highly integrated and boundaries between the different subsectors are difficult to establish. The national statistics bureaus make a distinction between seven subsectors of the chemical industry (NACE rev 1.1). These subsectors are: basic chemicals, which include petrochemicals, industrial gasses, dyes, pigments and fertilizers, as well as primary forms of plastics and synthetic rubber; manufacture of pesticides and other agro-chemical products; manufacture of paints, varnishes and similar coatings, printing ink and mastics; manufacture of pharmaceuticals, medicinal chemicals and botanical products; manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations; manufacture of man-made fibres and manufacture of other chemical products (such as photographic materials, explosives, glues, essential oils and intermediate inputs for other manufacturing processes).

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Another distinction is made by the High Level Group14, which distinguishes between petrochemicals, basic inorganics, polymers, specialties and consumer chemicals (HLG, 2009). The sales figures for each of these five subsectors are shown in Figure 3.4 below.

Figure 3.4 World sales of European chemical companies in the different subsectors in 2002 and 2009 (€ billion)

Source: Cefic basic facts

Chemical companies often are specialised and produce - within the range of this specialisation - a wide range of products. Chemical distributors have an important position in the supply chain, servicing a wide range of downstream users, most of which are SMEs (HLG, 2009). The role of distribution companies is expected to increase according to the Boston Consulting Group, as handling small buyers can be difficult for larger companies, especially seen the diversity of products.

Production, value added and employment in Europe

The chemical sector provides a major contribution to the European economy: the share of value added is almost 11%. Value added has grown 2.7% yearly on average in the period 2000-2007. The sector employs around 1.8 million people. Employment has slightly declined in the same period (0.2% yearly). This has contributed to a growth of productivity. Productivity is very high: it is more than double the productivity of the manufacturing average.

14 The High Level Group on the Competitiveness of the European Chemicals Industry, produced

its report in 2009.

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Table 3.10 Production, value added and employment (EU level)

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 161691 162936 171166 169602 170000 178460 190000 193849 2.7%

Share value added 10.5% 10.6% 11.5% 11.0% 10.6% 11.0% 11.1% 10.7% 0.3%

Employment (1000) 1897 1903 1839 1980 1941 1887 1857 1859 -0.2%

Apparent productivity (€ 1000 per person) 84 84 89 89 87 95 100 104 3.2%

Source: Eurostat structural business statistics

Most companies in the chemicals sector are small companies: 95.7% has less than 250 employees. These smaller companies contribute relatively little to the value added (26.3%) and employment (35.5%). The large companies provide the largest part of the value added and employment in this sector. The share of large companies is - as compared to the whole manufacturing sector - quite high: 4.3% versus 0.8%.

The largest subsector of the chemical sector in terms of employment and value added is the manufacture of pharmaceuticals, followed by the basic chemicals subsector. Together they are responsible for more than 70% of the value added and 60% of employment. The companies in these two subsectors are mostly large companies. As basic chemicals are bulk products, economies of scale are important. This is reflected in the lower share of enterprises. The same goes for the pharmaceuticals. The manufacture of other chemicals is the third largest subsector, followed by paints, varnishes and coatings. The manufacture of agrochemicals and man-made fibres are relatively smaller subsectors.

International trade and competition

The chemicals sector is one of the most important sectors in international trade. It comprises 11% of total international trade. World trade in chemicals has tripled between 1995 and 2008 (Kiriyama, 2010). In 2010 world chemical sales has been estimated at €2.353 billion (Cefic, 2011a). The market share of the EU is around 21%, while China currently accounts for 24%, making it the largest chemical producer in the world. The share of NAFTA sales is 19.3% and Japanese sales have decreased to 6.5%. The rest of Asia is responsible for 18% of world chemicals sales. Traditionally, Europe has been dominant in chemicals production. In 2000 the EU represented 29% of world sales, compared to 6.4% for China (Cefic, 2011a). Although the market share has decreased, European production has shown an average annual growth of 1.7%. China, India and Russia experienced production growth rates of 20% in the period 2000-2007 (HLG, 2009). Due to production growth, China and India have successfully built up increasingly sophisticated production facilities. China specialises in agrochemicals and bulk chemicals and industrial gasses. Focus is however shifting to specialty chemicals (PWC, 2008). Notably due to their feedstock advantages, countries in the Middle East attract very high investments in petrochemicals.

The EU is still the world’s largest exporter and importer of chemicals. In 2010 EU export is 44% of world exports. Asia’s share in world export is 33% and the NAFTA countries have a share of 14%. Exports to countries outside the European Union were €141 billion in 2010, which is 29% of EU chemical sales. The largest share of EU exports is within the EU (53% of sales). Home country sales are only 18% of total EU sales. Trade is often within a company. Asia (excluding China) and the NAFTA countries are the most

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important export regions. Exports are greater than important and in 2010 the trade balance was around € 47 billion, which is three times larger than in 1990. Pharmaceuticals has the highest share in exports of the chemical sector (42%). Moreover, this subsector has a share in imports of 34%. The basic chemicals have a share of 32% in export and 45% in imports. The other chemical products have a share of 25% in exports and 19% in imports (Cefic, 2011a).

Due to global competition Europe’s competitive position is weakening. The bulk of chemical investment takes place in China and Asia Pacific. Investment in Asia has grown rapidly since 2000 from around US$ 50 billion to roughly US$ 350 billion in 2010. Investments in the EU have increased only slightly since 2000, but are still larger than investments in North America and Japan (Cefic, 2011a). Investments in Europe are focused on modernising highly integrated and efficient plants of a size adapted to the needs of the European market. Production essentially grows through stepwise modification of existing plants (debottlenecking) leading to regular, but slow, annual increases in output (HLG, 2009). KPMG International predicts that a massive expansion of bulk chemicals production in the Middle East to 2015, will make up to 20% of plants of the European petrochemical industry uncompetitive (Kiriyama, 2010). Moreover, profits made by Chinese and Middle Eastern companies can be used to acquire EU firms and gain access to technology and markets.

Asian and Middle Eastern countries are also in the process of building new production capacity on a large scale. They also tend to have the additional advantages of newer technology and bigger economies of scale (Eurofound, 2005). Manufacturing takes place at large dedicated and capital-intensive plants using highly specialised processes. Fundamental process changes ex post are very expensive due to their high capital intensity and degree of specialisation. Having a modernised plant is therefore crucial (Kiriyama, 2010).

European companies are moving away from bulk products to more specialized products that provide higher value added. Competition in bulk chemicals is mostly based on (labour) costs, where Europe has a competitive disadvantage. An important strategy of European firms over the last decade to counteract competitive pressures from South-East Asia and the Middle East was to focus on specialty chemicals. Specialty chemicals are research intensive and provide higher value added. The role of innovation within specialty chemicals remains a key issue, as over time, specialty chemicals frequently become mass products as well, where again competition is driven by costs (Van der Zee et al, 2009).

One of the strengths of the EU chemicals industry is that its regional clusters benefit from close integration of production processes reducing transport costs, increasing on-plant efficiency and improving the scope for recycling. Inputs (feedstock) and outputs (chemical products) are, however, bought and sold globally. While basic and intermediate chemicals are produced and refined in Europe, the raw materials – mostly fossil carbon resources – are imported and sourced globally. Key chemicals clusters are mainly located in West-Germany, France, Belgium and Northern Italy (ibid).

Legislation concerning chemical safety to safeguard human health and the environment are implemented in a large network of regulations concerning the chemical processing and chemical products, with a significant impact on the organisation and operation of chemical companies. Especially SMEs have problems in dealing with the administrative and other burdens that go along with the implementations and monitoring of European and national regulatory requirements. However, environmental regulations also forced specific innovations, such as in the field of bioprocess technology which has brought these companies in return a competitive advantage as the cleaner bioproduction is in many cases also ‘economical friendly’.

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Technology and innovation

Innovation in the chemicals sector is the key to higher value added products and the main driver of competitiveness of the European chemical sector. As the sector is highly regulated, access to raw materials is difficult and adds to increasing costs, sustainable solution seems vital for the EU chemical sector, as this is where the EU has a comparative advantage and favourable markets. Basic industrial chemicals have limited opportunities to introduce new products and compete mainly on costs. Innovations are therefore mostly process or organisation related. Product innovation, responding to evolving customer needs transmitted through supply chains, is essential for speciality and fine chemicals. Also process innovation is important for the specialty and fine chemical subsectors, to improve sustainability (e.g. industrial biotechnology) or to pursue differentiation (Kiriyama, 2010). For consumer chemicals marketing innovations are vital.

Most innovations in the sector originate from the research labs of large firms, often they work in collaboration with universities and other private or public research centres, but also with companies in other sectors of the economy that rely on chemical intermediary products. Product innovation in the chemicals sector translates into further innovation downstream.

For the pharmaceuticals industry biotechnology has become a crucial sector that is driven by smaller, innovative start-ups compared to the chemicals industry. Access to finance is often an issue for innovative start-up companies. Often these small innovative firms are bought by the large firms when it comes to the commercialisation of new products. Still, Europe tends to be weak in bringing innovations to the market (‘European paradox’).

Innovation in the chemicals sector is the key to higher value added products and the main driver of competitiveness in the European chemical sector. As the sector is highly regulated, access to raw materials is difficult and adds to increasing costs, sustainable solution seems vital for the EU chemical sector. This is where the EU has a comparative advantage and favourable markets. Basic industrial chemicals have limited opportunities to introduce new products and compete mainly on costs. Innovations are therefore mostly process or organisation related. Product innovation, responding to evolving customer needs transmitted through supply chains, is essential for speciality and fine chemicals. Also process innovation is important for the specialty and fine chemical subsectors, to improve sustainability (e.g. industrial biotechnology) or to pursue differentiation (Kiriyama, 2010). For consumer chemicals marketing innovations are vital.

Most innovations in the sector originate from the research labs of large firms. Often they work in collaboration with universities and other private or public research centres. Also they cooperate with companies in other sectors of the economy that rely on chemical intermediary products. Product innovation in the chemicals sector translates into further innovation downstream.

For the pharmaceuticals industry biotechnology has become a crucial sector that is driven by smaller, innovative start-ups. Often the large firms buy these small innovative firms when the smaller firms begin the commercialisation of new products.

The chemicals sector in Europe spends around 7.6% of value added on R&D. This is 2% higher than the manufacturing average. This is mainly due to the pharmaceutical sector, which accounts for more than 55% of chemical R&D spending. If this sector is excluded the share of R&D expenditure of value added is 3%.

In the period 2000 to 2007 R&D expenditure has grown 4.2% yearly. R&D spending as a percentage of sales is however declining from 2.8 in 1991, to 1.5% in 2008. Also, R&D expenditure as percentage of sales in the EU is lower than the expenditure of Japan (4.1%) and the United States (2.1%). One reason for this is that the majority of sales of the European chemical sector is in base chemicals, which require less R&D than specialty

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chemicals, pharmaceuticals or consumer chemicals. However, profits made from base chemicals can be reinvested for research and innovation. R&D is concentrated within the larger firms.

The number of R&D personnel is almost 6% higher than the European manufacturing average. This is three times higher than the manufacturing sector. The number of R&D personnel has grown annually with 2% on average.

Table 3.11 R&D expenditure and personnel

2000 2001 2002 2003 2004 2005 2006 2007 Average yearly

growth

R&D expenditure (€ million) 11458 12933 10851 12976 12917 13627 14674 14677 4.2%

Share R&D expenditure 7.1% 7.9% 6.3% 7.7% 7.6% 7.6% 7.7% 7.6% 1.7%

Number of R&D personnel 94723 93497 77732 85829 88602 96589 103292 105578 2.0%

Share R&D personnel 5.0% 4.9% 4.2% 4.3% 4.6% 5.1% 5.6% 5.7% 2.2%

Source: Eurostat structural business statistics

Front-runners: specialization, productivity and innovation

In terms of specialisation a number of smaller countries have a relatively large chemicals sector. Ireland, Belgium, the Netherlands and Slovenia are countries where the share of their chemicals sector in the total manufacturing sector is highest. In terms of employment the larger countries have the highest share in total employment. Germany has the most people working in the chemicals sector. The productivity follows the specialisation rankings, with Ireland and Belgium at the top. They are followed by Sweden, The Netherlands and the United Kingdom.

Table 3.12 Country rankings of share of value added, employment and productivity in 2007

Country Share in manufacturing value added

Country Employment

Country Productivity (€ 1000 per person)

1 Ireland 35.6% Germany 456414 Ireland 545.6

2 Belgium 20.9% France 267139 Belgium 158.8

3 Netherlands 14.3% United Kingdom 198721 Sweden 152.1

4 Slovenia 13.9% Italy 194236 Netherlands 148.3

5 France 13.0% Spain 138434 United Kingdom 132.3

Source: Eurostat structural business statistics

Current situation - NMP relevant issues and developments The chemical industry combines advances in the chemical sciences, biology and physics with those in nanosciences and material sciences for the production of new materials. As

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shown above, the chemical sector in the EU faces increasing competition from emerging countries and its position is at stake.

Innovation in both products and processes is crucial for the European competitive position. In order to stimulate R&D, the European Technology Platform for Sustainable Chemistry (SUSCHEM) has formulated a strategic research agenda in which NMP technologies are seen as vital. SUSCHEM defines three key themes for future research that relate to NMP: new materials, nanotechnology and both industrial biotechnology and process and reaction design.

New materials are the core business of the chemical sector. The chemical sector produces a large variety of materials that are used in a wide range of products. Examples include light-weight materials for vehicles in order to reduce energy consumption, chemicals for the (high tech) electronics sector used for semiconductors, sensors, fuel cells and energy storage systems. Virtual modelling and simulation techniques have become increasingly important in developing these new materials and are expected to grow in importance in order to decrease the costs of development of new materials. The ability to control and characterize materials at the molecular level has stimulated the growth and integration of nanoscience with chemical science and engineering. At the nanometer length scale, certain materials demonstrate novel properties, which are different from their macroscopic behavior. Nanotechnology offers product developers in the chemical industry the chance to create entirely new or with improved properties through the controlled manufacture and structuring of materials.

The chemical industry is one of the main users of nanotechnologies for the production of nanoscale new materials: nanoscience is considered as an enabling technology for the development of new material technologies (SRA Suschem, 2005). By working on the atomic (i.e. nano) level (using for instance the so-called Atomic Tunnelling microscope) chemical problems are being simplified as chemists can see what they are doing, The new nanobased materials products of the chemical industry (of which many are still in a development phase) include nanostructured materials, nanostructured surfaces, nanoparticle materials including metal, oxide and other inorganic systems, carbon and inorganic nanotubes and fullerenes and their application in technological processes, biologically relevant nanostructures.

An important trend in the chemical industry, especially when it comes to nanomaterials is that - due to the small amounts of materials that is to be used in downstream products -, feasible business cases can only be profitable when the whole valued chain is incorporated. Examples are new nano-materials for energy supplies (based on developments in electro-chemistry and organic electronics for the production of new types of batteries) that are developed in close collaboration with the automotive industry that uses these batteries in the new types of hybrid cars. Strategic alliances between the chemical and the automotive industry guide such business models.

The chemical industry contributes to innovations in a number of downstream industries. The textile industry uses chemicals for the finishing of textiles. Furthermore, fibres i.e. advanced polymers with specific new characteristics for new fabrics are used in technical applications (technical textiles) and in the high-valued added segment of clothing (protective, medical, etc). Spray-on coatings containing hydrophobic wax crystals of around 1 nm (nanometer) in diameter have been developed that makes the textile that is treated with it, repel water droplets and dust particles. Nanosize fillers (nanoparticles, graphite nanofibers or carbon nanotubes) are dispersed into a polymer matrix through either a mechanical or a chemical process. The mechanical, electrical, optical or biological properties of the textile can be altered, depending on the kind of nanomaterial used and the amount and distribution of the nanomaterial. Dyes are another important product group of the chemical industry that are used in the textile industry. The colours

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produced in nature are a result of interaction of light with matter, by interference or diffraction phenomenon. This phenomenon can be applied to textile dyes to obtain pure and bright hues. When nanocrystals as colourants are mixed with dyes, they can produce a spectrum of colours, which is not attainable by either dyes or pigment. However, also rather common products of the chemical industry, such as nano-silver, which are used in clothing textiles for their antibacterial effect, illustrate the importance of the chemical industry for the product development in downstream industries.

Examples of nano-based materials produced by the chemical industry for paper making include the production of latex formulations enhanced with zirconium based cross-linkers and engineered pigments to be used for nano-surface treatments of paper, for better sheet properties, such as print quality, running smoothly and wet resistance.

A second important trend in the chemical industry is sustainable production processes. The use of bio-processes using enzymes in the chemical industry (industrial biotechnology, or ‘white biotech’) have proven to have many advantages. Compared to chemical catalysis, enzyme catalysis is highly specific and operates under mild (temperature, pH, pressure), non-toxic and non-corrosive conditions. These and other aspects make the use of enzyme-based processes more sustainable compared to chemical processes: less resources are consumed, less waste is produced and also less toxic substances are needed as catalysts, etc. Also its high degree of reaction specificity makes it possible to produce only the desired form of the two chiral forms of certain chemicals. This makes enzymes very suitable for fine-chemical production processes. In order to increase the integration of biocatalysis in the chemical industry, new cost effective biocatalysed processes have to be developed that can compete with chemical catalysis. Industrial biotechnology can both lead to product innovations or new materials, as well as process innovations; it is seen as a new and important growth market (HLG, 2009; SRA SUSCHEM, 2005; Kiriyama, 2010). Industrial biotechnology addresses sustainability issues, such as the replacement of non-renewable sources by renewable materials. Kiriyama (2010) estimates that, although products made by biotechnological processes currently account for only 1.5% in base chemicals (2007), much lower than other segments, this ratio will jump to 10% by 2017. Industrial biotechnology is at an early stage of its technological lifecycle: close collaboration between industry and academia plays an important role in this stage.

Also the development in the field of biorefineries provides an answer to the need for more sustainable production processes. Biomass is used as an alternative source of raw materials to fossil fuel. These renewable resources can be converted - through bioprocessing - into a wide range of products ranging from biofuels and bulk chemicals to specialty chemicals (Enzing et al, 2008). Using renewable raw materials is still challenging, as the chemical industry requires constant flow of constant quality and purity (HLG, 2009). Biorefineries are seen as an important subject for research and future competitiveness.

Barriers to these developments include the integration of scientific disciplines such as chemistry, biochemistry, microbiology, molecular genetics, nanotechnology, material sciences and process technology to develop useful processes and products. Other barriers are the relatively high prices of some enzymes, of some raw materials (glucose, vegetable oils) but also the high investments that have to be made in new bio-based production facilities. Introduction of biotechnology implies considerable investments in the building of new plants and equipment for treating waste-water, soil or air. Optimisation of existing processes seems to be the main cost-saving strategy.

Overall, there is continuous improvement of the production processes within the chemical industry with respect to reaction and process design aiming at more efficient, safe and sustainable production processes, smaller size facilities based on process intensification

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technologies with maximised re-use of materials; equipment that is geared for multiple usage and purpose thus increasing flexibility and decreasing costs; and chemical plants that are equipped with appropriate control systems for the reactions they process (SRA SusChem, 2005). This covers the entire lifecycle of processes ranging from product development through process development, plant development and operation to product handling and logistics and integrates the complementary approaches of chemical synthesis and process design and engineering.

Future outlook – two scenarios

The competitive advantage of the European chemical industry is significantly influenced by the innovation activity of this industry, amount of investments, external economic and political environment (regulation, energy, logistics), development of costs (prices of entrance raw-materials, development of energy prices). The chemical specialties segment, is the most innovative segment of the chemical industry and exerts a significant influence on the progress of other sectors of the chemical industry and of other industries.

Trends that are important for the future of the European chemical industry are:

− high growth of the consumption in China, − increasing share of the import of chemicals from Asia and the Middle East (not

only chemicals but also finished products), − change in the localization of consumer sectors, high production costs (prices of

raw-materials, energies, personal costs), − permanently more and more rigorous regulations in the field of the environment.

For the development of innovation activities there exists a great lag with the U.S.A. and Japan, which is caused mainly by:

− human resources: decreasing number of university graduates, „brain-drain“, − imperfect political unity of member states in the EU, − cost aspect in maintaining the protection of the industrial ownership in Europe

(unified patent policy, the so-called European patents point to the positive influence, the cost aspect leads to a lag),

− regulation of the environment affected by the chemical industry: the introduction of a new chemical substance needs in Europe the three times longer period than in the U.S.A., costs being the ten times higher. This fact also reflects on the substantially lower number of the newly accepted European patents.

In the first scenario there is a revitalization of the European chemical industry through increased innovations (partly facilitated by new developments in NMP technologies) and the improved orientation to customers. This scenario implies positive development of the macroeconomic situation throughout the world. There is growth of chemical specialties and also the successful competitive ability of plastics is expected. Through this, Europe can maintain its competitive advantage in chemical specialties. Cefic (2004) described this scenario as the Sunny Scenario: it implies a revitalised European chemical industry with increased innovation and customer orientation. Growth will be around 3.3% per annum. In 2015 annual production will be around €550 billion.

In the second scenario the European chemical industry will not be able to face sufficiently the import of chemicals, primarily of bulk chemicals and plastics. Simultaneously, a bad macroeconomic and political environment is envisaged. Europe is hardly able to keep its strong position in chemical specialties; new developments in NMP are mainly used in order to produce as cost effective as possible. This is the Storm Scenario, according to Cefic (2004) with a shrinking EU chemical industry not being able to beat imports. Erosion leads to an annual production loss of 0.6 % up to 2015. Both petrochemicals and

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specialty chemicals would be hurt intensively and in 2015 annual production would be around €330 billion.

The interviews indicate that from the innovation perspective Scenario1 is most likely to happen, as the chemical industry in Europe will stay functioning at a certain level. Also Europe will focus on specific niches where high tech and high value added products such as specialty chemicals are being produced. In addition, it will profit from new developments in bioprocess technologies and new energy-extensive technologies. However, from the perspective of human resources there are some doubts as the necessary increase in students outputs of institutions of higher educations of 3.3% per year is not very likely (many interviewees observe a decrease in numbers of students in natural sciences, incl NMP; some are more optimistic15). Cefic has calculated a yearly decrease of students in chemistry between 1997 and 2007 of 10%. If this decrease will not be stopped, the European labour force could only manage Scenario 1 if there would be a substantial and continuous increase of workforce productivity. This would need to be around 13% per annum.

3.4.2 NMP SKILLS AND JOBS Skills and education are an important factor in international competitiveness and the European chemicals industry is facing increasingly global competition for talent. Europe cannot base its growth on low qualified resources and low wages; its major asset is knowledge. For that reason a strong research base is, therefore, essential for building a knowledge-based competitive sector. Studies also show that the chemical sector has a higher than average share of higher education labour force (EMCEF, 2006; Van der Zee et al, 2009). Within the chemical sector, plant operators and engineers represent around 35% of all jobs in the sector.

There is also a trend of upskilling, meaning that higher educated workers replace job functions that were occupied by lower educated workers. The number of higher educated machine operators in the chemical industry has grown in the period 2000-2006. Also the share of IT professionals and service workers has increased, while these functions have decreased for low educated workers. The number of engineers (engineers is a broad category of all higher educated technical staff, including chemists, chemical and mechanical engineers) has increased overall, due to increases in medium educated engineers, while the share of low and high educated engineers have decreased (Van der Zee et al, 2009). The foresight study on skills (Van der Zee et al, 2009) shows that engineering functions in R&D and production, but also sales and supply change management are functions that are expected to increase. Overall employment is expected to decrease.

Labour costs in the chemical sector have increased more than in the manufacturing sector as a whole. In the period 2000- 2010, labour costs in the chemical sector have grown with 3.6%, compared to 3% in the manufacturing sector (Cefic, 2011a).

The main problem for the chemical sector is skill shortages. According to the High Level Group on Chemistry, developing human resources is crucial for European competitiveness and innovation: thus should require more attention (HLG, 2009). Eurofound 2005) (states that the chemical sector suffers from brain drain. A survey shows that the percentage of students that chooses a science subject is lower than one fifth and only 3% choose for chemicals (EMCEF, 2006).

15 Disciplines such as finance, business studies and marketing will get less popular for studies as

fewer jobs will be available in these sectors due to the financial crises. Engineers are needed all the time and provide safe job opportunities.

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Many chemicals companies are working to improve matters. BASF, for example, is among the most active leading global chemicals companies when it comes to fostering an understanding for chemicals at the general public. The company runs ‘Kids Labs’ at schools, which allows children to learn more about the chemicals that surround them at home. Similarly, Air Products, a global supplier of chemicals, industrial gases and equipment, sends ‘science ambassadors’ to schools and organises workshops at universities where undergraduates can get hands-on experience (Eurofound, 2005). Stimulating entrepreneurship and the creation of small start up companies in education is required. This is in line with the recommendations from the High Level Group on Chemistry. The group thinks that entrepreneurship skills will become important and should be integrated into curricula in cooperation with the chemical industry (HLG, 2009).

Especially SMEs require special help to address skill shortages (HLG, 2009). This is acknowledged in the interviews. According to an innovative and fast growing SME company, they have a large number of vacancies and difficulties to fill these vacancies. This is mainly due to competition from larger multinational firms. In their experience, new graduates are more eager to start employment within larger multinationals. The company complains that graduates do not know how dynamic SME companies can be and that they are able to do very diverse tasks and learn a great deal.

Also a research institute that functions as a bridge between universities and companies for research projects, finds it difficult to fill in research positions, even internationally. For this reason they hire head-hunters in order to find new graduates from China. The main reason for working with a headhunting agency is because of capacity. The institute want to select the best graduates, which means that they would like to select a few out of many possible candidates. This requires an extensive recruitment process, for which the institute does not have the capacity. The actual screening process takes place in China. Attracting the top graduates is difficult, as the best students in China are more interested in well known universities, mostly in the United States. The fact that top students favour these universities seems to be related to the image of these universities. The institute specialises in polymers, in which Europe has a better position than the United States. According to PWC (2008), European companies might also benefit from recruitment in China (see Box 3.1).

Box 3.1 The “war for talent” in China’s chemical sector and European companies

In the Chinese chemical sector and other sectors within China, competition for talent is high. Supply of managers is limited and they are therefore very much sought after; this drives up the wages for managers. Chinese managers switch jobs very often, in order to increase their salaries. Talented managers switch jobs around every 15 months. European and other foreign countries struggle to differentiate themselves. For large companies with a longer presence in China this is less difficult as companies have had possibilities to cooperate with institutions, such as universities in order to attract talented people. The possibility of working in Europe through job rotation schemes is very attractive for Chinese employees

Source: PWC, 2008

Cefic undertook a survey concerning skill needs of the chemical sector. The focus of the survey was on the skills that engineers and scientists should have in order to foster innovation. The survey results showed that main business skills required for scientists included intellectual property law skills, and strategic and innovation management. For engineers, project and innovation management, next to understanding of suppliers and consumers are important. Communication skills and team-work skills are seen as

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important personal skills. In addition, knowledge of catalysis, nanotechnology, formulation chemistry, sustainable chemistry, interface chemistry and biochemistry and industrial biotechnology are important technical skills for scientists. For engineers process modelling and simulation, reaction engineering and process design and process intensification are important. According to Van der Zee et al (2009), IT skills will become increasingly important for supply chain management and modelling and simulation in R&D and production processes. They consider legislative knowledge, related to safety and environment as one of the main skills for production engineers. Interdisciplinary skills are important for all engineering types (R&D and production).

The existence of skill gaps in the chemical sector that are related to NMP technologies is difficult to address. An interviewee of a large multinational chemical company does not expect that the impact of nanotechnology will cause revolutionary changes; they consider it as a logical and normal step in research. They expect from the people whom they hire that they keep up to date with new technological developments; this is not different from the past. Employees coming from institutes of higher education are expected to know something about NMP, but in the end the biggest part of the education happens on the job. Most impact of new NMP technologies for skills is expected in R&D positions; at the production sites there will be no need/urge to make skills-related changes, not now or in the future.

In some countries such as Germany, public funded programmes have stimulated the emergence of various nanotech related courses, up to a point where there were even too many and large numbers of people are highly educated in nanotechnology; according to one of our employees. In France but also in other European countries, safety issues dominate the discussion on nanotechnology. This is also an important topic to be addressed in courses in higher education. Due to the fact that in some countries nanotechnology received a lot of negative public attention because of the health aspects of nano-materials, one of the larger companies that was interviewed now works in more close and direct relation with a client in the marketing of a new product that holds nano-materials. But NMP did not only asked for new skills for those involved in public relations, but also for those involved in health and safety management. The company started a couple of years ago with raising awareness for new nanotechnologies; the health and safety managers within the different departments were trained on nano-safety issues. This training was organised by the company itself: toxicologists and industrial hygiene experts contributed to identifying best practices. The interviewee also indicated that the biggest need for NMP related qualifications is for people who can judge the safety of nanomaterials. This is something that will take a while, because first it has to be known what to test for. Currently there is a shortage of knowledge on nanosafety worldwide. The interviewee indicates that this issue is also being discussed at the European level.

Problems of skill gaps seem limited for larger (multinational) companies that are able to attract a diverse range of staff from universities in order to educate their staff on specific subjects they require. For SME companies these options are more limited. For standardised courses, offered by training institutes, or sector organisations, participation from SME companies is limited. The reason is that SME companies often lack resources, or there is a lack of priority. Moreover, SME companies are often highly specialised and for smaller companies specific courses suited for their company are not available. However, also from smaller companies interviewed, skill gaps were not seen as a major issue. There is however a need for blended learning courses with SME companies. A survey among chemical companies shows that most training takes place on the job (EMCEF, 2006).

An interviewee from a company that is specialised in the co-development and distribution of a wide range of (bio-based) chemicals reported no problems in terms of skills

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shortages or recruitment problems. The company acts as an intermediary between companies that demand chemicals and those that produce chemicals. The main basic requirement is sufficient knowledge of chemicals; having a PhD degree in chemistry is a condition. In distribution and sales functions, customer interactions with clients are important. As clients have constantly changing demands and the product range is diverse, there is always information asymmetry, which makes it almost impossible to plan trainings properly, according to the interviewee. Also there learning is done on the job, translating the clients’ specifications and finding the appropriate producer for the specific chemical.

This view that skill gaps and shortages are not very problematic was supported by another SME company that is a subsidiary of a large chemical company. In small companies the range of tasks is diverse and employees have to be very flexible. They need to be able to do research, know about design and fabrication, sales and maintain relationships with clients. For a small company maintaining a balanced wage structure is essential. This means that wages are generally lower in smaller companies. For this specific company, being a subsidiary of a larger chemical firm has several effects; for their employees it is relatively easy to take on a job at the larger firm through internal vacancies. Employees can therefore benefit from the higher wages offered at the larger firm. The company on the other hand, benefits from the brand of the mother company in attracting new personnel. The fact that employees can obtain a position at the larger firm is an attractive selling point. Mobility is high and ensures the inflow of new knowledge from universities. However, as they are looking for people with a broad skills set, this is not always easy.

In general, it is expected that new developments in NMP technologies will not radically alter the skills needs of the chemical industry; although a new bio-catalyst can have a huge impact on production and process technologies and there is continuous improvement on the process side. Chemical production in general is expected to become more small-scale and local; changes related to these new types of production processes would imply new skills needs in terms of working with micro reactors (both for continuous and batch production).

Interdisciplinarity is often mentioned as an important aspect of innovation in this sector. In many cases, a (bio-)synthetic chemist does experiments and at a certain point gives his work over to process engineers. There is a tendency to work in teams, but it remains difficult to look beyond people’s own expertise. People with different disciplinary backgrounds do not speak the same language. This is often exacerbated by the fact that different functions in the innovation process in a large company are often spread geographically.

3.4.3 NMP EDUCATION AND TRAINING For the chemicals sector, the importance of NMP skills is rather clear: ‘Nanotechnology is a major contributor to high-tech, high-wage job creation in sectors in which Europe is a global leader. It is estimated that by 2015 about two million nanotechnology workers will be needed worldwide, of which up to 400,000 would be employed in Europe’, according to dr. Gernot Klotz, Executive Director of Cefic.16 According to the European Association for Chemical and Molecular Sciences (EuCheMs) both Materials Chemistry and Nanoscience are among the eight key areas where scientific breakthrough is required

16 Speaking on May 31 at a panel discussion on the environment at EuroNanoForum 2011 in

Budapest. See also EuChemMS (2010).

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to meet the global challenges.17 In other words, NMP skills will be high on the agendas of educational practitioners. Within this context, higher educational institutes in the field of chemistry are in the process of incorporating NMP skills in their curricula. Their road however is a hard one. In November 2010, the High Level Group on Key Enabling Technologies concluded that there is still ‘a lack of dedicated educational facilities’ (HLG, 2010).

In general, our study shows there is some discrepancy between the views of representatives of higher education and those from industries on the need for specific NMP skills to be addressed in education. The interviewees from higher educational institutions are convinced of the need of raising awareness and knowledge level on the importance of NMP for innovation processes in the chemical industry, not only employees or students, but also the general public. Interviewed companies are less convinced of the need of a specialised NMP education and training of their employees. They need researchers with a general education, not specialists. NMP related skills will be taught 'on the job' in the companies. Larger companies even develop their own courses or training, for example on nanosafety issues. The in-company training is developed and lectured by internal or external specialists.

The interviews with representatives from academia indicate that the new NMP technologies are mainly addressed at the Masters and PhD levels within the chemical faculties; they are seldom part of education and training at the Bachelor level. In major subjects such as organic chemistry, material sciences, solid-state chemistry and physics there are specific courses dealing with new developments in nanotechnology giving by professors that have experience in research in that specific field. Education in new fields such as NMP is driven by the research interest of professors. This suits very much the specific demands of the chemical industry, as these is mainly interested in PhD students; they hardly employ Master students. The latter find there way mostly to SMEs or to human resources or sales departments of chemical companies. This does not apply for the engineers that have a Master degree: they are very much wanted and find their way immediately to industry.

The higher vocational education institutes that have been interviewed experienced that they are only able to keep up with new technological developments if they perform research themselves, but this requires external funding. Medium vocational education is of no importance when it comes to NMP skills, with exception of the need to raise awareness.

There are a couple of initiatives that aim to introduce nanotechnology in secondary education. For instance, in The Netherlands there is a regional project on NMP for high schools, with is facilitated by a network of companies and higher educational institutes. Another project (coordinated by a technical university and the organisation of Dutch chemical industry) is aimed at developing a new education curriculum for chemistry at secondary school for levels that prepare for higher education. New developments in chemistry, including nanotechnology and new materials are included in the curriculum, but mainly in the role of providing a context for introducing new chemical concepts.

The chemistry departments do not really see specific barriers to train researchers and/or professional with skills that suit - chemical - industry demands. Barriers are mentioned (availability of funds to do research, training competences of teachers in secondary education, the availability of technical and information infrastructures and of scholarships to attract students, cooperation with staff from other departments and getting them lined

17 EuCheMS President Luis Oro’s speech at the Global Chemical Industry European Convention,

September 2011.

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up for teaching NMP skills, staff numbers that are too small, and lacking enthusiasms from students) but none of them is considered as crucial. Some interviewees indicate that nanotechnology is a new name for an existing scientific domain of research and its related technologies; the recent attention for nanotechnology especially in science and technology policy is qualified as a hype. However, because it is a ‘hype’, this should be exploited by educational institutes to market themselves with NMP (to attract new students). According to them the main difference between existing technologies and the introduction of new NMP technologies is that there is a need for employees that are able to communicate with and understand other disciplines. This capability is considered as the most important skill in NMP. This asks for a different, more interdisciplinary approach in education. This is of course not only the case with nanotechnology, but also with other interdisciplinary fields such as regenerative medicine. Some institutes for higher vocational education institutes (such as in Germany, the Netherlands) integrated nanotechnology in their curriculum with the aim for students to develop this specific skill.

Interviewees from academia inform that there is hardly any contact with industry about the (changing) skills needs of employees in industry. The only occasion when such a contact with industry is made, this is through internships where students work for a certain period of time within a company R&D lab18. Another occasion is through ‘guest lectures’, where researchers from industry do some teaching at universities in specific subjects, mainly for the Master students sometimes also for Bachelors in their last years.

This is more or less confirmed in the survey. Although most of the chemistry departments (18 out of 24, see Chapter 5) that have participated in the survey, have contacts with the industry on the qualifications their students should have to successfully enter the chemicals labour market, almost half of them indicates that these contacts are ‘not very important’ for the actual developments of their curricula. In a few cases the industry has had a ‘passive role in developing the content of curricula’; in most cases they were not involved. When chemistry departments maintain contacts with the industry, this is done in a number of different ways, but most popular are research collaborations. Most departments that monitor needs in the industry (14 out of 18) do this through research collaborations with the industry. Less popular are internships (8 out of 18), and staying in contact primarily through contacts with alumni (7 out of 18).

An interview with a representative of a Dutch institute for higher vocational training shows how contacts with industry can benefit curriculum quality: “For each course we initiated a regional working field committee. The main aim is to determine whether the course programme is congruent with the developments in the working field. In addition, we involve external experts with the student’s thesis. Aside from this, we do not have a monitoring system that allows us to assess if we deliver students with the right qualifications”. This example also shows how higher vocational education institutes traditionally can have tight relations with the regional industry. An important reason for integrating NMP in the curriculum could be an increase in NMP-related industrial activities in the region. Also, the companies are asked to play a role in educating students, either by giving lectures at the educational institutes or by hosting students during their internships or job-orientation courses. Another mechanism for facilitating the interaction between education and industry is for instance the activities of the Royal Society of Chemistry (RSC) in the UK, RSC supports the teaching of chemistry in all levels of education in the UK and Ireland. RSC sends resources and materials free to schools and

18 The European Marie Curie programme provides funds for such education-focused cooperation

between academia and industry in specific fields. There is a big over-application for the MC funds: the demand from industry and university is much larger than the funds available.

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colleges and it also offers careers advice to HEI in the form of e.g. industry tours and careers conferences.

Monitoring of where Master students of chemical faculties in Belgium find a job has only recently been introduced (2009). Initiated by the peer review committees that evaluated the Belgium chemical faculties and who advised to profit more from their alumni, an electronic database was created holding the addresses of the students after they have left university; these are updated on a regular base.

With respect to the numbers of students, the current situation seems worrisome. The chemical industry notices a general ‘eroding skills basis’ (Cefic, 2004). The number of students graduating in chemical-related disciplines has declined over the years, and these numbers are expected to continue to do so. However, respondents do not foresee an increase in the demands of the chemicals industry.

The High Level Group on the Competitiveness of the European Chemicals Industry is very clear on this matter: ‘member states must boost the promotion of chemical and science education, starting with primary school. (…) European universities and their chemistry and chemical engineering faculties must work with industry in defining new professional profiles’ (HLG, 2009). For that reason, Cefic et al (2010b) have urged the European Commission to develop an ‘EU skills policy involving the European Commission, national and regional authorities, schools and universities, social partners, companies and workers’. In some countries these problems are addressed by government-funded programmes that aim at motivating secondary students for the natural sciences, such as in Germany the project ‘Naturwissenschaften Entdecken’ and in the Netherlands the Platform Beta-Techniek (see Box 3.2).

Box 3.2 National initiatives reflecting quantitative and qualitative challenges in education

In Germany, the situation is quite urgent, according to both the Verband der Chemischen Industrie e.V. and representatives from HEI departments. This urgency is perceived by many, especially because of the importance of the chemical industry for Germany’s economy.. In general, the German labour supply is expected to decrease with some 6.5 mln units between 2011 and 2025. Of the current 414800 workers in chemistry, about one sixth is over 55 years old. Only 29% is between 25 en 39 years old. This figure has dropped tremendously over the last 15 years.

In Germany a distinction is made between the so-called MINT-bereich19 and other disciplines. Even though the number of MINT students is slowly increasing in Germany, still too many students leave the university without any qualification. The latter is seen as one of the cores of the problem. In the German policy paradigm this should be solved in three ways: (1) strengthening education in MINT in Germany; (2) increasing the perceived attractiveness of MINT-occupations, and (3) increasing the attractiveness of MINT curricula for girls. With respect to NMP, apart from some educational material20, there seems to be no specific focus on NMP skills in these efforts (VCI 2011).

The Dutch government provided more than one million euro’s for changing the chemistry curriculum for secondary education If it is decided that NMP should be implemented in the curriculum on different levels of the educational system, it should also be recognized that a large sum of funding is needed. The higher vocational institute interviewed would ideally want to develop knowledge together with others, such as medium vocational education institutes, universities and companies, to avoid repetition. They hope that the Expertise Centre Chemicals that the Dutch government awarded them with, is an answer to this.

19 Mathematics, Informatics, Physics, and Technology studies (Mathematik, Informatik,

Naturwissenschaften und Technik) 20 e.g. Nanobox

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On the European level, industry organisations such as SUSCHEM and CEFIC have taken the initiative to address the education and training issues. This is rather new as in the past only research-related issues were addressed by these types of organisations. According to one of the interviewees, these European initiatives also will have an impact in member states where these issues are not yet on the national or regional agenda.

3.4.4 CONCLUSIONS This sector is where new developments in NM P technologies will have major applications. All three technologies are key themes for current and future research and innovation in the sector. Also the sector’s N and M products find applications in a wide range of downstream sectors. While skills and education are an important factor in international competitiveness, the European chemical industry is facing increasingly global competition for talent. Europe’s major asset is knowledge, and therefore a strong research base is essential for building a knowledge-based competitive sector. The chemical sector has a higher than average share of higher education labour force, with a trend of up-skilling as the number of higher educated machine operators and the share of IT professionals and service workers has increased, while these functions have decreased for low educated workers. Also in the future engineering functions in R&D and production, but also in sales and supply change management are expected to increase. Overall employment in this sector in Europe is expected to decrease.

The study shows that the development and application of new NMP technologies will not radically alter the specific skills needs of the chemical sector. The uptake of new technologies is a process of incremental development and implementation and a logical step forwards in the R&D activities of chemical companies. Most impacts of the new NMP technologies for skills is expected in R&D positions; at the production sites there will be no need to make skills-related changes, not now or in the future. New high-skilled employees that enter the companies after finishing their education must have some basic knowledge of NMP. The biggest part of the education for knowledge and skills needed in the company happens on the job. This applies for jobs on all levels.

The main problem for the chemical sector is skill shortages. The sector suffers from brain drain because the percentage of students that choose a science subject is low and for chemicals very low. Many European chemical companies are active in national programmes aiming at getting children and young students interested in chemistry. This skills shortages problem is most urgent for SMEs; they have more difficulties in filling their vacancies due to competition from larger multinational firms as new graduates are more eager to start employment with larger multinationals.

One specific issue deals with the health and safety aspects of nanomaterials: for that reason toxicology is an important topic that is addressed in courses on nanotechnology. This is not only necessary knowledge for employees working in the chemical companies but also for the clients in downstream sectors that use the nanomaterials in their products. Companies have started a couple of years ago with raising awareness for nanotechnology because of the safety issues; health and safety managers within the different departments were trained on these issues. There is a big need for people who can judge the safety of nanomaterials. However, there is not enough knowledge available yet on the safety issues of nanomaterials worldwide: a lot of research has to be done. This is also being discussed at the European level.

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3.5 THE MACHINERY AND EQUIPMENT SECTOR

3.5.1 NMP-BASED INDUSTRIAL DEVELOPMENT AND INNOVATION Definition of the Machinery Sector and the Value Chain in Europe

The machinery and equipment sector is important for Europe in many ways. First the sector contributes highly to value added. The share of value added for the machinery and equipment sector in total manufacturing is larger than 16% in 2007. It provides employment directly to more than 5.5 million people, which is also 16% of total manufacturing employment21.

Secondly, as indicated in the value chain shown below, the machinery industry is a key provider of production technologies for other industries and had close links with upstream and downstream companies in the value chain. It enables other manufacturing companies to produce at lower costs, cleaner and more resource efficient and with more flexibility. Innovation or technical advancement within this sector can have considerable impact on the downstream sectors in the value chain.

The machinery and equipment sector is the most important supplier of capital goods for the manufacturing sector. However, because investment in new production facilities is highly cyclical the machinery and equipment sector is very dependent on the state of the economy. Fluctuations in the sector are higher than in the economy as a whole. Moreover, the rate at which producers replace plant and equipment or update machinery will also be influenced by competitive pressures, from inside or outside the EU. The breakdown caused by the global financial and economic crisis hit the industry in 2009 and production fell by more than one fifth, on average, for all EU member states. The sector had an early recovery and high growth momentum in 2010. However, former levels have not yet been reached. Moreover, the growing weight of the emerging countries in manufacturing has even accelerated in the course of the global crisis (Ecorys, 2011).

The machinery and equipment sector is very diverse and delivers a wide range of products. Within the machinery and equipment sector, a distinction is possible between mechanical and electrical equipment (NACE rev 1.1: 29 and 31). Boundaries between these two sectors, however, are blurring, which is shown in the term “mechatronics”, which means the integration of mechanical and electrical equipment.

The main subsectors in the mechanical equipment sector are:

− Engines, turbines, pumps, compressors and other equipment involved in the production and use of mechanical power, such as bearings or gears (NACE 29.1);

− General-purpose machinery, such as lifting gear, furnaces and ovens, cooling and ventilation systems and weighing and vending machines (NACE 29.2);

− Special-purpose machinery, such as for iron and steel manufacturing, mining, construction, food and drink manufacturing and textiles and clothing production (NACE 29.5).

The main subsectors in the electrical equipment and machinery sector are:

− Electric motors, generators and transformers (NACE 31.1);

− Apparatus and control systems for the distribution of electricity, such as switches, fuses, junction boxes and relays as well as control consoles (NACE 31.2);

21 Based on Eurostat (nace 29, 31 and 33.3)

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− Electrical equipment not specified elsewhere (NACE 31.6), which includes electrical components for vehicles, signalling equipment and electro-magnets.

An important class of machinery and equipment is not included in these two sectors, namely the manufacture of industrial process control equipment (NACE 33.30). Compared to the other sectors, however, this sector is quite small, with a share of around 0.3% in manufacturing employment and value added. Still, from a technological standpoint this sector should be included in this overview. The machinery and equipment sector plays an intricate role in the value chain. It is the start of new production lines for all manufacturing industries, including itself, enabled by advances in other technologies, among which are new materials. New materials often require new production technologies, but new materials can also enhance the specifications of machinery itself. Companies in the industry are highly specialized and especially SME companies operate in a niche market. Besides capital goods the sector also provides various services to clients, such as installation, maintenance and repair and the training of operators and sometimes even financial services. Especially the larger companies provide services, which can amount to up to 30% of turnover and the share is increasing (Ecorys, 2011).

Figure 3.5 Overview of the machinery value chain

Source: SEOR, Technopolis

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Production, value added and employment From 2000 to 2007 value added grew around 4% in the mechanical engineering sector. Growth was slower in the electrical engineering sector (2%). High growth was reported for machinery for metallurgy, mining, quarrying and construction and industrial process control equipment. Specific machinery that showed high growth levels were pumps and compressors, engines and turbines, agricultural machinery, mechanical power and machine tools (growth rates vary between 7% to 13%). The production textile machinery showed a decline (-1.5%). The high level group on enabling technologies expects a growth of market size for advanced manufacturing systems of 5% in 2015 (HLG, 2011). The mechanical sector is the largest with a share in total manufacturing value added of 11.6%, whereas the electrical is responsible for 4.7% of manufacturing value added. Besides a high value added, the sector also employs a great deal of people. Both sectors have a total employment of 7.1 million people. Productivity in the mechanical equipment sector is higher than the productivity of the electrical equipment sector. Both sectors have a higher productivity than the manufacturing average (50.4 € 1000 per person).

Table 3.13 Production, value added and employment (mechanical machines and equipment)

Mechanical machines and equipment 2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 162573 168378 165494 164273 171983 178392 192559 210931 3.9%

Share value added 10.6% 11.0% 11.1% 10.7% 10.7% 10.9% 11.3% 11.6% 1.4%

Employment (1000) 3613 5341 5213 5093 5351 5319 5360 5447 7.1%

Apparent productivity (€ 1000 per person) 44.8 46.2 46.7 47.0 49.3 49.06 52.76 56.14 3.3%

Source: Eurostat structural business statistics

Table 3.14 Production, value added and employment (electrical machines and equipment)

Electrical machines and equipment 2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 76947 72799 71042 71398 75800 74785 82900 86000 1.7%

Share value added 5.0% 4.7% 4.8% 4.6% 4.7% 4.6% 4.8% 4.7% -0.7%

Employment (1000) 1719 1716 1685 1610 1680 1683 1710 1690 -0.2%

Apparent productivity (€ 1000 per person) 44.60 42.20 41.90 44.00 47.30 44.45 48.30 50.80 2.0%

Source: Eurostat structural business statistics

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Both sectors have a smaller than average share of small enterprises. The manufacturing average is 90%. Although the share of larger companies is higher than average in the mechanical sector, the share of value added they produce is smaller than average (54%). This is however not the case for the electrical sector. Employment across the sectors follows the share of value added. Only in exceptional cases are ME products suitable for large-scale manufacturing. This depresses the need for large production sites that are fully automated and are capable of achieving noteworthy economies-of-scale.

Table 3.15 Share of the number of enterprises, value added and employment for the subsectors in 2007

Company size Enterprises Value added Employment Enterprises Value added Employment

Mechanical machines and equipment Electrical machines and equipment

1 to 19 85.1% 11.6% 16.2% 86.9% 8.6% 12.4%

20 to 49 7.7% 10.3% 11.6% 6.4% 7.4% 8.5%

49 to 250 5.7% 27.6% 28.4% 5.0% 21.5% 22.2%

250 and more 1.3% 50.3% 43.6% 1.6% 61.7% 56.5%

Source: Eurostat structural business statistics

The largest subsector in the mechanical machinery and equipment sector is the manufacturing of general purpose machinery, in terms of enterprises, employment and value added. The second largest subsector is the manufacturing of other special purpose machinery. The manufacturing of machinery for the production of power has a limited number of enterprises, but a large share in employment and value added. Within the electrical equipment sector the manufacturing of electrical equipment n.e.c is the largest in terms of the number of enterprises, followed by manufacturers of electric motors, generators and transformers. The largest sector in terms of employment and value added is the manufacturing of electricity distribution and control apparatus.

Table 3.16 Share of the number of enterprises, value added and employment for the subsectors in 2007

Mechanical machines and equipment

Manufacturing of machinery for the production and use of mechanical power

Manufacturing of other general purpose machinery

Manufacturing of Agricultural and forestry machinery

Manufacturing of machine-tools

Manufacturing of other special purpose machinery

Manufacturing of weapons and ammunition

Manufacturing of domestic appliances n.e.c.

Enterprises 8.4% 38.5% 12.8% 8.3% 28.4% 0.8% 2.8%

Value Added 22.8% 30.1% 4.9% 8.8% 24.5% 2.5% 6.1%

Employment 19.9% 29.7% 5.8% 8.7% 25.5% 2.6% 7.6%

Source: Eurostat structural business statistics

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Table 3.17 Share of the number of enterprises, value added and employment for the subsectors in 2007

Electrical machines and equipment

Manufacturing of electric motors, generators and transformers

Manufacturing of electricity distribution and control apparatus

Manufacturing of insulated wire and cable

Manufacturing of accumulators, primary cells and primary batteries

Manufacturing of lighting equipment and electric lamps

Manufactuinge of electrical equipment n.e.c.

Enterprises 28.9% 19.2% 3.5% 0.9% 12.3% 35.1%

Value Added 19.5% 36.9% 7.3% 1.8% 9.4% 23.7%

Employment 18.6% 31.8% 7.9% 1.8% 9.5% 29.5%

Source: Eurostat structural business statistics

International trade and competition (EU level)

In 2007 electro-mechanical products (products produced by both the mechanical and electrical equipment and machinery sector) made up some 21% of the total exports of goods of the EU to third countries in terms of value, with machinery and equipment accounting for just over 16% of the total, and electrical equipment and apparatus for just under 5% of the total. The EU has a surplus on trade with the rest of the world on both machinery and equipment and electrical equipment and apparatus. The surplus is particularly large in the products of the mechanical equipment sector, amounting to around 37% of the combined value of exports and imports in 2007.

In 2010 the EU was the leading worldwide exporter of machinery and equipment and provided 37% of world exports of machinery and equipment (NACE 29). This share roughly increased from 34% in 2000, despite a decline of 19% in 2008/2009 due to the crisis. The export share of Japan and the US however decreased in favour of exports from China. The share of exports from China has grown since 2000 from just over 3% to almost 10% in 2006. The US share in 2006 was 18% (25% in 2000), while the share of Japan was 13% (17% in 2000). EU producers are less important in the electrical equipment part of export markets. In 2006, they accounted for just over 18% of total exports of the products concerned. Also for the electrical equipment the share of the US and Japan declined, while the share in exports of China increased. The US share was 13%, Japan 12.5% and the share of China was 16.5% (7.5% in 2000) (Eurostat, 2010b).

The EU and Japan are leading in high tech machinery. The main competitors of the EU are the US and Japan and to a lesser extent Taiwan and Korea. Both Taiwan and Korea have a trade deficit with the EU for machinery (Ecorys 2011). The labour productivity of the machinery and equipment sector is much lower than productivity in Japan and the US. Japanese productivity is 60% higher, while US productivity is more than 90% higher. Nonetheless, Europe has performed better than the US on the global market (Ecorys, 2011). Especially the US is losing ground in international competition. This is possibly related to outsourcing of manufacturing in general, but also because of the strength of the US in ICT, which is also subject to outsourcing. Japan’s manufacturing base also suffers from outsourcing to nearby countries.

While outsourcing is relevant for many manufacturing industries, outsourcing in the machinery and equipment sector is more difficult. The reason is that machines are highly customised and produced in small batches and are produced and designed in close cooperation with customers with high qualification requirements.

The Chinese machine tool industry has become large in terms of its size. However, the focus is on medium-quality and low to medium-precision machining. However, also on the technological level Chinese companies are gaining momentum and are developing

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further new machinery. This is supported by acquisitions of companies in order to gain access to new technologies (Ecorys, 2011). For low and medium tech machinery, such as metalworking and textile machinery competition from Turkey is increasing. Especially for smaller low and mid tech companies international competition poses a threat, but opportunities remain for upscaling, or outsourcing. In the last case it is suggested that these companies become handicraft companies, focussing on customised machinery and assembly (Ecorys, 2011). Services are also a way to reduce exposure to low cost competition.

European companies still have a strong European client base and strong regional clusters. This contributes to costs savings and innovation. The concentration of European M&E is in Central Europe. One of the major threats for the European manufacturers lies in their distance to emerging markets with high growth potentials.

Technology and innovation

Key technologies that are perceived to be critical for the EU’s position in international competition such as biotechnology, nanotechnology, advanced materials, photonics, micro- and nano-electronics, are dependent on innovations within the machinery and equipment sector.

R&D expenditure in the mechanical equipment sector has grown substantially, with 8.3% yearly on average. In the electrical equipment sector the growth of R&D expenditure is limited with 3% growth yearly on average. Probably this is mainly due to the fact that the electrical equipment sector already spends a great deal on R&D. 8.4% is well above the manufacturing average of 5.1%. The mechanical equipment sector is just below this average. The same is true for the share of R&D personnel.

Table 3.18 R&D expenditure and personnel

Mechanical machines and equipment 2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

R&D expenditure (€ million) 6514 6700 6329 8999 8380 8373 8974 10608 8.3%

share R&D expenditure 4.0% 4.0% 3.8% 5.5% 4.9% 4.7% 4.7% 5.0% 4.4%

share R&D personnel 2.0% 1.3% 1.4% 1.6% 1.6% 1.7% 1.8% 1.9% 0.7%

Electrical machines and equipment 2000 2001 2002 2003 2004 2005 2006 2007

Average growth

R&D expenditure (€ million) 6033 6784 6667 7110 7256 7894 8493 7246 3.0%

share R&D expenditure 7.8% 9.3% 9.4% 10.0% 9.6% 10.6% 10.2% 8.4% 1.6%

share R&D personnel 3.4% 3.3% 3.5% 3.6% 3.5% 3.7% 4.5% 4.1% 3.1%

Source: Eurostat structural business statistics

Expenditure on R&D in the EU is similar to the expenditure on R&D in the US and Japan, while in 1999 Europe was lagging behind, especially compared to Japan. In the EU R&D scoreboard European companies even outperform Japanese and US companies in terms of R&D expenditure. The R&D figures underestimate the real expenditure on R&D. Most machinery is custom built and requires a great deal of development and research. Product development is an integrated activity often in strong collaboration with customers and suppliers. Both upstream and downstream linkages provide new

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technologies to be integrated in machinery. There is continued focus on integrating design, computer-aided production, new material and new standards of precision emphasising links with R&D and universities and research centres.

Front-runners: specialization, productivity and innovation in the EU-27 (MS level)

Germany is for both sectors the leading country in terms of specialisation and employment. As far as productivity is concerned Germany also performs high (no. 7 for the mechanical equipment sector). Italy is the second largest in terms of employment, followed by France, the United Kingdom and Poland. France is more specialised in electrical machinery, while the United Kingdom is more specialised in mechanical machinery and equipment. Sweden, Hungary, Austria and Denmark are also very active in both sectors. Austria, Ireland, Belgium and the Netherlands have high productivity rates.

Table 3.19 Country rankings of share of value added, employment and productivity in the mechanical machinery and equipment sector in 2007

Mechanical Machinery and equipment

Country Share in manufacturing

value added

Country Employment

Country Productivity (€ 1000 per

person)

1 Germany 16.1% Germany 1106881 Austria 83.3

2 Denmark 15.1% Italy 574782 Ireland 81.2

3 Austria 14.8% France 315114 Belgium 80.9

4 Italy 14.3%

United Kingdom 281158 Luxembourg 80.6

5 Sweden 14.0% Poland 220356 Netherlands 76.2

Source: Eurostat structural business statistics

Table 3.20 Country rankings of share of value added, employment and productivity in the electrical machinery and equipment sector in 2007

Electrical Machinery and equipment

Country Share in manufacturing

value added

Country Employment

Country Productivity (€ 1000 per

person)

1 Germany 6.6% Germany 523620 Ireland 72.9

2 Hungary 4.9% Italy 220094 Belgium 64.7

3 United Kingdom 4.3%

United Kingdom 177316 Austria 60.8

4 France 3.9% France 172265 Germany 60.7

5 Italy 3.8% Czech Republic 104525 Netherlands 55.8

Source: Eurostat structural business statistics

Current situation - NMP relevant issues and developments The machinery and equipment sector consists of many highly specialised companies and supplies a broad range of products and technologies. As we are mostly interested in production technologies, the focus is on two subsectors, namely machine tools and other special purpose machinery. Other subsectors provide components that enhance machinery produced in the special purpose machinery subsector. In this subsector machines for

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textile and paper are included, but it also serves as a category for other machinery. Special purpose machinery and machine tools are used in all manufacturing industries. Special attention is given to sectors discussed in this report.

Within the paper machinery sector, Europe is leading in machinery and equipment. Other countries are Canada and China. China will become more important in the coming years, while within Canada companies do not seem to have the intention to expand globally. Most innovations in the pulp and paper sector come from the machine suppliers. New machinery produced paper that is 15% lighter, with the same printing properties. Another example is multi-layering technology, where fibers are combined in different layers. This reduces the amount of fibres needed, but maintains strength and creates saving of material.

For textiles, machinery production has followed the production of textiles to low cost countries. According to a textile machinery producer, the market is very flat. Moreover, they do not supply new technologies, but ”simply” build machinery according to the clients’ demands. This is different for technical textiles, where technological progress is strong. New composites, such as CFRP are important for lightweight vehicles, but also for wind power blades. It is still difficult to automate CFRP production processes. Process technicians and experts in robotics are co-operating to find solutions to a more industrialized manufacturing process. Although Europeans are on the leading edge of technology, competition is growing; for example Brazil has become an important supplier of wind power blades to the EU (Ecorys, 2011).

In the chemical industry, companies have their own engineering departments that design the production systems themselves and also act as main contractor. This industry is highly regulated, also internally. Each company has its own regulation, which is one of the main reasons why they are themselves responsible for their production technologies. Also some large manufacturing companies of machinery have the ability to act as the contractor and deliver the complete production line. In Europe, hardly any new production plants are built. However, plants are constantly refurbished. One of the main challenges in refurbishing plants is to safely stop and restart the production (reaction) processes. Systems engineering companies usually provide services that deal with these problems. Outside Europe, opportunities for new plants are abundant, especially in Asia and the Middle East. These opportunities are exploited by European companies that have a strong track record for building plants.

Process intensification technologies are a vast range of production technologies for the chemical industry. An example of such a technology is micro process engineering. In this segment Europe is leading and already supplies products in this technology. In other regions this technology is still mostly a subject in universities. Micro reactors are small modules that operate on a continuous basis and increase yields so that less raw material is needed. Favourable properties include fast mixing, effective heat exchange and increased yields. Combining more units can lead to upscaling for larges processes in pharmaceuticals and specialty chemicals. This technology also makes it possible to make production more mobile. A complete facility can be set up in mobile plants.

In general, the strength of the European M&E sector lies in combining and integrating new advanced technologies, such as lasers, gear and drive technologies, sensors and optoelectronics, new materials with more “traditional” mechanical engineering technologies (Ecorys, 2011). Over the years the intelligence and flexibility of machinery has increased. This allows for various opportunities for production technologies that are explained in more detail below. Engineering ingenuity and creativity are important aspects of this.

An example is the combination of laser technology with turning and grinding. Both grinding and laser are forms of cutting technologies. In this case the laser removes the

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chips that remain after grinding. This ensures the use of less space and decrease in manufacturing time.

Another element in production technology is automation. The combination of ICT and high tech machinery is used for the automation of production processes. For automation of production, system engineering is an important topic. The ability to automate and control complex processes have made EU manufacturers highly demanded suppliers of complex and high tech machinery and equipment, but also for turnkey-plants. The EU is on the leading edge globally, next to Japanese firms and to a lesser extent US firms (Ecorys, 2011). South Korea has become an important competitor in plant engineering, but their competitive advantage is based mostly on favourable financing conditions, instead of technology.

Europe has a strong position in high-tech performance machinery, such as lithography systems and machinery for the semiconductor industry. High performance manufacturing is related to producing high tech systems that are driven by micro- and nanoelectronics. Production of machinery for micro- and nanoelectronics is done in low volumes under strict and controlled conditions and are tested intensively, therefore margins of errors are very small.

Europe is strong in some components, such as gear and drive technologies. The position is less outstanding in some advanced technologies supplied by upstream industries, such as optoelectronics and electronic sensors and control components. In these technologies Japan, South Korea and Taiwan have a leading position. However, the competitive position is changing and the EU and Asian countries are competing at the same level.

Europe is the leading provider of energy efficient production technologies. 42% of energy savings can be attributed to investment in new machinery and equipment (Ecorys, 2011). Energy efficiency means minimizing move to mass ratio. Less machine tools means a reduction of manufacturing time. Other aspects are the use of materials, lubricants or energy based on specific needs of the machinery, rather than continuous, or in fixed proportions. Other possibilities are the regeneration of energy. At different stages of operation, the energy that has been developed and that is unused can be regenerated.

Finally, a European systems integrator that is a leading provider of automation solutions (also for energy-efficiency), is able to achieve a reduction of energy consumption by 30%. This is done by combining isolation and by optimising production processes using process controls. Through smart sensors and machine-to-machine communication, machinery can be put on standby until new inputs are provided. For companies the reduction of energy-consumption is however a side effect of automation. The company acquires the components from Asia, but the value added is provided through production process knowledge and systems integration.

Future outlook

Innovation processes in the machine building and equipment industry are aimed at more sustainable production, intelligent manufacturing (smart factories) through full integration of ICT, high performance and productivity, and the use of new materials to conserve resources (Mattuci, 2010). In terms of production technologies there are four key themes: (1) sustainable manufacturing, (2) ICT-enabled intelligent manufacturing and (3) high-performance manufacturing and (4) new high performance materials (EFFRA, 2009). All these concepts revolve around the integration of ICT/automation and more intelligent machinery.

Sustainable manufacturing is related to resource efficiency, cleaner production techniques, but also to creating a better workplace for employees. Within the field of machinery and equipment there seems to be a great deal of consensus about the relevance

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of resources, or energy efficiency of production technology. This means the improvement of the whole production process, but also the improvement of specific machines.

ICT enabled manufacturing refers to automation of production to create so called smart factories, through robotics, control systems and sensor technology equipment connected in (WIFI) networks enabled by ICT. Smart factories are important for improving flexibility of production. Networked factories (virtual factories), supported by cloud computing, enable manufacturing companies to improve the management of the supply chain and automate the planning process of production where this is geographically spread. ICT can also be used for simulation of production processes (Digital factories) in order to improve development of new production facilities and processes. Currently design of machinery is already based on virtualisation and 3D. This allows for cost efficient design, but especially for prototyping. These techniques will increase in importance. Technologies related to these developments are machine-to-machine communications, human machine communication, “plug-and produce” connections, and the integration of sensors and control systems into machinery to create intelligent machinery. In the future the shop floor will be organised as though is has social behaviour where machines are working together and where machines can coordinate themselves. The interaction between man and machine is therefore important. This requires decentralised intelligence, so that each component can function on it own and still work together.

High performance manufacturing is related to improving the efficiency and flexibility of production. This means the production of machinery and processes that increase the speed, quality and reliability of production at smaller scales, but also to reduce the setup costs that are incurred during a change in production. Increased customisation of production creates the need to improve the flexibility of production systems. Related to high performance manufacturing are rapid technologies. These are technologies based on processes that add materials and can replace today’s cutting and forming technologies. Rapid technologies are believed to have the ability to enable manufacture of products "right first time", which would lead to a reduction of waste and decreased time to market (Arilla, 2005). High performance manufacturing means the use of intelligent components with control capabilities. Other technologies are modularisation of machinery, miniaturisation of products and production appliances and integrated compact systems design.

Nanomanufacturing is the manufacturing of nanoscaled materials, through bottom up directed assembly but also top down high precision, high resolution processing, molecular systems engineering, and hierarchical integration with larger scale systems. This is used in several technologies such as laser assembly, etching and others. Nanomanufacturing is also defined as the controllable manipulation of materials structures, components, devices, and systems at the nanoscale in one, two, and three dimensions for large-scale reproducibility of value-added components and devices. Nanomanfacturing is a concept for future manufacturing, but for now, this is for the most part in the research phase. It is not expected that nanomanufacturing is very important for the more traditional machinery and equipment, especially for large scale production facilities.

Finally, high performance materials can be used to improve machinery itself, but it also means that the introduction of new materials requires adaptation of existing, or completely new machinery.

The realization of the ‘smart‘ ‘digital’ and ‘virtual’ factory concepts, but also concepts such as adaptive, zero-defect and high precision manufacturing includes the use of various new developments in N, M and P. Process and industrial control equipment and automation techniques are the drivers behind these concepts. Nanotechnology and micro technology are important elements within the electrical equipment needed for the

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machinery. Micro-electromechanical systems such as actuators with integrated sensors and microprocessors are used all over the factory as active components. This can lead to smaller and better measuring equipment (Arilla, 2005)..

Whether this leads to more complex machinery or not depends on the size and type of production. Usually large scale facilities are very complex. In these cases, there is a strong demand for simple automation, which is easier to build. This is the trend in the future, where everything is embedded, such as self diagnosis. This is the case in the paper sector, where machines are highly customised. The trend is towards more modules that can be put together to form a customised product. For smaller lot sizes, machinery can be less complex, but due to integration these will become more complex.

A third development is adaptive manufacturing and general process improvement. This main feature of adaptive production technologies is flexibility; the ability to produce a large variety of products in a highly automated environment. Other secondary aspects are the ability to produce faster, with more accuracy and efficiency. These aspects, however, are driven autonomously, as this has always been the focal point for machine manufacturers.

Combinations of Nanotechnology, new Materials and new Production technology Specific materials and nanomanufacturing (including materials and surfaces for nanomanufacturing, materials for advanced design, surfaces and the overlap between advanced mechanics and nanomechanics) belong to the group of main technologies relevant for future product and process innovations in this industry.

It can be applied within many areas of the machinery and equipment industry. Examples are thin film manufacturing that is now under development for applications in the semi-conductor industry and the development of electrochemical joining of nickel nanowires to an AFM tip that can be can be used to fabricate high-aspect ratio probes. The latter - joining - is an active field of industrial research, but nanotechnology is not yet a focus (Shaw, 2006). A different use of nanotechnology is the development of membrane separation technologies that can replace high-energy intensive separation processes in many industrial sectors, such as the food, chemicals and paper industry. The technologies concerned include microfiltration, ultra filtration, nano-filtration, inverse osmosis and electrodialysis.

Within the paper machinery sector, for instance, recently a new nano based paper was an innovation. It will take years to develop this paper commercially, because the product itself needs to be developed further, but also because this requires new production lines. This does not have to lead to new production technologies, or new types of machinery. In this case new production processes mean an alteration to an existing production process, an incremental change, rather than a revolutionary change. A similar remark was made for a company producing textile machinery. They simply produce machines to order, based on the wishes of the industry itself.

The introduction of new materials and new construction morphologies belongs to one of the main drivers based materials for bumpers and dash boards, etc.) and the optical industry, public health care (such as new biomaterials, scaffolds, artificial bones) (Enzing & Van Kasteren, 2006). For example, because of their extremely high strength-to-weight ratio and wear resistance, nanostructured materials can be important strengthening constituents in monolithic solids and composites for machines that have to be light in weight but also very strong.

There is a large variety of new materials and their potential applications in this sector (Bhat et al., 2007). These include high-temperature materials, such as metals, ceramics and composites for advanced gas turbines, metal casting molds, materials for hot working

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processes (forging, extrusion), furnaces, and materials that are resistant to severe conditions such as high-temperature erosion, corrosion and environmental degradation. Another class of new materials include for instance polymers, with improved mechanical properties (strength, toughness, fatigue and fracture resistance), corrosion-resistant materials coatings and surface modifications and tribological (reduce friction) and wear-resistant coatings. A last example to be mentioned is the development of novel material systems that use significant levels of recycled materials.

In terms of nanotechnology and new materials new alloys that can enhance certain aspects of machinery were mentioned. New materials can enhance the weight of machinery, but also aspects such as strength and stiffness. These developments are uncertain and information concerning details is subject to confidentiality, as this might be vital for competitiveness. Nanofabrication is mostly relevant for manipulation of new materials and material behaviour, mostly for chemicals and biotechnology, but not for production processes. Nanotechnology was also seen as a hype, which has to be reduced to realistic proportions. This was similar with micro technology.

Changing business models The machinery sector is very fragmented, which means that there are many different products, produced by a wide variety of manufacturers. Some of these produce systems (Original Equipment Manufacturer), while others produce components. Systems integration is key for an OEM, especially for high tech machinery. In high tech machinery the OEM specifies the complete specifications for the components they require. This requires extensive planning and cooperation between the systems and component manufacturers.

In case a user industry demands a specific component, or system, there is a direct relation between the user industry and the machinery and equipment sector. However, in more complex projects, involving (parts of) the whole production line, an engineering firm can be involved.

New production technologies lead to an integration of the value chain, up to a point where it becomes difficult to establish who is the owner of the intellectual property rights of the technology used. Producers of machinery and components, especially in high tech systems, develop new machinery in close cooperation. According to some, there still is room for improvement in the cooperation and transfer of knowledge between systems integrators and component manufacturers.

In terms of industrial models, closer cooperation was mentioned for suppliers of paper machinery with the paper sector, but also closer cooperation with energy producers. Within the paper sector bio refineries will become more important. Bio refineries fully utilise the incoming wood material (or biomass in general), for simultaneous production of fibres for paper products, chemicals and energy. Making pulp and paper will not be profitable enough and is no longer acceptable in this form. There is a need for more value added use. Paper companies, however, focus on producing paper, not on energy as the amounts of energy produced are too small. In order to fully utilise the bio refinery capabilities, stronger cooperation with the energy sector is needed.

Closer cooperation might mean joint ventures, or other forms of cooperation in order to spread the risk of innovations over the machinery producers and the end user industry. Another way to reduce the risk is by improving testing facilities. For the paper industry this is highly relevant, as machines can be very large. According to machine suppliers, the paper industry seems to be very much risk averse. Being able to test the machine lines in real life is therefore a way to support innovation, although a pilot in itself is also very costly.

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Especially for SME companies, innovation is driven by the user-industry. This was for instance mentioned by an SME company that produces machines for specialty textiles. They do not develop the technology themselves, but simply build machines to order. Most innovations in the pulp and paper sector come from the machine suppliers. Paper companies focus on manufacturing. Machine manufacturers are constantly discussing with them about their needs. Cooperation with universities is also a main factor for innovation, although innovations there are not always directly applicable.

Future outlook – two scenarios

According to Alphamatric & Ismeri (2009) this industry has moved from craft-based production (begun in Europe – notably Germany and the UK) through mass production addressing mass markets (initiated in the US) to a much more sophisticated interaction between suppliers and consumers – just-in-time stock control, total quality and quality circles, lean and flexible production (initiated in Japan).

The future performance of the sector will largely depend on how well the industry, and its sub-sectors, are able to recover form the past recession. However, with respect to the application of new NMP technologies new opportunities in product and process innovation occur. One of the preconditions to take advantages of these potentials is a skilled work force.

Future scenarios for this sector, to be used in this study, are composed from the combined effect of two types of trends: economic developments and technological advances and their application (in our study we focus on NMP technologies) (Alphamatric & Ismeri, 2009).

In scenario 1 – the low growth and low tech scenario – developments in this industry stick to rather incremental innovations, where new technologies mainly contribute to more efficient and competitive production processes.

In scenario 2 - the high growth and high tech scenario – the development and implementation of new manufacturing concepts have been realised. In addition to increased efficiency and lower costs, the new technologies make it possible to better integrate design and manufacture and, therefore, to meet faster and more advanced customer needs.

We did not include governmental controlled aspects in the scenarios. According to Alphamatric & Ismeri (2009) the EU authority attitude is inactive with respect to making regulation more attractive for this industry (removing restrictions on internal trade, liberalising markets for energy supply, environmental regulations, etc.). Also organizational changes within and between firms (which was included by Alphamatric & Ismeri as third trend) has not been included in our scenarios.

3.5.2 NMP SKILLS AND JOBS The capital intensity is lower than average in manufacturing. One of the reasons is that large scale production and economies of scale are less important, as most machinery and equipment is highly customised. The sector is highly dependent on qualified labour, which is reflected by the fact that wages are higher than average in the machinery and equipment sector. For the machinery sector itself, engineering and design, machine building and maintenance are key functions. However, innovations in production technologies also have consequences for production workers, who have to work with the machines. We will first discuss some issues for the functions in the sector itself.

The main issue within the machinery and equipment sector are expected shortages of qualified engineers. Currently the skills shortages situation is not very problematic.

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According to some companies, it is always “challenging” to find the right people, especially for positions that require a high level of education. It is challenging, but not problematic. Currently the crisis might also play a role in the possibility to attract sufficiently qualified people.

Employment in the machinery and equipment sector is expected to increase. At the same time companies see fewer students in technical subjects and some expect this to become worse. A company in the UK fears that due to the increase in college fees fewer people will be able to study.

According to some, the image of the machinery and equipment sector is problematic. In order to improve this situation, according to some, a change towards more sustainability is needed. Another way in which this issue is tackled is by creating products that are very much appealing in order to interest young people for technical jobs. One company develops prototype machines that appeals to the imagination of young people, but also because it enhances their knowledge, for instance using swarm intelligence.

Another problem that was mentioned is that students in both in higher and vocational education choose non-technical employment after graduation. Especially in vocational education, where people are generally very young when choosing the subject they enter, it was said that they often have no idea what they choose when they start their education.

For high tech systems the image is not very problematic. Partly because high tech does not have a “dirty” image, as production takes place within clean-rooms. For many companies in this segment more than 60% of the workforce is academically trained. Moreover, in high tech machinery equipment manufacturing companies, where machines are produced in low volumes, assembly of the machines requires careful monitoring of speed and friction and generally takes place in clean-rooms by academically trained workers. Although academically trained, the actual assembly of the machinery seems more like traditional hand craftsmanship.

Skills gaps do not seem to be very important at present. Technologies are changing constantly and most machinery is tailor made for specific customers. Companies therefore find it difficult to predict their own skill and training needs. For some companies it is only natural that recent graduates do not have sufficient technical knowledge. When students graduate they are not able to know everything, especially regarding the specific machinery the company produces.

Companies continuously rely on training in order to keep up with new technological development. Machinery companies often provide training themselves, especially for clients in order to teach them how to work with their machines, but also for their own employees. Training for machinery manufacturers is also highly relevant for sales people, as these have to become knowledgeable of all the ins and outs of the new technologies. Ongoing innovations in production technology will also require training of the operators who produce and work with the machines.

Some companies require new graduates to have a few basic requirements. For a machinery producer, (mechanical) engineering knowledge is highly demanded, as well as IT skills, such as programming capacities. Next to technical skills, some personal skills were mentioned: presentation skills, team skills, negotiating skills and a good level of English. English is improving for most graduates as a result of Erasmus programs.

Machine builders are mostly workers with a vocational training background. This group is continuously faced with changes in technologies, as machines are often highly customised. However, we did not come across major changes in the demand for skills. Language skills were mentioned. English is required for blue collar workers, as international clients might come to the factory and should be able to ask questions. For

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some companies, more detailed knowledge of different aspects of mechanical engineering is favourable.

Skills needs are different for systems manufacturers and component manufacturers. Systems engineering and integration knowledge is required in the first group. This requires a great deal of planning, as detailed specifications are delivered to subcontractors. Supply chain management and logistics are essential.

In the design and development of new machinery, different aspects of the design are captured in different functions. The design of new machinery and equipment begins with a general understanding of processes. Besides process knowledge, mechatronics (a combination of electrical and mechanical engineering) and programming skills are important. In designing new production processes a holistic view is required. Together, hardware and software should be optimized for all components. Software development and mechatronic design are two separate functions. In some cases software development can be outsourced depending on the resources within the company. For machinery to function properly, both mechatronic engineers and IT professionals have to work together. It is difficult to combine these types of knowledge within one function, as engineers usually work differently. Their work is to solve sophisticated problems, while programming requires more general approaches such as writing procedures for machinery.

For designing and developing new machines, the increase in integration of components will add to the need to be able to work together in teams to integrate knowledge, in order to design simplified user interfaces that can seamlessly perform complex tasks more or less independently. Having a holistic view is difficult for some engineers. For some, team working skills are also problematic. These skills will become more important. Engineers will need special and deep know how of electrical and mechanical engineering, but at the same time be able to work interdisciplinarily. Interdisciplinarity is therefore also a more demanded skill. For some companies, relations with subcontractors are close and as they already know each other, cooperation will be easier.

For job functions in maintenance, programming and IT skills will become more important, as servicing will rely more on distant servicing. Maintenance workers need to be continuously trained in order to understand the technologies behind the user interface. Man-machine interaction will change. An example is the service of industrial robots. Today the only way to service these safely is to shut down the activity, which means that production efficiency is decreased. It will become more important to service machinery from a distance.

Box 3.3 Consequences for users of new production technologies

Machinery will become more complex with regards to the technology used, although in some cases modularisation of machinery will lead to lower complexity. The operation of the machinery, however, will be simplified through the user interface. This could mean that skill requirements will decrease, although opinions are mixed. According to some, the skill and education requirements for production workers will increase.

The labour that remains on the shopfloor will need to become more knowledgeable. Machines will give more information to the operator. A single operator should be able to handle more processes. Therefore there is a need for better trained people on the floor. Programming or other IT skills used for the interface are not very important. These will become more simplified and should be easy to handle.

An important skill for operators will be the optimalisation of processes, especially for adaptive production, where large varieties are produced in small quantities. Moreover, operators need to become more knowledgeable about machines that have components with integrated functionality. This is different from current knowledge that is more or less purely mechanical. This will be the main task of shopfloor teams. Shopfloor teams are usually not very diverse in expertise and this is

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not likely to increase.

The shopfloor will change as a result of the integration of technologies and components. If machines become more flexible and more intelligent this might lead to substitution of labour. The most flexible factor within production is still the human factor. This person can make individual decisions. As technologies become better, for instance within robotics and bionics, people might increasingly be replaced. The decision to replace people within the shopfloor is in most cases based on cost efficiency. However, other aspects are also important. For instance, if more accuracy is required in the production process, the more obvious choice is an automated process.

Companies are rather satisfied about the cooperation with both VET institutions and universities, although there is room for improvement. Many companies have relations with universities and attract students for their master thesis. Some companies sponsor chairs within departments in order to maintain strong ties with the department.

Cooperation for research projects is sometimes difficult for small companies, but this is mainly due to a lack of resources. Publicly funded research programs that subsidise 50% of the costs, are often available. But a contribution of 50% from the company still amounts to a considerable investment for small companies.

In countries where apprentice systems are available in vocational education, these are often highly appreciated. In the apprenticeships students learn and work at the same time. The companies provide additional training, such as English courses and IT skills. The European Qualifications Framework is, however, unknown to HR managers who were asked this question.

According to some there is room for improvement. Some VET institutions buy their own machines for students to play around with (assemble/disassemble). However, they often lack funds to buy various types of machines, which means that students only acquire experience with a particular type of machine. However, many different machines are available in different companies for people to gain experience. Especially VET institutions should profit more from these opportunities.

Another point mentioned was that there are too many courses and that curricula are too rigid. An institution develops a curriculum and implements it some time later and ideally hopes to use it for some years. By the time the curriculum begins it is already outdated. One possibility mentioned was to work more with mirrors in cooperation with companies.

3.5.3 NMP EDUCATION AND TRAINING Education in the field of production technologies face declining interest from students. In some universities specific departments for production technologies have disappeared. Germany is still very strong in this field, but for instance in Belgium many have disappeared and this is beginning to be the case in the Netherlands. In Belgium one university remains that is highly specialised in production technologies and they report that Dutch universities are seeking their advice on how to survive.

One university that still has specialised departments has introduced new educational programs in order to attract more students. These new programs are only slightly related to production technologies in general, but focus on for instance aerospace technology. In the 1980’s mechatronics was a new subject and had a similar success, but nowadays very few students start in this subject. This is despite the industrial reality outside the universities.

Education within the fields of machinery and equipment has already seen a change in the form of more interdisciplinary studies, such as mechatronics, instead of purely electrical or mechanical engineering. Also new subjects are introduced such as micro-engineering and nano-fabrication and bio based technologies. For smaller universities it is not always

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possible to adapt quickly to changes in technologies and to extend courses to subjects that are different from their core knowledge, which is the case for nanotechnology. Resources are a bottleneck.

In some VET institutions subjects such as machine-building have been replaced completely by mechatronics. Within mechatronic engineering programs, programming and IT skills are also addressed. Other main subjects are automation, robotics and continuous development.

In the countries where the paper sector is of great importance in terms of value added, more sector specific educational programs are available. There are courses that are specifically related to paper and machinery. This is seen as a competitive advantage in this industry. For more general purpose machinery, having sector specific programs or courses is less important, as their products can be used by different industries, with little sector specific knowledge. For the paper and machinery sector there is a lack of education in the field of industrial biochemistry. The supply side is lacking knowledge. Specifically more attention within education should be paid to bio-refineries.

Educational, institutions do not expect large changes in the skill requirements for engineers. Companies specialize more and this also gives these companies the responsibility to educate their workforce. Education should provide students with a basis and a specialization. Further specialization should be the responsibility of the companies. One institution stopped programs for professional training courses, as there was no demand. In the 80’s there was a huge demand, basically because of many new technologies. Technologies nowadays do not seem to be very radical.

In general education programs, both companies and education institutions think that more specific courses on energy efficiency should be started. For most parts this is also part of general engineering knowledge. Environmental engineering is part of many courses, but specific programs are not always available. Also more emphasis on maintenance is seen as necessary, also because students find jobs in maintenance.

However, there is a close cooperation with companies. In one university all students write a thesis within a company, or based on a subject a company delivers. In summer there are possibilities for internships. For students, close cooperation means that it is easier to find a job as they gain valuable experience within companies. In some cases it is possible that students are offered a job. This cooperation is highly appreciated. Also many professors have roots in the industry. In most cases, cooperation is not only based on personal contacts, but is more structural.

Cooperation for research projects is successful from the standpoint of universities. Some departments have agreements with companies for longer term research and development. experiences can be integrated in education. Some universities have set up offices that offer administrative support and equity for start-up companies and for research programs in cooperation with companies. However, most research requests from companies are not taken up. The reason is often that expertise within universities is lacking. For instance, a company often comes to a university when they are no longer able to find an answer for a specific problem. If the business of the company is highly specialised, universities mostly have less expertise than the company and are unable to help. For instance, a university cannot mach the expertise of a specialised company that has 100 employees and 30 years of experience in a specific subject. In other words, company expectations are often too high regarding universities.

3.5.4 CONCLUSIONS The machinery and equipment sector is important for Europe in many ways. The sector provides more than 16% of manufacturing value added and employment. It is the main

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provider of capital goods and with close upstream and downstream links in the value chain, it functions as a provider of enabling technologies. The range of products is diverse, from engines and pumps to drives and complete machines and production process equipment. European companies are net exporters of machinery. European companies are, compared to Japan and the US, highly competitive, despite lower productivity. Besides Japan, Korea and Taiwan are important Asian competitors, but also the capacity of China to produce high end machinery is rapidly increasing. In the area of high-tech machinery and systems, the Japanese and European companies are the most important players. In sustainable production technologies, paper and specialty textiles machinery, Europe is the global leader. In more traditional machinery, such as sheet metalworking machinery, European companies provide technologically advanced and highly customized machinery.

New materials require new production technologies, but at the same time enhance the specifications of new machinery. The machinery sector combines mechanical engineering with advanced technologies. New production technologies are mainly ICT driven and are based on automation and intelligent machinery, leading to more flexible production, smart, virtual and digital factories and high performance manufacturing. Production processes are driven by nano-electronics important for process and control equipment (sensors).

The M&E sector is less capital intensive than other manufacturing sectors, as most machinery is built to order in low quantities. The M&E sector is therefore very much dependent on (highly) qualified labour. Skill shortages are relevant. For companies it is always challenging to find good people. Larger companies seek graduates with good general knowledge of mechanical engineering and have the ability to solve existing skill gaps through training, but this is difficult for SMEs. SME companies are highly specialized and often lack resources for training. Moreover SME companies are very dependent on systems integrators and find it difficult to predict their own skill and training needs. Skill needs for engineers that are becoming more important are inter-disciplinary skills, ICT skills, teamworking skills and knowledge of environment and energy and systems integration. For production workers firm knowledge of machinery behind the user interface is needed as well as continuous training.

The companies interviewed work in close cooperation with universities and VET institutions, both for research, and to attract new graduates. Students often write their master thesis within these companies and also the VET apprentice system is highly appreciated. Regarding cooperation for research projects, it was said that companies often have too high expectations and universities have to decline the majority of requests they receive, mainly because of a lack of expertise. Graduates from mechanical engineering subjects are decreasing and departments find it difficult to attract students. For this reason universities establish new programs, with specific focus on mechanical engineering to appealing product markets. New production technologies often do not alter programs, but are incorporated within the current curricula. For VET, it was said that curricula are quickly outdated and that more flexibility is needed, for instance by incorporating more minors in education programs. Smaller universities often lack resources to adapt quickly. More attention is needed for energy and environmental engineering and maintenance.

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3.6 THE PAPER SECTOR

3.6.1 NMP-BASED INDUSTRIAL DEVELOPMENT AND INNOVATION IN EUROPE

Definition of the sector and the value chain in Europe

The paper sector consists of two subsectors: the manufacture of pulp, paper and paperboard and the manufacture of products of paper and paperboard. This includes the manufacturing of various products made of paper, such as sanitary goods and of toilet requisites, wallpaper and other articles of paper and paperboard.

Machine design, development and manufacture, together with chemicals for pulping, surfacing and printing, as well as fibre development (including genetic work), are the main related sectors, besides the forest industry. Chemicals provide around 12% of production costs.

Figure 3.6 Overview of the Paper value chain

Source: SEOR, Technopolis

Since forest-based industries use large quantities of wood, its availability at a competitive price is a determining factor for their performance. Wood is the highest cost for many of these industries. In paper making more than 30 % of total costs are for wood. Because of the dependency on wood, the pulp and paper industry is mostly concentrated in rural areas (CEPI, 2009a).

Production, value added and employment in Europe

The paper sector consists of 19,230 enterprises in 2007, producing €168 billion. Value added was €42 billion in 2007, which is 2.3% of total manufacturing value added. The sector employs 0.7 million people. Both value added and employment decreased in the period 2000 to 2007. As value added decreased more than employment, productivity

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declined as well. Average annual value added growth was -1.7% from 2000 to 2007. From 2000 until 2004 the sector experienced negative growth. In 2006 production of the sector grew 6.8% and in 2007 5.6%. According to CEPI, Europe’s paper industry shrank by around 15% between 2008 and 2009 (CEPI, 2009b).

Table 3.21 Production, value added and employment (EU level)

2000 2001 2002 2003 2004 2005 2006 2007

Average yearly

growth

Value added (€ million) 47532 47276.6 46292.6 42636.2 42600 40000 41100 42000 -1.7%

Share value added 3.1% 3.1% 3.1% 2.8% 2.7% 2.5% 2.4% 2.3% -4.0%

Employment (1000) 758 741 738 730 750 730 715 696 -1.2%

Apparent productivity (€ 1000 per person) 62.5 63.6 62.5 58.3 56 55 57 60 -0.5%

Source: Eurostat structural business statistics

Table 3.22 Share of the number of enterprises, value added and employment for different size classes in 2007

Company size Number of enterprises Value added Employment

1 to 19 73.8% 5.7% 10.5%

20 to 49 10.8% 6.1% 9.1%

49 to 250 8.4% 19.3% 24.3%

250 and more 2.9% 57.6% 44.6%

Source: Eurostat structural business statistics

Compared to other industries, the paper industry is characterised by a high share of large companies. The share of companies with 250 and more employees is around 3%. This is substantially higher than the manufacturing sector which has a share of 0.8%. In the paper, pulp and paperboard subsector the share of large companies is especially high. 11% of the companies have more than 50 employees. The larger companies are also responsible for a large share of value added and employment.

The paper sector is very capital-intensive. A new state-of-the-art pulp mill costs around € 1 billion, or even more if it is part of a paper mill. Paper mills for "commodity grades" of paper, i.e. those intended for further cutting into sheets or rolls or subsequent conversion into products, are most often also large or very large and also quite capital-intensive, especially if there are several paper machines on one site.

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Table 3.23 Share of the number of enterprises, value added and employment for the subsectors in 2007

Manufacture of pulp, paper and

paperboard Manufacture of articles of paper and

paperboard

Enterprises 11.6% 85.2%

Value Added 41.8% 56.7%

Employment 29.9% 66.8%

Source: Eurostat structural business statistics

42% of the production value is produced by companies that make paper, pulp or paperboard. This subsector comprises 11.6% of the number of enterprises in the sector and around 30% of employment. 57% of the production value is produced by companies making paper products. This subsector contains the bulk of enterprises and employs 66.8% of the workforce in the sector. This shows that productivity is highest in the pulp, paper and paperboard subsector, which is also most capital intensive.

International trade and competition

The EU is a net exporter of paper and paper product, with a trade surplus of €11.5 billion in 2008. In 2008, the EU accounted for 25% of the world pulp production of 192 million tonnes. The EU accounts for 28% of world pulp consumption and is therefore a net importer of pulp, mostly from the Americas (CEPI 2010). 80% of the pulp imported into the EU comes from Brazil, the US, Canada and Chile.22 Pulp producers in Latin America play an ever-increasing role, due to lower material and labour costs. For this reason, pulp and paper companies, including European ones, invest in these countries. Around 72% of pulp export is directed to Asia.

The EU was the world's largest producer of paper in 2008, providing 28% of the global total of 390 million tonnes (CEPI, 2010). Europe exports 14 million tonnes and imports around 5 million tonnes of paper. The main destinations for EU paper exports and paper articles are Russia, the US and Switzerland, which account for 12%, 10% and 9.5% of total EU27 exports respectively (Eurostat, 2010b). Production in Asia is growing rapidly. Also, imports from Asia have increased. Still Europe is a net exporter of paper to Asia. 4 million tonnes have been exported to Asia, while 0.6 million tonnes have been imported. Europe imports paper mainly from North America (38%).

Japan has highest labour productivity in the paper sector, while European productivity is second best. Labour productivity has increased by more than 30% within the European pulp and paper industry (CEPI, 2010).

All pulp and paper tariffs on European markets were abolished in 2004. To serve the EU's growing need for paper sector exports, it is vital to have sound access to markets. However, some countries outside the EU have persistently high tariffs and/or non-tariff barriers, which limit the access of EU pulp and paper to some foreign markets.

22 Currently, China and South East Asia are important competitors. China is buying a lot of pulp

and producing fine paper for export to Europe. Europe is importing more pulp from Latin America. This is short fibre pulp. In Scandinavian countries, long fibre pulp is being produced. Formerly, in instances when demand for paper in Europe was low, Europe could export to China and South East Asia. This is not possible anymore.

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Major trade concerns in the EU paper industry include increasing supply costs for raw materials from certain sources, distortion of the competition resulting from subsidies to companies in countries outside the EU and access to new markets because of tariff barriers. International competition is increasing as the number of pulp, paper and panel producers, sawmillers and printers competing on the global market is steadily increasing.

Competition and globalization put pressure on prices. Demand for printing and packaging papers has been increasing for a long time, which is closely related to per-capita income growth. In many markets paper and printing industries face increasing competition from inter alia electronic media, leading to some overcapacity. Electronic and printed products can also complement each other.

Globally, buyers are usually larger firms or institutions, so they have stronger buying power to negotiate on price. Additionally, there is relatively little differentiation between paper products within a certain sector, meaning that market players have to compete heavily on price. With China and other low-cost suppliers active at the global level, paper industry in the EU is faced with great pressure on price.

Moreover, the average real price of paper is expected to decline in the coming years while the price for raw materials and labour continues to grow. As there is a growing supply of low-cost and high-quality commodity-grade paper from countries like China, the paper industry in the EU has to improve on its cost efficiency to increase its competitiveness. This could be accomplished by either implementing new production technologies or finding cheaper substitutes for raw materials.

Raw materials and sustainability Increased global production means that raw material prices have increased. On top of that, the increasing awareness of sustainability not only draws public attention on forest preservation but also induces the competition against bio-fuel industry for the raw materials. Because of these factors, the paper industry needs to reduce its reliance on wood raw materials. New materials may provide an alternative.

With the rising pressure on primary raw materials, the use of recovered raw materials continuously increases. Today, about half of the EU paper production is based on recovered paper, which means a growth of 25% since 1998. However, around 65% of paper is recycled (CEPI, 2009b). Paper recovery and recycling, linked to increased processing efficiency, have allowed substantial production increase without using more new wood. A partnership of paper manufacturing, converting and recycling industries, publishers, printers and makers of inks and glues aims to further increase the paper recycling rate and improve the quality and recyclability of recovered paper.

The EU's climate change policies have an important impact on pulp, paper and some wood panel production as a consequence of their energy-intensive processes. Fuel and electricity represent between 13% and 18% of the manufacturing cost in EU pulp and paper. Paper mills are big energy consumers, but chemical pulp mills can be net energy producers. About 50% of the primary energy used is produced by these industries from wood biomass. Mechanical pulp and paper production are largely dependent on external electricity and gas. The recent increases in their prices had a significant impact on these industries. Reasons for higher price levels include higher primary fuel costs, the need to contribute to reductions in greenhouse gas emissions and the development of renewable energy sources.

Technology and innovation in Europe As it is increasingly difficult to compete in price, companies have to find ways for differentiation. The paper industry in Europe is relatively stronger in terms of R&D compared to other countries in the world.

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R&D expenditure was well below the manufacturing average in 2000, but has increased significantly to 1.5% in 2007, compared to 1.4% in the whole manufacturing sector. The number of R&D personnel is limited, as 0.9% worked in R&D in 2007, compared to 2.1% in the whole manufacturing sector. The share of R&D workers however has grown substantially with 16.8% per year on average.

Table 3.24 R&D expenditure and personnel

2000 2001 2002 2003 2004 2005 2006 2007

Average annual growth

Number of R&D personnel 201 228 335 358 357 375 372 614 19.5%

Share R&D expenditure in VA 0.4% 0.5% 0.7% 0.8% 0.8% 0.9% 0.9% 1.5% 21.4%

R&D expenditure (€ million) 2454 2803 3590 2967 3935 4125 4196 6058 15.5%

Share R&D personnel 0.3% 0.4% 0.5% 0.4% 0.5% 0.6% 0.6% 0.9% 16.8%

Source: Eurostat structural business statistics

Suppliers have been of great importance in stimulating innovation. The pulp, paper and wood industries have gained from technical developments in the chemical industry. Moreover, the machinery and equipment sector provides more efficient production equipment.

Finland and Sweden are most specialised in the paper industry, as they have the highest share of paper and pulp value added in relation to that of the total manufacturing sector. Both countries also have a high productivity. Employment in the sector is high in Germany, Italy and France.

Table 3.25 Country rankings of share of value added, employment and productivity in 2007

Country Share in manufacturing value added

Country Employment

Country Productivity (€ 1000 per person)

1 Finland 6.9% Germany 144096 Austria 93.5

2 Sweden 6.4% Italy 78518 Sweden 90.8

3 Portugal 4.3% France 75768 Finland 83.8

4 Austria 3.4% United Kingdom 66550 Belgium 81.6

5 Slovakia 3.2% Spain 54340 Netherlands 81.3

Source: Eurostat structural business statistics

The paper industry is a major contributor to Europe’s economy and employs a large number of people, despite a reduction of employment in recent years. Moreover, the paper sector and especially the producers of paper products affect people on a daily basis.

Companies in the paper industry face severe competition. As a result of competition and increased prices of raw materials, profitability tends to go down in Europe and there is a need to differentiate into more profitable products. The challenge is to find niches and to

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develop new products with high return for these niche markets. Another major challenge is to increase sustainability within the sector. This is related to climate change, forest conservation and the supply of raw materials.

Current situation - NMP relevant issues and developments

The European paper and paper products sector is competitive compared to other countries, although opinions regarding the competitive position of Europe in the paper and paper products sector differ. According to some interviewees, Europe’s position within the paper industry is a runner up in terms of profitability, while others indicate that Europe is leading. Production increasingly takes place within Eastern Europe or Asia. In China major production facilities are created. Other countries such as Brazil and other South American countries are growing and becoming more competitive in this sector. This further increases competitive pressure on European companies. Companies in these countries are buying European technologies. The industry there uses machinery that is based on European technology. Europe is the leading equipment supplier.

There seems to be consensus about Europe being a technology leader in the paper sector, especially technologies related to sustainability. The range of technologies, however, is broad and some countries are better in certain technologies than others. Outside Europe, currently the leading countries are Japan and Canada, who are according to some also very active in NMP. Within Europe, the Nordic countries (mainly Finland and Sweden), Germany and Austria are the technology leaders.23 These are also the countries that are most active with NMP in this sector. France does noteworthy research in the area.

In some other countries, NMP is apparently not very important in the paper industry. In the Netherlands, for instance, only some 5 or 6 out of 100 companies in the paper industry have some people in R&D working on new things. This is mainly in bigger firms that form part of global companies that have R&D centres. The cost of investment in nanotechnology appears to be a bottleneck.

Concerning the ‘N’, Sweden and Finland are leading. Nanotechnology in the paper sector is mostly related to new materials. In Sweden and Finland the largest pilot lines are available. Regarding the ‘M’ it is more even between countries, though Germany is especially in the front in material technology in general. Regarding the ‘P’, the Nordic countries plus Austria are leading in productivity. For the Nordic countries this is due to historical and geographical factors that required these countries to be more productive due to relatively higher transport costs.

Bio-based solutions increase in importance and become the main driver of change to tackle current issues of environmental degradation, deforestation and sustainability. Bio-energy seems to be the most promising part in this sector. To this end, NMP plays its role. Research in NMP is necessary for attaining promising new materials based on wood. NMP has been part of the development in the paper industry. Some new technologies will be used in the near future.

Nevertheless, the achievement in this NMP field has not been revolutionary to have substantial economic impact. One important reason for this is the lack of resources channelled towards R&D in this sector. They are low compared with sales, but also low when compared with other branches. Compared to the size of the sector, they are very low. The problem is that too many decision makers tend to see the industry as a mature industry, producing everyday products such as paper. The potential of high-tech forest materials is still overlooked. According to one interviewee, the investment in NMP is

23 One interviewee stated that the UK and Spain are using the latest technology in operation.

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considered to be high risk and thus the industry players are very cautious in investing in NMP.

In general, NMP can contribute to improving the competitiveness of the European pulp and paper industry that is operating in a mature market with rising costs for energy and raw materials.

In several parts of the paper production process – pulping, process chemistry, paper coating, and recycling – the paper industry can benefit from nanotechnology and new materials. They include four types of applications: nano-assembly on pulp fibres, nanocoatings applied on pre-fab paper, smart/intelligent paper with embedded sensors and polymeric micro devices and nano- and microcapsules for drug sustained release and targeted delivery24.

The nano-assembly technique is one of the technologies for making multilayered paper products that increase the strength and the surface characteristics of paper and reduce energy and fibre consumption. This assembly technique aims at systematically modifying the surface charge and roughness (to decrease pulp beating for energy saving) of fibres and is used for the production of multilayered films with nanometer precision through alternate adsorption of oppositely charged components. Through this technique the nano-coating is directly applied onto the wood microfibers. This technique is especially suitable for the production of electrically conductive paper. The nanocoated wood microfibers and paper may be applied to make electronic devices, such as capacitors, inductors, and transistors fabricated on cost-effective lignocellulose pulp. The use of a conductive nanocoating on wood fibres is part of the trend of smart paper technology, applied as embedded sensors, communication devices, electromagnetic shields, and paper-based displays25. This trend of intelligent/smart paper deals with future paper and board products that interact with the user by delivering additional and timely information: the paper can be temperature sensitive (e.g. as packaging for baby food), warn when the “use before date” is over by changing colour, hold in-depth product information on food packaging such as dietary compatibility or culinary advice, helps to follow health records and reminds of the moment for taking medicines. There are a variety of markets for ‘on paper printed electronics’ using nanocoatings.

Moreover, nanocoatings also have other types of applications: make pulp more homogeneous and repair broken fibres for better recycling. A final example of the application of nanotechnology is the development of biomass-based materials that is an alternative for more commonly used materials. An example is microcellulose that is composed of nano-sized cellulose fibrils and is usually made from wood (pulp fibres). The properties of microcellulose (mechanical, film-forming, viscosity, etc.) makes it useable in many types of applications such as barriers in packaging, reinforcing plastics, as an additive in paper coatings to improve printing properties, in hygiene/absorbent products, as a substitute to a low-calory carbohydrate additive, and many other applications.

The application of nano-coatings on pre-formed paper, using nanoparticles such as clay and ceramic nano-tubules, can improve the quality, appearance and performance (such as enhanced wet and dry strength) of paper. This allows for better paper characteristics such as printing (improved printability, ink fixing and densities, as well as better control of colour bleed) and permeability (paper filters by nano-organized polymer coating).

24 http://www.nanopulpandpaper.com/ 25 http://www.nanowerk.com/spotlight/spotid=925.php

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New technological developments in the pulp and paper production technologies that can help to make the European paper industry more competitive include the development of intelligent and efficient manufacturing processes, aimed at reduced energy and raw materials consumption. The last decades, the significant increase in energy prices has been the main challenge for the competitiveness of the European pulp and paper industry, as for all energy intensive industries. The development of energy recovery, advanced process control technology in combination with strategic energy management tools might contribute to the integration of energy consumption, conversion and recovery. Such integrated approaches even might make the pulp and paper industry a net producer of bio-energy, while having less environmental impact. In addition the development of more advanced paper recycling processes might make the use of recycled fibre for high value-added paper grades more attractive (FB-ETP, 2005). Examples of such new technologies include innovative optical sorting technologies that enable improved material separation and therefore higher quality recycling on different paper grades (and also of other materials). Another example is black liquor gasification for the production of a combustible mixture of gases from pulp-making by-products, as well as to separate out the inorganic pulping chemicals for the pulping process. It can deliver up to 30% power efficiency in comparison to conventional boilers. Coupled with bio CCS (carbon capture and storage) the process becomes carbon-free (ibid).

The pulp and paper sector is characterised by high volumes and harsh process conditions (e.g. temperature, pH), which are not beneficial for enzymatic applications. A range of enzymes is available, but so far their use is limited, primarily because they are still inadequate in terms of cost and performance. However, continuous technological improvements and escalating environmental and performance concerns are rapidly overcoming these barriers, and within the next decade the pulp and paper sector may well find itself among the leading users of process-integrated biocatalysts (Reiss et al., 2007). Chemistry and biology, using nanoscience and nanotechnology, have the potential to develop new and improved enzymes to be used in several stages of the paper production process. Pulping, bleaching and pitch removal are the main processes in paper making where industrial enzymes can be used. Emerging new enzymatic applications include deinking, boosting of mechanical pulping, fibre modification and slime control in paper machines (ibid).

Future Outlook and Vision The future is promising in terms of new materials production. NMP will play a role in this. The future trend within the paper and pulp industry is to go for bio-based materials, solutions and also products. An example is the use of bio-energy. A huge amount of energy is required for chemical pulping. Finland is the leading country in the field of using bio-energy. Bio-based products are becoming important in 10-30 years time.

NMP is seen as a driver to increase the variety of products produced from wood and to provide a better and more efficient usage of raw materials, but also to increase the sustainability of production. The ideal vision is for wood to replace the use of fossil fuel as cheap energy source. New usage of wood and possible replacement of fossil fuel with these wood-based materials will ensure future competitiveness of the paper industry.

New materials (M) will play the largest role. In terms of the nanotechnology, nanofiber research can be important. For new production processes, it will involve the production processes to produce wood-based textile products. European companies within the paper industry are currently searching for a larger variety of use of wood-based materials, but have not been very successful so far.

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New materials include:

− Wood: for production of wood-based textile products, for construction and gluing. Wood comprises about 40% of input

− Composites (mixture of wood and other materials) − Bio-chemical products − Bio-energy: replacement of crude oil based materials as these can be made from

sugar and ethanol production − Chemicals (which are different for hard and soft wood) − Fiber-based packaging − Use of bio-based materials for constructions (Steel and concrete will loose market

shares).

The supply-chain is a major issue for forest-based materials, since collection of raw material is done in Nordic countries and logs need to be transported to central Europe for production. A lot of production is done in central Europe. In regards to NMP, when the product portfolio changes, the supply-chain may change due to the possible involvement of small and medium enterprises (SMEs) in developing new products. NMP will also have impact on the supply-chain for the process to be more environmentally sustainable. Also new technologies will change the sector, because of new entrants. This is the case in the bio-chemical sector.

The bio-based economy will become more important in the next 20 years. According to one interviewee, the impact of NMP will be most significant in the 10-15 years time frame. The reason is that most developments will take place in more than 10 years time is due to the fact that research takes a few years and it takes around 10 years to prepare all the necessary equipment for production. Thus, it easily takes 15-20 years for change to happen.

Moreover, one of the interviewees mentioned that NMP needs to have a revolutionary impact. Revolutionary change is needed for the industry as the market is becoming more competitive. New players will also enter the industry because of the development of NMP. Europe will be able to compete in the medium and long term by developing new materials. It must be noted, however, that some interviewees do not expect revolutionary changes as a result of the use of NMP, but rather piecemeal and less decisive changes.

A major change would be to move to dry formed paper, since most energy is used for evaporation of water. (Currently, 99% of pulp consists of water and 1% of fibres.)

Apart from that, NMP will play a key part in the future competitiveness of Europe within the industry. Nonetheless, countries such as China, Brazil and other South-American countries have been growing tremendously in this sector and also the education systems in these countries have improved a great deal. China has been growing and there is a large pool of engineers which allows them to choose the brightest to work in the industry. China however faces barriers with access to raw materials.

Europe will need to be at the forefront in research and technology in this sector in order for European firms to be competitive. This will require cooperation between European countries. But also more cooperation between universities and companies is needed. Both need to act faster and form consortia. Generally, the people involved tend to be conservative.

In this context, one interviewee pointed out that there is a difference between future-oriented companies and the business-as-usual companies. In the future-oriented companies there is a growing emphasis on R&D to develop new products from the NMP. R&D of the future-oriented companies is quite advanced and innovative.

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Future outlook – two scenarios Future scenarios for the European pulp and paper industry will be characterised by horizontal and vertical integration. It is expected that the process of mergers and acquisition will continue. There will be no increase of production capacities in Europe for the growing global market, which is mainly located in Asia and Latin America. Except for continuing the search for more efficient and less costly production processes of existing products, the main opportunities for the European industry will be in product development: new products with specific characteristics for new markets. However, the industry is not known for its innovative character, it has a long tradition on commoditizing their existing products. Product innovations that have been realized (such as disposable diapers or carbonless papers) were mainly driven by customer demands.

New technological developments in NMP, especially in nanotechnology and new materials provide opportunities for developing new products that meet consumer demands. It is a challenging task for the industry to do market research and learn to know the potential needs of their consumers and to develop - together with their suppliers of chemicals and other inputs - products that meet these needs. One interviewee pointed out that retailers are becoming more and more important in the supply chain and that everything becomes increasingly demand-oriented.

The shift from a product-driven to being consumer-driven, demands that companies in this industry must develop into a more knowledge intensive organisation and get into contact with experts in the specific market segment and with the right research organizations and suppliers. This is a very big step for companies in this industry and this will be the main component of the scenarios that will be used in this study.

Scenario 1 says that paper companies in Europe are able to take this step and to become more knowledgeable about new product demands and about the technologies (including NMP) for developing new types of products for new markets. Although the highly capital intensive nature of making paper is a high barrier to adapt to new technologies, this barrier is being taken in order to improve their competitive position.

Scenario 2 says that paper companies in Europe are not able to do so as they are reluctant to look beyond their own established ranks for leadership. They continue implementing incremental improvements that allow them to be competitive during the next period, but for how long?

3.6.2 NMP SKILLS AND JOBS Opinions on whether or not NMP has led to new functions vary. One opinion is that NMP has indeed created new functions within companies. This can be found mainly in the area of R&D. Some say that the changes are still confined only to R&D and have not affected other functions within firms.26

At present, companies are allocating about 10-20% of their Research and Development unit especially for NMP specific projects. Consequently, NMP specific functions are currently being handled by around 10% of the total R&D employees. In one company, the personnel that is specialised in NMP constitutes a small proportion of the people working in the company, but in the past two years more people had been hired for NMP related functions.

26 One interviewee stated for instance that nanotechnology and biotechnology are less important for

production, but more important in research and development.

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Some changes can also be observed in marketing and sales. In terms of skills, skills in chemistry are highly demanded and skills related to material engineering and sciences are also increasing in importance. Another opinion is that environmental science and management are becoming more important, given that the industry is currently not the most environmentally conscious one. One example is from the waste-water treatment. For this reason, biotechnology is still very important. Process engineering and production management are also said to be important.

As far as general skills are concerned, one opinion is that business development skills will become less important in the future, but other interviewees expressed that it will become precisely the opposite.

Another opinion is that, currently, there is no significant change that requires modification of job functions within the company. The change tends to be gradual and will not drastically affect the employment situation.

Some interviewees indicate that skills mismatches are not observed at present and that the current workforce seems to have adequate skills in dealing with NMP. This is mostly due to changes in the education system that have already taken place. For instance, universities already teach bio-material courses and other related courses.

But other interviewees are of the opinion that skill mismatches and gaps in regards to NMP do exist. These are due to the shortage of specialised material scientists and engineers in general. The nature of the shortage is both in the number of scientists (quantitative) and also the skills of the current graduates (qualitative). Academic people have become the major bottleneck, especially at PhD and MSc level. These shortages and mismatches are more prominent in the R&D section.

Many companies are searching for people with skills in this area. In Europe, there is a shortage of graduates in this field and European companies are looking to other countries to reduce the shortage. Foreign employees can also help in bringing contacts.

According to one of the interviewees, the gap has arisen because of the decreasing importance of science and mathematics in the education system. The industry needs motivated and capable people and without a strong foundation in mathematics and science, the gaps will be widened in the future. Currently, there are some changes being implemented to rectify these mismatches.

Another interviewee stated that currently, there is a shortage of operators. There are more jobs than people. A difficulty is that the paper machines are operational 24 hours a day, so the companies have to work in 5 shifts. But not many young people are willing to work in shifts. It is expected that the shortage of operators will increase in the future, because, on the one hand, young people are often not willing to work in shifts and, on the other hand, there are older people working in the sector who will retire in the near future.

Yet another interviewee is of the opinion that there are only some specific areas where shortages exist. For example, in the area of mechatronics, industrial electrical engineering and IT, there are many people who are willing to work in academics and consulting work, but not at the work place in production.

As far as skills gaps exist, they have been around for quite some time and there will be no immediate improvement in this situation. Some specific new skills have been mentioned. Environmental management is one of the new skills required. Also it will become more important to understand ICT tools. Moreover, the need for certain knowledge will increase in importance, such as knowledge of bio-based materials, sustainability and also knowledge of advanced modelling and statistics.

The need to have more chemical engineers, material scientists and physicists will increase with the progress of NMP. To this end higher education will rise in importance.

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Moreover, potential engineers should also prepare for the challenges in the future and not merely concentrate on learning to tackle current issues.

However, the shift in demand for highly-educated personnel will not be drastic given that there will be a slow change in the industry. Abrupt changes in required skill levels – and hence in skills mismatches and gaps – are therefore not to be expected.

In the future, NMP-related functions will become more important, especially in relation to bio-based solutions. Some say that NMP-specific skills will already increase in importance during the next 5 years. More material specialists, chemical engineers, material (Polymer) chemists, physicists and biochemists will be demanded than before. The size of the workforce dealing directly with NMP will also increase in the coming years.

Related to this, there will be an increase in demand for highly-educated personnel in the future. In the past, workers in paper-making industry were mostly unskilled, but currently they are becoming more skilled. The industry wants to have skilled workers. Certain lower-segment jobs will become obsolete as tasks might be either automated or taken over by higher-educated people. The substitution of lower-skilled to higher-skilled workers does not always seem to be so apparent in the production process, as some tasks have become more repetitive and do not necessarily need highly skilled personnel.

If the companies are not able to develop new products, then there will be a need to reduce the workforce, but if the company is successful, then new competences will be needed, which means that there will be a shift from a low to a highly educated workforce. However, according to one interviewee, labour savings are not to be expected to ensure competitiveness of the industry. Innovation and product differentiation are more important.

There will be restructuring in the industry, but also restructuring within companies. Large companies will merge and there will be more small companies (called converters). These small companies will deal with new materials, such as new solutions in the packaging sector. The tendency is from big to small.

Thus, production units will become smaller in size and small and medium enterprises (SMEs) will be able to enter the industry and be active in producing new products. Nevertheless, there will always be some big companies in the sector. In the production process, one example of specific skills that are needed is knowledge of the English language, which is becoming increasingly important (and is now the common language in factories).

As research progresses, NMP skills will infiltrate different segments of business, such as production. Thus, necessary NMP skills need to be acquired by the production workers.

3.6.3 NMP EDUCATION AND TRAINING In Finland, there has been a change in the vocational education for production workers. In the past, the people were trained specifically for the paper industry within 3 years of education (i.e. 90 study-weeks). Currently the structure has been changed to 1 year of common processing subjects for all students and 2 years of paper industry-specific processes and some other obligatory subjects and free-electives. In 90 study weeks, only 20 study weeks directly concern paper processes. The reason for this change is related to the decline in the industry in 2008 and 2009, which has been more pronounced in Finland than in other countries. It has been a very big change which started recently. The result for this change will only be known in 2013 when the first students graduate.

Other than that, there is also collaboration between schools and companies in developing the courses and also in providing 6-months practical training in the mill or factory.

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In the Netherlands, a training course for machine operators is being offered. Machines are very expensive (300-400 € million). The production process is highly automated. In the training course an attempt has been made to create insight in both the technique and the process, so that operators can identify deviations from the normal process.

In general, (public) universities are delivering sufficiently skilled graduates and knowledgeable researchers. This might be due to the close cooperation of companies and universities. Companies in the paper and pulp sector are heavily involved in terms of education by providing research projects. Universities have also become the platform for recruitment or network for companies to search for well-known scientists in the field.

The situation in countries such as Sweden and Finland is different from that in a country like the Netherlands, where an MSc in Paper Technology is being offered, but only about 10 people per year take this course. The small number has also to do with the fact that labour mobility in the paper sector in the Netherlands is stagnating. In bigger companies there is only demand for only 1 or 2 people who have studied paper technology.

Companies within the industry prefer graduates with general knowledge rather than with very specific knowledge of the sector. Therefore, the current situation in the education system has in general been appropriate.

The challenge for the future is to master this basic knowledge and then to bridge it with the new development in technology and science. Bachelor studies, in science and engineering, need to produce graduates that possess good understanding of the basic science and are able to apply it to the problem at hand.

It appears that public universities have been changing their programmes somewhat to ensure sufficient training in, especially, nanotechnology and new materials. For example, from a paper-making course, currently the course has been changed to a bio-based course which shows the shift in focus. There might be some shortage in these fields within a couple of years, but given the current changes in the universities, these potential shortages can be reduced.

However, one interviewee pointed out that the problem is not the content of engineering and science courses, but rather the limited number of students enrolling in such courses. Without a substantially larger number of graduates, it is hard for companies to make a selection of the graduates and employ the best graduates.

Education institutes have to adapt and define their role in a more basic way while making sure that they keep up with the emerging technology. They have to motivate new students. Investment in education is highly important, especially in the technical field. Meanwhile, the education institutes need to review their curriculum to ensure good understanding of basic science knowledge and of new applications.

Training is necessary due to the fast changes in technology. Companies are investing in this all the time and will need to continue to invest in re-education and self-learning platforms. Lifelong learning in this context becomes a highly relevant concept to ensure that employees keep up with the development of the technology.

Training is sometimes done in cooperation with the companies. Trainees often already have a job in a paper company. The trend is that companies become more involved in the curricula of training. In the past 2-3 years, companies have expressed the need for more tailor-made training.

A major training centre in one country reported that it can currently not handle all the demand for training, because it has a shortage of trainers. There may be need for more professional trainers from the industry. A training centre in another country employs only a small number of full-time trainers, but works indeed with around 50-60 professional trainers from the industry. The institute hires contract trainers who undergo on-going self-

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training. These trainers are mainly from the industry (experts and professionals from the industry) who are familiar with the most relevant developments within the sector. Thus, it has a close connection with the paper making industry. Another important tool for learning comes from supervising theses. Thus, trainers have an everyday inroad into very well-defined problems in the industry.

Training is sometimes also done in cooperation with universities. This is done by creating courses for employees to update their knowledge on relevant subjects.

However, one interviewee stated that even lifelong learning seems to be insufficient or perhaps incorrectly administered to keep up with the need for NMP skills.

One interviewee stated that the current change in regards to NMP relates to the automation process. Automation will continue to be a driving force in the industry and this has a severe impact on how training should be conducted. It also relates to the change in required competences of people. For example, doing more automation will mean that people need to understand the process, be in control, responsible and able to handle problems. Workers will need to have more skills.

3.6.4 CONCLUSIONS There seems to be consensus about Europe being a technology leader in the paper sector, especially technologies related to sustainability. Within Europe, the Nordic countries (mainly Finland and Sweden), Germany and Austria are the technology leaders. These are also the countries that are most active with NMP in this sector.

Bio-based solutions increase in importance and become the main driver of change to tackle current issues of environmental degradation, deforestation and sustainability. NMP has been part of the development in the paper industry. Some new technologies will be used in the near future.

Nevertheless, the achievement in this NMP field has not been revolutionary to have substantial economic impact. The potential of high-tech forest materials is still overlooked. Investment in NMP is considered to be high risk and thus the industry players are very cautious in investing in NMP. In several parts of the paper production process – pulping, process chemistry, paper coating, and recycling – the paper industry can benefit from nanotechnology and new materials. New technological developments that can help to make the European paper industry more competitive include the development of intelligent and efficient manufacturing processes, aimed at reduced energy and raw materials consumption. Such developments can provide opportunities for developing new products that meet consumer demands. The future trend within the paper and pulp industry is to go for bio-based materials, solutions and also products. NMP is seen as a driver to increase the variety of products produced from wood and to provide a better and more efficient usage of raw materials, but also to increase the sustainability of production.

On average, R&D personnel specialised in NMP constitutes only a small proportion of the people working in companies. Though it appears that this proportion is increasing somewhat.

Skills in chemistry and skills related to material engineering and sciences are increasing in importance. Apparently, environmental science and management are becoming more important, given that the industry is currently not the most environmentally conscious one. For this reason, biotechnology, process engineering and production management are said to be important.

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Some interviewees indicate that skills mismatches in regards to NMP are not observed at present, but other interviewees are of the opinion that they do exist and that they are due to the shortage of especially material scientists and engineers in general. The nature of the shortage is both in the number of scientists (quantitative) and also the skills of the current graduates (qualitative). Academic people have become the major bottleneck, especially at PhD and MSc level.

As far as skills gaps exist, they have been around for quite some time and there will be no immediate improvement in this situation. The need to have more chemical engineers, material scientists and physicists will increase with the progress of NMP. However, abrupt changes in required skill levels – and hence in skills mismatches and gaps – are not to be expected.

In the future, NMP-related functions will become more important, especially in relation to bio-based solutions. Some say that NMP-specific skills will already increase in importance during the next 5 years. The size of the workforce dealing directly with NMP will also increase in the coming years. As research progresses, NMP skills will infiltrate different segments of business, such as production. Thus, necessary NMP skills need to be acquired by the production workers.

Both education and training are in a process of (continuous) change. For example, in Finland, in response to the decline in the paper industry, there has been a change in the vocational education for production workers, from training people specifically for the paper industry within 3 years of education to 1 year general training in common processing subjects for all students, followed by 2 years of training in paper industry-specific processes and some other obligatory subjects and free-electives. In the Netherlands, in a training course for machine operators, an attempt was made to create insight in both the technique and the process. In the area of lifelong learning companies expect more and more tailor-made solutions and there are signals that emerging NMP-related skills needs are not taken into account sufficiently.

3.7 CONCLUSIONS

The sector studies cover sectors that each have specific characteristics concerning the importance of impacts of new NMP technologies for new products and processes in the sectors, now and in the near future. They differ considerably. In the chemical sector the development and implementation of new technological developments in NMP is rather pervasive and deals with a large variety of new products and new processes. Also the impact of NMP in the chemical sector touches on other - downstream - sectors as these use the new products (such as new types of nano-materials) in their products: automotive, paper and textile are three of these downstream sectors that are included in this study. In the automotive industry the most relevant developments of NMP for the automotive OEMs themselves deal with lightweight engineering materials and lightweight design, as well as the associated production processes in order to meet the requirements on reduced CO2 emissions. An important trend within the paper and pulp industry is to go for bio-based materials and products. NMP can contribute to increasing the variety of products from wood (such as high-tech paper) and to provide a better and more efficient usage of raw materials and increase the sustainability of production (bioprocessing). In the textile industry new developments in NMP are expected to be limited to a relatively small number of front-runner companies especially in the technical textiles segment (smart materials, intelligent textiles). In the machinery industry mechanical engineering is combined with advanced technologies. New production technologies are mainly ICT-driven and based on automation and intelligent machinery (for more flexible production, smart, virtual and digital factories and high performance manufacturing). Some production processes use nano-electronics for process and control equipment (sensors).

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Table 3.26 Summary of most important results of the sector studies

Sector:

Diffusion NMP Skills demands, gaps and shortages

Education and training

Automotive NMP will be most relevant for developing light- weight cars, new materials (composites) will playa key role

Increasing demand for mechanical engineers with dedicated knowledge of composites Increasing complex environment for assembly line workers (such as computer literate, understanding of quality issues) General problem is future supply of (mechanical, chemical) engineers

Engineering education (MSc, PhD) and qualifications of workers is more or less adequate. For all levels, additional on-the job training is necessary for industry-production specific knowledge and skills

Textiles The use of NMP will mainly effect technical textiles: smart materials is the main contribution of NMP: new fibres and fabrics, in finishing and coating in combination with the use of (nano-) electronics: intelligent textiles

Skills shortages for employees with MSc and PhD level in natural sciences and engineering On workers level: no skills shortages Technical textiles requires inter-disciplinary skills

Problem in higher education graduates in engineering and sciences in general, but also in specific textiles curricula Companies require broad scientific basis for engineers, HEI aim for specific skills (research driven)

Chemical New materials, nanotechnologies and new sustainable production technologies (biobased economy) are key themes for future research and innovation in the chemical industry

NMP technologies will not radically alter the skills needs of the chemical industry Training (for all levels) is on the job

NMP is part of HEI curricula (research driven) General problem is less inflow of students in natural science Safety of nano-materials should be addressed

Machine building

The trend is towards more interconnected self-adapting machinery. This enables more (resource) efficient and flexible production

Nano-electronics create new possibilities for process and control equipment. New materials require new production technologies

Skills shortages most important and are expected to increase

No skills gaps identified, although interdisciplinarity is important

Larger companies require broad (mechanical, or mechatronic) engineering skills. Specific needs are met by training employees

SME companies are highly dependent on demand from systems integrators. They lack resources for training

Companies specialize. For that reason, the company trains on the job for company-specific skills

Need for more education in bio-refineries, energy efficiency, environmental engineering and maintenance in HEI, by more flexibility within curricula

Closer cooperation between education, systems integrators and suppliers (SMEs) is needed

Paper Some parts of the paper industry can benefit from NMP, but industry is cautious with actual investments NMP is seen as a driver for future increase in variety of products, more efficient use of materials and sustainable production. NMP facilitates growing importance of bio-based solutions

Material sciences and chemistry and environment management become more important. The latter also has consequences for biotechnology, process engineering and production management Companies expect future skills shortages at PhD and MSC level for material science and engineering in general

Specifics of knowledge infrastructure for this sector differs strongly per country Research institutes are in a (nearly continuous) process of changing of how to organise specialisation (e.g. at what stage) and which elements should dominate Lifelong learning does not keep up with NMP developments and related skills needs

Notwithstanding these differences between sectors, the overall main messages on the impact of new developments in NMP on the current and future skills requirements in the sectors is more or less the same. These new technologies will mostly have an impact on

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R&D functions and production/assembly line functions. Companies need researchers and engineers (chemical, mechanical) with a good basic training in a number of disciplines. The company’s specific knowledge and technologies will be learned ‘on the job’. This applies to functions on all levels. For more sector specific skills gaps (concerning specific types of knowledge) we refer to Table 3.26.

In most chemical curricula nanotechnology and new materials are part of the basics that is being taught. New (bio)chemical production technologies are part of curricula in technical universities and in institutes for higher vocational education that educate chemical and mechanical engineers. Concerning more specific applications of, for instance, the use of new (nano)materials in the textile and paper industry: these are addressed in a few countries where local or regional institutes for higher vocational education work closely together with these industries.

Internships, students writing their thesis within companies, and the VET apprentice system are good instruments for achieving a better match between skills needs and demands, but not sufficient. A general problem that all sectors deal with is a shortage of higher education graduates in engineering and sciences in general.

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4 THE COMPANY’S POINT OF VIEW: A SURVEY

4.1 INTRODUCTION

In the literature review, both the definition of NMP technologies (nanotechnology, new materials and new production technologies) and the impact on jobs and skills were discussed. The available literature has a strong focus on nanotechnology and higher education, however it focuses less on “M”, “P” and VET. The sector overviews provided an in-depth view of the importance of NMP technologies for the following sectors: automotive, chemicals, paper, machinery and equipment and textiles. The sector overviews were based on interviews and literature reviews and gave an insight into the skill needs and recruitment problems for these specific sectors. In order to broaden the number of sectors and to get a more systematic overview of company needs for skills and education we held a survey among European companies. In this chapter we describe the results of this survey. This survey complements the other research activities, as the results are more quantitative and cover more sectors. Furthermore, the focus is less biased towards “N” and explicit attention is paid to VET (including lifelong learning). Many of the issues dealt with in the literature review and sector studies return in this survey. In both the literature review and the sector analyses worries were expressed concerning shortages that are related to required NMP-skills. Moreover, these shortages are expected to increase. The literature review showed that changes in skill requirements are taking place for a wide range of skills. Interdisciplinary thinking is one of the skills considered to be important for combining new developments with innovative products. Also the importance of personal skills, like creativity and team working skills are emphasised. In the literature some educationalists state that the current education system has shortcomings to match the changing needs of companies. Their main argument is that students are not stimulated enough to be creative, to learn actively and to think critically. Providing students with assignments set in a “real life” context in cooperation with companies is an example of a way to better fit these needs. We will address these subjects in this chapter. We will begin with a description of the survey in section 4.2. Next, in section 4.3, we discuss the importance of NMP for the participating companies. In section 4.4 we deal with changing skill requirements (including personal skills). Skill gaps and shortages are the subject of section 4.5. In section 4.6 we discuss the opinions of the responding companies on the adequacy of the education and training system.

4.2 DESCRIPTION OF THE SURVEY METHOD

The main objectives of this study are to identify the impact of nanotechnology, new materials and new production technologies on current and future skills and competences and the possible education, training and re-skilling schemes to be implemented to fill potential skill gaps. The sector overviews gave a first insight into the skills and competences needed as a result of NMP technologies. In order to assess these questions more systematically and for more sectors, we sent out a web-based survey among more than 6 thousand European companies. Most of which are active in one or more of the

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NMP technologies. The interviews and the literature review provided the input for the questions asked in the survey.

The added value of a survey among companies next to the interviews is that more companies can be reached. Because of this, a more general picture covering the whole industry can be obtained, instead of the in-depth views of a selected number of companies. Moreover, a survey gives the possibility for questioning in a more structured way, also creating the possibility to make comparisons between subgroups.

Questionnaire

The content of the questionnaire is included in Annex 3. The following issues are addressed in the survey:

− Company characteristics (country, size, sector).

− Current and future use of the different NMP technologies.

− Judgement on current and future position of the EU in the production and research & development of NMP technologies.

− Impact of new technological developments (of which NMP is a subset) on the demand for different job functions, the importance of skill changes for each job function and demand for personal and technical skills.

− Skills shortages and recruitment problems and company policies to address skills shortages and recruitment problems as a result of new technological developments.

− Judgement of the national higher education system and vocational education and training system (VET) with regard to skill needs related to present and future technological developments.

− Suggestions for solutions in order to address skill gaps and recruitment problems through education and training.

In the survey we determined whether or not these companies are active in new materials, nanotechnology, and/or new production technologies. In case the companies say they are active in these technologies, we asked them to assess the position of the EU in the production and R&D of NMP technologies. Companies that say they are not active in at least one of the NMP technologies were directly routed to the questions concerning skills.

We asked companies about the impact on skills, and education and training needs as a result of new technological developments in general, instead of directly asking about the impact on skills because of NMP technologies. One important reason for this was to increase the response rate, especially for companies who are not very active in NMP technologies. By changing the focus to skills and education needs for technological developments in general, it was possible to also attract companies that are not active in NMP technologies. If the focus would be exclusively on NMP, the expectation was that companies which are not (very) active in these fields would not respond, meaning that our respondents would only be companies that are (highly) active in NMP technologies. It is important to include the group that is not involved in NMP in order to have a reference group to compare the results for companies involved in N, M, and/or P to. The broader focus made it possible for companies not active in NMP to fill in the complete questionnaire.

Another important reason has to do with the concept of “NMP”. We noticed during the interview phase that NMP is not a common term for companies. Therefore, introducing “NMP” as a crucial concept in many questions carried a certain risk. Moreover, during the interview phase it proved to be difficult to find respondents willing to participate,

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even for companies that are active in nanotechnology, new materials or production technologies. There was a risk that companies that are only active in only one of these technologies would not see the relevance of the survey for their company and would not participate if “NMP” were the red line in terminology. This could mean that even companies that are (only somewhat) active in NMP might not respond and the overall response rate would be very low.

However, even though we used the more general concept of changes because of new technological developments, it is still possible to be more specific for N, M and/or P, as we know the technologies every company is involved in. In our analyses we have made a division in types of companies according to technologies used, to have a better idea about specific changes and requirements.

Sampling

The sample used for the company survey is not based on the idea of general representativeness for companies in Europe. The most important reason being a pure practical one; there is no database available holding all companies in the various relevant sectors and countries, including names and e-mail addresses, from which a representative sample can be taken.

Therefore we built our own company database, also known as convenience sampling. In the sampling method we tried to make sure that all sectors and countries were represented. However, we were limited by the number of available personal e-mail addresses27. We used all kinds of different sources, such as conference attendants, European Framework programs participants and members of sector organizations. In total we used about 40 different sources. The most important ones in terms of numbers are the FP6 and FP7 participants for NMP projects, Nanoforum and Nanoperspective. The latter two sources lead to relative large shares of respondents from the UK and Germany. We used other sources to gather respondents from other European countries.

As we would like to know the impact of NMP technologies on skills, it was important to have a large share of companies that are active in the field of NMP technologies28. Our sampling method was appropriate for this. Many of the sources used concern companies that are involved in NMP or in other technological developments. The companies in our sample deal with the issues concerned and should be judged as good experts to answers the questions.

Our way of sampling is crucial for interpreting results. A large share of the answers was given by companies already strongly involved in NMP. However, it does not give a representative picture of all companies in Europe.

In total 6336 e-mail addresses were approached with the web-survey. 3822 of these addresses (60%) came from sources highly related to NMP. The remaining 2514 addresses are from other sources. More details about the sampling are given in Annex A1.

27 Experience shows that companies only seldom react to surveys sent to general e-mail addresses

(info@company). Our search for names and e-mail addresses concentrated on finding both names and personal e-mail addresses.

28 The question remains what being active in NMP technologies means: all manufacturing companies use some form of production technology and many are likely to use new materials. For many it is likely that production technologies and new materials are only marginally important and that these companies would not be willing to participate in a survey. In a representative sample, this could lead to a self selection bias.

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Fieldwork procedure

The questionnaire of the web-survey was tested in several ways. First the web-survey was tested internally by an experienced researcher outside the team and by sending it to four companies. This testing focused on the content, on technical issues (routing etc.) and on the time needed. The survey was returned and commented on by two companies. Both companies did not think the survey was too long and did not experience any problems filling in the survey. One company mentioned that in some cases it was difficult to make the answers specific for the company, but at the same time understood that it is difficult to make the questions more specific for a diverse range of sectors and countries.

A next step was to send out the web-survey to a limited share of the sample to see if any problems occurred. We sent the survey to 100 companies, but we received no response. The rest of the invitations for the survey were sent out in a number of different batches. This allowed us to keep adding contacts to the database, thus increasing the number of respondents. This also gave us the possibility to control the sample, by looking for sectors and countries that are underrepresented.

Another reason for sending invitations in batches was because we had different types of lists: Some lists had only general “info” e-mail addresses (info@company.com), others contained specific e-mail addresses with names, some lists contained FP-participants and others came from different sources. Each list received a specific invitation for the survey, in order to increase the response rate.

As the first 100 companies did not respond, we decided to contact groups of companies by phone during the period in which the survey was open (28-04-11 to 15-07-11), in order to invite them to participate. This also allowed us to control the sample for instance by phoning companies from countries that were underrepresented in the sample. In order to increase the response, the companies received two reminders to fill in the questionnaire. These reminders were also specific for each list (info address, with name, without name, FP participant or not).

Response

Out of the 6336 company invitations sent, 502 (8%) companies made a start with the questionnaire and 387 (6%) respondents completely filled in the questionnaire. As not all questions have been filled in response rates differ somewhat per question. The survey has been filled in mostly by people working in R&D (38%) and by general management (35%). The function of the respondents is presented in Table 4.1.

Table 4.1 Function group of respondents

Function Group Number of respondents Share

General management 176 35%

Human Resources 13 3%

Engineering and design 37 7%

R&D (management) 190 38%

Production management 10 2%

Other (mostly: finance, marketing, sales, business development, consultants and QHSE managers)

76 15%

Total 502 100%

Respondents to the survey mainly work in small companies: about half of the respondents work in companies (establishments) with less than 50 employees. A quarter of the

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responding companies are medium-sized (between 50 and 250 employees). The remaining quarter of the respondents come from large companies (more than 250 employees).

Table 4.2 gives the distribution of the response per country. The table shows that Germany and the UK are well represented in the sample. For other countries this is not the case. For Ireland, Slovenia, Slovakia, and Cyprus we have one respondent. Response is limited from countries such as France, Spain, the Netherlands and Austria. In general the number of observations form Eastern European countries is also limited. This is mainly due to sampling, as our sources did not contain many Eastern European countries. Part of the reason is that companies in Western European countries are more active in NMP technologies.

As the number of observations is limited for some countries, it is necessary to aggregate countries into a number of clusters with sufficient number of respondents in order to compare answers for different countries. We have made a division between:

− Germany;

− United Kingdom and Ireland;

− Eastern Europe: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia;

− Southern Europe: Italy, Spain, France, Greece, Portugal and Cyprus;

− Other North-Western Europe: Netherlands, Belgium, Norway, Finland, Denmark, Sweden, Austria, Switzerland.

21% of the 493 respondents are based in Germany, 23% in the UK, 22.3% in Southern Europe and only 8% in Eastern Europe. The rest, 26% comes from Scandinavia, Benelux, Austria or Switzerland.

Within the responding companies, most companies are in the chemical (12%), machinery (14%) and R&D (14%) sector and the optics and electronics sector (10%). The remaining sectors have fewer respondents, between 5 and 8%. For some sectors the observations were limited and further clustering was necessary. For this reason we clustered paper and textile together, as well as energy and environment, optics and electronics, aerospace and automotive (into transport equipment). Finally, construction and basic metals were clustered into other manufacturing. Further details about the response, including sector, are presented in Annex 2.

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Table 4.2 Response per country

Started; not finished Finished Total % of Total

Austria 2 7 9 2%

Belgium 11 29 40 8%

Cyprus 0 1 1 0%

Czech Republic 0 9 9 2%

Denmark 1 5 6 1%

Estonia 1 3 4 1%

Finland 1 12 13 3%

France 6 23 29 6%

Germany 24 80 104 21%

Greece 4 7 11 2%

Hungary 4 7 11 2%

Ireland 0 1 1 0%

Italy 7 24 31 6%

Latvia 0 1 1 0%

Lithuania 1 2 3 1%

Netherlands 9 17 26 5%

Poland 1 5 6 1%

Portugal 0 5 5 1%

Romania 0 4 4 1%

Slovakia 0 1 1 0%

Slovenia 1 0 1 0%

Spain 6 27 33 7%

Sweden 1 14 15 3%

United Kingdom 22 89 111 23%

Other (mainly Norway and Switzerland)

4 14 18 4%

Total 106 387 493 100%

4.3 IMPORTANCE OF NMP AND PERCEPTION OF EUROPEAN POSITION

One of the main elements addressed in the survey is the importance of NMP technologies and the changes in skill demands as a result of NMP technologies. NMP technologies are quite important for the companies that have responded to the survey.

For 84% of respondents N, M, and/or P technologies are important and for 89% of the responding companies N, M and/or P technologies will become important in the future. Only 75 out of 464 (16%) companies that have answered the questions on the importance on NMP indicate that neither N, M, nor P are important and 51 companies (11%) indicate that they do not expect NMP technologies to become important for their company in the coming years. This means that within our sample a large amount of companies are present for which NMP technologies are important.

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For most of the companies that say that NMP is important, more than one of the three groups of new technologies is relevant. This shows that the underlying technological elements of NMP are often intertwined. About a third considers all elements of N, M and P as important for their company. This group “N and M and P” will represent companies strongly involved in new technologies.

Table 4.3 Current and future Importance of nanotechnology (N), new materials (M) and new production technologies (P)

Currently important (n=464) Important in future (n=460)

Only nanotechnology (N) 7% 8%

Only new materials (M) 7% 7%

Only new production technologies (P) 11% 10%

N and M 8% 8%

N and P 5% 3%

M and P 16% 17%

N and M and P 31% 35%

No N, M or P 16% 11%

Total 100% 100%

EU position in the R&D and production of NMP technologies Those companies that have indicated that NMP technologies are important, or will become important, have been asked to rate the position of the European Union in R&D and production of NMP technologies in their sector. Companies could rate the position as leading or as following. Most companies (39%) indicated that the EU has a leading position in R&D while 31% indicated that the EU has a following position in R&D. As far as production of NMP technologies is concerned, 27% indicated that the EU has a leading position and 39% that the EU is following in production. Around one third of the respondents have no specific opinion on the position in R&D and production.

Most respondents are optimistic with regards to the development of the EU position: 46% of respondents expect an increase in the position in R&D, while 41% expect an increase in the position in production. This optimism is consistent with the results of the literature review with regard to the position of China and India. China and India are serious competitors in this field, but also struggling with a number of problems, making it uncertain if they can reach a dominant position in this field of manufacturing.

Companies in Germany are most positive about the European position in NMP-related R&D and production, while Eastern European companies indicate that Europe lags behind. This is shown in table 4.4, where the numbers indicate the average opinion for the companies in the specific country (Germany, UK) or group of countries on Europe’s position in R&D and production. The remaining country groups (other North-Western Europe, Southern Europe, UK,) are in between and provide rather similar answers. In general they indicate that Europe is leading in NMP-related R&D, but following in production; all believe that the position in both R&D and production will improve. Country differences are statistically more convincing in R&D than in production.

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Table 4.4 Position of the European Union in NMP-related R&D and -production

R&D Production change in R&D

position Change in

Production position

Germany 4.0 0.3 5.4 2.6

Southern Europe 0.8 -2.1 1.3 4.2

UK 0.7 -1.5 2.5 1.1

Other North-Western Europe 0.4 -2.6 4.7 2.5

Eastern Europe -4.3 -5.5 4.7 3.9

Total 1.1 -1.9 3.7 2.8

Kruskal-Wallis test for significant differencesa) ** ns ** ns

Average score based on rating of the position of the EU as leading (score +10), or following (score -10) and an increase in this position (+10 points) or a decrease (-10 points), or remain the same (0)

a) * = significant at 10% level; ** = significant at 5% level; ns = not significant

If we compare the results per industrial sector we can observe that there are some differences. The R&D sector itself and sectors like transport equipment, optics and electronics and medicine are more optimistic about future changes in R&D position, while for example chemicals is less optimistic. Chemicals is also less positive about the current position, but the differences between sectors on this variable are not statistically different. The same is true for differences between sectors in perception about present and future position in production. However, this also has to do with the limited number of observations per sector we have in our sample.

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Figure 4.1 (Change of) Position of the European Union in R&D of NMP-Related R&D in different industrial sectors

-4

-2

0

2

4

6

8

10

Optics

&Electro

nics

Software

Paper&

Textile

Machin

ery

Energy

&envir

onmen

t

Engine

ering

&Consu

ltanc

y

Medici

ne

Other M

anufa

cturin

gTota

l

Transp

ort Equ

ipmen

tR&D

Chemica

lsOthe

r

EU positionRD

EU change inposition R&D

Average score based on rating of the position of the EU as leading (score 10), or following (score -10) and an

increase in this position (+10 points) or a decrease (-10 points)

Note: differences in change of R&D position are statistically significant at 10% level, but not at 5% level. Differences in perceived position are not statistically significant.

Most companies see new applications of NMP technologies for their own company currently happening or happening within the coming 5 years. This is consistent for all elements of N, M, and/or P although nanotechnology has a lower score (65% of respondents for which nanotechnology is important now or in the future) compared to companies for which new materials and new production processes are important (78% for both).

Respondents from small companies tend to be more optimistic in their expectations as they believe that NMP will be implemented currently or within the coming 5 years (70-80%). In contrast to that, respondents from medium-sized and large companies tend to have slightly longer time view on the matter (with 50-70% currently or for the coming 5 years). For nanotechnology 20% of the large companies expect new products in the coming 6 to 10 years. Around 10% to 15% of the medium and large companies expect new products in the coming 6 to 10 years. In contrast to company size, differences in time frame between country groups are not statistically significant.

4.4 IMPACT ON SKILLS

The literature review indicated that NMP has quite some skill consequences, both in quantitative and qualitative sense. With regard to the latter, the importance of personal skills is also underlined. In this section we test to what extent companies expect changes. The terminology of the questions focuses on demands for skills that result from new technologies in general. We asked companies about their expectations concerning the changes in demand for different job functions (quantitative) and the impact that new technologies will have on skills (qualitative). Because for 84% of the responding companies at least one of the elements of NMP currently plays an important role and for 89% it will in the future; the results can be considered highly relevant for companies

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active in NMP. We will also show specific results for companies using N, M and/or P, to focus even further on specific demands from these various types of companies.

The job functions used in the survey are inspired on classifications used in a number of sector studies in manufacturing in the framework of the EU programme “New skills for New Jobs”29.

Changes in demand and skills for different job functions About half of the responding companies expect a limited increase in total employment because of new technological developments, 12% a strong increase and 24% hardly any change. Only a small minority expects a decrease.

When we calculate the average scores of the answers provided by the companies and rank the answers for the specific job functions according to the expected increase in demand and add the scores for the impact on skills, we get the results as shown in Figure 4.2.

Figure 4.2 Increase in demand and changes in skill requirements for different job functions as a result of new technological developments

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6

R&D

Engineering, design

Marketing, sales, business development,finance

IT

Production managers

Production workers

Maintenance and service workers

General Management

Total employment

Increase indemand

Skillchanges

Average scores for changes in demand: strong increase 2, increase 1, (hardly) no influence (0), decrease -1

and strong decrease -2 and for skill changes: large changes (2), limited changes (1) and no changes (0).

Note: for both types of indicators we also tested if differences between the scores for the various groups were statistically significant, which was the case (5% level).

The figure shows that on average all job functions are expected to increase in employment figures because of new technological developments. Especially the number of R&D, engineering and design and business functions are expected to increase. These

29 http://ec.europa.eu/social/main.jsp?catId=784&langId=en

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functions are also expected to be mostly affected by new technology in terms of skills. Because for the majority of the sample consists of companies involved in NMP, the results illustrate that expected changes in skills related to NMP are strongly felt for these functions. The high scores for R&D and engineering and design are consistent with the results of the literature review and sector studies which also stress the importance of changes for high level functions in R&D and production.

In table 4.5 we have listed the expectations separately for firms that are active in different combinations of N, M and P technologies. All companies that indicate that N, M, or P is important expect a larger increase in total employment than the companies for which N, M, or P is not important. For example, companies for which N, M or P is not important, expect a limited decrease in production workers, while the group involved in N, M and P expects an increase because of new technological developments, although a smaller growth than for other function groups. Total expected employment growth is highest in companies that combine N, M, or P. Companies only involved in new materials score relatively low. Companies with new production technologies score relatively high on expected growth and changes in IT functions.

Table 4.5 Expected changes in total employment demand due to new technological developments (average scores)

Companies’ involvement in N, M and/or P Manufacturing

All sectors (Manufacturing and service)

Only nanotechnology (N) 0.74 0.70

Only new materials (M) 0.21 0.25

Only new production technologies (P) 0.59 0.77

N and M 1.05 0.97

N and P 1.07 1.06

M and P 0.81 0.80

N and M and P 0.82 0.82

No N, M or P 0.29 0.36

Total 0.72 0.73

Kruskal-Wallis test for significant differencesa) ** **

Average score for all functions per country group where: for changes in demand: strong increase 2, increase 1, (hardly) no influence (0), decrease -1 and strong decrease -2.

a) * = significant at 10% level; ** = significant at 5% level.

Respondents have a certain tendency to estimate the changes in their own function to be larger compared to how others see this. This observation is strongest for those in R&D-functions. However, this does not fundamentally change the picture. For example also respondents not working in a R&D function consider the growth and changes because of technological developments in this function to be strongest. The differences between the different size classes of companies are minimal and generally follow the total averages.

The increase in total employment because of technological developments per sector is shown in Figure 4.3. The figure shows that companies in the energy and environment,

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software and R&D sectors expect the largest increase in demand for the different functions. Chemical, Engineering and consultancy and paper and textile companies expect the lowest increase in demand for the different functions.

Calculating the results for each function per sector leads to some interesting insights. For instance, in the paper and textile and the “other” sectors, demand for general management is lowest. In the “other” sectors demand for general management is even expected to decrease.

The number of production workers is expected to increase most in the transport equipment sector and other manufacturing. IT professionals show the strongest increase in the software sector, while the increase in demand for IT professionals is lowest in the paper and textile sectors. The increase in demand for engineering & design functions is highest in the energy and environment, transport equipment, machinery and Optics and electronics. R&D functions score relatively high in energy and environment, optics and electronics, medicine, other manufacturing and transport equipment.

Figure 4.3 Increase in total demand and overall changes in skills per sector related to new technological developments

0.0 0.2 0.4 0.6 0.8 1.0 1.2

Other

Paper&Textile

Engineering & Consultancy

Chemicals

Medicine

Machinery

Other Manufacturing

Transport Equipment

Optics & Electronics

R&D

Software

Energy & environment

Skill changesIncrease in demand

Average for all functions per sector where: for changes in demand: strong increase 2, increase 1, (hardly) no

influence 0, decrease -1 and strong decrease -2 and for skill changes: large changes (2), limited changes (1) and no changes (0).

Note: differences in increase in total demand per sector are statistically significant at 5% level, while this is not the case for differences in changes in skills.

The expectations for the changes in skills are quite similar between sectors. The transport equipment sector and R&D sector expect the largest change in skills. Other sectors that score somewhat higher in expected changes in skill requirements are the chemical sector, software and energy and environment sectors. However, these differences are not statistically different. Differences between country clusters are also not significant.

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Impact of new technologies on Personal skills We also asked companies which skills they expect to become more important as a result of new technological developments. A distinction has been made between personal skills and technical skills. The classifications used for both skills sets are based on literature and statistical sources. Basis for the classification of personals skills are several comprehensive sector studies that were used to identify emerging skills needs30 (“New skills for new jobs”), a CEDEFOP study concerning skills in relation to nanotechnology (Freikamp & Schumann, 2007) and a number of surveys in the field of skills, (Singh & Dunn, 2007; CEFIC, 2011). The technical skills are based on the International Standard Classification of Education (ISCED).

The Figure 4.4 below shows the results for personal skills ranked by average score. The values behind range from 5 to 1 (much more important to much less important).

Figure 4.4 Ranking of expected growth of importance of personal skills because of new technological developments

1 2 3 4 5

Other

Self-Management

Social

Management Skills

Intercultural& Language

Team Working

Business Development

Problem Solving

Creativity

Innovation Skills

Iimportance of personal skills are ranked according to the average value given by respondents (5 much more important, 4 more important, 3 no change, 2 less important, 1 much less important).

Note: we also tested if the differences between scores on the personal skills were statistically significant, which was the case (5%). This result remains after leaving out the category “other”.

30 The sector studies can be found at: http://ec.europa.eu/social/main.jsp?catId=784&langId=en

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Table 4.6 Overview of skills used in the survey for the skill types

Elaboration of skills categories

Innovation skills (Strategic, visionary, Seeing opportunities, practical applications, perseverance)

Creativity, multi-tasking, interdisciplinary skills

Problem solving, Analytical skills, reasoning

Business development skills

Team working skills (Coaching & team building, being a team player)

Intercultural & Language

Management skills (leadership, project management, change management)

Social skills (Communication, Networking, perceptiveness)

Self management (planning, time management, flexibility)

In general the scores are quite high, underlining the importance attached to personal skills. This is in line with the literature review, which also stressed the importance of these types of skills (section 2.3). There are two personal skills that clearly score higher than the rest. First, innovation skills are expected to be most important. 30% of the respondents perceive this as becoming “much more important” and nearly half (49%) as “more important”. Innovation skills are defined as strategic and visionary skills, the ability to see opportunities and practical applications and perseverance needed to innovate. Creativity, multi-tasking and interdisciplinary skills are second most important (27% much more important and 48% more important).

There is a limited influence from the type of respondent on these scores. The only exception is that people working in R&D functions tend to give higher ratings to the expected growth of importance of personal skills. However, this is only statistically significant for intercultural/language and creativity.

There are differences, although limited, between the country groups: the country cluster other North-Western European countries scores relatively high on the expected growth in personal skills.

Companies that rate NMP technologies as important, rate the personal skills in exactly the same ranking, but the level of importance is - as could be expected - higher for the companies that are involved in NMP than that of the group which is not involved in NMP. The only exception is the group of companies that is only involved in new materials; their importance level is somewhat lower than the rest of the NMP involved companies.

Different sized companies rank the personal skills in similar ways. One difference is that large companies rate social skills and team working skills higher. Medium-sized companies also rate team-working skills higher than small companies. Differences between sectors are not statistically significant.

Impact of new technologies on Technical skills

Table 4.7 shows the scores respondents give to various technical skills. Technical skills in this study are related to knowledge in scientific fields like nanosciences, chemistry and their specific branches linked with NMP. Technical skills also include methodological competences or the ability to handle technical processes. Production management, innovation management and environmental management refer to scientific knowledge. These are however not similar to more traditional scientific subjects, but deal with methodological competences to handle technical processes. For this reason we distinguish the methodological competences as a separate cluster of technical skills.

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Hardly any of the skills mentioned are considered to become less important. For most skills more than half of the respondents perceive this as to become more important. In the first group of technical skills, material science, nanotechnology and process engineering score highest. In the methodological competences, innovation management scores high, which is a similar outcome to innovation skills in the demand for personal skills. This pattern of changes is a broad field of technical skills, including a relatively high score for material science, is consistent with other studies (see for example Abicht, 2008).

Table 4.7 Scores for growth in importance of technically-related types of skills (ranked according to average importance) because of new technological developments (%) (n=382/392)

Technical skills

Much more important

More important

No change

Less important

Much less important

Do not know Total

Material science/material knowledge 22 55 20 0 0 3 100

Nanotechnology 20 43 25 3 1 8 100

Process engineering 12 47 34 2 0 4 100

Chemistry 11 39 41 2 1 6 100

IT/programming, design 10 32 51 2 0 4 100

Biotechnology 15 25 45 2 2 11 100

Mechanical engineering 5 36 49 3 1 6 100

Electrical engineering 7 31 50 3 2 7 100

Mathematics 4 21 61 4 2 8 100

Methodological competences

Much more important

More important

No change

Less important

Much less important

Do not know Total

Innovation management 24 47 24 0 0 4 100

Environment management 8 51 36 1 0 3 100

Production management 5 38 49 2 0 6 100

Note: we also tested if the differences between scores on the technical skills were statistically significant, which was the case (5%).

There are some differences according to the type of respondent. If we concentrate on the two largest groups, R&D managers and general managers, the first group tends to give higher ratings to the expected changes. The same can be said about most personal skills. However, the overall picture, for example in ranking between the expected changes between the various skills, is not fundamentally different between these two groups.

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Table 4.8 shows which skills are relatively more important for companies that are active in different combinations of NMP technologies. For each technical skill, Table 4.8 shows two company types that rate this particular skill higher than the average.

The company types are classified according to their expectation of future importance of N, M, and P technologies (Table 4.3 shows the shares of companies for each category). For instance, some companies indicate that only N will become important, while another set of companies indicate that both N and P will become important. The table shows the relative importance, which does not mean that this particular skill is most important for this type of company. In absolute terms the importance of the skills are similar to the average ratings. So material science is important in all types of companies. However, for companies combining N and M and companies combining N, M and P, material science is even more important.

Chemistry, material sciences, nanotechnology and biotechnology are rated relatively highest in companies that indicate that N and M will become more important for them. The various engineering sciences score relatively high for companies involved in M and P, with the exception of electrical engineering which scores high in N and NMP. IT scores relatively high in companies involved in P and not involved in NMP. Companies that have indicated that NMP technologies are not important score below average on all skills, except IT skills and environment management (although in the last case, the differences between categories are not statistically different).

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Table 4.8 Two types of companies per skill type which score relatively high compared to the average for that skill

Important technologies in future

“Technical” skill Only N Only M Only P N, M N, P M, P N, M and P

No N, M, or P

Statistical test a)

Mathematics X X ns

Chemistry X X **

Material science/material knowledge X X **

Nanotechnology X X **

Biotechnology X X **

Mechanical engineering X X ns

Electrical engineering X X *

Process engineering X X **

IT/programming, design X X **

Methodological competences

Innovation management X X **

Production management X X **

Environment management X X ns

Note: Based on an average score using the following scale: 5 much more important, 4 more important, 3, no change, 2 less important, 1 much less important.

a) Test for differences between NMP categories. * = significant at 10% level; ** = significant at 5% level; ns = not significant (Kruskal-Wallis test).

The rankings of the skills are quite similar for the different (clusters of) countries. The answers are also not very different for the different company sizes. Main differences are that small companies tend to rate environmental management skills lower and process engineering higher. Innovation management scores relatively high for both small and large companies and lower scores for the group in between.

For most sectors material science is considered to grow the strongest in importance. Most noticeable differences are the medical sector, where nanotechnology and biotechnology are most important, while IT knowledge is important for software and engineering and consultancy. For the machinery sector mechanical, electrical and process engineering are more important compared to other sectors.

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Table 4.9 Ranking in expected growth in importance of technical skills (excluding methodological competences)

Sector Skill 1 Skill 2 Skill 3

Chemicals Material knowledge/science Chemistry Nanotechnology

Paper&Textile Material knowledge/science Process Engineering Nanotechnology

Machinery Material knowledge/science Process Engineering

Mechanical and electrical engineering

Transport Equipment Material knowledge/science Nanotechnology Process Engineering

Energy&environment Material knowledge/science Nanotechnology

Biotechnology Process engineering

Optics&Electronics Material knowledge/science Nanotechnology

Chemistry Process engineering

Medical Nanotechnology Biotechnology Material knowledge/science

Other Manufacturing Material knowledge/science Nanotechnology

Mechanical engineering

Engineering&Consultancy IT Material Science Process engineering

R&D Material Science Nanotechnology Biotechnology

Software IT Material Science Process Engineering

Conclusion Companies involved in NMP technologies expect both a growth in employment figures, as well as changes in skill needs related to new technologies. Expected growth in demand and changes in skill needs are highest for R&D functions and engineering/design. In terms of types of skills that will become more important, both personal skills as well as technical skills are rated quite high. In the first category innovation skills and creativity rate high, while in the technical skills, especially material science, nanotechnology and process engineering score relatively high. This pattern differs somewhat by sector and by type of technology. For example, in the machine industry and companies involved in new production technologies, engineering sciences are rated relatively high.

4.5 SKILLS SHORTAGES, RECRUITMENT PROBLEMS

We have concluded that most responding companies expect an increase in demand for all job functions and changes in skills requirements related to new technological developments. The question remains whether these changes in demand and requirements will lead to skills gaps and/or recruitment problems. Both the literature review and the sector studies already signal these problems.

Recruitment problems or skills shortages exist where there is a genuine lack of adequately skilled individuals available in the accessible labour market. A skills shortage arises when an employer has a vacancy that is hard-to-fill because applicants lack the necessary skills, qualifications or experience.

Skills gaps arise where an employee does not fully meet the skills requirements for a specific job function but is nevertheless hired. Skills gaps can arise where new entrants to

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the labour market are hired and although apparently trained and qualified for occupations still lack some of (some) specific skills required for that function in that company. But skills gaps can also apply to existing employees when their skills types or levels are inadequate to meet their employers’ objectives. Such a gap can arise when new technologies are introduced and existing workers have to learn to work with these new technologies.

Table 4.10 shows the overall results regarding current and future skills gaps and recruitment problems due to new technological developments. The table shows that 78% of the companies in the survey currently experience skills gaps; 15% of the companies consider these skills gaps as substantial. Currently less companies (57%) experience recruitment problems; 15% of all companies in the survey have substantial recruitment problems. More companies expect skills gaps (84%) and recruitment problems (69%) in the future and also more companies expect substantial problems. 20% of the companies expect substantial future skills gaps and 23% of the companies expect substantial recruitment problems.

Table 4.10 Recruitment problems and skills gaps related to new technological developments

No Limited Substantial Do not know Observations

Current skills gaps 16% 63% 15% 6% 100% (n=399)

Future Skills gaps 11% 64% 20% 6% 100% (n=397)

Current recruitment problems 38% 42% 15% 5% 100%

(n=398)

Future recruitment problems 23% 46% 23% 8% 100% (n=398)

Current and future skills gaps are less important in Germany. Companies in Eastern Europe experience and expect less skills gaps and less recruitment problems than companies in the other European countries31. In Southern European countries, the percentage of companies that have current skills gaps is larger than the share of companies that expect skills gaps, meaning that they expect skills gaps to decrease. In the United Kingdom, more companies expect future skills gaps.

Between sectors, the differences in skills gaps are limited. However, in terms of recruitment problems the differences are more profound (Figure 4.5). The sectors software and transport equipment have the highest score on current and future recruitment problems. The R&D sector expects a large increase in recruitment problems.

As one might expect: the larger the expected growth in employment demand, the larger the expected recruitment problems. This correlation is strong for R&D functions and IT functions, indicating that a strong growth in demand for especially these functions will

31 The differences in recruitment problems between country clusters are not statistically different

(although the level of 10% is nearly reached). However, a similar test on individual countries is significant at the 5% level, reflecting the fact that differences between countries within clusters are high.

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lead to recruitment problems. For production functions, the correlation is negative (but not significant), indicating that a growth in demand for these types of functions, will not lead to recruitment problems.

Figure 4.5 Current and future recruitment problems for all sectors ranked by current recruitment problems

1.0 1.5 2.0 2.5 3.0

Other

Other Manufacturing

Medicine

Engineering&Consultancy

R&D

Energy&environment

Total

Machinery

Chemicals

Optics&Electronics

Paper&Textile

Transport Equipment

Software

Futurerecruitmentproblems

Currentrecruimentproblems

Sectors are ranked according to the average scores of the respondents on current recruitment problems. The

following scale was used: 3 substantial recruitment problems, 2 limited recruitment problems, 1 no recruitment problems

Note: differences in current and future recruitment problems between sectors are both statistically significant at 5% level.

Company strategies Irrespective of the expectations of possible problems, companies can develop various strategies for dealing with changes in skills and demand for the different functions. Figure 4.6 shows that company strategies to avoid recruitment problems and skills gaps generally focus on recruiting young people from the education system and on the job training. Stronger cooperation with other organisations (such as trade unions, sector organisations and research institutes) is a third most common strategy. Increasing wages is seen as the least viable strategy.

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Figure 4.6 Strategies of companies to address potential skills shortages and skills gaps ranked by importance

0% 10% 20% 30% 40% 50% 60% 70%

Other

Do not know

Increase wages

Try to postpone retirement older employees

(Further) automation and mechanisation to substitutelabour

Restructuring the (work) organisation

Use of specialised agencies/temporary workers/headhunters

Outsourcing and off shoring

Increase internal job mobility in the company

Participation of employees in off the job training andeducation programmes

Recruiting workers from other sectors, or othercountries

Stronger cooperation with other organisations (tradeunions, sector organisations and/or research institutes)

On the job training

Recruiting young people from the education system

Strategies are ranked according to the percentage of respondents who selected a particular strategy.

In general, companies that have more skills gaps and recruitment problems tend to score higher on the use of the various policy strategies. This indicates that companies that have problems are forced to be more active. In principle the causality direction can work in two ways: the use of certain strategies can also alleviate these problems. However, the results show that the first causality direction (from problems to strategies) seems to be stronger. The two-way causality issue therefore makes it difficult to evaluate the success of strategies in reducing problems.

Table 4.11 Differences in sector scores on a number of policy instruments: ranking the sectors scoring highest

Policy instrument Sector with highest score on this instrument

Sector with second score

Sector with third score

Recruiting workers from other sectors or other countries Optics and electronics Chemical R&D

Recruiting young people from the education system Optics and electronics Machinery Software

Use of specialised agencies/temporary workers/headhunters Machinery

Optics and electronics

Transport and equipment

On the job training Software Other manufacturing Paper and textile

Note: only those instruments are selected for which sector scores are statistically different (10% level).

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The pattern of using instruments is different according to sector. This is illustrated in Table 4.11, which presents differences in ranking of scores per sector for a number of instruments.

There are some differences in company strategies according to company size (Table 4.12). Small companies less often recruit from other sectors and countries and less often use internal job mobility, off the job training and specialised agencies.

Table 4.12 Company strategies according to company size

Strategy Small Medium Large Total Chi-square

testa)

Recruiting young people form the education system 60% 66% 60% 62% ns

On the job training 52% 58% 48% 53% ns

Stronger cooperation with other organisations 41% 43% 40% 41% ns

Recruiting workers from other sectors, or other countries 31% 39% 44% 36% *

Participation of employees in off the job training and education programs 28% 40% 36% 33% *

Increase internal job mobility in the company 16% 37% 43% 28% **

Outsourcing and off shoring 25% 19% 24% 23% ns

Use of specialised agencies/temporary workers/headhunters 18% 26% 30% 23% **

Restructuring the work organisation 16% 20% 25% 19% ns

(Further) automation and mechanisation to substitute labour 13% 14% 13% 13% ns

Try to postpone retirement older employees 12% 11% 14% 12% ns

Increase wages 14% 11% 7% 12% ns

a) Test for differences between size classes: * = significant at 10% level; ** = significant at 5% level, ns = not significant.

When looking to country differences, the UK has a special position. The UK scores high on the use of specialised agencies and outsourcing and off shoring, but relatively low on recruiting young people from the education system. Other North-Western European countries also score relatively high on outsourcing and off shoring.

4.6 ADEQUACY OF THE EDUCATION SYSTEM

How should the education and training system respond to NMP-developments? To what extent is the actual education and training system adequately organised and responding to deal with these developments? In this area, the available literature still has a number of questions not fully answered. There is no clear message on the need for specialisation, for example in nanotechnology (although most authors have a preference for a broader base

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and specialisation in a later phase). Consequences for the education levels below higher education have less attention. The education system is criticised by some educationalists because personal skills like creativity and critical thinking are valued too little. Education should use more “real world” assignments, also using contacts with companies.

A number of questions in the survey deal with the adequacy of the national education system to fulfil skills needs for present and future technological developments. These questions have been asked for the higher education system and for the system of vocational education and training (VET). By also specifically looking at results per type of technology, we also get a better view on differences in judgements from this angle.

Higher education Because the adequacy of the higher education system is clearly linked to the specific situation of the national education system, we present the results for the different country clusters (Table 4.13). First, it is important to mention that less than one quarter of all companies find that the higher education system is “to a large extent” able to fulfil the skills needs related to technological developments. This indicates that companies are, at the least, not fully satisfied. There is clearly a difference between, on the one hand Germany and the cluster “other North-Western Europe”, and on the other hand the UK, Eastern Europe and Southern Europe. The satisfaction about the system is higher for the first group. Most critical are the companies from Eastern Europe.

Table 4.13 The ability of the higher education system to fulfil skills needs related to new technological developments per country cluster

To great extent

Somewhat Very little Not at all Do not know

Total Average scorea)

Germany 37% 50% 7% 4% 1% 100% 3.23

UK 7% 61% 20% 5% 5% 100% 2.75

Other North-West Europe 39% 48% 8% 1% 4% 100% 3.31

Eastern Europe 3% 51% 36% 3% 6% 100% 2.58

Southern Europe 16% 60% 17% 3% 2% 100% 2.92

Total 23% 54% 15% 3% 4% 100% 3.02

a)Great extent = 4; somewhat = 3; very little = 2; not at all = 1

Note: The differences between country clusters are statistically significant at 5% level (Kruskal-Wallis test).

The responding companies have been given the possibility to choose between a number of options for improvement of the higher education system (Table 4.14). Stronger cooperation with companies is by far the most mentioned option (80%) and is seen in the results for all country clusters. Stronger cooperation with universities is also characterised as a “challenge” in a recent OECD study of the impacts of Nanotechnology (OECD, 2010). The interviewed companies in this OECD study sometimes find it difficult to identify commercially relevant university research. Moreover, there is a clash of incentives between university (reputation, publications) and those of companies (royalties, propriety patents).

More possibilities for PhD programs is mentioned by 44% and most mentioned in Southern Europe. More international cooperation is another option mentioned by quite a large group (42%). The UK scores lower on the latter issue, but scores remarkably high compared to other countries on the need to improve the supply of graduates. At the level

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of higher education, there is no strong signal that companies criticise the system because of lack of attention for personal skills. With regard to the issue of more or less specialisation in science, the scores are quite even. Moreover, both scores are not very high. These results do not favour a strong change of the present situation towards more or less specialisation. The differences in scores by size class of companies are limited.

Table 4.14 Options for improvement of higher education by country (multiple answers possible)

Germany UK Other North Western Europe

Eastern Europe

Southern Europe

Total Chi-square testa)

Stronger cooperation with companies 80% 80% 75% 82% 86% 80% ns

More possibilities for PhD programs 36% 45% 44% 33% 56% 44% *

Improve international cooperation 44% 28% 40% 51% 52% 42% **

More attention for technical developments in non-technical studies 32% 25% 26% 27% 25% 27% ns

More specialisation (i.e. in depth knowledge of specific domains) within science 18% 29% 23% 36% 30% 26% ns

Improve the theoretical level 27% 26% 20% 36% 25% 25% ns

Less specialisation within science 33% 18% 25% 12% 22% 23% *

Increase supply of graduates 15% 35% 26% 12% 13% 22% **

More attention for personal skills in education 18% 20% 15% 18% 14% 17% ns

More opportunities for training courses of experienced professionals to update skills and acquire new skills 16% 23% 16% 18% 14% 17% ns

Start new types of higher level science courses 10% 14% 5% 12% 8% 9% ns

Total 100% 100% 100% 100% 100% 100%

Solutions for higher education are ranked according to the percentage of respondents who selected a specific solution).

a) Test for differences between country clusters: * = significant at 10% level; ** = significant at 5% level, ns = not significant.

In Table 4.15 the options for improvement are shown for the types of NMP technologies the companies apply.

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Table 4.15 Options for improvement of higher education by use of N, M and/or P technologies (multiple answers possible)

Only N

(n=22)

Only M

(n=29)

Only P

(n=45)

N, M

(n=33)

N, P

(n=20)

M, P

(n=68)

NMP

(n=121)

No N, M, or P

(n=57)

Total

(n=395)

Chi-square testa)

Chi-square

test NMP vs. resta)

Stronger cooperation with companies 64% 76% 89% 82% 85% 84% 84% 67% 80% ** ns

More possibilities for PhD programs 41% 31% 47% 42% 55% 46% 53% 30% 45% ns **

Improve international cooperation 45% 38% 40% 42% 45% 43% 48% 26% 41% ns *

More attention for technical developments in non-technical studies 18% 34% 22% 21% 40% 34% 26% 25% 27% ns ns

More specialisation (i.e. in depth knowledge of specific domains) within science 23% 28% 20% 33% 25% 21% 35% 16% 26% ns **

Improve the theoretical level 41% 24% 18% 24% 20% 21% 31% 21% 25% ns *

Less specialisation within science 23% 28% 22% 24% 15% 26% 26% 16% 23% ns ns

Increase supply of graduates 18% 17% 20% 24% 20% 25% 24% 17% 22% ns ns

More attention for personal skills in education 18% 0% 4% 24% 30% 13% 28% 7% 17% ** **

More opportunities for training courses of experienced professionals to update skills and acquire new skills 14% 10% 9% 27% 10% 19% 21% 14% 17% ns Ns

Start new types of higher level science courses 9% 3% 9% 18% 0% 6% 14% 5% 9% ns **

Total 100% 100% 100% 100% 100% 100% 100% 100% 100%

Note: solutions are ranked according to the percentage of respondents who selected a particular solution. a) Test for differences between NMP groups:. * = significant at 10% level; ** = significant at 5% level, ns = not

significant. In the last column, differences are tested between the results for the NMP group (combining N, M and P) versus the rest.

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In general companies not involved in NMP score lower on the options, indicating that they have fewer demands towards higher education. Companies combining all elements of NMP in general score high on the options, indicating that especially for these types of – highly innovative - companies the demands for higher education are higher. An important difference can be found for the option ‘more attention for personal skills’. This option scores high for all combinations in which N is involved, underlining the importance of personal skills for companies involved in nanotechnology.

VET

Similar types of questions have been included in the survey with regard to the national vocational education and training systems. This is an important element of the survey, because it complements the available literature, which has little attention for the VET system. Compared to the opinions on the higher education system, general satisfaction about VET is somewhat lower. Less than 10% thinks that the VET system fulfils skills needs to a great extent. This underlines the importance of giving attention to this type of education system.

The country differences of opinions about the ability of VET to fulfil skills needs as a result of new technological developments are comparable to those of the higher education system. Germany and the cluster of other North-West European countries have a higher score than the UK, Eastern and Southern Europe. These results are in line with the fact that especially Germany, but also some other North-West European countries have a relatively well-developed VET system. For example, the apprenticeship system in Germany has a good reputation. The opposite is true for the UK system, which has a disadvantaged position in this area and has tried to improve this by setting up systems like modern apprenticeships etc. Involvement in N, M, P or combinations do not show large differences in these judgements.

Table 4.16 VET’s ability to fulfill skills needs related to new technological developments per country cluster

To great extent

Somewhat Very little Not at all Do not know

Total Average score a)

Germany 14% 54% 16% 2% 13% 100% 2.91

UK 3% 32% 38% 12% 15% 100% 2.32

Other North-West Europe 12% 47% 13% 2% 25% 100% 2.93

Eastern Europe 3% 25% 50% 3% 19% 100% 2.35

Southern Europe 6% 37% 31% 12% 14% 100% 2.43

Total 8% 41% 27% 7% 18% 100% 2.60

a )Great extent = 4; somewhat = 3; very little = 2; not at all = 1.

Note: The differences between country clusters are statistically significant at 5% level (Kruskal-Wallis test).

What do the companies suggest that should be improved within the vocational education and training system to better fulfil skills needs related to new technological developments? Table 4.17 shows the options companies selected. By far the most mentioned option is stronger cooperation with companies (mentioned by two thirds of companies). Other options quite frequently mentioned are better conditions to employ apprentices and interns (38%), more attention for personal skills (37%), and improve international cooperation (31%). This score for more attention for personal skills is

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clearly higher compared to the situation in higher education. So the need for attention for this is much more felt in this area of the education system. Finally, it is important to mention the low scores on the need for more training courses for experienced professionals. This score fits within the general trend, also noticed elsewhere in this report, that companies have little attention for lifelong learning as an important instrument to deal with skills gaps and shortages.

Table 4.17 Options for improvement of VET by types of technologies ranked by total (multiple answers possible)

Germany UK Other North

Western Europe

Eastern Europe

Southern Europe

Total Chi-square

test

Stronger cooperation with companies 59% 77% 59% 58% 79% 68% **

Improve conditions for companies to employ apprentices and interns from the vocational education system 34% 52% 25% 46% 40% 38% **

More attention for personal skills in vocational education 36% 41% 34% 33% 41% 38% ns

Improve international cooperation 30% 19% 29% 30% 48% 31% **

More attention for technical developments in non-technical studies 29% 32% 22% 18% 25% 26% ns

Improve the theoretical level 24% 28% 27% 33% 16% 25% ns

Increase supply of graduates 5% 13% 11% 9% 12% 10% ns

More opportunities for training courses of experienced professionals to update skills and acquire new skills 4% 12% 11% 3% 13% 9% ns

Start new types of vocational specializations 2% 12% 5% 15% 8% 8% *

Total 100% 100% 100% 100% 100% 100%

Note: solutions are ranked according to the percentage of respondents who selected a particular solution).

The outcomes per country clusters are similar. However, there are some exceptions. For example, the UK scores relatively high on the need for stronger cooperation with companies and the need for improvements for conditions for apprenticeship and interns, but relatively low on the need for improvement in international cooperation. The latter need is most mentioned by Southern European companies. This country cluster also scores high on the need for stronger cooperation with companies.

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The differences in scores by size class of companies are limited. Differences by types of NMP technologies follow roughly the same patterns as in higher education (e.g. higher scores for companies involved in all elements), but the differences between categories of companies are less strong.

Conclusion Companies are rather critical about how the education system in their country is able to fulfil company needs for skills as a result of new technological developments. They are more critical about the VET-system than they are about the higher education system. The critics are the strongest in the UK and in Southern and Eastern European countries. The most critical point with regard to both the higher education system and the VET system is the (lack of) cooperation with companies.

Companies involved in all elements of NMP, generally have higher scores on the suggestions for improvement, indicating that their demands from higher education and VET are stronger. Companies involved in nanotechnology more strongly underline the importance of personal skills in education.

4.7 CONCLUSIONS

In this chapter we discussed the results of a survey among companies, many of which are active in NMP technologies. Companies involved in NMP are more inclined to say that in their sector Europe is leading in R&D research, but following in production. Regarding the future they are quite optimistic on the position of the EU in terms of production and R&D of NMP technologies. Companies in Germany have the highest scores.

Most companies involved in NMP expect that the application of NMP will lead to new/improved products for their company within 5 years. The time frame for new/improved products is expected to be longer for Eastern European companies; more companies from this region expect a time frame of 6 to 10 years than the rest of Europe. The time frame for new/improved products is on average expected to be longer for products in the field of N, compared to M and P.

Many companies expect a limited increase of jobs as a result of new technological developments. An increase is expected most for the function groups R&D and engineering/design. The expected increase in employment is highest for the sectors energy & environment, software, R&D and optics & electronics. The expected increase in employment is in line with the results from the literature review, although most available studies only focus on “N”. From the survey we can conclude that the expected growth is somewhat lower when the company is only involved in M. The growth expectations are highest when the company applies a combination of NMP technologies. The most innovative companies seem to grow fastest.

Also in terms of the impact on skills changes, new technologies are expected to have quite some consequences. Skills changes because of new technological developments are expected to be most important for the function groups R&D and Engineering & design. Most important changes in personal skills concern innovation skills and creativity/interdisciplinary skills. Regarding the technical skills the most important changes in skills are in the fields of material science, nanotechnology and process engineering.

The outcomes on skills changes are in line with what we have found in the literature: especially changes for R&D functions and in material science are very prominent in other studies too. The fact that also more personal - “softer” - skills play an important role is in line with other studies in this field. Skills that have an element of technical, business and

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personal competences, like innovation management, also score very high in other studies. Some studies also stress the importance of project management.

Most companies experience skills gaps and recruitment problems as a result of new technological developments. However, most companies rate these problems at the moment as “limited”, but they are expected to become stronger in the future. Between 20% and 25% perceive future problems as “substantial”. Skills gaps and recruitment problems differ per country. For example the score on skills gaps is low for Germany. Companies use various strategies to deal with these problems, which is even more the case for the larger companies. Some strategies are very popular: recruiting young people from the education system, on the job training and cooperation with other organisations such as sector organisations and trade unions are mentioned most frequently. Increasing wages and postponing retirement is mentioned very limited. Strategies differ somewhat between size classes and between country clusters.

Companies are rather critical about the education system in their country. They are more critical about the VET-system than the higher education system. The critics are much stronger in the UK and Southern and Eastern Europe. The most critical point, with regard to both the higher education and the VET system, is the (lack of) cooperation with companies. The importance companies attach to cooperation is an opportunity for education institutes to introduce more “real life” contexts in pedagogical approaches, which is advocated by a number of educationalists as a more proper preparation for a society with continuous innovations.

Demands on the education systems are strongest for companies which combine all elements of NMP and lower for companies which are not involved in any of these technologies. The need for more attention for personal skills seems to be more apparent for the VET-sector than for higher education. What also is striking is that the need for more attention for personal skills is more stressed in companies involved in nanotechnology. Companies are divided on the need for specialization or more general science studies. This was also discussed in the sector overviews. Company views are divided in their need for in-depth and specialized knowledge on the one hand, but at the same time the necessity of interdisciplinary and “out of the box” thinking. However, the fact that the scores of the options for more, or less, specialisation are not high and quite even, does not point in the direction of required radical changes in the present situation.

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5 THE EDUCATIONAL PRACTITIONER’S POINT OF VIEW: A SURVEY

5.1 INTRODUCTION

This chapter investigates the key analytical questions for Higher Educational Institutions (HEI) and institutes for Vocational Education and Training (VET). We investigate current and future activities of both HEI and VET in the EU27 in educating and training NMP skills to both young students and to people in later stages of their professional lives. Furthermore, we investigate how companies are involved in the development of these education and training (E&T) programmes.

For analytical reasons a distinction is made between HEI and VET. Their involvement in teaching NMP skills in E&T programmes differs considerably, as was shown in the sectors studies in the previous chapter. For that reason data on HEI have been gathered through the survey. This enables us to follow the topics mentioned above and get a more quantitative view of the subject of the study. Data on VET came from interviews; the questions in these interviews have a primarily qualitative character.

As much as possible, we have made a distinction between nano-sciences and nanotechnologies (N), materials (M) and new production (P) technologies. However, due to data restrictions, in most analyses this is not possible.

Section 5.2 explains the methods that have been used: the survey and interviews. It describes how the names of respondents and interviewees have been collected and it discusses the questionnaires that have been developed for survey and interviews. In the other two sections of this chapter, the results of the survey under institutions for higher education (Section 5.3) and interviews with representatives of VET institutions (Section 5.4) are summarized. The final section draws conclusions, in which we also reflect on findings in other parts of this study (Section 5.5).

5.2 RESEARCH METHODOLOGY

5.2.1 IDENTIFICATION OF RESPONDENTS FOR OUR SURVEY AMONG HIGHER

EDUCATION INSTITUTIONS

Our respondents represent individual departments within Higher Education Institutions in Europe. The HEIs they represent all provide conventional levels of tertiary education, and from the associate degree level in the first stage of tertiary education to the second stage of tertiary education that ultimately leads to an advanced research qualification.

In ISCED32 terms, this implies the following levels:

− ISCED 5b − ISCED 5a − ISCED 6.

The European Commission provided us with a database of contact persons of the FP6 en FP7 projects in the field of NMP. First of all, we deleted all double contact details. After this, 442 contact persons remained.

32 SCED - International Standard Classification of Education

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Secondly, we searched for new contacts through web search. The main sources were:

− Seminar list for educational development of technical studies in The Netherlands, − European Nanotechnology Education Catalogue, − Hochschulangebote im Bereich Nanotechnologie, − A file by Øresund University about Nano Education in Europe, − A post-graduate course directory of courses in Nanotechnology in the UK, − Attendees of the Conference on Industrial Technologies in Brussels.

On 24 May 2011 an email inviting these persons to participate in the survey was sent to them. A link to the web-based survey was included in the email message. Giving the number of ‘undelivered emails’ that bounced back, 789 people have received our invitation. 33

On 20 august 2011, the response was 178; this is a response rate of 25.6%. All major member states are included; most respondents (48) were German. Other major countries included were the UK (19), The Netherlands (12), Italy (11), Denmark (10), and Belgium (9). Ten respondents come from outside the EU27. Not all respondents completed the survey. Only 125 answered the entire list of questions, the response rate per question is between 15.8% and 25.6%. Most respondents have a background in either Research or Management & Coordination (see Figure 5.1). This gives the respondents a good insight in current and future trends.

Figure 5.1 Professional backgrounds of the respondents

33 On 6 June 2011 a first reminder was sent by email. In addition, that same day many of the

persons who had not yet filled in the questionnaire were contacted by telephone, asking them to fill in the questionnaire. This resulted in a relative strong increase in response. On 20 June 2011 a second reminder was sent. The survey closed on August 20 2011.

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5.2.2 STRUCTURE OF THE SURVEY

The questionnaire that was developed has gone through a number of development stages before it was finalised. A first draft was discussed in the project team, also to link this questionnaire to the one for the companies.

The second draft was sent to the European Commission. Based on the feedback from the Commission a third draft version was made. This version was tested in a pilot. Ten persons were selected from the list that already was drafted. These persons have been invited to fill in the questionnaire. Also they were asked to give feedback on the questionnaire (we announced that we would call them and have a short interview about the questionnaire). A reminder was sent after one week in case a person had not responded. In the end, there was only one person who had filled in the questionnaire and also provided feedback. He only had a small comment on the wording of one of the questions.

The final questionnaire consists of five parts and includes 34 questions.

1) General.

Questions about the type, name and country of the organisation the respondent is working, his/her position, the number of students (plus how many come from outside Europe) and how this number has developed since 2007, and will develop the next 5 years (8 questions).

2) Role of NMP in education and training programmes

Questions asking for if NMP is addressed in the Bachelor, Masters, PhD or other programmes in the organisation and about the compulsory character of these NMP-related courses, about the expected in- or decrease of NMP education and training the coming five years in the organisation, about training and education for professionals in industry, number of students and expectations about future developments (11 questions).

3) Graduate careers

Questions about career guidance system of students that monitor to which sectors students go after graduation (2 questions).

4) Role of companies in curricula development

Questions about the contacts with companies about curricula development, which company departments, the purpose of these contacts and how the importance of these contacts is perceived (4 questions).

5) Future activities in NMP education and training

Questions about plans for future NMP education, content of these new courses, role of companies in developing these courses, plans for addressing future skills needs of companies, limitations in NMP-related education and training, expectations about future NMP-related skills shortages in Europe, suggestions for EC policy makers (8 questions).

5.2.3 INTERVIEWS AMONG INSTITUTIONS FOR VOCATIONAL EDUCATION AND TRAINING

There is a common understanding that most NMP education and training is given in institutions for higher education. Nevertheless, it was decided also to have a small number of interviews with representatives of organisations that are dealing with vocational education and training (VET).

In ISCED terms, we have demarcated VET as follows:

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− ISCED 2c − ISCED 3c − ISCED 3a − ISCED 4.

VET is a more complex part of the education system for this study because of three reasons:

1. The number of VET-“suppliers” is larger, but it is often difficult to determine beforehand if a school offers NMP-related courses. At HEI level it is relatively easy to identify specific education and training courses that are relevant for the field. Especially for nanotechnology there are some databases available. At the level of VET, this is not the case.

2. It is more complex to determine the relevant contact persons in these schools for a large-scale survey, because databases of relevant contact persons in this area at this level are lacking.

3. In contrast to HEI, the responsibility for curricula at VET level is often centralised rather than left to individual schools. Many countries have specific institutes or councils responsible for a qualification structure, often in close cooperation with social partners. Examples are the “Kenniscentra” in the Netherlands, and the BIBB in Germany that has a coordinating role for the dual system.

In a study by Ecorys (2010), sectoral councils are listed which have such roles in skills policy for the sector. They are often a good source of information about developments in the sector (especially in terms of skills). Ecorys (2010) gave us the possibility to find the names of sector councils in relevant fields of our study. In the case of VET, these institutions and councils are a more appropriate partner to approach than individual schools (as in case of the HEIs). To reach this group through a survey would not be logical, because of the limited numbers. Therefore interviews by telephone with representatives of a number of these institutions have been used.

The organisations to contact were mainly selected from the Ecorys study, with additional information from websites34 and earlier contacts made by team members in previous studies. This preliminary list with names of organisations was complemented with the names of the persons to be interviewed for each organisation. These names were gathered by additional web search and by contacting these organisations by telephone.

This resulted in the selection of the following organisations for an interview:

− Kenteq, Netherlands, − BIBB, Germany, − Proskills, UK, − Cogent, UK, − Cereq, France, − Serv, Belgium, − Finnish National Board of Education, Finland.

34 On the list were organisations in The Netherlands, Belgium, Denmark, Finland, France,

Ireland, Italy and the United Kingdom. The preliminary list of organisations was the result of a web search was complemented by phone interviews to several organisations of this list, to ask for the right contact persons.

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The interview questionnaire consisted of 12 questions, a number of them directly taken from the HEI-survey, plus some additional questions. The questionnaire is included in Appendix 3.

5.3 NMP EDUCATION AND TRAINING IN HIGHER EDUCATION INSTITUTIONS

5.3.1 CHARACTERISTICS OF THE RESPONDING ORGANISATIONS The respondents were asked to answer the questions for the department or faculty they are located in. We provided them with the following definition of department/faculty: this is the unit within the higher education institution, in which NMP education and training is provided (for instance: the faculty/department of Natural Sciences, of Chemistry, of Physics, of Material Sciences, etc.).

For as far as levels and types of education provided by the respondents are concerned, the HEIs in our sample are quite homogeneous in terms of the education levels they provide. The figure below shows that most of our respondents (93.6%) offer PhD courses. More or less the same share of respondents (respectively 85.9% and 81.3%) offers MSc and BSc programmes. Specialised post-master courses are offered by 31.5% of our respondents.

Figure 5.2 Educational levels provided by the responding organisations

5.3.2 NMP SKILLS ADDRESSED IN HIGHER EDUCATION NMP skills are not addressed in all courses taught. The extent to which NMP skills are taught differs from department to department. The figure below shows to what extent nanotech (N), new materials (M) and new production technologies (P) are addressed in the various levels of higher education of the respondents and the compulsory character of these programmes. We distinguish between the three most important levels of education introduced above. The figure shows that in the respondents HEI’s nano-sciences and new materials are taught more intensively than new production technologies.

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Figure 5.3 Education and training in N, M and P provided at the BSc, MSc, and PhD levels

Figure 5.4 below shows the compulsory character of the courses in NMP at the institutes that have responded. It can be observed that especially courses in the field of new materials are compulsory. In nano-sciences and in new production technologies, there is an emphasis on the MSc phase.35

This indicates that our sample is a good one: only respondents are included that are active in tertiary education in the field of NMP.

Figure 5.4 Education and training in N, M and P compulsory at the BSc, and MSc levels

35 Because of the structure of PhD tracks, these are excluded from this analysis.

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Concluding, the results of the survey show that NMP skills are taught both at the BSc and the MSc levels, with nano and new production technologies being taught relatively more often at the graduate level. When taught earlier, our interviews among HEI representatives (for the sector studies: see previous chapter) show, courses are significantly less in-depth. The interviews also taught us that teaching NMP skills at the BSc level is less common.

5.3.3 CAPACITY AND DEVELOPMENTS IN STUDENTS OUTPUTS The current student outputs of the departments in terms of graduations that provide E&T in one or more fields of NMP differ significantly from department to department. The largest HEI in our sample has an output of 600 BSc students, 450 MSc students and 100 PhD’s per annum.36 But perhaps more relevant are the figures on the average and median in Table 5.1. On average, the output of the departments is 124 BSc students, 78 MSc students, and 24 PhD students per annum. Medians are somewhat lower, which indicates the appearance of some large organisations in our sample.37

Table 5.1 Students outputs per annum (BSc; MSc; PhD)

BSc MSc PhD

Largest 600 450 100

Average 124 78 24

Median 90 50 15

Smallest 1 1 1

The number of students in HEIs in general has increased significantly in the past few years. OECD statistics show a growth in students between 2007 and 2009 of 5.87% in general in EU-27 countries. It is interesting if this also applies for students in the fields of NMP skills.

According to our respondents, the enrolment of students in their NMP-related departments has been increasing since 2007. Only 15% has noticed a decrease in their departments. Most respondents (30%) have witnessed a small increase, lower than 10%. Some 19.5% of our HEI-respondents have witnessed an increase between 10% and 20%. And 15.8% of the respondents indicated that the number of students within their own department has increased with more than 20%. Some 23% believes the number of students has remained roughly the same.

36 Five outliers were excluded from the data. All were positioned at least five standard deviations

from the mean. 37 Please be aware that not all of these students followed an NMP curriculum. However, all of

these students were able to follow courses in the fields of nano-sciences, new materials, and new production technologies.

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Figure 5.5 Development in student enrolment in NMP departments, in the period 2007-2011

These perceived growth figures are related to growth figures of tertiary students in EU27 member states in general. In 2007, 30% of those aged 25-34 had graduated from ISCED 5 and ISCED 6 education, compared with 25% of those aged 35-44 and 19% of those aged 45-64 (Eurostat, Education and training database). This growth can be witnessed in all member states apart from Germany. Highest shares of ISCED 5 and ISCED 6 graduates in the 25-34 age in member states of most relevance for this study group were found in France (42%), Belgium (41%) and Denmark and Sweden (40% each), and the lowest in the Czech Republic (16%), Romania (17%), and Italy (both 19%).

Apart from the fact that growth figures are related to growth figures of tertiary students in EU27 member states in general, the reader should be aware of the following:

− Our data does not allow us to distinguish between different levels of education or N, M and P;

− A number of years ago the OECD came to a more or less similar conclusion about students in science and technology: the absolute numbers are increasing, but decreasing in relative terms (OECD, 2008). The same conclusion can be drawn from recent Eurostat figures. The share of enrolled students in the fields of maths/science/engineering/manufacturing/construction at tertiary level (ISCED 5 and 6) in EU 27 has decreased from 26.2% in 2000 to 24.5% in 2009 (see also Box 2.1);

− Differences between Member States do exist in these growth rates, but the data for our survey do not allow for inter-country analyses among respondents;

− Data samples are too small to see significant differences between Member States. Further study would be necessary to draw conclusions on such differences.

5.3.4 CONTRIBUTION OF EXTRA-EU STUDENTS TO STUDENT OUTPUTS IN THE UPCOMING FIVE YEARS

The competition for talent has been increasing and will continue to do so in the years ahead of us. European HEIs increasingly depend on non-EU talent for student inflows.

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European industries, as was shown in Chapter 3, will see an increasing dependence on non-EU graduates. Hence, already in 2005, the European Research Council (ERC) stated that ‘Europe needs new institutional mechanisms to make it more attractive to (…) retain them within Europe’ (ERC 2005).

There has been a rapid growth in extra-EU students in the past 30 years, and many EU Member States are increasing efforts to attract non-EU students. Many member states have opened offices abroad for branding their HEI systems. This also goes for Central and East-European member states. They first have to improve the international focus of their systems, and improve the recognition of their qualifications, but further investments in international branding are expected.

However, the effects of such measures are still unknown, in particular in the field of NMP skills. Actual data seem to be lacking. In 2011, the European Commission's Education and Culture Directorate-General (DG EAC) stated that ‘International mobility statistics are notorious for their unreliability’ (European Commission 2011). Nevertheless, it is important to shed a light on the expected contribution of non-EU students to student outputs in the field of NMP skills for the upcoming five years.

Despite the increasing efforts mentioned above and below, our respondents expect the contribution of students from outside the EU27 to the expected development in student enrolments to be relatively small.

Figure 5.6 Expected contribution of extra-EU students to the expected development in student enrolments

Slightly less than a quarter of our respondents (24.6%) expect a considerable contribution of students from outside the European Union in the upcoming five years; 4.6% of our respondents expect a large contribution.

These figures are not that optimistic, given the policy measures to increase the number of students from outside the European Union. The European University Association, for example, is currently running three large projects to increase inflow from outside the EU.

These are:

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− CODOC: Cooperation of Doctoral Education between Asia, Africa, Latin- America and Europe (2010-2012),

− Europe-Africa Quality Connect (2010-2012),

− ALFA PUENTES (2011-2013).

In the recent past, the European University Association has given substantial attention to further development of exchange and cooperation with North American partners, the facilitation of “Regional Dialogue Meetings” with partners in other regions (Africa, Asia, Latin America), and following up the adopted EUA/ Consejo Universitario Iberoamericano (CUIB) Asturias Declaration (EUA 2006). In its recent Prague Declaration the European University Association saw promoting internationalization as one of the ten top objectives until 2020.

The European Commission itself has been particularly active in the field of attracting extra-EU students. For example, trough "policy dialogues" with partner countries, the EU stresses the attractiveness of EU tertiary education in third countries. The EU also has a substantial number of international cooperation programmes in higher education. This goes in particular for China. With China, the focus is on student mobility (Lehmann, 2011).

The UK is the leading destination for international students in the EU-27 and ranks second in the world after the United States. Moreover, in the UK, tertiary education in general is seen as an important export product. This is also found in our survey: respondents in the UK expect more extra-EU students than respondents from other Member States. This should be considered in the context of the relatively high international focus of British higher education. Section 4.5 shows that the UK NMP industry shares this international focus, as UK companies have a higher than average favour for international solutions (outsourcing and off-shoring) for dealing with skill gaps and recruitment problems.

5.3.5 LIFELONG LEARNING Some 29% of HEI-respondents indicate that their departments also provide E&T in NMP skills in the framework of Lifelong Learning (LLL) projects for professionals. There are relatively many NMP training programmes for professionals in Belgium, Germany, Italy, Spain and the UK. Especially in Belgium, Italy, and Spain most departments provide education in the fields of NMP for professionals.

However, the number of professionals taking part in such courses is small as compared to BSc or MSc programmes. On average, the HEIs that participate in this study and are active in the field of NMP education for professionals have an output of some 35 students per annum.

About 17.6% percent of the respondents claim that their HEI will set up such programmes in the nearby future or that they will increase the capacity of the current programme. In other words, besides the 29% of HEIs that currently already provide LLL programmes, another 17.6% of HEIs indicate that they will set up LLL programmes in the near future.

5.3.6 FUTURE PLANS OF THE HEIS The figure below shows respondent’s future plans for NMP courses within their educational programmes. The importance of all three fields is expected to increase in the respective curricula. Most substantial increases in future curricula are expected for nanotechnology, and for new materials.

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Figure 5.7 Future plans on the role of NMP in educational programmes (percentages)

About 31% of our respondents indicates that their departments will start new educational and training programmes in the fields of nanotechnology, new materials, or production techniques in the upcoming two academic years or that they will expand current programmes.38. Examples of such programmes are given in the box below.

38 We see no significant differences between countries.

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Box 5.1 Examples of envisaged new programmes in the fields of NMP

This might give the impression that the entire landscape of NMP education programmes in HEIs will change dramatically in the upcoming years. We do not expect this to be the case. Our sample might be biased in a way that it includes many relatively entrepreneurial FP participants in the fields of NMP. However, we do expect major changes in a large number of departments. The common denominator of these changes will be a shift towards more entrepreneurial skills in NMP curricula. Respondents have clearly identified a number of limitations of NMP education for the future. Except for availability of funds (70%) the two most important ones are the availability of technical and information infrastructures (21%) and training competences of teachers (18%). Other limitations mentioned (less frequently) are: availability of materials/chemicals, awareness of relevance of NMP and supply of students (i.e. student shortage). We see no significant differences between member states in our survey.

5.3.7 INDUSTRY-HEI COOPERATION Most respondents (86.4%) indicate that their HEIs have contacts with industry. Of the departments that have these contacts, some 71% considers these contacts important or very important. There are no significant differences between EU member states. Departments that indicate to have no contacts with the industry seem to be somewhat smaller in terms of student outputs than departments that have these contacts.

− A new MSc programme in Mechanistic Biology will be starting this semester. This will include two modules relevant to NMP: Physical Biology and Bionanomaterials

− Advanced new materials, enhancement of nanotechnology in various materials, new methods for employing production technologies for green environment

− International Master programme in Logistics and Supply Chain Management − Materials chemistry and energy technology / resource efficient processes − Entrepreneurship and innovation management − Nanobiology, basic science BSc program at border of Biology and Physics. Not

specific topics in NMP but general area will be covered − Nanomembranes, Nanoparticles, Nanointegration − Nanoscience, covering physics, chemistry and biology − New materials: polymers, self-assembling molecules. Nanotechnology and

bionanotechnology. − New nanomaterials for SMEs, New nanobiomaterials, Nanotechnology (Electronic

department), New nanomaterials and nanodevices for PV equipment (Electrical Engineering Department)

− Organic electronics − Renewing a master in material science, which will include aspects of nanotechnology

and micro-manufacturing − There is a growing number of nanotechnology students and the option courses

provided for them will expand. − Thin Film Technology Functional Materials for innovative Applications: protective

coatings bio-inspired and bio-integrated Materials − Materials for Fuel cell energy conversion PV and Solarthermal applications − The development of a National NanoScience and Nanotechnology structured PhD

programme

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Most of the contacts with industry are organised with the purpose of research collaborations (77.5%). Significantly less important are traineeships (48.6%), exchange of information (36.9%), and alumni contacts (35.1%).

It is interesting to notice that the curriculum-related types of contacts, such as the evaluation of graduate skills (30,.6%), the setting up of new courses (27.0%), and LLL (15.3%) are applied considerably less often for industry-HEI cooperation.

Only a small part of our respondents (12.5%) says that companies play an active role in the development of the new curricula.39 More than half of the respondents to the question (58.3%) indicate that companies have a passive role in developing the content of their curricula. This means the draft curriculum is presented to them and they are providing feedback, but there is no regular contact on the curriculum. The remaining 20.8% indicates that their curricula are developed without any industry input.

Figure 5.8 Use of different types of contacts of HEI with companies

Contacts can be organised with several industry departments, e.g. the R&D department, human resources department or the engineering and design department. The figure below shows that usually the contacts are with the R&D departments of the companies. Contacts with the companies’ human resources departments are less common. These findings relate directly to the finding on the types of different contacts.

39 This implies that the companies are being questioned on the content on a regular base, and their

input if of cardinal importance for the outcomes

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Figure 5.9 Relevant company departments for HEI-company relations (percentages of respondents)

It is striking to see the large number of HEIs that have no contacts with industry. Cooperation between the two seems to be more in its infancy than many think. And even if there are relations between industry and HEIs, the industry most of the time does not have an important role in developing curricula in the field of NMP skills. Both the industry and the HEIs have much to gain over here.

5.3.8 POST HEI CAREERS Monitoring of alumni careers differs between HEIs. Slightly more than half of the respondents’ organisations (59.2%) have a career guidance system implemented.

The number of potential career paths for NMP alumni is substantial. The figure below shows career paths of HEI alumni in EU27 (red). Because of the relatively large number of German respondents we also have included the figure for Germany (yellow)40.

40 German distributed has been normalised, based on total distribution. Differences before

redistribution were minimal (2%)

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Figure 5.10 Career paths of HEI alumni in EU27 and in Germany (percentages)

Relatively many alumni remain in higher education, either as a researcher or as a teacher. There is no difference between BSc and PhD levels, indicating that PhD tracks are already excluded. However, post docs are not. Also the numbers of graduates that go to industry, especially chemicals, electronics, energy and engineering are quite substantial.

5.3.9 EXPECTED SKILLS SHORTAGES The figure below shows expectations regarding the future skills gap in the field of NMP. Respondents were asked for their expectations on this matter for the upcoming five years.

Figure 5.11 Expectations regarding the future skills gap in the field of NMP

Some 34.4% of the respondents expect limited skills shortages in the near future. 31.1% expects substantial shortages. Only 13.9% expects no shortages at all. The majority of our respondents expect skills shortages.

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5.3.10 SUGGESTIONS FOR EU POLICY MAKERS

We have asked the respondents for some suggestions for EU policy makers. The most remarkable results are listed below.

With regard to the organisation of education:

− Increase the attractiveness of teaching compared to research for university professors,

− Involve students in real cases, − Broad base of knowledge remains essential before specialisation on NMP, − EU level networking in teaching of nano-sciences should be improved, − Funded positions for teaching personnel with companies experiences in the field

NMP, − Give incentives to companies to provide more internships to students, − Increase funding for education/student exchange programme. With regard to EU policies: − NMP is a very broad field! In general a structured forum between academia and

stakeholders would be useful in terms of identifying needs and skills gaps, − Invest in long-term basic research and related study programs, − From what I can see the EU is already investing a lot in this field as well as general

outreach programmes to children in order to capture there curiosity early etc., − Promote grant for non European students to study in EUROPE, − The EU should be more supportive of consortia that wish to develop education and

training programmes to meet the requirements of industry, − Inter-country funding for students. Make it attractive for universities to run Masters

degrees, − EU could sponsor some University places on courses that include NMP. With regard to industry-academia relations: − Industrial PhDs, − Industry - in particular SME - should clearly define which kind of skills they

require, not just generally criticize HEI, − Support industry-academia exchange programmes with focus on finding use for, or

making use of research at the academia, to solve industrial problems, − They should acknowledge the importance of a solid fundamental education in

physics and material science also for the application side, − To increase involvement of academic partners into EU-funded R&D projects.

5.4 VOCATIONAL EDUCATION AND TRAINING Our interviews for the sector studies showed that NMP skills are not high on the agenda of VET policy makers in the countries of the interviewees. NMP skills are simply too complicated and too fundamental to teach at the level of vocational education and training. This is confirmed by the additional interviews we did.

The interviews in the UK also showed that at the VET level, NMP skills are not an issue. Priorities of VET organizations are more related to basic skills; NMP skills are considered primarily academic. In the UK no VET organizations have been identified that have set up NMP skills training programmes.

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The interview with the Finnish respondent indicated that nanotechnology or any other specific technology is not mentioned in the national central steering documents on VET. However, this does not mean that it is not included in VET E&T programmes. The national core curricula and requirements for vocational qualifications are drawn up on a fairly general level so as to leave room for local adaptations and interests. Moreover, teachers have a high level of autonomy regarding the contents of their training modules. The respondent however, did not expect that NMP skills are included in one of these training modules in Finland.

Similar observations were made based in the interview with the Dutch respondent. In The Netherlands, at the VET level, NMP skills are considered a ‘secondary technology’. This implies that NMP skills are perceived as primarily supportive to other technologies and crafts. Given the assignment of VET in The Netherlands, it is therefore not taught on the VET level.

The situation in Germany is somewhat different. The educational system in Germany differs between the Länder. In general, students get tracked in one of the three pathways after primary schools. These can be Gymnasium, Realschule and Haubtschule. The latter two result in VET-careers, the first one in an academic career. About 75% of VET-students enrol in the typical dual system of apprenticeship (Duale Ausbildung). The other 25% enrols in full-time VET-schools. In Germany, no explicit learning outcomes for VET are defined. This goes for both the Duale Ausbildung and for the full-time VET-schools. Outcomes are defined as occupational capacity to act. This implies a substantial decentralisation.when it comes to decision-making processes on incorporating NMP skills in VET curricula.

A study by ISF indicated that in typical Nano-unternehmen (nano-companies) in Germany about half of the employees has a HEI background, and a minority has a background in VET. This does not mean VET has a role in teaching NMP skills. Necessary skills are taught in companies. A case study on BASF clearly shows this mechanism (BMBF 2008). For smaller industrial organisations that do train students in the system of apprenticeship in the field of NMP, a structure of nine knowledge centers has been set up all over the country by the federal Ministry of Sciences and Education. These centers focus on nanotechnology.

In Germany, the Bundes Institut für Berufsbildung (BIBB) intensively monitors skills developments needed at the shop floor level. BIBB, and its role in the German VET-industry interface are described in more detail in the box below.

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Box 5.2 Bundesinstitut für Berufsbildung (BIBB)

BIBB indicated in the interview that they see no direct shortages of VET-students in NMP skills. Also Hackel et al. (2011) did not find any shortage of nano-students at the VET-level. BIBB (2008) states that no educational developments at the VET level should be expected in the field of nanotechnology before 2013. However, BIBB also concluded that this matter should be closely monitored in the future. The reason for advocating such close monitoring is simple. The current discourse might be based too much on official statistics. Apart from the age of most recent statistics, such statistics also have a tendency of pushing concepts into categories. Whenever that turns out to be impossible, the concepts or developments do not show up in statistics. According to BIBB, NMP in relation to VET skills might be such a concept (Dworschak 2008). This shows the importance of an institute such as BIBB.

Monitoring has been put in practice by a project that was recently started by BIBB. The project will assess the skill needs resulting from various new technologies for qualification in the dual system. A description of the project can be found in Hackel et al. (2011).

5.5 CONCLUSIONS In this chapter we have analysed current and future activities of both HEIs and VET in the EU27 in the field of education and training of NMP skills to both young students and

BIBB (Federal Institute for Vocational Education and Training) is an interesting organisation when looking at industry-VET relation ship. It aims at being the centre of excellence for “vocational research and for the progressive development of vocational education and training (VET) in Germany”. It serves as a well-developed VET research institute. Anno 2011, BIBB has got five major goals. These are: − the training place market and the employment system; − updating vocational training and improving the quality of vocational training; − life-long learning, the permeability and equivalence of training paths; − vocational training for specific target groups; − the internationality of vocational training. Currently, the institute has some 500 staff members. They work in four departments, each with a number of sub-departments. Especially Department Four (Regulation of Vocational Education and Training) is of importance for the development of NMP skills in Germany. The department “is responsible for developing new training occupations and continuing vocational training provisions and regulations, as well as updating the training requirements for existing occupations”. BIBB organises contacts with companies and it lobbies for educational improvements at the VET level that could serve these companies. It collects panel data on the needs for certain skills at the shop floor level. The panel consists of 1300 German enterprises that are surveyed three times a year. BIBB also has an expert-panel that is organised in a relatively ad-hoc manner. Through these sources, BIBB identifies future challenges in VET, stimulates innovation in national and international vocational systems, and develops new, practice-oriented solutions for both initial and continuing vocational education and training. The institute therefore has a crucial role in the typical German system of education. The institute was set up in 1970 by law. This law was renewed in 2005. The institute is funded directly by the federal government. The Federal Ministry of Education and Research (BMBF) supervises it.

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to people in later stages of their lives. We also have analysed how companies are involved in the development of these education and training programmes. Also, we have identified a number of needs and future trends according to HEI professionals.

Most of our HEI respondents (85%) represent departments that teach NMP skills. In about 50% of the observations, taking these courses is actually compulsory for students. NMP skills are taught most intensively at the PhD level, followed by the MSc level and the BSc level. We have found that especially nano-sciences and new materials are taught intensively at the HEI level. New production technologies are taught less intensively. About one third of the departments that provide education in NMP skills also provide LLL courses. The average number of students in these courses is 35.

Overall, according to our respondents, the enrolment of students in their departments has increased since 2007. This growth should – at least partly - be seen within the context of growing figures of tertiary students in the EU27 in general. The expected contribution of students from outside the EU27 to the expected development in student enrolments is relatively small. However, this growth is a key necessity, given the expected shortages in the companies.

Most HEIs have contacts with industry. This is striking since our findings presented in Chapter 4 show that such intensive cooperation is not noticed by the industry. Of the departments that do have these contacts with industry, about two third considers them important or very important. HEI departments that have no contacts with industry are smaller in terms of student outputs. Hence, external contacts might primarily be a capacity issue. Most contacts with industry deal with research collaborations. Less frequently they are dealing with traineeships, exchange of information, and alumni contacts.

It is striking to see that, - even though contacts with the industry are intense - relatively many HEI alumni remain in higher education, either as researcher or as a teacher. Graduates that go to industry, most often go to companies in the chemical, electronic, energy and engineering sectors. HEI respondents expect skills shortages in NMP to increase in the nearby future.

With respect to VET we also found (as in the sector studies) that NMP skills do not seem to be an issue at the VET level. It was relatively hard to arrange interviews with VET representatives on the topic of NMP skills and we expect that this was mainly due to the fact that NMP skills was not an issue for them. From the interviews that we finally had, the clear message was that NMP skills are hardly taught at the VET level. There are two main reasons for VET organisations to pay relatively little attention to NMP skills. The first and most obvious reason is related to the level of education. To many sublevels within the VET level, NMP skills are simply too difficult and complex to teach effectively.41The second reason is related to the intrinsic nature of the VET system in most countries. VET considers itself primarily as a system for applied education. NMP skills are considered too ‘fundamental’, and too ‘strategic’ to teach in a system that is meant to teach practical skills. There are however some exceptions. Especially in Finland and in Germany, there is some strategic thinking about more applied forms of NMP E&T at the VET level. In Germany, this process is primarily demand driven. Here, skills demands at the shop floor level are intensively monitored and translated into new modes of thinking about NMP E&T at the VET level.

41 This complexity can also be witnessed within the HEI system. We see significant differences in

NMP skills being taught between BSc, MSc, and PhD. Below BSc, this statistical correlation continues.

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6 CONCLUSIONS AND RECOMMENDATIONS

In this last chapter we draw conclusions about “the impact of NMP and new industrial patterns on current and future skills and competences needed for research, engineering and manufacturing levels” (Objective 1 of the study) and we formulate recommendations “on education, training and other measures to be implemented to fill potential skill gaps” (Objective 2 of the study).

6.1 NMP VERSUS N, M AND/OR P

Already in the beginning of the study we made a first important observation. In the five industrial sectors we contacted, interviewees were not familiar with the “term” NMP: it is not a very common expression. For that reason we addressed the different groups of technologies separately (N, M and/or P). Nanotechnology, new materials and production technologies cover a wide range of different technologies. NMP technologies are key enabling technologies and as such influence a vast range of applications in many industrial sectors. This made this study not an easy task. Furthermore, because of the limited number of interviews that could be performed, the study has a somewhat explorative character especially where it concerns the five sector studies.

The sector studies show that each sector has its specific characteristics concerning the importance of NMP for new products and processes, now and in the near future and that this differs considerably by sector. In the chemical sector the development and implementation of new technological developments in NMP is rather pervasive and influences a large variety of new products and new processes. The impact of NMP in the chemical sector influences other sectors downstream. The three downstream sectors in this study, automotive, paper and textiles use the new chemical products (such as new types of nano-materials) in their products and production processes. In the automotive industry the most relevant developments of NMP for the automotive OEMs themselves deal with lightweight engineering materials and lightweight design, as well as the associated production processes in order to meet the requirements for reduced CO2 emissions. An important trend within the paper and pulp industry is the use of bio-based materials and products. NMP contributes to the increasing variety of products derived from wood (such as high-tech paper, chemicals and energy), to more efficient and effective usage of raw materials and to the increase of sustainability of production (bio-processing). In the textile industry new developments in NMP seem to be limited to a relatively small number of front-runner companies especially in the technical textiles segment (smart materials, intelligent textiles). The machinery sector is an important supplier of production technologies for the chemical sector and the downstream sectors In the machinery industry mechanical engineering is combined with advanced technologies. New production technologies are mainly ICT-driven and based on automation and intelligent machinery, leading to more flexible production, smart, virtual and digital factories and high performance manufacturing. Some production processes apply nano-electronics for process and control equipment (sensors).

Notwithstanding these differences between sectors, the main messages on the impact of new developments in NMP on the current and future skills requirements in the sectors is more or less the same. These new technologies will impact mostly R&D functions and to a much lesser extent production/assembly line functions. Companies need researchers and engineers (chemical, mechanical) with a good basic training in a number of disciplines, while the company-specific knowledge and technologies will be learned ‘on the job’. This applies for functions on all levels.

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In addition to this explorative, but in some respects also in-depth, overview of how companies and educational institutions in the five sectors address problems of skills shortages and gaps, the surveys provided a much more generic picture. A wide coverage of relevant sectors and countries was aimed for and realised.

The results of the company survey showed that companies involved in NMP technologies have a lot in common. Many of them expect a growth in employment related to new technological developments, and consequently skills shortages are expected to increase. Moreover, the content of required skills will change related to the specific new technological developments, both in the area of more technical skills as well as personal skills. However, there are some differences in for example the types of (new) skills demands according to the type of underlying technology. For example, companies involved in new production technologies, give a relatively high score to the expected qualitative changes in skill demands in the fields of process engineering and IT, while companies involved in nanotechnology or new materials expect relatively high changes in skills in the areas of chemistry, material science, nanotechnology and biotechnology. It was also found that companies indicating that they are involved in a combination of N, M and P technologies are confronted with relatively strong changes in skill demands compared to companies involved in just one of these new industrial technologies. We will come back on some other differences in the following sections.

6.2 SKILLS DEMANDS AND GAPS

Both desk study and surveys indicate that employment increases related to technological developments are expected in companies involved in NMP. Expected growth is highest in companies that indicate that they are involved in a combination of N, M and/or P technologies, compared to companies involved in just one of these new technologies.

There are a number of studies specifically focusing on the change in demands of specialists in nanotechnology over time. The level of expected growth in employment differs significantly in these studies. There are also differences in opinions between our interviewees in the sector studies about the pace and importance of technological changes that will take place and its impacts on skills. One might conclude that the new developments in NMP are that new that there is still quite some uncertainty and ambiguity about the implications for human resources (both quantitative, and qualitative). However, there are some trends to be distinguished in our analysis. The most important one is that both skill shortages and skill gaps will increase.

Both desk study, survey and sector studies support the idea that expected growth related to new technologies like NMP is strongest for functions in R&D and engineering and design. This shows that NMP mainly influences high-qualified job functions. This is very well in accordance with the current education in the field of NMP as these new technologies are mainly addressed at the MSc and PhD levels. At the undergraduate level (BSc) they are addressed less intensively. At the VET level they are hardly addressed.

In first instance, the observation that the increased demand related to NMP, especially at graduate level, leads to increasing shortages does not seem to be straightforward. The absolute number of graduates in MST (Mathematics, Science and Technology) is growing, but employment in manufacturing as a whole is hardly growing. However, there are a number of reasons why shortages could become more severe. First, the relative share of MST graduates is declining and in combination with smaller youth cohorts this leads to limitations in new supply. Second, within manufacturing, there is a strong trend towards up-skilling, which means that the demand for high-qualified workers is increasing. Third, ageing in manufacturing is relatively strong, which means that many older workers leave the sector and (partly) have to be replaced. Fourth, the demand for

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technically oriented skills comes not only from manufacturing, but also from other sectors, like health, transport and trade. A forecasting study commissioned for Cedefop (2010b) even concludes that technicians and associated professionals will be the occupation with the strongest growth.

Both desk research and the company survey show that new developments in NMP also lead to qualitative changes in the skills demands. First of all they deal with technical skills: among the science and technology disciplines, material sciences are mentioned very frequently. In the company survey 22% of respondents indicate that knowledge in this scientific and technological domain will become much more important and 55% that it will become more important. But also other disciplines like chemistry and process engineering are mentioned frequently. In literature, also technical skills such as sol-gels technology, lithography and scanning microscopy are mentioned frequently. These technical skills increasingly have to be used in a context of well-defined projects, and in teams consisting of scientists and technicians from different disciplinary backgrounds. Moreover, the need for skills that make it possible to communicate beyond the borders of disciplines, countries and sectors increases. Examples of the need for cross-sectoral skills are shown in the new business cases that have to be developed in order to capitalize on the investments in nano-research. For instance chemical companies that develop nano-materials for energy storage applications are creating strategic alliances with downstream parties and have to do work closely together with for instance producers of batteries, and companies in the automotive industry.

So-called methodological skills such as project management skills, innovation management skills, and personal skills like creativity, problem solving, communication skills and the ability to work in teams, therefore score high when companies are asked for skill requirements. Both literature and some survey results seem to indicate that these more soft skills seem to be even stronger in relation to nanotechnology. A surprising outcome of the survey in this respect is that companies involved in nanotechnology value the extra attention for personal skills in education higher than other companies.

In literature less attention is given to quantitative needs for skilled workers, i.e. workers that are trained at the level of Vocational Education and Training (VET). However, the results of the surveys and the sector studies show that expected growth has hardly been felt at that level. On the other hand, interviewees that are active at the VET-level in all sector studies foresee a future trend towards more demanding technical skill requirements at this level (mostly because of up-skilling trends at this level).

6.3 NMP EDUCATION AND TRAINING

Our survey shows that NMP science and technologies are intensively taught in institutions for higher education (HEI), especially at the MSc level and the PhD level. Skills in the field of new production techniques are taught less intensively than skills in nanotechnology and new materials. Compared to N and P, M skills are relatively often compulsory. Education of NMP at the BSc level is less common.

Most HEIs expect small increases in numbers of students in the upcoming five years. This fits within the overall trend in students numbers in science and technology: they are increasing in absolute numbers, but decreasing in relative numbers compared to other disciplines. With respect to the entrance of students from outside the EU (extra EU-students): only a minor part of the respondents actually expects a substantial inflow of these students. Teaching of professionals that work in industry and other places (lifelong learning) in the fields of NMP is provided by many HEIs, but the number of students is only small. Development of educational programmes is substantial: four out of ten institutes will set up new NMP curricula in the upcoming two years.

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One important issue is the extent to which students in higher education (BSc, MSc) should specialise in a specific field or subject. The alternative for such specialisations would be more generic scientific education, in combination with on the job training in companies for new employees. The sector studies clearly show that companies indicate to prefer that students are taught in the basic disciplines – i.e. have a more general profile - and do not specialise too much. For all jobs levels applies that employees have to be trained on the job in the specifics of the companies R&D and/or production technologies in order to get more practical knowledge about the industry. Regarding the moment to specialise in N, M, or P, literature generally advocates late specialisation, too. The company survey shows that more specialisation versus more generic curricula is not a very pressing issue for companies. Both options are not that much chosen as factors to improve education and score even. Taking both literature, interviews and survey into account, we can conclude that there is little immediate cause to initiate changes in the direction of more specialisation.

Regarding this issue, there are some differences between European (groups of) countries in the survey. German respondents advocate less specialisation somewhat stronger and respondents from Eastern Europe advocate more specialization somewhat stronger. These differences could be caused by differences in the educational systems, and differences in industrial training capacities and budgets. In other words, German industry – to a large extent - can afford to educate. Taking literature, the interviews and the survey into account, we can conclude that companies do not favour more specialisation. They require a high level of more general technical knowledge that can be extended through on and off the job training.

Both literature on nanotechnology and our survey confirm the strong demand in NMP skills for those who have attained a PhD. This outcome is consistent with the fact that especially the demand in R&D and for engineers is expected to increase. The plea for more PhD students, however will be problematic, as this requires an increase of budgets for research programmes that are mainly executed by PhDs. HEIs do not expect to increase their outputs of NMP trained students within the next five years from now: our analyses shows that increasing supplies of PhD, MSc, and BSc graduates should not be expected within the EU27.

One of the causes of the limited numbers of NMP students is the decreasing interest of secondary school pupils in natural sciences and in engineering. The sector studies show that in all sectors there is large concern about the shortage of higher education graduates in engineering and sciences in general. Companies - especially the large chemical firms - are very actively involved in public programs aiming at getting children and young students interested in science and engineering and specifically in chemistry and chemical engineering. This problem is addressed in a number of countries. For instance in Germany, industry organization have taken efforts to increase the attractiveness of science and technology through the so-called MINT-programmes. Also in the Netherlands, public programmes aim at stimulating secondary school pupils to choose for natural sciences. However as these problems will not be solved in the short term and the international competition for talent will increase in the years ahead, HEIs in North-European countries (were these problems are most urgent) increasingly depend on non-EU talent for student inflows. Regulations on entrance of foreign ‘knowledge-workers’ are being simplified in these countries.

The process of transforming VET-curricula in response to new technological developments in the area of NMP hardly takes place; only in a few countries NMP is addressed in VET. Germany pays relatively much attention to this. The typical German culture of Berufsausbildung and the strong relationships in Germany between education and industry, plus a strong chemical industry where these capacities are needed, are of

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course a key condition. Therefore it is not surprising that German respondents in the company survey are most satisfied about VET education related to new technological developments.

German and to a lesser extent the rest of the group of North-West European respondents in the company survey are on average more optimistic about the present and future position of their sector in R&D and production in the field of NMP compared to the other regions. This stronger optimism can partly stem from the fact that their satisfaction with higher education and VET in relation to technological developments in their own country is higher.

6.4 COOPERATION BETWEEN HEI AND INDUSTRY

There is a strong discrepancy in perception in the visions of industry and of HEI on mutual cooperation and alignment of demand and supply on the labour market. Educational institutes perceive that they are active in adjusting curricula to industry needs. Also a clear majority of education institutes perceive their contacts with companies as important or very important. These contacts often consist of research collaborations and traineeships. Evaluation of education programmes for graduate skills is mentioned less. However, the perception of companies is quite different: they perceive a much less intensive cooperation than the HEIs. Companies mention stronger cooperation with HEIs as the most important option for improvement of both the higher education system, as well as the VET system. Internships and students writing thesis inside the company are two mechanisms through which HEI and industry can get closer.

The literature shows that the background of the bottleneck in the cooperation of companies with higher education is that the interests and incentives of companies and the HEI in such cooperation are not the same. For instance, interdisciplinarity is important for innovation in companies, but in HEIs education and research mainly takes place within disciplinary boundaries. In addition, university researchers are driven by incentives like reputation and publications (and interdisciplinary journals have relatively less high impact scores), which differ from companies (royalties, propriety patents).

Companies tend to solve their skill shortages by recruiting young graduates from the education system and provide them with in-company training. However, in the light of increased demand and the smaller cohorts of young people that have a decreasing interest in S&T, one can question the confidence companies have in this source being the solution of future shortages and skill gaps. The importance of training of the employed (lifelong learning) will grow, even reinforced by the ageing of the workforce. However, both the company survey as the survey among HEI indicate that in the present situation, lifelong learning in terms of off-the-job training has less attention in addressing skill gaps. A German survey on training needs of the employed in nanotechnology illustrates that these needs are quite broad and quality and infrastructure on the supply side far from perfect.

6.5 RECOMMENDATIONS

Some of the main conclusions of this study are:

− Future shortages and skills gaps related to NMP are expected to increase. This refers mainly to high level graduates in the fields of Science and Technology (S&T). At the same time there is still quite a lot of uncertainty about future developments of demand and supply. Skills demands in both quantitative and qualitative terms differ according to sector and the type of technology applied.

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− Besides various types of technical skills, personal skills such as creativity and ability to work in an interdisciplinary context are considered very important.

− Companies are very critical about their cooperation with education institutes, while the perception of education institutes is that they are very active in this field.

− In spite of developments like ageing and expected increasing skills gaps, lifelong learning in the sense of off the job training courses does not have a high priority for companies and higher education institutes.

− The whole area of VET does not get much attention in relation to skills needs related to NMP.

In the following of this section we give some recommendations linked to these conclusions.

Information about future skills developments

There is no clear picture yet about the pace and size of extra demands for employed resulting from developments in NMP. Monitoring of quantitative needs of industry in the coming years will help to increase a sense of urgency in education and training institutions and help them in adjusting their supply to industry needs. The availability of information about future skills needs is a more general issue. The availability of this type of information differs strongly per country. At European level there is clearly room for improvement. In existing European foresight studies the future demand side often has more attention than supply side and confrontations between demand and supply to determine discrepancies are poorly developed. Moreover, the level of detail of these studies is often limited, which makes it more difficult for education and training institutions to respond to the expected labour market developments. As far as information on the match between supply and demand for specific subgroups is available, this mainly concentrates on educational levels. For skills needs related to NMP, however, the field dimension is also crucial. At the higher education level, the labour market situation for MST-graduates is highly relevant, while other fields like social scientist are far less relevant. The European Commission is monitoring the supply of MST-graduates, but there is no indicator that relates this supply to future demand and to the discrepancies that can be expected. Current attempts of Cedefop for more detailed analyses of future labour market developments and better information on the match between demand and supply should be supported.

A more day-to-day monitoring of the current situation is better developed. The European Vacancy Monitor gives, for example, several indicators of labour shortages by occupation. In several countries, technicians score high on these indicators. However, even these types of classifications are on a rather high aggregation level. More detailed information on for example the extent of hard to fill vacancies by specific categories of engineers and technicians can only be collected by specific surveys among the companies concerned. Another way of collecting relevant detailed information would be to follow recent graduates in relevant fields in their labour market career, as is being done in some EU-countries. In the first case sector organisations are the logical initiator for this kind of monitoring. In the second case, the education institutes should be involved.

Preventing future shortages

The increase in the required number of employees in high-level science and technology functions and the increasing skills shortages stress the increasing need for more S&T students. This need differs per country and is for example somewhat lower in Eastern Europe. Interest in S&T should be stimulated at young age (even in primary schools). Companies can play an important role in teaching young people what technology is by offering internships, company visits to (young) pupils/students, assignments, student jobs

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etc.. Companies and education institutions should explore new ways of giving students more opportunities to learn what industrial practices look like. Students that meet the industrial “communities of practice” can get a better picture of what the industrial professions are about, including the challenging elements in it. Because upfront technologies and their potential for consumers can especially raise the interest of young people, NMP-developments are very suitable to be used in these strategies. The Swiss “Nano-cube” (Box 2.2) is a practical example of such an application. The confrontation and involvement at a relative young age with more practical day to day problems and developments of companies is also important to develop and stimulate personal skills such as creativity and critical thinking which are crucial in a context of continuous learning and innovation. Schools can also influence student choices in the direction of S&T by teachers who have a certain “drive” for these professions and bring in real life contexts. Guidance tests can also help to make the interest (and potential) of students in this direction more explicit. Instruments that show potential are especially important for groups that traditionally not often choose for S&T, such as girls and certain groups of ethnic minorities (and their parents). Information about (favourable) labour market perspectives can support this process.

Governments should be reluctant in limiting the inflow of foreign students for budgetary reasons. These students could be a valuable resource when they stay in the EU. More information should become available to their stay (the US has such information for their foreign engineers) and what could be done to influence this.

Cooperation between companies and education institutes

The industry and educational institutes should increase the intensity of their relationships. It is recommended that this interaction should be organised at the member state level, since labour market structures, and industry-HEI relationships differ between member states. ‘Europe’ can help alleviating skills shortages in regions with the strongest shortages by facilitating labour market mobility over national borders. Also European industry organizations could play an important role in this respect. The Strategic Research Agenda’s of many relevant European Technology Platforms - in which these organizations play a central role - address the skills issue but the industry associations could initiate more elaborated efforts to bring industry and HEIs together and work on the issues mentioned above. One important issue to be discussed is the level of specialization of the education programs that are provided and at which point industry takes this process of further specialization in knowledge and technologies that are specific to the company. In the previous sections we already pointed out that there seems to be a certain preference towards more generic science and engineering education instead of students’ education focusing on small specialized profiles.

Cooperation between education institutions and companies is essential when it comes to skills developments that meet industry requirements. But also the incentive systems within academia could be focused more on the education and training of students. Now it is aimed at publications with high impact factors; there are hardly any incentives to be a qualified trainer and ‘go out and meet the industry’ (and learn to know the future labour market of their students). The management of careers with academia could use a review in this respect.

Finally, as earlier mentioned cooperation between education institutes and companies is also essential for the earlier mentioned issue of increasing student choices in the direction of S&T. Elements like assignments, company visits and internships bring the world of S&T closer to students and can help to bridge the divide between education and company practice. Companies also indicate that they attach value to internships and apprentices.

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Personal skills

Companies clearly identify the need for personal skills. This translates in the demand for more attention to this in VET. However, their expectations from HEI to address these skills in their curricula are not that high. Apparently, companies foresee that at this level their own role (and employees themselves) to improve these skills is the most important. Companies can further develop this role by a well-developed personnel policy in terms of well-structured project teams, internal function mobility, specific training and regular feedback. In principle, this is the responsibility of individual company itself. However, our survey results show that policy instruments like off the job training and internal mobility are only used by a part of the responding companies. Especially smaller companies less often use these kinds of instruments. At the sectoral level facilities should be developed to help companies in this respect, for example by industrial organisations giving advice and stimulate the exchange of good practices.

Lifelong learning

Companies still attach much importance to the recruitment of young graduates for dealing with skills shortages and gaps. However, with the increasing skills gaps and shortages to be expected in the near future and a further ageing of the workforce, more attention for lifelong learning is needed. Policy makers at various levels should raise awareness of companies in this direction. This could be supported by offering companies financial facilities to enhance training. For example, in some countries sectors have chosen for a levy out of which training support and infrastructure is financed. Raising awareness is also an issue for the supply side of education institutes. They train only limited numbers in this area compared to initial education. The broad field of skills gaps shows that potentially there is a serious “market” in this area. To better develop this market, a customer-friendly approach is needed with flexibility in curricula, training times, starting moments, etc.. The educational approach for these kinds of target groups should be different. For example: a connection with the day-to-day activities of the professionals is very important to see the relevance of the training. Obvious subjects to develop in these training courses are skills that are expected to change strongly because of NMP-developments; this can be both in the technical field (such as material sciences) and in the direction of personal and methodological skills (such as project management and communication skills).

VET

In literature, there is much more attention for the higher education level consequences of NMP compared to that for workers at VET level. Policy makers in VET should be made more aware of developments going on in this area. An example of good practice is Germany in which a project has started that addresses the consequences of all types of new technologies, including NMP, for professions in the “dual system”. There are indications that new demands show up both in technical fields, as well as in personal skills, and health and safety. When NMP-developments evolve to further stages of application, the demands for the VET level will become clearer.

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ANNEXES

A1. SAMPLING COMPANY SURVEY

Basis for building the database for the company survey

The sample used for the company survey is not based on the idea of general representativeness for all types of companies over Europe. The most important reason is purely practical. Such an approach would require workable database(s) containing the following information:

− Containing all companies of various sectors and countries, from which a representative sample can be taken;

− Containing contact details in terms of e-mail addresses. The survey method used is a web-survey. In order to be more successful in terms of response rates, these e-mail addresses should preferably be of “real” contact persons, and not info-addresses. The latter is expected to lead to very low response rates.

However, these types of European-wide databases containing this information do not exist. Therefore, we needed to build up a database ourselves of companies with relevant contactpersons and their e-mail addresses.

We managed to compile a database that included various sectors in most European countries. The main sources include:

− contact details of participants of European framework programmes and other European projects;

− contact details of relevant networks and forums, like Nanoforum and Nanoperspective;

− contact details of participants from relevant conferences. The Commission itself might also have this information of quite a number of conferences;

− contacts details from trade exhibitions in various European (and to a small extent non-European) countries

− contact details from European Technology Platforms; − company-members of country skill councils in the relevant sectors; − members from European sector organisations. The renewable energy sector

(Europabio) made it possible for us to have an item in their digital newsletter with a link to the online survey. Contacts with other sector organisations did not lead to such a result.

The procedure in building the database has been as follows. First we used the sources that contained most contact details and most complete contact details, such as specific e-mail addresses, names and phone numbers of contacts and sources that have a great number of contact details of companies involved in NMP. The most important sources in this respect are FP6 and 7 contact lists, Nanoforum and Nanoperpective. However, the latter two sources lead to a selective sample in terms of a strong focus on Nanotechnology and specific countries.

As the study focuses on NMP, however, the companies chosen from these sources were expected to provide highly relevant results for the survey given that the respondents will have more understanding of the issue and are in practice confronted with skill issues in the field of NMP technologies.

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Another sampling issue is that one could expect that in all three sources “frontrunners” will be highly represented. For reasons of selectivity, we have broadened the sample base by other sources. From public sources it is easier to find companies that are highly active in new technologies, than companies that are not very active, as highly active companies are probably overrepresented at trade shows and conferences. Therefore, when interpreting the results, it must be kept in mind that frontrunners are well represented in the survey.

With regard to the selection of other sources we tried to use them to give more balance in the sample in terms of spread by country and sector and less focus on nanotechnology.

The final point about the ad hoc database building is the doubling of sources. We eliminated the double sources by compiling all the names and contact details into one single file and checked for double e-mail addresses, names and companies. This 3-step check ensured that double sources are minimized.

In total we contacted 6336 companies, of which 3822 were from Nanoforum, Nanoperspective and FP 6 and 7. The remaining 2514 companies came from other sources. The complete list of sources is shown in Table A1.1.

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Table A1.1. Sources used for sampling

No. Source E-mail Sectors countries

1 FP 6&7 info address contacts (the EU's main instrument for funding research in Europe)

1081 (general contact)

Most Most

2 FP 6&7- with specific contacts (the EU's main instrument for funding research in Europe)

402 Most Most

3 Nanoperspective (a listing of Nanotechnology and Nanomaterial contacts)

1184 Most Various, but many from UK

4 Nanoforum (operate as European Economic Interest Group in providing news items from across EU including information from projects and organizations)

1066 Most Various, but many from Germany

5 European Chemical Industry Social Partners Conference (conference organised by the European Mine, Chemical, and Energy Workers' Federation-EMCEF)

5 one Few

6 FP7 Call for proposals - CO2 Capture and Storage for Zero Emission and Clean Coal Technologies (event to disseminate information about FP7 and research areas)

91 Most Most

7 Hydrogen in Europe -Towards a consistent Policy Framework for Energy and Mobility (conference about the application of hydrogen technology)

8 Few Few

8 European Technology Platform conference (seminar on interactions between the ETPs and national research actors)

24 Few 1

9 Environment and Eco Innovation Calls (information day for FP7 project on environment and eco innovation)

28 Few Few

10 2nd Annual Nanotechnology “Safety for Success” Dialogue Workshop (EU conference)

24 Few Few

11 Italian Institute for Environmental Protection and Research ( Minutes of the 1st AD HOC WORKING GROUP (AHWG) Meeting)

6 1 Few

Biological Testing of Food Contact Materials (workshop) participants list

8 1 Few

17 Federation of Estonian Chemical Industries member list

45 1 1

18 Austropapier (Austrian Paper organization) 20 (general contact)

1 1

19 Hungarian printers and paper makers 77 1 1

20 VNP (Royal Association of Dutch Paper and Cardboard)

14 (general contact)

1 1

21 IAA Commercial Vehicles Exhibition (event of VDA German Automotive industry representative)

420 (general contact)

1 Few

22 ChemBio 2011 (trade fair) Finland 68 1 Few

23 Chemspec Europe (The fine and specialty chemical connection) trade fair

36 1 Few

24 EUROSURFAS (International Paint and Surface Treatment Exhibition)

144 (mostly general)

1 Most

25 The British Wood Pulp Association (corporate members)

17 1 Most

26 The Commercial Vehicle Show 313 Few Few

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27 Expofil 13 1 Few

28 International Fair for Manufacturing Technology and Automation

96 (Some general contact)

1 Most

29 CEFIC ( The European Chemical Industry council) 38 1 Most

30 European Textile Platform (member of governing council list)

9 1 Few

31 Dornbirn Man-made Fibres Congress 5 1 Few

32 Mov'eo: French Automotive Cluster 89 1 1

33 26th European Photovoltaic Solar Energy 431 (general contact)

1 Most

34 Power Days (trade fair for Electrical engineering) Salzburg

105 (general contact)

1 Few

35 Yorkshire Chemical Focus member list 52 1 1

36 Envirolink Northwest programme suppliers' list 580 Few 1

37 SPCI World Pulp and Paper Week 114 Most Most

38 COMPOSITES THERMODURCISSABLES ET THERMOPLASTIQUES

186 1 1

39 Athensparticipants 81 Few Few

40 FP7-SEC-2011-1 Info Day Participants 172 Most Most

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A2. RESPONSE COMPANY SURVEY AND CLUSTERING CATEGORIES

Country clustering The numbers of respondents per country are already presented in section 2.1. For making crosstabs by country, it is necessary to aggregate countries into a number of clusters with sufficient number of respondents. We have made a division between (1) Germany, the (2) UK, (3) Eastern Europe, (4) Southern Europe (including France) and the remaining countries, namely Scandinavia, Benelux and Austria and Switzerland (often referred to as other Western Europe). The response from Eastern Europe is limited. This is mainly due to sampling, as our sources did not contain many Eastern European countries. 21% of the 489 respondents are based in Germany, 23% in the UK, 22.3% in Southern Europe and only 8% in Eastern Europe. The rest, 26% comes from Scandinavia, Benelux, Austria or Switzerland.

Size

Respondents of the survey mainly work in smaller companies. 37% of the companies (or more precise: establishments) of the respondents have less than 50 employees. However, the larger size classes are represented. This makes a division into 3 size classes “small” (1-49), medium “50-249” and large (more than 250) possible for the crosstabs.

Table A2.1 Size class companies (establishment) of respondents

Number of employees Share

1-20 employees 37%

20-49 employees 11%

50-99 employees 12%

100-249 employees 13%

250 – 499 employees 6%

500 – 999 employees 5%

1000 – 4999 employees 6%

More than 5000 employees 8%

Total 100% (n=490)

a)Great extent = 4; somewhat = 3; very little = 2; not at all = 1

Table A2.2 shows that the share of company size is similar across countries. Germany has more larger companies and the UK and the other Nothern European countries have more smaller firms than the total. Eastern European companies that responded to the survey are mostly medium sized.

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Table A2.2 Size class companies (establishment) per country cluster

Germany UK Other Western Europe

Eastern Europe

Southern Europe

Total

Small 43% 53% 54% 38% 48% 49%

Medium 22% 27% 21% 50% 23% 26%

Large 35% 20% 25% 13% 29% 26%

Total 100% (n=103)

100% (n=110)

100% (n=127)

100% (n=40)

100% (n=109)

100% (n=489)

Sector

The division of sectors by country clusters is given in table A2.3 and figure A2.1 Within the responding companies, most companies are in the chemical (12%), machinery (14%) and R&D (14%) sector and the optics and electronics sector (10%). The remaining sectors have fewer respondents, between 5 and 8%.

If we compare the division in sectors between countries we see that Germany the UK and the Southern and other Western European countries have a similar distribution among the sectors that roughly follows the distribution of all respondents. Most striking differences are the paper, medicine and other manufacturing sectors in the UK, the high share of machinery and optics and electronics in Germany. In southern Europe the share of engineering and consulting firms is high, while the chemical sector is less well represented. In the other Western European countries the number of respondents from the transport equipment sector is low. Eastern Europe has a high share in R&D companies, paper & textile and Optics and electronics, while the share in machinery, transport equipment and engineering and consultancy is low. These differences are directly related to the sources used for sampling.

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Table A2.3 Sector division per country cluster

Germany UK Austria, Benelux, Scandinavia and Switzerland

Eastern Europe

Southern Europe

total n

Chemicals 13% 15% 14% 8% 7% 12% 57

Paper&Textile 9% 0% 6% 21% 7% 7% 32

Machinery 19% 10% 15% 3% 14% 14% 65

Transport Equipment 9% 12% 3% 0% 7% 7% 33

Energy&environment 3% 7% 5% 5% 6% 5% 25

Optics&Electronics 14% 7% 11% 13% 8% 10% 50

Medical 7% 3% 6% 8% 7% 6% 28

Other Manufacturing 4% 11% 10% 8% 7% 8% 39

Engineering&Consultancy 4% 14% 5% 0% 8% 7% 34

R&D 11% 7% 14% 31% 19% 14% 68

Software 5% 7% 4% 5% 7% 5% 26

Other 2% 7% 6% 0% 5% 5% 23

Total 100% 100% 100% 100% 100% 100% 480

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Figure A2.1 Sector division per country cluster

0% 20% 40% 60% 80% 100%

Germany

UK

Other WesternEurope

Eastern Europe

Southern Europe

total

ChemicalsPaper&TextileMachineryTransport EquipmentEnergy&environmentOptics&ElectronicsEngineering&ConsultancyR&DMedicineOtherOther ManufacturingSoftware

The following table gives the division by size classes per sector.

Table A2.4 Division by size class per sector

Small Medium Large Total

Chemicals 42% 25% 33% 100%

Paper&Textile 34% 31% 34% 100%

Machinery 55% 25% 20% 100%

Transport Equipment 18% 24% 58% 100%

Energy&environment 52% 20% 28% 100%

Optics&Electronics 54% 30% 16% 100%

Engineering&Consultancy 71% 24% 6% 100%

R&D 54% 30% 16% 100%

Medicine 57% 14% 29% 100%

Other 57% 17% 26% 100%

Other Manufacturing

31% 31% 38% 100%

Software 54% 23% 23% 100%

All sectors 48% 26% 26% 100%

Respondents from the engineering & consultancy sector are mostly small companies and very few large companies. To a lesser extent also the machinery, optics and electronics, R&D, Medical and software sectors contains a great deal of small companies. Respondents from the transport sector are mostly large companies. The share of large companies is also high in the chemicals sector and the paper & textile sectors.

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Figure A2.2 Division by size class per sector

0 20 40 60 80

Chemicals

Paper&Textile

Machinery

Transport Equipment

Energy&environment

Optics&Electronics

Engineering&Consultancy

R&D

Medical

Other

Other Manufacturing

Software

SmallMediumLarge

Importance of NMP by size class and sector

The sample is built in such a way that companies involved in NMP are strongly represented. For the survey this is important, because for a number of issues, like skills impact, we are specifically interested in these kind of companies. The following results illustrate that we managed to get companies for which NMP is important in all kind of size classes and sectors.

If we make a distinction between small and large companies, 94% of the large companies indicate that NMP technologies will become important for them, compared to 87% of small companies.

We crossed the importance of NMP technologies by sector (Table A2.5). Because of the way of sampling the results are expected to give an overestimation of this importance. However, the figures can be used to give indications on the relative differences in importance by sector. NMP technologies are for example important for chemicals for 56 out of 57 companies. For Engineering and consultancy firms and software companies NMP technologies are least important. Around 30% of these companies in the survey indicate that no NMP technologies are relevant. In the rest of the sectors any of the NMP technologies are important for 80 to 90% of the companies in the survey.

Nanotechnology is currently mainly important for R&D companies and for companies in the optics and electronics and chemicals sectors as is shown in table A2.5 and will become more important, except for chemicals. Nanotechnology is least important for the transport equipment sector, paper and textile and engineering and software firms.

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Table A2.5 Current and growth of importance of NMP per sector

Importance of

Nanotechnology Importance of New

materials Importance of New

production technologies observations

current growth current growth current growth

Chemicals 60% -4% 81% 6% 67% 2% 57

Paper&Textile 34% 10% 69% 10% 59% 12% 29

Machinery 48% 0% 38% 42% 69% 0% 64

Transport Equipment 29% 56% 77% 0% 68% 10% 31

Energy & environment 48% 30% 72% 16% 64% 4% 25

Optics & Electronics 67% 3% 56% 30% 60% 7% 48

Engineering & Consultancy 35% 33% 44% 13% 44% 33% 34

R&D 69% 4% 65% 2% 62% 2% 68

Medicine 44% 17% 74% -10% 59% 0% 27

Other 64% 7% 64% 0% 55% 0% 22

Other Manufacturing 43% 25% 70% 4% 68% 4% 37

Software 9% 50% 26% 0% 61% 14% 23

Total 50% 10% 61% 10% 62% 6% 465

Note: for current position: Percentage of responding companies that indicate that NMP is important. Growth is the percentage growth in the percentage of companies.

In the survey, new materials are currently important for 81% of the responding chemical companies. In the medical sector, transport equipment, energy and environment and other manufacturing, more than 70% of the responding companies indicate that new materials are currently important and will become important. New materials are currently less important for the machinery and the software and engineering sectors. The differences in the scores for new production technologies are smaller.

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A3. SURVEYS AND SEMI-STRUCTURED INTERVIEW GUIDE

COMPANY SURVEY

INTRODUCTION E-mail Innovations are crucial for the future competitiveness of the European economies. A necessary condition for companies, is that employees have the required skills and competencies. The European Commission (DG Research and Innovation) has asked SEOR and Technopolis to assess the impact of use of new technologies on the European economy and, in particular, on skills, education and training needs for the period 2010–2030. Particular attention is paid to Nanotechnology, new materials and new production technologies (NMP). A letter of recommendation from the European Commission is attached to this e-mail. By your participation in a web-survey, we would like to know how important new technologies are for your company, what new skills are needed as a result, and how you think these new needs can be met. We kindly ask you to fill the questionnaire, even if your company has little involvement in these areas. We expect the survey to take about 15-20 minutes of your time. The questionnaire should preferably be filled out by someone who has an overview of (potential) technological developments in your company, but also has a view on associated skill needs. This could be someone from management, a more “technical” officer (e.g. R&D, production), or someone from human resources. If you fit in this profile, even if your knowledge in this area is not perfect, do not hesitate to fill in the questionnaire. If you really think a colleague is better suited to this description you could forward it. All responses will be treated strictly confidential. Results will be presented in such a way that they cannot be traced back to individual companies. If you like to receive an electronic version of the final report, please leave your e-mail address at the end of the survey In case you have any questions, please do not hesitate to contact Matthijs de Jong (jmdejong@ese.eur.nl) or Arie Gelderblom (gelderblom@ese.eur.nl)

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GENERAL

1. In which function group are you working? ? General management ? Human Resources ? Engineering and design ? R&D (management) ? Production management ? Other, namely.........................

2. What is the resident country you are working in? ? Austria ? Belgium ? Bulgaria ? Cyprus ? Czech Republic ? Denmark ? Estonia ? Finland ? France ? Germany ? Greece ? Hungary ? Ireland ? Italy ? Latvia ? Lithuania ? Luxembourg ? Malta ? Netherlands ? Poland ? Portugal ? Romania ? Slovakia ? Slovenia ? Spain ? Sweden ? United Kingdom ? Other, namely

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3. What is the number of employees within your company? we speak of “company” in this and following questions we refer to the establishment you are working for in your country ? 1-20 employees ? 20-49 employees ? 50-99 employees ? 100-249 employees ? 250-499 employees ? 500-999 employees ? 1000-4999 employees ? More than 5000 employees

4. What is the main sector of economic activity of your company? Manufacturing

? Chemicals (including basic chemicals, paints, fine-chemicals, specialities, etc) ? Automotive ? Paper ? Textile ? Basic metals and metal products ? Machinery, equipment (including biomedical equipment) ? Medicine/pharmaceuticals/biomaterials ? Building, construction ? Electronics ? Optics ? Aerospace ? Energy ? Environmental

Services: ? Engineering and consultancy firm ? Software consultancy and supply ? Research and development company or institute ? Other, namely ……………….. If Manufacturing: àGo to Q5

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5. In which sector of economic activity are your main clients? ? Chemicals ? Automotive ? Paper ? Textile ? Machinery and Equipment ? Aerospace ? Medicine/pharmaceuticals ? Construction ? Basic metals and metal products ? Electrical and optical equipment ? Energy ? Other, namely….

IMPORTANCE OF NMP TECHNOLOGIES FOR YOUR COMPANY This section deals with the importance of NMP technologies for you company. NMP Technologies are defined as: Nanotechnologies (N) – i.e. methods and processes connected with the design, 187echnologies187ion, production and application of structures, devices and systems by controlling shape and size at the 187echnolog scale, i.e. with dimensions of 1 to 100 nanometers, used in the manufacturing of new products and services. New Materials (M) – i.e. new types of materials and material technologies. The role of materials technology is increasing because of the growing focus on life cycle management of processes and limitations set by existing engineering materials. New production processes and devices (P) – i.e. wide range of different technologies, conceptual approaches, methods and devices that deal with the making of products on an industrial scale (varying from small pilot to large scale plants, from batch to continuous processes, from vast to fluid processes, etc.). When we speak of “company” in this and following questions we refer to the establishment you are working for in your country

6. Are either nanotechnology, new materials or new production 187echnologies important for your company at this moment?

(Multiple answers are possible) ? Yes, nanotechnology ? Yes, new materials ? Yes, new production technologies ? No, none of the elements of NMP are currently important for our company

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7. Do you expect nanotechnology, new materials or new production technologies to become (more) important for your company in the future?

(Multiple answers are possible) ? Yes, nanotechnology ? Yes, new materials ? Yes, new production technologies ? No, none of the elements of NMP are currently important for our company à go to

question 13

8 A (for manufacturing companies) What is the time frame in which the application of NMP will lead to new/improved products, or new/ improved production processes in your company?

B (for service companies) What is the time frame in which developments in NMP will lead to new/ improved products, or new/ improved production processes of clients of your company?

(Note: This question is dependent on question 3. service companies are automatically directed to 8B)

Nanotechnology New materials New Production technologies

Is now already the case O O O

1-5 years O O O

6-10 years O O O

11-20 years O O O

More than 20 years O O O

Do not know O O O

9. In your sector, is the European Union leading or following in research and development of NMP technologies, as compared to other regions of the world?

? Leading ? Following ? Do not know

10. In your sector, do you expect the position of the European Union in research and development of NMP technologies to increase or decrease, as compared to other regions of the world?

? Increase ? Decrease ? Remain the same ? Do not know

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11. In your sector, is the European Union leading or following in production of NMP technologies, as compared to other regions of the world?

? Leading ? Following ? Do not know

12. In your sector, do you expect the position of the European Union in production of NMP technologies to increase or decrease, as compared to other regions of the world?

? Increase ? Decrease ? Remain the same ? Do not know

IMPACT ON SKILLS The following part deals with the impact on skills of new technological developments in general in your company. NMP technologies are a subset of these technologies.

13. What are the effects of new technological developments on the required number of employees in your company of the function groups mentioned below?

Effect of new technological developments on required number of employees Strong

increase Limited increase

(Hardly) no influence

Limited decrease

Strong decrease Do not know

General Management O O O O O O

IT O O O O O O

Marketing, sales, business development, finance O O O O O O

R&D O O O O O O

Engineering, design O O O O O O

Production managers O O O O O O

Production workers O O O O O O

Maintenance and service workers O O O O O O

Total employment O O O O O O

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14. Which job functions in your company do you expect to be influenced by present and/or future technological developments in terms of changes in skill-requirements?

Large changes Limited changes

No change

Do not know

General management O O O O

IT O O O O

Marketing , sales, business development, finance O O O O

R&D O O O O

Engineering, design O O O O

Production managers O O O O

Production workers O O O O

Maintenance and service workers O O O O

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15. Will the following more general/personal skills become more or less important for your company as a result of new technological developments?

Much more important

More important

No change Less important

Much less important

Do not know

Team working skills (Coaching & team building, being a team player) O O O O O O

Social skills (Communication, Networking, perceptiveness) O O O O O O

Intercultural & Language O O O O O O

Problem solving, Analytical skills, reasoning O O O O O O

Creativity, Multi-tasking, Interdisciplinary O O O O O O

Self management (planning, time management, flexibility) O O O O O O

Innovation skills (Strategic, visionary, Seeing opportunities, practical applications, perseverance)

O O O O O O

Business development skills O O O O O O

Management skills (leadership, project management, change management) O O O O O O

Other, namely…. O O O O O O

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16. Will the following more technical skills become more or less important for your company as a result of new technological developments?

Much more important

More important

No change Less important

Much less important

Do not know

Material science/ material knowledge O O O O O O

IT/ programming, design O O O O O O

Environmental knowledge/management O O O O O O

Chemistry O O O O O O

Mechanical engineering O O O O O O

Electrical engineering O O O O O O

Nanotechnology O O O O O O

Bio technology O O O O O O

Process engineering O O O O O O

Mathematics O O O O O O

Production management O O O O O O

Innovation management O O O O O O

Other, namely …… O O O O O O

17. Skills gaps arise when the current employees do not fully meet the skills requirements for their job functions. To what extent do job-requirements stemming from new technological developments currently lead to skill gaps in your company?

? No skill gaps ? Limited skill gaps ? Substantial skill gaps ? Do not know

18. To what extent do you expect new technological developments to lead to skill gaps in your company in the future?

? No future skill gaps ? Limited future skill gaps ? Substantial future skill gaps ? Do not know

193

19. Does your company currently have recruitment problems as a result of new technological developments?

? No recruitment problems ? Limited recruitment problems ? Substantial recruitment problems ? Do not know

20. Do you expect your company to have future recruitment problems as a result of new technological developments?

? No future recruitment problems ? go to question 21 ? Limited future recruitment problems ? Substantial future recruitment problems ? Do not know

SOLUTIONS

21. What is the strategy of your company to address potential skill shortages and skill gaps that result from new technological developments?

(Multiple answers are possible).

? Increase wages ? (Further) automation and mechanisation to substitute labour ? Try to postpone retirement older employees ? Recruiting workers from other sectors, or other countries ? Recruiting young people from the education system ? Use of specialised agencies/temporary workers/ headhunters ? Restructuring the (work) organisation ? Increase internal job mobility in the company ? Outsourcing and off shoring ? On the job training ? Participation of employees in off the job training and education programmes ? Stronger cooperation with other organisations (trade unions, sector organisations and/or

research institutes) ? Other, namely........ ? Do not know

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22. Do you think the higher education system (Universities, polytechnics, higher vocational education) in your country is able to fulfil skill needs related to present and future technological developments?

? To a great extent ? Somewhat ? Very little ? Not at all ? Do not know

23. What should be improved within the higher education system to better fulfil skill needs related to technological developments?

(Multiple answers are possible). ? Stronger cooperation with companies ? Increase the supply of graduates, especially in fields like............ ? Start new types of higher level science courses, like................. ? Improve the theoretical level of education programs on Bachelor/Masters level ? More possibilities for (part-time) PhD programs ? More specialisation (i.e. in-depth knowledge of specific domains) within science ? Less specialisation within science, but more general knowledge of scientific domains

within science ? More attention for personal skills in education, such as …….. ? More attention for technical developments in non-technical studies ? More opportunities for training courses of experienced professionals to update skills and

acquire new skills, especially in subjects like........ ? Improve international cooperation ? Other, namely..................................................... ? Do not know

24. Do you think the vocational education and training (VET) system your country is able to fulfil skill needs related to present and future technological developments?

? To a great extent ? Somewhat ? Very little ? Not at all ? Do not know

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25. If relevant, what should be improved within the vocational education and training system to better fulfil skill needs related to technological developments?

(Multiple answers are possible). ? Stronger cooperation with companies ? Increase the supply of graduates, especially in subjects like............ ? Start new types of vocational specialisations in the education system, like................. ? Improve the theoretical level ? More attention for personal skills in vocational education ? More attention for technical developments in non-technical studies ? More opportunities for training courses of experienced professionals to update skills and

acquire new skills, especially in subjects like......... ? Improve conditions for companies to employ apprentices ad interns from the vocational

education system ? Improve international cooperation ? Other, namely............................................................. ? Do not know

26. Do you have any other suggestions for policy makers which could help to fulfil skill needs related to present and future technological development and NMP-development more specifically?

27. Do you have any other remarks (e.g. concerning this questionnaire)?

Would you like to receive a copy of the final report? In case you would like to receive a copy, please leave your e-mail address:

Thank you very much for responding to this survey! If you have filled in your e-mail address, we will send you a copy of the final report. This final report includes detailed descriptions of the results of this survey, including specific results for your sector (still warranting anonymity; it will never be possible to trace back individual answers).

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HIGHER EDUCATION INSTITUTES SURVEY

Introduction Dear Sir/Madam, Innovations are crucial for the future competitiveness of European economies. A necessary condition for companies for technological innovation is that their employees have the necessary skills and competencies requested to develop and apply new technologies. The European Commission (DG Research and Innovation) has asked our organisations (SEOR and Technopolis BV, both located in the Netherlands) to investigate the impact of new technologies for the European economy in the long term, and more specific for the skill demands of the European industry, and how institutions of higher education address these new skill demands. Because of their pervasive and enabling character, our study pays attention to a number of specific technologies: nanotechnology, new materials and new production technologies (NMP). We would like to invite you to participate in this study and kindly ask you to answer a number of questions; this will take about 10 minutes of your time. The questions deal with current and future activities in NMP education and training of students and professionals, with graduate careers and with the role of companies in curricula development. Your answers will be treated with strict confidentiality. Results will only be presented on an aggregated level and with no reference to individual persons/departments. In case you would like to receive a copy of the final report, please leave you e-mail address at the end of the survey. Please enter the survey by the following link: http:// etc Many thanks for your cooperation. Christien Enzing

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General In this questionnaire we refer to your organisation as the institution of higher education (university, college) you are working at the moment. In case we ask you to answer questions for your faculty/department we refer to the unit within this organization, in which NMP education and training is provided (for instance: the faculty/department of Natural Sciences, of Chemistry, of Physics, of Material Sciences, etc.). Answers are saved automatically after each question. If you would like to stop and finish the questionnaire at a later stage, you can simply close the questionnaire. When you return, you will be referred to the question where you left off. The first questions deal with some general characteristics of your organisation.

Question 1 What level(s) of education does your organisation offer? (Multiple answers possible)

? Bachelor ? Master ? PhD ? Specialised post-master degree ? Other, namely …..

Question 2 In which country is your organisation based? ? Austria ? Belgium ? Bulgaria ? Cyprus ? Czech Republic ? Denmark ? Estonia ? Finland ? France ? Germany ? Greece ? Hungary ? Ireland ? Italy ? Latvia ? Lithuania ? Luxembourg ? Malta ? Netherlands ? Poland ? Portugal ? Romania ? Slovakia ? Slovenia ? Spain

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? Sweden ? United Kingdom ? Other, namely …..

Question 3 What is the name of the faculty/department within this organisation in which you are employed?

(open question)

Question 4 What is your most important function (in terms of hours per week) within this faculty/department?

? Teaching ? Research ? Management & coordination ? Technology transfer services ? Other, namely ……

Question 5 Approximately, how many students graduate from your faculty/department every year?

.. Bachelor students

.. Master students ;; PhD students .. Other types of students, namely: …..

Question 6 Approximately, how has enrolment (i.e. number of students) in your faculty/department developed between 2007 and 2010?

? Decreased 0-10% ? Decreased 10-20% ? Decreased >20% ? Stayed the same ? Increased 0-10% ? Increased 10-20% ? Increased >20%

Question 7 Do you expect the number of students in your faculty/department to increase or decrease in the coming 5 years?

? Strong increase ? Increase ? Remain the same ? Decrease ? Strong decrease ? Do not know

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Question 8 What was the contribution of students from outside the European Union to this increase?

? Negligible / Very small ? Small ? Considerable ? Large ? Very large ? Do not know

Role of NMP in your education and training programmes Definitions Nanotechnologies (N) – i.e. methods and processes connected with the design, characterisation, production and application of structures, devices and systems by controlling shape and size at the nanometre scale, i.e. with dimensions of 1 to 100 nanometers, used in the manufacturing of new products and services. New Materials (M) – i.e. new types of materials and material technologies. The role of materials technology is increasing because of the growing focus on life cycle management of processes and limitations set by existing engineering materials. New production processes and devices (P) – i.e. wide range of different technologies, conceptual approaches, methods and devices that deal with the making of products on an industrial scale (varying from small pilot to large scale plants, from batch to continuous processes, from vast to fluid processes, etc.). We use the abbreviation NMP to refer to the full cluster of all these types of technologies.

Question 9 Are nanotechnology, new materials or new production technologies addressed in the Bachelor programmes of your faculty/department?

YES No Do not know

Nanotechnology o o o New Materials o o o New Production technologies o o o

Question 10 Are courses on these elements of NMP compulsory for the student within

the Bachelor programme?

YES No Do not know

Nanotechnology o o o New Materials o o o New Production technologies o o o

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Question 11 Are nanotechnology, new materials or new production technologies addressed in the Master programmes of your faculty/department?

YES No Do not know

Nanotechnology o o o

New Materials o o o

New Production technologies o o o Question 12 Are courses on these elements of NMP compulsory for the student within

the Master programme?

YES NO Do not know

Nanotechnology o o o

New Materials o o o

New production technologies o o o Question 13 Are nanotechnology, new materials or new production technologies

addressed in the other education and training programmes of your faculty/department?

YES No Do not know

Nanotechnology o o o

New Materials o o o

New Production technologies o o o Question 14 Are courses on these elements of NMP compulsory for the student within

these other programmes?

YES NO Do not know

Nanotechnology o o o

New Materials o o o

New production technologies o o o Question 15 Are nanotechnology, new materials or new production technologies

addressed in the PhD programmes of your faculty/department?

YES NO Do not know

Nanotechnology o o o

New Materials o o o

New production technologies o o o

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Question 16 Do you expect the role of NMP in the education programmes of your faculty/department to increase or decrease in the next five academic years?

Strong increase

Increase Remain the same

Decrease Strong decrease

Do not know

Nanotechnology O O O O O O

New Materials O O O O O O

New Production technologies O O O O O O

Question 17 Does your faculty/department provide training courses that also cover NMP

issues for professionals working in the manufacturing industry and in other organisations?

?Yes ?No ?Do not know

Question 18 Approximately how many of these professionals from industry attended these training courses in the academic year 2009/ 2010?

[open question Absolute figure]

Question 19 Will your faculty/department start with or increase the number of training courses for professionals in the NMP-field in the next two academic years?

? Yes ? No ? Do not know

graduate careers The questions in the next part deal with the careers of graduates of your faculty/department

Question 20 Does your faculty/department have a career guidance system for students? ? Yes ? No ? Do not know

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Question 21 In which sector (public, private) do most of the graduated students of your faculty/department find employment? Please name the three most prominent sectors.

Public research (for instance as research student): ? Within our department or organisation ?Within other higher education institutions Manufacturing firms:

? Chemicals (incl basic chemicals, paints, fine-chemicals, specialities, etc) ? Automotive ? Paper ? Textile ? Machinery, equipment (incl biomedical equipment) ? Medicine/pharmaceuticals/biomaterials ? Building, construction ? Electronics ? Optics ? Aerospace ? Energy ? Environmental ? Basic metals and metal products

Services: ? Engineering and consultancy firm ? Software consultancy and supply ? Independent research and development company or institute ? Other, namely ……………….. ?Do not know

Role of companies in curricula development The next four question deal with the involvement of companies in curriculum development of your organisation

Question 22 Does your faculty/department have contacts with companies on the skills your BSc/MSC/PhD students and/or trainees should obtain?

? Yes ? No ? Do not know

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Question 23 In your faculty/department, how important are contacts with companies for the development of education/training curricula?

? Very important ? Important ? Not very important ? Not important at all ? Do not know

Question 24 With which company departments does your faculty/department discuss the skills your students should obtain?? (Multiple answers possible)

? General management ? Human resources ? Research and development ? Engineering and design ? Production/operations ? Other, namely ……………….. ? Do not know

Question 25 What is the purpose of these contacts? (Multiple answers possible) ? Exchange of information on a regular base ? Exchange of information on an irregular base ? Evaluation of adequacy of graduate skills ? Cooperation in development of new courses or adapting existing courses ? Traineeships/Internships ? Research collaborations / joint research projects ? We remain in contact with alumni ? We train employees (life long learning/in-company training activities) ? Other: namely …… ? Do not know

Future activities in NMP education and training

Question 26 Will your faculty/department start new education and training programmes that include NMP education in the next two academic years?

? Yes ? No ? Do not know

Question 27 What will be the content of these new programmes? [open question]

Question 28 What has been the role of companies in the development of these programmes?

? They have had an active role in developing the content of this programme ? They have had a passive role in developing the content of this programme ? They were not involved in the development of this programme ? Do not know

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Question 29 Your own faculty/department might have concrete plans to better fulfil the skill needs of the industry. What are concrete plans of your faculty/department for the upcoming two academic years? (Multiple answers possible)

? Stronger cooperation of higher education system with companies ? Increase the supply of graduates, especially in fields like ............ ? Start new types of high-level science courses, like ................. ? Improve the theoretical level of education programmes on Bachelor/Masters level ? More specialisation in (part-time) PhD programmes ? More specialisation (cq in-depth knowledge of specific domains) within science ? Less specialisation, but more general knowledge of scientific domains ? More attention for personal skills in education, such as …….. ? More attention for technical developments in non-technical studies ? More opportunities for training courses of experienced professionals to update skills and acquire new skills, especially in subjects like ..... .... ? Improve international cooperation ? Other, namely ..................................................... ? We have not such plans

Question 30 What are the type of limitations that your department encounters in education of BSc/MSc/PhD students and training professionals (life long learning) in NMP? (Multiple answers possible)

? availability of technical and information infrastructure ? availability of materials, chemicals ? availability of funds ? training competences of teachers ? other, namely: …… ? do not know

Question 31 Do you expect skill shortages in the European industry in the field of NMP-skills in the near future?

? No future skill shortages ? Limited future skill shortages ? Substantial future skill shortages ? Very substantial future skill shortages ? Do not know

Question 32 Do you have any suggestion for EU policy makers which could help to develop education and training programmes to fulfil companies’ skill needs related to present and future NMP-development?

[open question]

Question 33 Do you have any other remarks (e.g. concerning this questionnaire)? [open question]

Closure

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Question 34 Would you like to receive a copy of the final report? If so, please write your e-mail address:

[open question]

Thank you very much for responding to this survey! If you have filled in your e-mail address, we will send you a copy of the final report. This final report includes presentation of the results of this survey. [Open question] In case you have any questions, please do not hesitate to contact Christien Enzing (+31 20 535 2244, christien.enzing@technopolis-group.com) or Derek Jan Fikkers (+31 20 535 2244, derekjan.fikkers@technopolis-group.com).

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EXAMPLE OF SEMI-STRUCTURED INTERVIEW GUIDE

INTERVIEW QUESTIONNAIRE FOR INDUSTRY/SECTOR REPRESENTATIVES

Introduction

Purpose: the interview questionnaire serves as a prime guidance for interviewers in the interview phase of the project. The interview is semi-structured which allows for additional information to be taken on board, depending on how the interview evolves. The questionnaire is arranged by topic and meant to structure the interview. For each of the four categories of interviewees, a separate questionnaire is made, notably for:

• Industry/sector representatives (i.e. firms, sector and employer organizations)

• Trade union/worker representatives

• Education, training and research policy officials

• Educational practitioners.

The interview should aim to get a better picture of what NMP means for the future of European industry and more in particular for demand for skills, skills mismatches/gaps, education and training. On the basis of the interviews two scenarios will be compiled of plausible NMP skills developments in each of the five selected sectors in the oncoming 20 years. In order to focus the interviews, the interviewer should be aware of key developments in the sector and have some idea of what scenarios might emerge. To this end, sector descriptions containing key economic and NMP developments as well as a sketch of two possible scenarios (‘hypotheses’) will be provided by the two teams.

Two other purposes of the interviews – apart from content – are 1) to identify (suggestions for) interesting cases/case studies, and 2) to identify other interviewees in one or more of the four above stated categories of interviewees (snowball method).

For most interviewees, NMP will be an unknown term or label. At the start of the interview a short introduction should be given by the interviewer on what NMP entails and on the purpose of the project. See the inception report for an overview of relevant issues.

Identifying case studies. Try to identify at least one possible case study with each interviewee – this might also be building on or extending examples/suggestions made in earlier interviews.

Identifying new potential interviewees. Try to identify at least two to three new interviewee candidates, and ask for contact details such as e-mail addresses and telephone numbers.

Clearly note down the name, function, organization and contact details of the interviewee, as well as the date of the interview. Each interviewee should be notified in advance of the topics (short bullet-wise list) that will be addressed in the interview at least one week before the interview.

Timing is an important element in the uptake and use of NMP. Use where applicable the timing questions, as follows: when do you expect most change as a result of NMP uptake in your sector (sub-sectors) to occur? 1-5 years from now? 5-10 years from now? 10-15 years from now? 15-20 years from now? Why?

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Part 1. Scoping the future – impact of NMP on sector development, competitiveness, sustainable production, new products and/or processes, new business models, and the transformation of the European industrial landscape

First objective is to investigate, understand and map strategic views on future orientations of the specific sector at hand, with particular emphasis on the role of NMP. The starting point for the interviews is to create a general outline of possible NMP-induced changes and trends for each of the selected industries, and what these might imply for sector growth and competitiveness, the introduction of new products and new ways of production/production processes. The following questions may apply:

• NMP and sector changes.

1. How would you define ‘your sector’, and – where applicable - how would you position/describe the activities of your firm within the sector?

2. Which are current and likely future directions of change in your sector? 3. For future changes: which time frame for each change? 4. To what extent do these changes depend on or link to NMP? 5. How key is NMP in future sector changes?

• New materials, products and production processes/methods.

1. Which new materials, products and production processes/methods do you expect as a direct result of the use / application of NMP in your sector: now and in the future?

2. Would you qualify the impact of NMP on your sector as incremental, piecemeal change or revolutionary, sweeping change?

• Supply chain. [what is most relevant for study, why?. Relation with NMP!]

1. Do you expect any future changes in the way the supply chain is organised / managed because of NMP: changes in the way R&D, production and related business services are organised; outsourcing, subcontracting (inside or outside Europe)?

• New business models and new industrial models.

1. How might NMP change existing business models and industrial models in your sector?

2. To what extent will NMP for your sector enhance more sustainable [economic, environmental] ways of production and/or consumption?

• Competitiveness.

1. To what extent does Europe currently have a leading competitive edge in your sector?

2. How does NMP feed in in this equation? Which countries in Europe would you consider as leading in NMP in your sector?

3. Which are Europe’s current major competitors in using, integrating and forging ahead with NMP technologies in your sector? Which countries and/or firms?

4. How do you estimate the chances for Europe to maintain or increase sectoral competitiveness as a result of implementing new developments in NMP?

• Timing.[Use the timing questions for each issue in this questionnaire]

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When do you expect most change as a result of NMP uptake in your sector (sub-sectors) to occur? 1-5 years from now? 5-10 years from now? 10-15 years from now? 15-20 years from now? Why?

• Challenges and barriers to change.

1. What are the key challenges/ barriers/problems in your sector for further NMP uptake and roll-out?

Part 2. Current and future NMP skills and jobs

Job functions (both entirely new functions and function changes)

1. To what extent have NMP altered existing job profiles/functions? And/or have caused entirely new job profiles (jobs or job functions that before did not exist) to emerge in/for your sector? Which functions have/will become obsolete?

2. Are these jobs which will be altered/created typically found in the high-educated/skilled segments, or could you identify typical NMP jobs in the low- and medium segments? In which part of the supply chain can they be found: R&D, physical production, business services, such as installation and maintenance, etc. ?

3. Which specific NMP skills can you distinguish for these job functions/profiles?

4. Are there any new skills in NMP to be expected in the future? Which? Applying to which functions?

5. Which ‘horizontal’ NMP-related skills can you distinguish, i.e. skills that are not linked to a particular job function but apply to various functions in a more or similar degree?

• Job numbers.

1. How important are jobs which you would qualify as typical NMP jobs in terms of size and number? How do you expect this to become in the future (more/less – when)?

2. And what is their proportion as measured against sector employment as a whole?

3. Where is the bulk of NMP employment currently located: in R&D (R or D?), production, sales & marketing, other?

• Work organisation.

1. To what extent does NMP affect the work organisation? (now and in the future)

2. Do you expect NMP to be an important factor in future restructuring operations in your sector? Ditto, in your firm?

• Substitution of labour.

1. To what extent does a more full-fledged roll-out of NMP give rise to labour savings/ labour substitution in your sector? (now and in the future) Ditto, in your firm?

2. In which job functions and/or categories in particular? How will NMP affect employment in the low-/medium- and high-skilled/educated segments in your sector?

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Part 3. Current and future NMP skill gaps and mismatches and possible solutions

• Skills gaps and mismatches.

1. Where would you currently identify NMP-specific skills gaps and/or mismatches in your sector? Have these mismatches a more quantitative character (shortages of personnel), a more qualitative character (shortcomings in skills of available personnel), or both?

2. If you look at your sector as being part of a broader supply chain or supply chains, in which parts or segments of the supply chain are these skill gaps or mismatches most prominent? (Think of R&D and knowledge production; ‘physical’ production; and (business) services such as installation and maintenance.)

3. Where would you assess NMP-specific skills gaps and/or mismatches to arise in your sector in the future? In which time window do you judge are the problems most severe - 5, 10 and 20 years from now?

4. How important is the issue of skills gaps for NMP take-up in your sector, compared with other factors (access to finance, taxation, administrative procedures, etc.)?

5. What are NMP job qualifications (profiles) for which a strong demand in your sector exist?

6. Due to massive retirement of the current babyboom generation the problem of skills gaps and mismatches could increase. To what extent could this pose problems for your sector? To what extent does NMP intensify and/or lessen this challenge?

• HR strategy.

1. What human resources strategy (external recruitment, training, outsourcing/subcontracting, collaboration with research centres, universities or VET institutions, etc.) do you follow in your firm/are followed in your sector to reduce the skill gaps problem (general, NMP-specific)?

• Recruitment.

1. With respect to senior NMP staff – which recruitment strategies are followed to attract new staff? How successful are/do you judge these strategies?

2. With respect to senior NMP staff – how big is the proportion of foreign nationals working in the sector approximately? In which job functions in particular? Do you see any changes in the recruitment of foreigners in the future?

3. With respect to junior NMP staff – which recruitment strategies are followed to attract new staff? How successful do you judge these strategies?

4. How difficult is it to retain / keep qualified staff? What about the degree of competition from other sectors and/or from abroad?

• Education and training.

1. Do you observe a current and future need for specific training trajectories for the current workforce in your sector because of NMP? For whom?

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2. Is lifelong learning a relevant concept regarding NMP skills and to what extent does the concept need further tailoring?

3. What are possibilities for today’s workforce to engage in lifelong learning?

4. Does the sector stimulate and/or actively enhance lifelong learning for employees?

5. To which extent does the public education system deliver sufficient students (i.e. numbers) with the ‘right’ qualifications to the labour market in your sector, in particular for NMP (i.e. right content and fit to work in NMP)?

6. Would you advocate any significant changes to be made in the current education and training of students, i.e. the newcomers on the labour market of tomorrow, in order to be able to more easily reduce existing or future skills gaps and mismatches in NMP-based job functions in your sector? [Question applies to both university and medium and higher vocational education, in nanosciences and nanotechnologies, but also broader (engineering, physics, chemistry, biology)].

Part 4. Final questions

1. Do you have any suggestions for two to three other candidate interviewees (from competing firms, but potentially also from sector or other representative organisations, educational practitioners and the like)?

1a. (only for sector/employer representative organisations): do you have an overview / mailing list of member firms, more specifically those that are actively involved in NMP in your sector? Might we approach these members with a short online survey questionnaire on the topic of the present and future of NMP jobs, skills mismatches and skills needs?

2. Do you have an example of a specific job function/a department in your company/ a specific subsector in your sector which gives a very good illustration of what is happening and is to be expected in terms of changes induced by NMP? If yes, is it possible that we contact you in a later stage to elaborate a little bit more on this? (this could be an example of a practical “case” in our report.

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A4. ANSWERS FOR SOME OPEN QUESTIONS FOR IMPROVEMENT OF THE HIGHER EDUCATION SYSTEM

The list of fields that the respondents mentioned in regards to better fulfill skill needs by the higher education is shown below:

No List of Fields Counts

1 Material Science 9

2 Chemistry 10

3 Nanotechnology 7

4 Electronics 7

5 Electrical engineering 2

6 Engineering 15

7 Power Engineering 1

8 Micro Processing 1

9 Biotechnology 2

10 Analytical science 1

11 Physics 8

12 Engineering Design and Production 3

13 Polytechnic 1

14 Science 5

15 Maths 2

16 Technical Studies 2

17 STEM 2

18 Integrated optics/Laser 5

19 Ultra Precision Technology 1

20 Chemical Engineering 1

21 Hardware & Software 2

22 Process engineering 1

23 Informatics/IT 2

24 Biomedical Engineering 1

25 Multi-disciplinary studies 2

26 Building service engineering 1

27 Energy 1

28 Photonic 2

29 Textile 1

30 Geology 1

31 Dev design and application 2

32 Membrane 1

33 Mechatronics 1

Total 103

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Other solutions: (Open question)

Improve the level (but not only the theoretical, also practical) of education programs on Bachelor/Masters level

Include at least a medium level IT training for all students majoring in Business related studies

Increase the cooperation among different studies in common technical projects.

More realistic appreciation of industry

Science combined with general management basics

translation of theoretical concepts into product designs

Business education for science graduates

Funding

Quality of courses

University Teachers need to be more skilled and better “backup-ed” by Industry Experience

Practices

Improve attractiveness to study science (better financing of education time; family & job)

Communication language

Real hands on practical application of science, and less classroom bound theoretical. Less "spoon feeding" and more hands on problem solving to encourage individual thinking, and thinking outside of the box.

Financial structure that enable young people to afford to study

More practical applied courses relevant to industry

More apprenticeships

Cooperation platforms between companies, Universities and Public Authorities

Improve science teaching in secondary schools

Give psychology classes

Back to basics with well approved theories and PRACTICE. Top researchers are NOT good teachers because too focused on details and lack of global vision of technologies

Select candidates for higher education based on ability to benefit not on ability to pay or willingness to sustain debt

Stronger exposure of students to industrial work (internships etc.)

Cancel Bachelor/Master and get back to old education system

Give a stable status to PHD students

Intellectual Property Rights management

Everybody should be forced to be at least 5 years in industry before he/she returns to university for a permanent job

math

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