Study: The Puzzle of Innovation in China | Page 13

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EXPLANATION
FIG. 10 І IMPACT OF INDUSTRIE 4.0
Business Model
Innovations &
Implications of
Industrie 4.0
A strong innovation portfolio is not just about products.
Even though this category represents the most important
innovation field for now, our survey results indicate the
rising importance of business model innovations. In fact,
business model innovations are expected to evolve into the
most important innovation type in the years to come.
Up to now, business model innovation has often been
regarded as a task primarily for start-ups. With the rise
of Industrie 4.0 (I4.0), business model innovation is also
becoming vital for well-established companies (see fig. 09).
FIG. 09 І TYPES OF INNOVATION
Which types of innovation do/will you engage in?
Today
73.0%
PRODUCT INNOVATION
53.2% 55.9%
Within the next three years
33.3%
BUSINESS MODEL INNOVATION
Cyber-physical networks are currently implemented
across the entire value chain and products and processes
are extensively digitalized. Naturally, this changing
business environment paves the way for new products,
product-related services and business models. Traditional
production and product technologies can be taken as
a starting point and merged with modern information
technologies to form a next stage of value creation.
In the manufacturing industry, future business models
will very likely lead to a shift away from physical up-front
product sales and toward more usage-based revenues
derived from services. Almost 50% of interviewed companies
anticipate a strong transformation of their product/
service portfolio mix in upcoming years (see fig. 10).
What will be the impact of I4.0 in the following areas
in your Chinese entity in 5 years?
19.4%
43.7%
36.9%
BUSINESS MODEL
11.7% 11.7%
COMPOSITION
OF OUR STAFF
No impact Moderate impact Strong impact
48.5% 49.6%
43.7%
33.3%
PRODUCT/SERVICE
ASSORTMENT
One new type of business model is represented by “as-aservice”
offerings, i.e. instead of an initial fixed purchase
price, customers pay on a usage-basis and thereby transform
machinery from CAPEX to OPEX. For the machinery
supplier, this model yields attractive opportunities as well,
particularly regarding data that can be collected during the
operation of the machine.
Collecting relevant machine data and capitalizing on
these existing data sources opens up another business
opportunity: machinery manufacturers can tap into the
wide spectrum of monitoring services, ranging from the
mere detection of failures and diagnosis, to opportunities
for predictive maintenance and autonomous control,
thereby unlocking new value potential.
However, many of the companies we have spoken with are
not yet able to clearly see what I4.0 actually stands for, nor
the specific benefits it provides. This fact is also reflected by
our survey results: Over 60% of interviewed companies are
not actively engaged in I4.0 topics yet.
FIG. 11 І INDUSTRIE 4.0
To what degree have you already engaged in I4.0?
13.7%
WE HAVEN’T
THOUGHT
ABOUT I4.0
AT ALL YET
49.0%
WE ARE OBSERVING/
ANALYZING I4.0
OPPORTUNITIES
37.3%
WE ARE WORKING
ON INDUSTRIE 4.0
PROJECTS
This situation is opening up opportunities. Since primarily
start-ups and innovative companies are moving into the
I4.0 field at a fast pace, incumbent manufacturers need to
react swiftly so as not to lose their competitive positions.