TRADE, INVESTMENT, INNOVATION & INDUSTRY 4

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TRADE, INVESTMENT, INNOVATION & INDUSTRY 4.0 Bernardo Calzadilla-Sarmiento, PhD Director, Department of Trade, Investment and Innovation

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TRADE INVESTMENT INNOVATION

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Global Challenges relate to …

NEW INDUSTRIAL REVOLUTION INDUSTRIAL MODERNIZATION

GLOBAL INVESTMENT

GLOBAL VALUE CHAINS

TRADE

FACILITATION

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Responding to Global Challenges Achieving the SDGs will require global investments far beyond current levels of development finance, private investment can play a major role Rapidly evolving global manufacturing landscape, SMEs need to embrace a focused approach to improving and sustaining competitive manufacturing capabilities Innovation is integral to a country’s performance as enhanced productivity ultimately results in higher social welfare Quality and compliance of products and services with market requirements and standards are key elements of competitiveness in global business relations There is a need to improve movement of goods across borders

GLOBAL INVESTMENT

INDUSTRIAL MODERNIZATION

NEW INDUSTRIAL REVOLUTION

GLOBAL VALUE CHAINS

TRADE FACILITATION

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Trade, Investment and Innovation: Focus

TRADE

Quality Infrastructure

INVESTMENT

Impact Investment

& ITPO Network

INNOVATION

Industry 4.0

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TII Vision

We endeavor to drive socio-economic transformation and sustainable growth, by creating jobs, enhancing industrial competitiveness and boosting innovation for better access to markets.

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Modular Approach

Environment

Energy

Agri-Business

Partnerships

Improving Business Environment

Industrial Modernization & SME Clustering

Mobilizing Responsible Investment & Sustainable Technology

Boosting Innovation

Promoting Quality & Standards

Facilitating Trade

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Trade, Investment & Innovation

Improving Business

Environment

Create and maintain an operating

environment that stimulates

sustainable industrial

development

Industrial Modernization

& SME Clustering

Enhance productivity and develop linkages

to sustainable supplier

networks

Mobilizing Responsible

Investment & Sustainable Technology

Diversify the economy, expand

the production base and create jobs through the mobilization of resources and promotion of technology

Boosting Innovation

Deploy innovation to

foster entrepreneurship

and enhance productivity

Promoting Quality & Standards

Ensure quality and compliance with standards

and market requirements for

enhanced competitiveness and integration

into global value chains

Facilitating Trade

Improve the movement of goods across

national borders to facilitate

connectivity to global markets

TII THEMATIC MODULES

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Improving the Business Environment

The business environment (BE) is

determined by the nexus of policy, legal,

institutional, and regulatory conditions that govern business

activities as well as by the mechanisms of

government policy and institutional

arrangements that influence the way key

actors operate.

UNIDO FLAGSHIP PROGRAMMES & TOOLS o Business registration and single point of registration o Formulation of sectoral and/or thematic policies (e.g.

investment policy, quality policy) o Capacity building focusing on analysis, design,

implementation and monitoring of business environment reforms

o Advisory services on quality and investment policies, quality infrastructure development

o Market intelligence and diagnostic studies o Advisory services on business infrastructure (hard and

soft) for establishing science, industry and technology parks, economic zones and innovation hubs

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Business Registration in Vietnam

CONTEXT UNIDO’s technical assistance addressed obstacles faced by entrepreneurs in completing start-up registration procedures, including business, tax, statistics and seal registration

MAIN APPROACH o Implementation of

enterprise law o preparation of legislation

to simplify and standardize business registration procedures

o In 2010, the Agency for Business Registration (ABR) was established to manage and oversee business registration nation-wide

IMPACT & RESULTS o The statutory o time-limit for registration

was reduced from 15 days to 3 days in 2014.

o Doing business in Vietnam became less risky: legal and accurate information is now publicly available online

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Industrial Modernization and SME Clustering

To keep up with the rapidly evolving global manufacturing landscape, small and medium-sized enterprises (SMEs)

in developing countries and economies in transition need to embrace a focused

approach to improving and sustaining competitive manufacturing capabilities,

proving conformity with market requirements and connecting to

external markets. Furthermore, the increased consumer attention on social

and environmental dimensions of production processes requires

adjustments in global value chains and business models across all sectors.

UNIDO FLAGSHIP PROGRAMMES & TOOLS

o Industrial Upgrading and Modernization Programme (IUMP)

o Sustainable Supplier Development (SSD) Programme

o Cluster Development (CD) Programme o Export and Origin Consortia Programme o Subcontracting and Partnership

Exchange (SPX) Programme

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Enhanced Competitiveness in Central Africa

CONTEXT

The Industrial Restructuring and Upgrading Programme (IUMP) for Central Africa aims at strengthening productive capacities in the region and enhancing the competitiveness of local enterprises.

MAIN APPROACH

UNIDO’s technical assistance seeks to stimulate competitiveness and regional integration, enhance industries and promote accessibility of goods to regional and international markets. In particular, the objective is to upgrade and modernize enterprises, improve access to finance, support the industry, enhance institutions and strengthen entrepreneurial culture and entrepreneurship.

IMPACT & RESULTS

o More than 300 national experts trained to perform enterprise diagnosis

o More than 130 national trainers coached to support young entrepreneurs

o Online database with 700 regional experts created

o 50 enterprises supported to modernize their technology and management systems

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Government Enhanced Innovation

& Technology Policy

Academia

Intermediaries Enhanced

institutional technical capacities

Systems of Innovation

Systems of Innovation Mapping

Empirical Policy Advice

STI Observatory

Technology

Foresight | Transfer | Upgrading

Innovation Networks

Innovation & Technology Centres

Empowering SMEs

Firm-innovation Analysis

Standard for Innovation Management Systems

SMEs Higher productivity | Upgraded production process | Improved

innovation capacities | Promoted standards of innovation | Enhanced

competitiveness and market access

Boosting Innovation

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Organizational Innovation India

CONTEXT

The ability of an organization to innovate is the requisite for the successful utilization of resources and new technologies. Consequently, the challenges associated with the introduction of a new technology leads to changes in managerial practices and the emergence of new organizational forms.

MAIN APPROACH The project aims to address gaps identified through the following approaches : o Skills, knowledge and

technology transfer o Structured expert dialogue o Study tours o Twinning programmes o International fellowship

tours o Learning-by-doing o Training of trainers

IMPACT & RESULTS

o A comprehensive evidence-based action plan for government to affect institutional change

o Better support infrastructure for innovation

o Development of linkages and networks with European institutions

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Investment Monitoring

Investment Learning

Investment Networking

ITPO Network and Delegate Programme

Investment and Technology Promotion

Offices

Investment Learning Centre Computer Model

for Feasibility Analysis and Reporting, COMFAR

SPX Subcontracting and partnership

exchange

EDIP Enterprise

Development and Investment

Promotion programme

Foreign Direct Investment (FDI) monitoring tools Firm-level survey

Mobilizing Responsible Investment and Sustainable Technology Responsible investment and sustainable technology contribute to economic transformation and lead to greater prosperity. Increased investment and technology flows create new jobs, generate income and help diversify the economy by expanding the production base while improving market access and infrastructure development.

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Worldwide Network of ITPOs

GERMANY

AUSTRIA

NIGERIA

CHINA (2) RUSSIA

JAPAN

KOREA

BAHRAIN

ITALY

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FLAGSHIP PROGRAMMES & TOOLS o Quality policy advice o Standards compliance

observatory o Quality infrastructure systems

(QIS) strengthening o Quality and standards

compliance development for value chains

o Laboratory diagnostic and knowledge tools

o Quality promotion and award schemes

o Sustainability and private standards capacity-building

Promoting Quality and Standards

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World-class Cosmetic Sector in Colombia

CONTEXT The Government of Colombia has identified the cosmetics industry as a sector with high growth and high export potential. However, an insufficient capacity for compliance with international standards as well as the absence of internationally recognized conformity assessment services, among other shortfalls, have caused low competiveness and export rejections.

MAIN APPROACH UNIDO aims at supporting Colombian enterprises to improve compliance with international quality standards and private and sustainability standards. The overall objective of the programme is to help local enterprises to be more competitive and allow them to enter international markets, creating new opportunities and increasing socio-economic impact, which ultimately leads to sustainable growth.

IMPACT & RESULTS o Compliance with

international quality standards and private and sustainability standards is increased

o 6 trainings conducted in topics related to market access and 223 people trained

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Conduct analytical work to identify the shortcomings

in traded products

Increase transparency by supporting

testing / inspection

service providers

Support institutions/

National standards

bodies (NSB) to align with

international standards

Strengthening WTO

TBT/SPS/TF Enquiry Points to contribute to

the simplification

of trade flows

Harmonization of compliance requirements and mutual

recognition of conformity assessment procedures

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Facilitating Trade The need to improve the movement of goods across national borders has become ever more important with value chains spanning the globe. Lengthy procedures and border rejections result in major financial losses for the producers, particularly for small and medium-sized enterprises (SMEs), and can damage the reputation of exporting countries. Therefore, effective, efficient and internationally-recognized testing, inspection and certification services that are compliant with WTO agreements are crucial to meeting the standards of external markets.

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Facilitating Trade in SADC

CONTEXT To prove and verify the quality of goods, conformity assessment certificates are sought for. Certificates obtained in the SADC region are often not recognized nationally/internationally, which represents a barrier to trade. Hence, there is a need to enhance the capacity of SADC countries to verify compliance with standards and quality requirements in order to facilitate trade.

MAIN APPROACH

o Strengthening the laboratories in the SADC region to offer high quality and reliable testing services for enterprises and regulators to facilitate trade

o Improving the availability of market-driven quality infrastructure services (testing and inspection) to support trade facilitation

IMPACT & RESULTS o Development of the

Laboratory Assessment Tool which helps identify the technical gaps of testing laboratories in the SADC region

o Application of the tool in 11 SADC countries in 2016 and generating responses from 175 laboratories

o Identification of key technical gaps in testing laboratories which need to be addressed

THE NEW INDUSTRIAL REVOLUTION INDUSTRY 4.0

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Industry 4.0 Side Event during UNIDO GC

SIDE EVENT

INDUSTRY 4.0

THE OPPORTUNITIES BEHIND THE CHALLENGE

during UNIDO General Conference

29 November 2017

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The 4th Industrial Revolution

18TH CENTURY MECHANIZATION Steam and Water Power

20TH CENTURY AUTOMATION Computer

TODAY CYBER PHYSICAL SYSTEMS Internet of Things

19TH CENTURY MASS PRODUCTION Electrification Conveyor

Economies of Scale Economies of Scope Individual Production

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4th Industrial Revolution

SMART FACTORY

BIG DATA & CLOUD

COMPUTING

CYBER-PHYSICAL SYSTEMS

SIMULATION & VISUALIZATION

MODELS

ADDITIVE MANUFACTURING

(3D PRINTING)

ARTIFICIAL INTELLIGENCE

BLOCK CHAIN

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4th Industrial Revolution CYBER-PHYSICAL SYSTEMS Embedded computers and networks monitor and control the physical processes, with feedback loops where processes affect computations and vice versa

BIG DATA & CLOUD COMPUTING A model for enabling access to shared

pools of configurable resources (e.g. computer networks), which can be

rapidly provisioned

ARTIFICIAL INTELLIGENCE Intelligent machines capable of

performing tasks in the world by themselves, without explicit human

control

SIMULATION MODELS Enables scenarios for products or processes to be altered and tested in a virtual environment

ADDITIVE MANUFACTURING (3D PRINTING) Processes used to create a 3D object in which layers of material are formed under computer control to create an object

BLOCK CHAIN A digital ledger in which transactions

made in bitcoin or another cryptocurrency are recorded chronologically and publicly

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Industry 4.0: Smart Factory

Technical System

Technical machinery

Embedded System

Hardware & software

Cyber-Physical System

Merging of physical + virtual

Cyber-Physical-Production System

Application to manufacturing

Smart Factory

Network of people, machinery and resources

Source: Fraunhofer Austria

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Benefits of a Smart Factory

DRIVER FOR INNOVATION

INCREASED (RESOURCE) EFFICIENCY

CUSTOMIZATION

Smart factories are drivers for innovation, digitalization allows for new business models, products and processes oProducts can be designed and produced faster oMachines can be repaired quicker oProcurement processes are faster oResource usage is optimized Producers are directly linked to consumers, this allows for individual production and customization

+30%

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Industry 4.0

INTERNET OF THINGS

INTERNET OF PEOPLE

INTERNET OF ENERGY

INTERNET OF SERVICES

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Smart Cities

ENERGY

ENVIRONMENT

MOBILITY

INDUSTRY 4.0

energy transformation | renewable sources | green energy | energy efficiency

circular economy | climate protection | zero emission | responsible use of resources | waste management

infrastructure | multi-modal transport systems | public transport solutions | reducing individual motorized transport

research and technology | digitalization | artificial intelligence | connectivity | productive use of technology

PEOPLE

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Industry 4.0 Implications

PEOPLE

CHANGE OF SOCIETY

CHANGE IN SERVICE PROVISION

PRODUCT CUSTOMIZATION

NEW DIVISION OF LABOUR

RELATED TO QUALIFICATION NEEDS

INCOME WITHOUT WORK

EDUCATION

BUSINESS

NEW LANDSCAPE OF COMPETITION

COMPARATIVE ADVANTAGE

RELATED TO COST OF LABOUR MAY DECREASE

DECENTRALIZED

PRODUCTION

GOVERNMENT

MARKETS NEED TO BE PREPARED FOR UPCOMING

CHANGE

POLICY REQUIRED TO MAKE SURE ADVANTAGES

AND BENEFITS ARE SHARED EQUALLY, NO ONE

IS LEFT BEHIND

ATTRACT VENTURE CAPITAL

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UNIDO’s role in the New Industrial Revolution

Establishing multi-stakeholder knowledge sharing platforms to create awareness on Industry 4.0 opportunities and challenges for pursuing ISID in developing countries

Support governments and industry to work together with an aim to establish innovation-friendly policies, regulations and standards and to build an enabling digital Infrastructure and ensure digital Inclusion

Sharing available tools and methods for innovation management and foster innovation hubs and networks

Exploring methods and best practices to support SMEs digital transformation and bridging the gender digital divide

Building awareness on the issues of new infrastructure, standards and policies that need to be developed or mainstreamed to correspond to the new technologies

KNOWLEDGE SHARING

POLICY SUPPORT

INNOVATION MANAGEMENT

SUPPORT TO SMEs

AWARENESS RAISING

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Paradigm Shift

Industry 4.0 will have mayor implications for …

POLICY

INSTITUTIONS

ENTERPRISES PEOPLE

CONCLUSION

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Conclusion It is important to have a coherent strategy for Industry 4.0

Government has to take a leading role, for example, bringing together all stakeholders, adjusting regulation, supporting entrepreneurs, creating education centres, etc.

Implementation of Industry 4.0 will have implications on policy, institutions, enterprises and people

Innovators in particular need financial resources, education and research as well as experts and talent

People might experience employment gaps in the short run, but need to be prepared for fundamental change in the long run

The private sector-government link is important and collaboration is fundamental for successful adoption of Industry 4.0

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Conclusion

INVESTMENT

INNOVATION

INCLUSIVENESS

… are three important elements to embrace the 4th Industrial Revolution towards a Smart Society

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THANK YOU.