Disruptive Technologies and Innovation

Transcription

1 Disruptive Technologies and Innovation Lecture WOOD 465 UBC, Vancouver March 14, 2017 Ian de la Roche, PhD Faculty of Forestry University of British Columbia

2 Discovery and invention are not synonymous with innovation Discovery & Invention A process where money is converted into ideas, etc. Outcomes Ideas, discoveries, patents, knowledge, HQP Innovation A process where ideas are converted into money Outcomes Wealth/GDP growth, productivity improvements, exports : Invention Innovation 2

3 Innovation Defined The extraction of economic and social value from knowledge People 3 Policy The Innovation Ecosystem Discovery & Invention

4 The discovery, invention and commercialization value chain Researchers S&T $ in KNOWLEDGE TECHNOLOGY INNOVATION PRODUCTIVITY Companies Goods & Services PROFITS $ out GROWTH 4

5 Invention to Innovation is nonlinear and iterative; focused too often is on research push and not enough on shop floor innovation and market pull Valley of Death INVENTION INNOVATION 5 The State of Industrial R&D in Canada Council of Canadian Academies, 2013

6 Canada has mostly used indirect tax incentives rather than direct support to companies who are bridging the valley of death 6

7 Canada has been investing in invention and knowledge generation and expecting the outcome will be innovation and higher productivity Canadian academic research, overall, is strong and well-regarded internationally Canadian business innovation is weak by international standards and is the primary cause of our weak productivity growth and declining competitiveness 7 1. The State of Industrial R&D in Canada Council of Canadian Academies, Paradox Lost CCA Innovation Canada: A Call to Action, 2011

8 Weak multi-factor productivity (proxy for disembodied innovation) largely explains the productivity gap between Canada and US 8 Paradox Lost CCA 2013

9 Canadian businesses, particularly in the resource sector, have been as innovative as they have needed to be. 9 Paradox Lost CCA 2013

10 Canadian forest sector research and innovation agenda Research focused on commercial solutions Build new partnerships with universities and others Strengthen technology receptor capacity (Valley of Death) Optimize current and future product value streams Emphasize transformative technologies Capitalize on bio-economy window 10

11 Core National Research Program Strategy Committee Board of Directors Forest Sector Innovation Support Agenda Delivery Mechanisms NSERC Forest Sector Investment New Funding for university R&D New Oversight Board to select projects and ensure alignment with high level agenda Large Scale Demonstration Initiatives New To be developed Rebuild Technology Receptor Capacity New Use of technical specialists in mills University R&D FPInnovations Operating Divisions University R&D University R&D Other New Initiatives 11

12 Potential firm-level innovation strategies can be either incremental, transformational or both.. Cawood and de la Roche, Forest Products Journal 1999 Incremental Improvements New Product Value Streams Sales Volume Profits Growth Maturity Growth Decline Introduction 12 Time

13 Innovation can occur all along in the Forest Industry value chain Forests Clonal & Somatic Embryogenesis propagation Marker-Assisted Tree Breeding Genetically Modified Organism (GMO) Drones & Lidar 3-D Landscape & Bio-diversity Management Manufacturing Timber Processing Heads Continuous Presses Log X-Ray Scanning Real Shape and Grade Lumber Scanning High Efficiency Recovery Boilers Value Chain Optimization Business innovations Products Biorefinery - biochemical, biofuels and bio-materials 13

14 Walmart is a pioneer in Value Chain Optimization by exploiting the early digital revolution 1. Inventory 2. Cash Cycle 3. Growing the Brain Learning Data sales 4. Global supply chains Store Supplier Bank Cawood and de la Roche,

15 IKEA backward integrates to drive innovation and maintain a competitive price structure IKEA s Role in the Supply Chain IKEA Industry IKEA Manufacturer Parts Supplier Assembler Retailer End User Core Competences: Product Manufacturing Value Engineering Global Supply Chain Shelf Space Further Processing Product development Design & Marketing while ensuring required volume to supply their global sales expansion IKEA s internal supply division is a leading force behind s the company s ability innovate and be a globally competitive future retailer 15

16 18 BOKlok

17 Home Depot is a big box home improvement retailer serving 3 customer segments Home Improvement Retail Do-It-Yourself DIY Do-It-For-Me DIFM Professional Interconnected (online) Sales 17

18 Home Depot value proposition is providing innovative product and services offerings Home Depot s Role in the Value Chain Home Depot s Influence Home Depot Manufacturer Parts Supplier Assembler Retailer End User Core Competences: Product Manufacturing Value Engineering System Solutions Shelf Space New Product Development New Product Development Design & Marketing Local store locations Further Processing Last Mile Distribution Influence product development The company s scale give them the influence in the value chain to: Rationalize product distribution and remove costs Work throughout the supply chain to develop products and product bundles that provide the customer with solutions and gives the company proprietary positioning 18

19 BillerudKorsnäs develops innovative products to meet the demand for sustainable solutions 19 Adapted from BillerudKorsnäs

20 and is pursuing emerging technologies such as interactive & intelligent packaging 20 Adapted from BillerudKorsnäs

21 with the objective of driving sustainability throughout the value chain Blue Ocean Strategy 21 Adapted from BillerudKorsnäs

22 Over last 7 years, UPM has re-branded itself into a valueadded bio-products company The Biofore Company 22 Adapted from UPM annual report

23 Disruptive technologies are having major impact on innovation and the forest sector Disruptive Technology Platforms (convergence) Digital and Wireless big data gathering, processing, management and sharing Genomics and Tree Improvement Nanotechnology Disruptive Technologies Innovation Technology costs are rapidly decreasing Technology Year Cost Genome Sequencing 2000 $100 million (per full DNA sequence) 2016 $1,000 Computing Costs 1992 $222 (per million transistors) Data Storage (per gigabyte) 2013 zero Solar PV module 2006 $3.25 (per watt) 2015 $0.57 Sector Transformation Bioeconomy 23

24 The digital and wireless revolution: Drone embedded LIDAR technology with interpretation using I-phone or I-pad apps 24

25 The construction industry is among the least digitized 25

26 Genomic technologies are starting to have an enormous impact on forest adaptation to climate change and on helping reduce GHG Genomics is basically trying to understand gene diversity and patterns of gene expression across different environmental conditions and then be able to use that information to breed plants and animals for better adaption and resiliency Tools to better adapt trees and entire forest ecosystem by monitoring biodiversity and environmental changes (i.e. climate change) and by marker-assisted breeding for disease resistance, drought tolerance and overall forest resiliency Tools to mitigate climate change and carbon emissions by enhancing breeding for yield and quality to increase BioCCS as well as providing additional forest fibre for higher value bio-products Improve the efficiency of enzymes and processes for convert biomass into C-neutral biofuels, biochemical and biomaterials Mitigate the impact of industrial activity on the environment (e.g. bioremediation and ecosystem services) 26

27 27 Is the Nano-World Different?

28 Nano-World and Nature: Optical Efficiency in Ultra-Thin Structures and Nano-cellulose 28

29 29 Nanotubes and Nanofilms

30 Nanotubes Carbon nanotubes (CNTs) are used in baseball bats, tennis racquets, and some car parts because of their greater mechanical strength at less weight per unit volume than that of conventional materials. Electronic properties of CNTs have made them a candidate for flat panel displays in TVs, batteries, and other electronics. Nanotubes for various uses can be made of materials other than carbon. 30

31 Nanofilms Different nanoscale materials can be used in thin films to make them water-repellent, anti-reflective, selfcleaning, ultraviolet or infraredresistant, or electrically conductive. Nanofilms are used now on eyeglasses, computer displays, and cameras to protect or treat the surface. 31

32 Cellulose Nanocrystals (CNC) microfibril : crystalline region amorphous region acid hydrolysis H 2 SO 4 FPInnovations 32 Cellulose Nanocrystals

33 Cellulose Nanocrystals Colour Opacity Porosity Stronger than Steel 33

34 Technology is driving a renaissance in new innovations and opportunities in a range of wood building systems Building Systems Light Wood Frame Mass Timber Frames Mass Timber Plates Hybrid 34

35 Systems and Solutions increase the knowledge and service requirements Services Knowledge Solutions Integrated Systems Conception & engineering Combined products Roofs Walls Flooring Indoor / Outdoor Systems Support the design team Components I-Joists Glulam Paneling & Siding Fencing & Decking Engineering & Process development Raw materials Lumber Plywood PSL LVL OSB Particleboard Production & Distribution 36 Lars Sandberg, Timwood

36 Seeing regulations change towards sustainable building designs and more stringent performance demands. 36

37 . and with a paradigm shift in how technology is developed and implemented Provinces FPInnovations Universities NRC NRCan Programs Package Technical Solutions for Adoption Early Adoption through Demos & Regulations Code Implementation Industry NSERC 37

38 Wood Solutions examples illustrating engineered wood products and hybrid applications 18 storey mass Timber construction Olympic Oval Hybrid (CLT, glulam, steel and concrete 38

39 Origine in Quebec City is the tallest all wood building constructed in North America 13-storey tall with first floor in concrete (40 meters high). Used CLT and Glulam. First timber shaft in N.A. Advantages over concrete: Environmental footprint Prefabricated off-site Speed of construction Concrete pouring and setting in winter Strength-weight ratio; 45% lighter 39

40 North American forest products industry in transition driven by need to improve returns 40 Modified from NRCan, 2016 Status quo not an option for N.A. commodity producers Highest returns were at the extremes in the value chain Highest standard deviations in operating margin is in commodities (cyclical nature and year to year volatility) Commodity products are fungible and producers have no control on fibre costs; cost cutting to offset squeeze on margins Resource firms often capture most of the value associated with commodity production, leaving only enough value for producer to generate enough ROCE to continue operations Consumer goods can be branded and differentiated and margins can be increased by building consumer preference Firm business models in North America can be categorized 1. Operational efficiency move to 1 st quartile mills; relocate to low cost regions; value chain optimization 2. Market Diversification new markets for traditional products; SWL to Asia; mid-rise and tall buildings 3. Move up Value chain exit commodity trough; SWL to home builder; newsprint to consumer products 4. New Technology Commercialization invest in new products (CNC, CF, CLT, fibre reinforced composites, lignin-based bioproducts, etc)

41 Firm-level transformation strategies in North America fall into four categories 1. Move up value chain Exit commodity production: SWL to home builder Paper to consumer goods 4. New Technology Commercialization Invest in new products: NCC, CF, CLT, fibre mat or lignin-based bioproducts Conventional Competition 2. New Market Development New markets for traditional products: SWL to China/India Mid-rise res construction Low cost commodity production 3. Operational Efficiency Significant capital program: 3 rd to 1 st quartile mills Relocate to low cost region Value Chain Optimization Modified from NRCan,

42 North American forest products industry is restructuring through M&A and divestments 42 International Paper Focus on Containerboard Packaging Weyerhaeuser & Temple acquisition Domtar Focus on White Paper and Hygiene Products Attends, Associated Hygienic, Laboratorios Indas (Spain) acquisitions Weyerhaeuser LP Focus on Timberlands Longview and Plum Creek acquisitions Focus on Panels Ainsworth acquisition falls through Canfor Focus on Lumber Tembec & Scotch Gulf Acquisition Georgia Pacific Public company taken private by Koch Brothers Temple lumber and Grant OSB acquisitions West Fraser 1 st quartile lowest cost producer US South sawmill acquisitions

43 Achieving new heights through cooperation Thank you 43 McKinsey Quarterly 2015 (2)

44 Elements of the Innovation Game Business Context Maturity of market Product architecture Rules of the Game Rate of innovation Alliances and ecosystem Intellectual property Etc. Competencies Scale, funding, etc. Nimbleness Marketing Technology Roger Miller and Marcel Côté. Innovation Re-invented,

45 Businesses practices can be grouped in one or more of the six games of innovation Autonomous Platform-based Closed products products systems Innovations in emerging Eureka Battles of System markets Architecture Breakthroughs Innovations within mature New and Mass Pushing markets Improved Customization the Envelope EWP Prefabrication Systems - CLT Tall Buildings Roger Miller and Marcel Côté. Innovation Re-invented,