Niels B Christiansen Concluding remarks

Now we're almost through the program. We have one more thing that I'd like to do before we round off. Actually, 2, but the second is a surprise. So Niels, chairing the Production Council, please come up here and let me ask you what you think about this, because it must be sort of a daunting task to chair the Production Council. I mean, it's a great responsibility that you have, that we all in Denmark have jobs 10 years from now. So, so after today, what are you more? Scared or optimistic?

I'm optimistic, but I was optimistic before I came. But I've not gotten less optimistic. I've been writing quite a few notes down from the day here, and standing here now being asked to provide some concluding remarks, it's actually— it's not that easy. But I tried to group it into 2 different things, and maybe just come back to the question at the end, and then—

That's okay, I'll hold you to the question.

And then just, at least for me, try to pick up some of the most important themes or some of the things coming in here. And I think it's always nice starting, is this important or is it not important? I think it's important. I think just judging by the attendance we have, judging by what we have heard from all our colleagues in other countries, and we've been around Holland, Sweden, Singapore, the US, a lot of countries that have similar themes, similar issues on the table. We've heard our minister this morning talk about how important the Danish politicians see this, and I think we are all aware that that is something that is luckily very broadly spread on the political scene, that the importance of the issue of manufacturing and production is high. We heard OECD also echo that and show some also statistical and data facts substantiating that, so it's important. We heard things like it is the foundation, it is the lowest level of the Maslow's pyramid. I really liked Ineke from Holland talking about the earnings power. Maybe that's a way for us to also get it on the mind of the broader population. There's no doubt that said in many different ways, jobs in production manufacturing are high value-added jobs relative to many other jobs, also relative to especially probably many indirect service jobs. We just heard Professor Shi talk about the fact that it's not only important just to have it, but the impact of not having it is exactly losing this collective knowledge about not only then manufacturing production in the long run, but the ability to innovate. If we cannot innovate and we don't have production, then I get scared about what we would live off. So the link between manufacturing and R&D and innovation, I think we've heard several speakers talk about that, several discussions in different ways, all the way from investors up to— it's important. So it's clear that it is also a sense for a way to get high productivity in a country. There's no doubt that some of these jobs that we're talking about, we can always get back to whether there will be more, we can keep the same or whatever, but they are highly productive. They're highly value-added. And if we don't stop at least the decline of manufacturing jobs, we will never get to the kind of productivity increase we need to sustain the wealth and the welfare we have. So I think from the nodding around the room, I can kind of feel that it is important. That's why you're in the room, that's why we're debating this, and that's why we're quite happy that the government of Denmark has put this on the agenda, as have some other countries done already. Now secondly, I noted really that we cannot look at manufacturing without looking at this new industrial revolution. It's everything, whether it's industry, whether it's the 4th generation or it's the 5th, as Peter was saying, I don't know, but it is a revolution. It's the Internet of Things, it's ICT, it's connectivity, it's big data, it's all those things that we call, kind of put into place, that will have an influence here on that. And I think Peter Maas was saying it, it is happening. So whether we like it or not, it's happening, and the Minister was quite clear this morning saying It's not business as usual. We have— it's not an option not to go on this. And I actually like this case of the faster horse or the car, and I think that is probably a good way to talk to the point that we cannot not do this, even if it has negative implications on the short term. This is the way forward. It actually led on to several discussions around that we must see this as an opportunity. And on some of the things I heard, I was actually sitting there saying, okay, what do you— what I kind of felt a little bit also hit as a business leader in saying, I think 50% of what we talked about is actually things that should flow into business strategies, and maybe the other 50% is something that really has to do with more like policymaking and policy response to things. So it's really not a clear-cut one or the other way, and I heard things that I I brought with me home. One of the issues on this one, the new industrial revolution, that I think is especially important in Denmark, where I think like Holland we have a structure with many small and mid-sized companies, it is dangerous if the small and mid-sized companies on average are lacking the frontier, as Catherine from OECD was talking about. But on the other hand, we heard Anders from Vestas say, okay, now it's much easier to be innovative as a small company because you have access to all these data and you can do that. So it's a little bit of a dilemma here and I think we then need as a country of Denmark to be good at using the opportunity part of it and I think we have some work to do there. Also noted that with this new industrial revolution we see a tendency of moving from products to more solutions and I can say even in my own business where we've been looking at ourselves as a component provider or product provider for a long time we think in solutions. There's no doubt for me that's the way to go and the industry, the new industrial revolution, whatever we call it, will only fuel that journey. Now that moves me on to what I, the point number 3 here that I called ambition and it was not something we talked a lot about but I did make some notes here. I really, I liked as I said the earnings power, it is really what will, looking at that I think it will get our priorities right. It is, at the end of the day, how this can contribute to welfare and wealth that's important, and that should be our guiding light in making priorities. We've had a lot of discussions around how do you target set something like this? What is the target? You've been asking questions, and Peggy as well, can we get more employment in this area? I don't think I would stand here and have the answer for that. My ambition would definitely be that we stop the curve going down, but maybe, maybe the— that's not the only question we should ask. Maybe it really is about the value, and that's back to the earnings power, because value to society is of course employment, but it's also productivity that transforms into competitiveness that actually makes us get a bigger share of the pie that then eventually could lead to more employment. So that's some of the discussions we also have in the Danish Production Council around that, and there's no doubt that we need to not only look at employment, we also need to look to value to society. But clearly here it has priority, and compared to many other initiatives around employment, there's no doubt that in a world where we see everything we see, we look into a period that we may have scarce resources in developed countries, I think then we want our resources deployed where they add more value, and there's no doubt that manufacturing jobs add more value than the average indirect service job. So I think ambition-wise, I got some input there, but I think there's something for us to think about. Then I have a little group of things I call themes or complications actually to the story. I was a little intrigued by this discussion about manufacturing and service, and I actually wrote a note to myself here of not making sure we don't get confused, because I think here there is some truth to what has been said, but I think we probably need to be a little more detailed than just saying manufacturing and service. In my mind, talking about solutions, there are definitely services that move close to manufacturing. That could be like things that are embedded in the product, are directly linked to a product. So when Vestas is out there monitoring, maintaining a wind turbine that they have produced and sold, fine for me, that's very close to— that's a product. Call it service or manufacturing, but that's kind of the embedded part of it. I think those kind of services provide growth opportunities, and those jobs that come out of that have the same kind of opportunity for productivity as has kind of more traditional manufacturing I think the other part of service that is quite distinctively different, that's kind of the indirect or the support services in a society. That's the legal advice, that's the taxi driver, that's the hairdresser. And I think relatively to thinking manufacturing or production, that is more like not so much a growth opportunity, that's actually more a cost that needs to fit the value it provides. And that's one of the issues I think. I also heard here between the lines that that is actually something that also needs to be effective and productive in a country. If it isn't, it puts a drag on the manufacturing side. So it's related, but I just wanted to clarify that in my mind service is not just service. Service needs to be looked at what kind of service it is. Long discussions around this focus and prioritization, whatever we heard David from Singapore talk about, Ineke from Holland also, Professor Shi here towards the end, also Katherine actually on this, and it was called everything from focusing on strongholds, and there was a few offers for what that could be, looking at both horizontals in terms of the application knowledge stuff and the verticals in terms of technology. Clearly, and I would say I can personally get on that boat saying, it doesn't make sense from a small country to try to boil the ocean. ocean. It probably doesn't make sense for any country to try to pick the winners, but there is kind of a continuum in between that, and I think we need to find our spot in there that somehow will create— require some kind of focus or prioritization. Moving on, I called the next one solutions because that's actually what I really hope to get away from here, and that is actually with some concrete ideas because I Come May, the Production Council here has to come up with concrete ideas for what the Danish society can actually do to move forward here. And it's clear, just getting back to some of the first speakers from Vestas, we heard about the importance of productivity but also flexibility, the importance of getting our brightest minds into engineering, the importance of also being able to pull in international talent into the country to grow. I think from Holland I took a lot of inspiration in the field labs and would actually like to learn more about the detail of that. I think that's a concept that goes very well with some of the talks we've had, and I think we need to figure out what would be a good Danish implementation of something similar. Johan from Sweden talked a lot about the Swedish Production Academy, and I think we've taken the first steps of crawling, if you can say that, in Denmark with the MADE initiative. That also, I think, and very much to my agreement, got a lot of positive feedback and actually also advocacy for expanding that and making more out of that. Also, I think, recommended here by Professor Shi in terms of those kinds of initiatives on research that will carry forward. Took note of, of course, these indirect or support services. I think here is especially in Denmark a problem. I think that came out of the OECD numbers and we've seen that in different ways, so there is an issue for us in Denmark to work with. In terms of OECD talked about that the small and mid-sized companies, 40% of them had difficulties getting loans, which was kind of— or could get loans, which was the lowest percentage. She had a very quick note about business angels and I think that's part of the— that's probably part of the answer and we're looking into that. It also turns out that Danish small and medium-sized companies tend to be less capitalized than in other countries. So often things go hand in hand, but does not take away the importance of solving that issue. That brought me on to some of the things that we also talked about— education. And education, there were several times certainly some Like it's more quality than it's quantity, and it's really about now also engaging our young people and the brightest young people to also study engineering and scientific studies where they eventually add more value to society after that. Several times, and lately here by Professor Xi also, it was mentioned that frame conditions are important and we should not make tax regimes that makes things difficult. We've not spent a lot of time on that today. But I don't think that's because it's not important, but I actually like that we spend time on a lot of other stuff. So in my mind, if I would offer just a wrap-up, I've actually grouped things in 3 areas. I think there is one area that is about recognition of the importance of this. And on this area, I'm singing to the choir when I'm in this room, because you guys are here because you understand the importance and you want to push forward on this. I think by and large politicians are getting there. And also showing willingness to really start to act. I'm probably a little bit more in doubt whether the broad population has fully got it so far. So I would think there is still a theme of making sure that the importance to society of this gets broadened out, because only when the public opinion is really backing something, that gives more power for politicians to do something. So there is an issue around recognition. Then of course there is, and I always use this, if you have a rope and you want that rope through a small hole, it's very hard to push it through. It's a lot easier to pull it through. And therefore I also think we need to work on both ends of the rope here. And there are some things around frame conditions, around incentives, incentives for making investments go up because we saw we have pretty low investments in Denmark. Investments to incentives to make sure we fund the small and mid-sized businesses better. Incentives that we get more people into engineering studies. Incentives in terms of pushing forward initiatives like made more, and of course incentives on tax that at least we don't do stupid things. But but I could maybe even be so. Optimistic that we could even do something on tax that could actually make good things or make things better. So there is an incentive part, a pulling of the rope part, and then of course there is the enablers. And we spent more time, I think, today on the enablers or removing barriers in terms of making sure that we have sufficient skilled, highly educated, or relevantly educated labour, research, field labs, productivity, a lot of stuff I have mentioned in terms of enablers for that to happen. So I think that would be my wrap-up in saying how did I hear what was there, and you probably have a question or two, Charlotte, but before that, I think I will— I would like on behalf of the Production Council to really thank you all for participating very actively and lively in this dialogue today, and it's been great having real input from also outside the country, that this was not becoming just a Danish exercise, and it's clear to me that there are other people that have had similar thoughts and in some areas are actually ahead of us that we can learn from, and we will take that inspiration into our work. So thank you very much from my side.