Issuu on Google+

FINAL REPORT Operational and Organisational Model for the Furniture Technology Centre and Internationalization Strategy

delivered by the

INI-GraphicsNet Stiftung Wolfgang Kniejski Veneta Ivanova Bruno Fernandes

Darmstadt, May 2007


Table of Contents

0

GENERAL REMARKS................................................................................................................................ 5

1

VISION, MISSION AND STRATEGIC VIEWS ........................................................................................ 5

2

3

1.1

VISION AND MISSION ............................................................................................................................... 5

1.2

STRATEGY ............................................................................................................................................... 6

1.3

ESTABLISHMENT OF PARTNERSHIPS AND NETWORKS ............................................................................ 7

1.4

IMPACTS FOR THE OPERATIONAL MODEL .............................................................................................. 9

BUSINESS LINES AND SERVICES .......................................................................................................10 2.1

A GENERAL VIEW ....................................................................................................................................10

2.2

THE SERVICE PORTFOLIO......................................................................................................................12

IMPLEMENTATION OF SERVICES ........................................................................................................15 3.1

GENERAL TECHNOLOGY TRANSFER MECHANISMS ...............................................................................15

3.2

INNOVATION CENTRE SOURCES ............................................................................................................17

3.3

APPLICATION CENTRE SERVICES ..........................................................................................................20

3.3.1

Shared usage of labs and infrastructures ................................................................................20

3.3.2

Shared use of software applications.........................................................................................21

3.3.3

Specific examples for technologies to commercialise through promoting shared applications...................................................................................................................................23

3.3.4 3.4

INFORMATION CENTRE SERVICES .........................................................................................................26

3.4.1

The need for information exchange ..........................................................................................26

3.4.2

The organisation of students exchange programs .................................................................27

3.4.3

General collaboration with Furniture SME ...............................................................................31

3.4.4

Organisation of regular meetings to exchange experiences.................................................33

3.4.5

Provide incentives for international collaboration ...................................................................34

3.5

4

Collaboration with international organisations, e.g. INI-Graphics Net .................................24

QUALIFICATION AND QUALITY ASSURANCE SERVICES .........................................................................36

3.5.1

Qualification Effort .......................................................................................................................37

3.5.2

Quality Assurance effort and Aspects ......................................................................................38

MARKETING CONCEPT AND SWOT-ANALYSIS...............................................................................40 4.1

UNIQUE SELLING PROPOSITION (USP).................................................................................................40

4.2

THE USE OF SCALING EFFECTS ............................................................................................................40

4.3

SHORT-TERM ACTIVITIES .......................................................................................................................41

4.4

SWOT ANALYSIS...................................................................................................................................41

4.4.1

Strengths.......................................................................................................................................42

4.4.2

Weaknesses .................................................................................................................................42

4.4.3

Opportunities ................................................................................................................................43

4.4.4

Threats ..........................................................................................................................................44

2


5

4.5

SWOT ANALYSIS CONCLUSION ............................................................................................................44

4.6

MARKETING SUPPORT AS A SERVICE ....................................................................................................45

ORGANISATION, PERSONAL, FINANCES AND TIMELINE.............................................................47 5.1

ORGANISATION.......................................................................................................................................47

5.1.1

Legal Structure.............................................................................................................................47

5.1.2

Location.........................................................................................................................................48

5.1.3

Internal Organisation...................................................................................................................49

5.2

PERSONNEL STRUCTURE ......................................................................................................................51

5.3

FINANCES ...............................................................................................................................................53

5.3.1

Costs .............................................................................................................................................53

5.3.2

Revenues......................................................................................................................................55

3


Table of charts Chart 1: Establishment of partnerships and networks............................................................................. 8 Chart 2: Business lines in the FTC........................................................................................................ 12 Chart 3: Examples of Services provided by the FTC ............................................................................ 13 Chart 4: General Technology Transfer Mechanisms ............................................................................ 15 Chart 5: The FTC as mediator in the furniture market .......................................................................... 16 Chart 6: The Innovation Centre business lines: its mission and tasks.................................................. 17 Chart 7: Technology Commercialisation Process ................................................................................. 18 Chart 8: Shared usage of labs and infrastructures................................................................................ 20 Chart 9: Shared usage of software applications ................................................................................... 21 Chart 10: Benefits of integrating students in SMEs............................................................................... 28 Chart 11: Integration of student teams .................................................................................................. 28 Chart 12: Design trends analysis .......................................................................................................... 29 Chart 13: International collaboration network........................................................................................ 35 Chart 14: Qualification and Quality Assurance in an orthogonal business line..................................... 36 Chart 15: Aspects of Quality Assurance Activities ................................................................................ 38 Chart 16: Different business lines within one legal entity...................................................................... 47 Chart 17: Allocation of responsibilities to stakeholders......................................................................... 47 Chart 18: Allocation of shares to stakeholders...................................................................................... 48 Chart 19: Recommended organisational structure................................................................................ 51 Chart 20: Recommended staffing structure........................................................................................... 53 Chart 21: Recommended staffing structure........................................................................................... 54 Chart 22: Budget assumptions for the first five years ........................................................................... 55 Chart 23: Grant schemes to support the furniture industry ................................................................... 56 Chart 24: Revenue assumptions for the first five years ........................................................................ 57

4


0

General Remarks

The terms “incubator”, “innovation centre” and “technology centre” are interchangeable. For many policy makers, incubation refers to the process of nurturing and developing a business idea and supporting new businesses throughout their early years within a given environment. Innovation Centre is often viewed as an incubator specifically for high-growth knowledgebased businesses. This report follows the meaning for a “Technology Centre”, which is set by the UK Business Incubation (UKBI, 2004) and applies also to the Furniture Technology Centre (Furniture Tech Centre – FTC): “Business Incubation is a unique and highly flexible combination of business development processes, infrastructure and people design to nurture and grow new and small businesses by supporting them through the steps of development and change.”

1

Vision, Mission and Strategic Views

1.1

VISION AND MISSION

Core knowledge & technology innovation is critical in building regional, national and international strength. Therefore, the mission of the Centre is to create a knowledge-based economic system, centred on technological innovation, for the furniture market. Its vision is expressed as to be the unique mediator in Portugal, linking the knowledge system with the furniture market, building clusters and networks in a long term, acting globally ensuring sustainability. The Centre aims to strengthen the science-business relationships and to establish an innovative business environment to increase the productivity, efficiency and competitiveness of the micro-, small and medium-sized enterprises in the furniture industry. In this regard, the FTC will: •

Promote R&D-centred regional innovation systems by fostering the region-specific Furniture Industry;

Endorse regional innovation by integrating industrial functions and R&D functions;

Establish access to R&D results for the market players and selectively support

5


commercially-viable technology projects through advance technology screening and valorisation; •

Promote innovative climate in technology-based small & medium size firms and ventures;

Establish technology sharing systems to facilitate shared licensing of outstanding technologies; and

Introduce advanced technology application finance systems.

In order to achieve these goals and to follow its mission, the FTC should develop an appropriate strategy, should implement measures and services to respond to the SMEs’ needs and finally, ensure long-term sustainability.

1.2

STRATEGY

The FTC will contribute actively towards the social and economic development of companies by providing support and encouraging processes of technology innovation and development, as well as strategies for increasing competitiveness of the furniture small and medium companies in Portugal. Therefore, the Furniture Technology Centre should be positioned as a translator and communicator for relevant information. It will be a key element in the integration of R&D results in the market. This activity should occur in an innovative environment, based on communication between all parties involved as illustrated in Chart 3 on page 25 in the summary of Part I of this report. The FTC has to help the market to understand what the technology needs in the market are. Furthermore, it has to communicate them to the universities and research institutes. There are technologies with market potential already available, but the SMEs are not aware of them. Therefore, the FTC needs to address the market and promote the regional innovation system as well as to exchange demand information between the carriers of ideas and the market players. As a result of this communication and intermediation function, the players in the market or within the relevant market segments will be aware of existing technologies, available in the knowledge system to improve processes, infrastructures and efficiencies. On the other hand, the carriers of ideas will be aware of demands and needs in the market. Thus, over time a sustainable feedback system will be established, also enforcing universities and research institutions to develop new technologies oriented towards the furniture market.

6


It is in the interest of both, the FTC’s management team and the players in the furniture market, that links with external stakeholders are established and maintained. Public sector funding, for example, is especially important to create new business opportunities in the market. Keeping abreast of new funding opportunities, new demands for innovation, training of entrepreneurship and strategic changes, could potentially offer major opportunities.

1.3

ESTABLISHMENT OF PARTNERSHIPS AND NETWORKS

One way of adding value to businesses through a technology centre, is by facilitating the development of regional, national and international networks. Encouraging the business and entrepreneurs to be more open about their ideas and thinking allows discussion and creates opportunities for like-minded individuals or companies to: •

Develop synergies;

Bounce ideas of each other;

Open technological debates; and

Build up contacts within the furniture sector.

The FTC’s Board of Directors, shareholders and the Committees should be based on networks of experts, including scientific experts, financial experts, business plan experts, design experts, patent lawyers, and others. This will give the possibility to rely on a broad spectrum of expertise without having ongoing costs for the required consulting services. The collaboration between the Centre and the Pool of Experts will be win-win based: the experts will get access to the latest research achievements and the FTC will benefit from the professional feasibility and marketability evaluation of ideas, e.g. through technology screening activities. Moreover, if the market potential of an idea has been identified through assessment, the FTC could provide coaching and mentoring support. Example: UPIN and Tecminho are interested to integrate expertise from the market to commercialise successfully. The Centre could allow them interface to their process. For this reason, both units should be represented in the Pool of Experts and should have a seat in the Experts Committee (Steering Committee). A careful selection of Board Members can provide the management team with a unique and wide-ranging set of skills and experience upon which to draw in order to form the overall strategic direction of the FTC. It also enables the FTC’s team to address the individual needs of the SMEs in the market.

7


For example, Board and Committee Members may be able to: •

Assist in the selection of suitable technologies;

Provide in-depth understanding of certain technologies being utilised within the market;

Facilitate new networking opportunities with key leading business people and large companies; and

Offer practical management advice and guidance when necessary.

Board Members can have very different motivations. Some may be honoured by the invitation or interested in the innovation processes. Others may see it as a way to pursue the strategic interests of their organisations to find business partners and opportunities. Stakeholder 1

Board

...

... n Experts Committee

... ... ... n

1

FTC

... ... ... ... ... n

Outsourcing

1

...

Scientific Experts

Financial Experts

Business-Plan Experts

Other Experts e.g. Designer

Market Experts

Pool of Experts Chart 1: Establishment of partnerships and networks

The FTC should not rely on existing wood-clusters, but build within the network a furniture cluster as an ecosystem, providing economic growth. Another benefit of networking is that there is financial support provided by the European Commission towards clusters building. If the Centre is operating successfully, it will be able to establish an efficiently working furniture cluster in Portugal that will later collaborate with those in Finland, Italy, Denmark, Bulgaria, etc. The provided services should be offered towards reaching these goals. Using a sociologic methodology and instruments, the impacts of the Centre to the business and research environment should be analysed. A furniture cluster in Portugal will be able to start cooperation with other countries, such as Italy, Finland, Bulgaria, etc., applying together for European funds with the goal to develop a European Furniture Cluster. Thus, it is important 8


to concentrate all activities in Portugal within a single institution, following the examples in Italy or Finland.

1.4

IMPACTS FOR THE OPERATIONAL MODEL

During the process of preparing this document, a detailed analysis of the furniture market as well as a benchmark of international furniture technology centres has been performed. As a result of those activities, it became obvious that a Furniture Tech Centre (FTC), operating in the North of Portugal should offer a diversity of services. The network of core partners as a key element for a sustainable success has already been mentioned. A further objective should be: •

To offer actively “hands-on” services for the centre’s costumers; and

To build a lean organisation with a small number of staff to minimise the risk.

The focus should lie solely on the furniture market, integrating cooperation with universities and research institutions. The goal of implementing a Furniture Technology Centre should follow the establishment of “THE” Furniture Technology Centre with a clear and focused business orientation. With this in mind, the following guide lines should apply: •

Furniture Technology Centre as the Enabler for Profiling the North of Portugal as core European Furniture Area;

Services to be provided should be structured in different business lines;

Information Gathering and Awareness Raising should be offered for the knowledge system as well as for the players in the market;

Active Mobilising of the Innovation Potential as USP;

Networking on a regional, national and international level as key success factor;

Qualification shall strengthen competitiveness;

Quality Assurance is key for Future Recognition.

9


2

Business Lines and Services

2.1

A GENERAL VIEW

Since the formation of the first facilities in the United States in the late 70's, the establishment of innovation centres for the founding of new technology enterprises has become an important instrument. One of the central principles of the American NBIA (National Business Incubation Association) is as follows: "the incubator / innovation centre strives to positively affect the economic welfare of a region by increasing the success of emerging enterprises". A similar statement attained from a study by the European Commission in 2002: "Incubators in the European Union contribute substantially to the creation of workplaces and to prosperity. Thus with incubators operating, approximately 40,000 new jobs are generated per year.“ Directly compared with other SME founding measures, incubators create according to this study a clear increase in value to a region as they help to accelerate the structure of new enterprises and to increase the growth potential of existing enterprises. Also in Portugal innovation centres are considered to be important instruments for local and regional promotion of economy development as well as for the employment creation. Hence, the establishment of such centres in economic-weak areas has been seen as a promising beginning for the acceleration of structural change for a long time.1 Beyond this, innovation centres are important instruments of technology transfer, especially if they emerge in close relation to universities or external-university research facilities. Here, they contribute considerably to the improved commercial utilisation of scientific research results. Through this connection, thematically aligned centres can also work together as important components in the build-up of so-called technology clusters, which serve as a strategic component for regional and local politics. The search for literature resulted in statistical data, which provides a general orientation over the magnitude, character and function modes of innovation centres. These data were confirmed through the individual interviews with innovation centres. The performance of the innovation centres is broadly varied. In this study, real estate incubators limited to the offer of areas and infrastructure services, were not considered.

1

Baranowski, G., Dressel, B., Glaser, A. (Hrsg.): Innovationszentren in Deutschland 2005/2006, Berlin 2005, p.17.

10


During the analysis of the different offers of the innovation centres, the following main service fields for a Furniture Technology Centre have been crystallised: •

Examination of business ideas;

Supply of technical infrastructure (IT network, server, telephone system etc.);

Allocation of a small, flexible space;

Allocation of meeting rooms with conference technology;

Consultation and consulting arrangements;

Qualification measures/advanced training;

Consultation and relieve of formalities with the establishment (commercial, financial questions stand in the foreground less specific specialised questions);

Team recruiting when establishments from research facilities (usually addition with mercantile and marketing/sales expertise);

Entrance to developing labs;

Support during product development;

Support with funding acquisition (systematic entrance);

Subsidies consultation;

Contact preparation to business partners/customers; and

Coordination of additional projects.

From this spectrum, the preparation of contacts to business partners, the examination of the business ideas and the evaluation of the market chances of a technology as well as the support during the procurement of funding, are important and should be provided by the FTC.2. The FTC should act as a modern and contemporary incubator, offering particularly consulting services. Nowadays, the technology centres are not any more to compare with these from the early 90’s, when they entered the business area offering infrastructure and space. The modern incubators:

2

Rely on broad spectrum of services;

Build strategic networks;

Exchange expertise through the access to pool of experts on international level;

Möhlig, G., Diethelm, G., Feidicker, H.: Problembereiche und Handlungsfelder bei Existenzgründungen, Trier 1998.

11


Offer entrepreneurship education and special professional training and understand this as a an essential and a critical success factor within a technology centres’ service portfolio; and

Act as a global player. They not only focus on the internationalisation of the local market and its players, but also on its own international network building and positioning to support the local market players accordingly.

2.2

THE SERVICE PORTFOLIO

Accordingly, the FTC should provide services to companies and other entities in a wide variety of resources ranging from R&D projects to specific training courses in the fields of management, computers, wood technology, new composite materials, quality control, processes optimisation, logistic, marketing, etc., as well as laboratory testing and certification services. Based on the result of the benchmarking and supported by the individual experience of the team members, we recommend bundling the variety of services in different business lines as: •

Services of an Innovation Centre;

Services of an Application Centre;

Services of an Information Centre;

Qualification, Training and Quality Assurance Services;

Other Services such as financial support and others.

This recommended structure is illustrated in Chart 2 below:

Furniture Technology Centre Qualification, Quality Assurance Innovation Centre

Application Centre

Information Centre

Other Services

Chart 2: Business lines in the FTC

Within each business line, there are several service areas, to which more than 30 services in total apply. These fields are structured as follows in Chart 3: 12


SERVICE AREAS

Support commercialisation of innovative technologies in the furniture market

Support usage/application of innovative technologies in the furniture market

Support information exchange and communication

Support fund raising

Support training and qualification

Other services

SERVICES TO BE OFFERED                                            

Promote commercialisation of new technologies Analysis of company needs Support marketing activities Active identification id innovation potentials Technology assessment Identification and provision of funds Foster a regional innovation system Promote shared use of applications and labs Provide infrastructures and facilities Support production and material engineering Analysis of company needs Identification and provision of funds Support application sharing Support of shared technology licensing Active identification on innovation potentials Technology assessment Awareness raising for investment for emerging technologies Increase readiness to use new technologies Run an internet portal for players in the furniture industry to share expertise Analysis of company needs Coordination of student programs and internships Adapt scientific publications to the market language Analysis of market needs Provision of market information regarding the new market trends Organisation of conferences, workshops, etc… Investment for emerging technologies Strengthen international cooperation Identification and provision of funds Organisation and coordination of exhibitions, fairs and design competitions Organisation of conferences, workshops, etc… Increase readiness to the use of new technologies Training of management and staff members Coordination of student programs and internships Coordination of student’s integration Support the usage of test infrastructures Consultancy in production management and material engineering (e.g. material testing) Provide quality assurance and certification Strengthen international cooperation Support in marketing activities Organisation and coordination of exhibitions, fairs and design competitions Organisation of conferences, workshops, etc… Organisation of competitions Special thematic task forces Technical feasibility statements

Chart 3: Examples of Services provided by the FTC

The service portfolio of the FTC is an exceptionally flexible combination of training, information exchange, technology commercialisation, application support services. This will 13


contribute to the development of a sustainable model that provides opportunities for transferring new technologies, based on the needs, stimulating jobs creation and raising the level of global competitiveness of the furniture SMEs. Some of the services are assigned to more than one activity area, due to the broad interacting relation and due to the interdependencies of service offers. There are “general” services, which should be free of charge, like awareness rising, for example. Their goal is to sensitise towards implementing new technologies, to develop positive image and to build reputation. Example: A technology demonstration as a service to the companies is creating awareness of new technologies that challenge current way of thinking and current methodologies. Other, so called “professional” services, like supporting marketing activities, are offered on commission basis or are charged with a fee. It is sharply recommended by the authors of this report: •

To structure the service portfolio time-wise: -

Do not start providing the services all at once; moreover start offering service on a low-cost base, then internationalise and then grow.

• To bundle and centralise services: -

Do not start single actions, but collect core competencies.

• To bundle private energy with public goals, by clustering services: establish a public/private partnership. The centre has to be put into the middle of the research/knowledge environment and the market environment. This will enable the FTC to enhance communication into each direction. All these recommendations are valid and could be implemented quite quickly through the set of detailed services mentioned above. However, it must be noted that the advantages of launching those services are that there is a person or team required, able to take responsibility for the further development, the maintenance as well as regularly update the services and activity lines.

14


3

Implementation of Services

3.1

GENERAL TECHNOLOGY TRANSFER MECHANISMS

The main objective of the FTC is the transfer of knowledge and innovation to the furniture market to enhance the competitiveness through raising productivity, efficiency and effectiveness in the market’s processes. The implementation of innovation for this propose has to be encouraged and has to replace the traditional technology transfer mechanisms first, as it is illustrated in Chart 4 below:

EDUCATION & RESEARCH Consulting

ts

ul re s R& D

ul

Training

s re

Consulting

University D R&

ts

Development

Technical System Systems Solutions

R&D Projects

Product Development

System Integrator

Products

Software Integration

INDUSTRY AND COMPANIES

Products

Producers of Hardware

Chart 4: General Technology Transfer Mechanisms

The standard and current way of technology transfer from the knowledge system to the market is that the universities try to sell their research results (prototypes or demonstrations either) to system integrator companies which develop the final product, or to hardware producers, that use the software tools to sell additional features or functionalities. Both, system integrators and hardware companies, are finally selling into the market, but these are only very rare cases. Most of the ideas never see the market, although they might have good chances for successful commercialisation. In the North of Portugal there are only a few success stories in the furniture market and the innovation impact is not accomplished in the desired scale. Thus, most of the inventions, ideas and research results are not applied in the market. This can be significantly approved by putting the FTC into the role of a mediator linking the systems and enforcing sales success of innovative technologies.

15


Here is the unique and essential role of the FTC, to get actively information about knowledge that is available in the universities and R&D institutes and that has the potential to benefit the furniture market. The authors of this report strongly recommend that the FTC actively collaborates especially with UPIN and Tecminho to get access to research results and to help them to commercialise those results in the furniture market. Thus, an innovative climate in the market will be stimulated, accompanied by awareness raising campaigns and appropriate PR activities. If the centre in parallel offers and supports qualification programs for management and staff (workers) in the relevant companies, over time sensitiveness for the advantages of high tech applications will be raised. This will lead into a communication structure in which the FTC will receive valuable feedback from the market, especially in terms of information about market results and market demands. The process is illustrated in the Chart 5 bellow:

Gets actively information about

University

climate

R&D results

FURNITURE

R&D Institutes

Qualification

SME1 SME2

of management

TECH Communication of problems and requests

Develops R&D results

Stimulates innovative

Delivery of applications

CENTER

SME3 Information about demands and needs Implementation

... SMEn

Chart 5: The FTC as mediator in the furniture market

If this market information will be further communicated to the universities and R&D institutes, over time the research activities will become more oriented towards the market and problems will be solved by innovative ideas, which really exist in the market. Thus, the knowledge system will be supported to prepare and finally to deliver applications which then may be implemented as solutions in the market with the support coming from FTC.

16


3.2

INNOVATION CENTRE SOURCES

The below mentioned activities should be part of a FTC business line, which we recommend to call “Innovation Centre”. Within this activity come the following tasks should be performed:

Innovation Centre Mission: Promote Commercialisation of New Technologies

Tasks: •

Establish access to R&D results;

Selectively support commercially-viable technology projects through advance screening;

Promote innovative climate in technology-based small & medium size firms and ventures;

Establish technology sharing system to facilitate shared licensing of outstanding technology;

Introduce advanced technology application finance system. Chart 6: The Innovation Centre business lines: its mission and tasks

Out of this business line, the following services should be offered: •

Consulting services and coaching;

Active identification of innovation potential;

Technology assessment;

Technical feasibility statements;

Provision of infrastructure;

Acquisition of financial support;

Mentoring and coaching which is very important to help the creation of spin-off companies;

Collaboration with UPIN and Tecminho. FTC can even help them finding commercial opportunities of some new technologies.

17


Usually and actually the technology commercialisation process is performed as follows: A. Scanning and Screening In the phase of scanning and screening, the technologies are analysed in consecutive steps. Chances in the respective markets, utility and the feasibility potential are evaluated in such a way that the results of the process form a pool of exploitable ideas. The registered ideas are then evaluated by a round table panel of experts; a new generation of scientists receive at this early stage a detailed feedback regarding potential strategies of exploitation, market potential and possible further applications and marketing concepts. Starting potential for agreements concerning licensing and copyright protection within these screening rounds are further evaluated and have to be proceeded – in this case by UPIN and Tecminho.

B. Incubation The results of the screening pass into a breeding process. Here, precise specifications and ideas for market-applications are developed, documented, analysed and discussed by a round table panel of investors for selected ideas only. By including further experts in the fields of investment and venture capital, the existing market situation, the distribution channels, product life cycles and expense budgets are analysed and a definite management team is formed.

Market & Business Experts

Other Experts

Scientific Experts

Innovation Scouting

Concept Developmt

Business planning

Mentoring Coaching

Application

Assessment and Evaluation supported by Experts of FTC Chart 7: Technology Commercialisation Process

18


The authors of this report strongly recommend that this process is not organised within the FTC. Since the main source for innovative technologies for the furniture market will be University of Porto, University of Minho and the collaborating institutions, their technology transfer units, UPIN and Tecminho, should be in charge as well as responsible for the transactions within the commercialisation process. Moreover, and as marked in Chart 7, the process should be supported by FTC staff through activities like: •

Accompanying and organising;

Technology screening;

Technology assessment;

Feasibility assessment, and especially by the

Exchange of experts.

Thus, the FTC would have easily access to relevant technologies, and the effort and resources for the valorisation of those technologies could be shared. This will lead into a mutually beneficial collaboration structure. Having this in mind, it is strongly recommended that FTC steps into cooperation agreement with both entities, and that both entities appoint representatives in FTC’s Steering Committee. As a result of the screening meetings which were scheduled at both Universities3, it becomes obvious that the majority of professors are committed to collaborate with the FTC. Furthermore, they can imagine different collaboration schemes – supporting students integration into SMEs for a semester or master thesis, building interdisciplinary teams of students, for example of engineering and business students that bring different perspectives from the point of their field and thus, elaborate praxis-oriented student works and translate scientific publications into the “market language”. As a reference please see the case study of “I3P, Incubatore Imprese InnovativePolitecnico di Torino, Italy” in annex 6.

3

For details please see the minutes of those meeting in the part IV of this report.

19


3.3

APPLICATION CENTRE SERVICES

While the previous chapter discussed services that should be offered in a business line called “Innovation Centre”, this chapter now will illustrate a variety of services which should be provided in a business line, which we recommend to call “Application Centre”. The mission of the “Application Centre” should be to foster the regional innovation system in the furniture sector. This will be accomplished by the following tasks and services to be offered: •

Shared usage of labs and Infrastructures;

Shared use of software applications; and

Collaboration with international organisations.

3.3.1

Shared usage of labs and infrastructures

The universities and research centres in the North of Portugal are well equipped with technical infrastructures. It became obvious in the various discussions with the professors and scientists that the existing labs, machines, test equipments, etc. are not used the entire day in their full capacity.4 Moreover, the professors and scientists offered that such an infrastructure may be shared by staff from a Furniture Technology Centre. Consequently, the FTC would not need to invest in new equipment and test environment. It could offer already existing hardware and equipment for shared use to its customers, the companies in the furniture market:

University R&D Institutes

offers infrastructures

pays a fee

FTC

makes infrastructures

Organises and promotes shared use

SME

available

• Uses tests and other equipment

pay of a fee

• Saves costs • generate value added

Chart 8: Shared usage of labs and infrastructures

4

For details please see the minutes of those meeting in the part IV of this report.

20


The companies would be allowed to use the available equipment for their own purposes. This would generate value added, especially for the SMEs. In addition, the companies would not have to invest their capital gains in technical equipment, could increase their own productivity, their efficiency and finally would be positioned to gain higher margins. The FTC has to promote the usage of shared equipment and, of course, has to organise this activity in close collaboration with the universities and R&D institutions. Those units would have to charge a fee for providing the infrastructure or even a higher fee for providing personnel. The FTC should charge a fee, including a small profit, to its customers. At the end, the FTC is not only offering value-adding services. Moreover, it generates revenue stream to fund this level of services.

3.3.2

Shared use of software applications

In the same manner as illustrated in the previous chapter, the FTC could grant the companies in the furniture market access to software prototypes and demonstrators. The authors of this report would like to recall here that universities and R&D institutes are generating research results, which they also may call products. However, those research products are not final products that can be sold in the market. The development state is in most of the cases close to a technical prototype or a demonstrator and in only a few cases a commercial prototype. Thus, the users in the market have to be informed that such inventions and research results are available. Even more, besides raising awareness, someone has to teach companies in the market how those technologies could increase the productivity, could open new market segments or could achieve cost savings. This role has to be taken by the FTC. Having this stated, the following service model could be applied:

b)

University R&D Institutes

a) c) licence

FTC

e)

n companies in the market

d) fee

f)

Chart 9: Shared usage of software applications 21


a) FTC generates information about existing research results, e.g. software prototypes. b) FTC informs market about potential benefits and value added by those research results. c) FTC raises demand within the furniture market (by the companies). d) FTC purchases a multi-use license and pays license fees and/or royalties to the owner of the technologies. e) FTC sells the licenses in the market, supports the application and implementation and organises to solve maintenance and first-level-support services. f)

FTC charges a license fee to the customers and gains a profit through selling the application n-times in the market.

In the various discussions the professors and scientists of the universities and research centres confirmed their willingness and open mind to step into this kind of collaboration with representatives of the FTC.5 Such a collaboration scheme is illustrated as a potential win-win activity organised by the FTC. The authors of this report have to mention here that a lot of detailed issues have to be solved before this model can be applied, services can be offered and financial revenue can be achieved. Among those issues are questions like:  Who pays for the final application;  Who determines the final application;  Who pays the product implementation; or  How is the value of a technology license being determined. Solving these issues will not only cost time, it will also cost money. Therefore it is to recommend that: •

Not only the FTC initiates those services as soon as possible, but

•

Moreover the FTC initiates collaborative projects (e.g. with funds from European or Governmental sources) to close the financial gap.

The funding issue will be discussed in a more detailed level later in this report. (see chapter 3.4.5)

5

For details please see the minutes of those meetings in the part IV of this report.

22


3.3.3

Specific examples for technologies to commercialise through promoting shared applications

A. Within the DEMM at FEUP (Prof. Luís Filipe Freitas Ferreira; Luís Filipe Malheiros; Vítor Martins Augusto) there is a 3D visualisation software developed to improve processes in the manufacturing. Changing the assembling line is cost intensive and not affordable for the SME. The alternative solution gets advantage from the visualisation. The FTC could license the technology and offer it to the SMEs for a low license fee. Thus, technology implementation is generated and the Centre benefits from revenues. B. Technology addressing the development of micro-capsules with perfume has been developed for the textile industry (Alírio Egídeo Rodrigues, part of DEQ, at FEUP) and can be applied also in the Furniture Sector, e.g., in cushions. This technology can cause differentiation to the lower price furniture coming from Asian countries and Eastern Europe. C. Wood-wood and metal-wood bonding, as well as composite materials or fasteners combining different materials. Technologies related to product development have already been developed for possible commercial purposes. D. In order to minimise raw material waste and to solve some process constraints, different solutions for board cutting optimisation have been developed. FTC can offer this technology from José Fernando Oliveira (part of DEEC, at FEUP, and INESC) to the Furniture Industry. E. INEGI, as an interface institute with University of Porto is willing to collaborate in the following areas: •

Technical and consulting services to the companies;

National and International R&D projects; and

Training programs and special courses, according to companies’ needs.

F. INESC could offer integrating Systems on the factory floor and also can collaborate in the field of Enterprise Information Systems for ERP, Decision Support, QM, Planning, etc. For the shoe industry INESC deployed a system for the automatisation of the assembling lines to improve information flow and to optimise the flow of materials (65 installations have been made). It can be applied also to the furniture market. Recommendations: FTC needs to develop collaboration concepts, describing the partnership with the professors. They are willing to offer applications, software, technologies, prototypes as well as humane resources for the needs of the furniture companies.

23


Next Steps: FTC should actively initiate collaboration schemes and the signing of collaboration agreements. Furthermore, the Centre should contact the SMEs and convince them of its benefits.

3.3.4

Collaboration with international organisations, e.g. INI-Graphics Net

INI-GraphicsNet Stiftung manages a so called “Pool of Technologies”, consisting currently of more than 100 technologies from different research areas and application fields. Most of these cutting-edge technologies are ready to be commercialised through licensing, technology sale or establishment of a spin off. Some of the technologies of INI-GraphicsNet that can benefit the furniture industry are: •

Spacemantix

3D Sales

ADIVI

Those technologies can be provided to the FTC to enable the centre to initiate collaboration structures as discussed in the previous section of this report. To be specific: Nowadays, showroom decor and environment gain more and more in importance and are getting crucial competitive and instrument outstanding criteria in the fight for customers. The below described solutions enable high quality product presentation with different goals.

Spacemantix Spacemantix aims to enhance usability and usefulness of 3D graphics in commercial applications (like e.g. product catalogues, or assembling instructions).The goal is to combine the spatial 3D-model of a part/product with semantic information. This refers to both, traditional product data, as well as 3D-related information. Some of this information can also be used in the direct manipulation of the 3D-model on a computer screen, in such a way that a part "knows" where it can be placed in a given scene, or how it may be "plugged" together with others. Using such "natural" constraints in 3D-datasets will empower the user to manipulate 3D-models in the most natural and easy way.

24


3D Sales 3D Sales is a software technology for high quality interactive 3D visualisation. The tool allows accomplishing of interactive room planning and offers photorealistic rendering of complex scenes. Demonstration of product functionality, assembly and maintenance handbooks and proof of ergonomics are some of the potential functionalities that can benefit the furniture producers and designers.

ADIVI – Add information to Video ADIVI is an open system for Hyperlinked Video addressing distributed environments in terms of collaborative knowledge construction. With the ADIVI system the video content is enhanced by additional information, enabling a more detailed description of the objects seen in the video sequences. In particular, users can mark an object in a video and combine this object by an annotation, for instance, with a text, a picture, a graphic or any thinkable multimedia content. By clicking with a mouse point on a marked detail in the video sequence additional information can be easily accessed and presented on the display. The Web-based ADIVI System integrates standard technologies and offers an intuitive graphical user interface, which allows the users to quickly become familiar with its services. As an application for the furniture industry, the technology could replace the written instruction of the self-assembling furniture (e.g. like IKEA furniture), giving clear and easy to understand video and audio assembling description step by step. Furthermore, the majority of the SMEs are not able to provide financial resources for restructuring their showrooms. Here should be the role of the FTC- to provide the appropriate tools in the World Wide Web and to convince the SMEs to launch their furniture online, thus reaching broader customer segments.

25


3.4

INFORMATION CENTRE SERVICES

3.4.1

The need for information exchange

As it was already documented in part I as well in chapter 1.2 of this report, one of the key success factors to foster the cooperation of universities and R&D institutes with companies in the furniture market is the adequate flow of information within and between the sectors.

The FTC has to act as an intermediator between the knowledge sector and the furniture industry, communicating problems and challenges to the universities and the solutions to the market. To accomplish this, a variety of services have to be offered like: •

Information concerning the furniture market;

Information concerning market trends;

Organisation of conferences, workshops, fairs etc.;

Organisation of competitions;

Information concerning innovation;

Information and knowledge-portal;

Special thematic task-forces; and

Co-ordination of student integration and student exchange.

Since this set of information boost activities should be offered in a global scale, the mission of the “Information Centre” business line should also be to strengthen international collaboration. In the following, three of the main tasks will be illustrated in detail: •

Increase the number of exchange programs for researchers and engineers;

General collaboration with furniture SMEs;

Provide incentives for international cooperation through: -

Coordination of research projects on a regional, national and international level; and

-

Boost participation in bilateral/multilateral technology cooperation programs.

26


3.4.2

3.4.2.1

The organisation of students exchange programs

Integration of students in SMEs

In regard to the students’ involvement into the SMEs, the FTC could rely on the following model. During workshops, organised together with CFPIMM6, Profisousa7 or Polytechnic Institute of Viseu8, for instance, professors and lecturers can inform about the available applications, technologies, research ideas they are working on. This would support the generation of an innovative climate and the awareness rising for technical solutions for problems existing in the furniture market. As a next step, the centre hires students and sends them to the SMEs, where the already performed requirements analyses have shown technology needs in a concrete field. The students develop their master thesis, studying the problems and analysing the benefits from possible technology implementation. Finally, the university and the FTC are the owners of the student work. In a short term, the FTC will build portfolio of thesis that can be offered to the SMEs, generating additional revenues source in terms of consultancy fees. As a good opportunity should be mentioned the fact that from 2007 on the Ministry of Education has decided that within their curriculum, all the students from engineering faculties have to absolve obligatory internship by the industry for 6 months9. This will support the establishment of the said interaction scheme. In addition, the Faculty of Economics of University of Porto (FEP) offers now a post-graduation program especially oriented to the furniture market.10

3.4.2.2

Building interdisciplinary students teams

The integration of business expertise within the university with the engineering knowledge will leverage the student work and as a result, the initiator of this kind of collaborations (FTC), gains business concepts, market analysis, marketing concepts or analysis of specific industrial problems. The benefit for the professors is that they get feedback directly from the market, free of charge. The FTC can offer these results for small amounts to the SMEs.11

6 7 8 9

For details about the activities developed by CFPIMM see please the annex I of this report For details about the activities developed by Profisousa see please the annex III of this report For details about the activities developed by the Polytechnic Institute of Viseu see please the annex II of this report. According to Prof. JosĂŠ A.S.Cabral, from DEMEGI - FEUP

10 11

See please description of the program in the annex V of this report. Readiness and interest in adopting curriculum has expressed for example Prof. Carlos Brito, from FEP.

27


This collaboration schema and its benefits are illustrated in Chart 10 below:

• Sending Students • Technical Support UNIVERSITY TECH CENTER

FURNITURE LABOUR MARKET

• Awareness raising for lack in management skills • Coordination

• Identifying Markets Trends • Generating Innovative Climate • Provide hands-on solutions • Industrial clustering through Postgraduate Programs Chart 10: Benefits of integrating students in SMEs

For a successful implementation, the process should not only be built but also coordinated by the FTC. On one hand, the FTC should start initiative to acquire the professors from the business schools and business departments to step into said collaboration. On the other hand, the professors and lectures from the engineering departments and R&D institutes should be attracted. This process is illustrated bellow:

Chart 11: Integration of student teams

28


This collaboration is not only a way to integrate students in the Furniture Market. Moreover, it is a win-win collaboration. Students will get credit points for their curriculum and the market can acquire labour force that they don’t need to pay for. At the end, technical and economical feasibility statements will be made, thesis and concept papers will be delivered, supervision on a coordinated and interdisciplinary basis will be provided and students will be granted employment opportunities. In order to collaborate with key partners in the area of organising and supervising interdisciplinary student programs with practical orientation towards the furniture market it is strongly recommended starting cooperation with CFPIMM12, Polytechnic Institute of Viseu13 and Profisousa14 immediately. Moreover, structuring those collaboration schemes would also support embedding innovative behaviour in the furniture market through jointly offered qualification programs as referred to herein after in chapter 3.5.1 of this report.

3.4.2.3

Integration of Design Knowledge

One of the biggest problems of the SMEs in Portugal is related to low initiative for own new design inspirations. Visiting a fair, the SME’ representative is impressed by an outstanding design item which is already successful in the market.

sales

D

A

B Fair

C C

time

E Fair

Chart 12: Design trends analysis

As Chart 12 above illustrate, international competitors, especially in the high-end furniture sector, are participating in furniture fairs and exhibitions to introduce new design trends in the market [point “A” in the chart]. Typically, Portuguese furniture companies are visiting those fairs and exhibitions and start copying the items [point “B” in the chart]. They will be able to 12 13 14

For details about the activities developed by CFPIMM see please the annex I of this report. For details about the activities developed by the Polytechnic Institute of Viseu see please the annex II of this report. For details about the activities developed by Profisousa see please the annex III of this report.

29


push their products into the market [point “C” in the chart], when competitors are already selling and when they are especially cashing the significant margins [point “D” in the chart]. Competitors use parts of their financial gains to reinvest in identifying and setting new trends [point “E” in the chart]; thus a never ending source for getting market advantages is established. Therefore, the main goal of a SME at a fair should be the presentation of his own ideas rather than looking for copying the competitor’s innovation, already positioned in the market. The chain has to be broken and the FTC can play a significant role. Universities and research centres can contribute significantly toward the furniture industry, especially in the field of design. The industry has very good carpentry knowledge; however there are lack of connection between them and the design sector. University units, like FEUP, have a vast knowledge about industrial design, for example, CAD and CAM systems that can facilitate the introduction of new design into the existing furniture manufacturing process. Art and Design Schools, as ESAD and FAUP, can contribute to the design of the furniture, as well to the environment where furniture will be put. Design students integration on the FTC is also a chance to bring new ideas to the market and a way to merge their creativity to a practical level. As it was described in the previous chapter, the FTC should be coordinator of interdisciplinary student teams. This would also lead into a mutually benefiting collaboration structure. And it would position the Portuguese furniture industry to be a global player on the leading edge of design oriented furniture markets.

Engeneering Students Design Students

From a FTC’s point of view, also idea competitions should be implemented in order to create new furniture design trends, as well as brainstorming sessions organised in an interdisciplinary mode. Art

Business Students

and Design School’s technical support and new trends can also be applied to a FTC showroom and then this know-how can be used by the centre to help companies building their own showrooms.

30


The entire interdisciplinary programs mentioned and recommended here will generally help fighting the lack of entrepreneurship and innovation education in the companies of the furniture market. Such programs will add value to the players involved by: •

Providing management skills to the students as well as to the SMEs;

More practically oriented education of students;

Individual tutoring and mentoring;

Stimulating interdisciplinary thinking and team building;

Integration of projects into faculties’ study curriculum; and

Integration of students into the companies’ management environment.

Those programs are important elements of promoting innovative thinking among its target groups. They support upgrading the existing network.

3.4.3

General collaboration with Furniture SME

In order to be successful, the Centre needs to be close to the SMEs and to identify and understand their needs. Therefore, the FTC can offer the companies a consulting service in the field of the analysis of company production processes, development of product evolution scenarios, development of product strategies and ideas. Furthermore, in collaboration with a network of experts, the Centre should offer assistance and consulting in the processes related to the research and application of innovative materials in the wood/furniture sector. The activity includes research into materials with specific technical or functional properties; support in the definition of the material’s field of application; assistance and provision of labs for material testing. In order to convince the companies in the benefits of this kind of services, awareness raising measures are required. An example for an awareness rising strategy is the TEAK Oy (Finland) initiative: it organises once a week breakfast with representatives from the SME who present a problem to be discussed. Finally, the companies should be convinced that the FTC, being aware of at the universities available technologies, will identify the right idea meeting company’s needs and responding to their requirements. Furthermore, it will coordinate the measures to adapt and implement it. The centre can offer the companies low-cost/free consultancy services for cost analysis. For example, for an optimisation technology, the centre could provide a quick analysis of the company, to roughly estimate the benefits of the technology when applied to the industry. 31


The availability of facilities and knowledge suggests that the centre would have a very important, transversal role of clustering the existence of: •

Facilities – create a list of CAD software, prototyping systems, etc, throughout the involved institutions, to support the use of these resources;

Knowledge – create and support a community of experts in several areas (CAD, training, etc); and

Dissemination activities like workshops for different subjects, which could, for example, be provided jointly with Profisousa15.

In addition to the content clustering, and as part of the dissemination of new technologies, facilities and knowledge, a very brief summary of the technologies and its applications would be useful. This summary would be included in a publication for the promotion of the centre. Good design ideas (like a special folded table, a corner shelf, etc.) have strong demand, especially for custom-designed furniture. The centre can support the design of this furniture. Not promoting design activities, but rather designing and maintaining a repository of experts, techniques and design solutions (CAD Software, repository of design ideas, material descriptions and applications, etc) would bring a value added. The potential creation of unique high value pieces of furniture can be supported by the existence of a serial numbers of the furniture. This is a fact in many areas where tracking is adequate, and as a “quality guaranty” in products ranging from automobiles to HI-FI speakers. The record of the furniture can be accessed in a booklet of in an online site. The serial number can be printed on the furniture, or can be an embedded RFID tag. The services offered to the SMEs should include: •

Coaching instruments;

Consulting instruments;

Controlling instruments;

Training and education instruments; and

Networking instruments.

If the services are offered in an integrated mode, its combination will deliver the required result in the market: taking the right decision at the right time. This, again, will let the furniture 15

For details about the activities developed by Profisousa see please the annex III of this report.

32


companies demanding those services, willing to pay service fees. Over time, a sustainable revenue stream will be generated.

3.4.4

Organisation of regular meetings to exchange experiences

The SMEs in the furniture market are often overloaded and engaged in their individual projects that they isolate themselves from others. The FTC may introduce an easy to apply method for furniture companies to keep in touch, exchange experience and allow collaborative access to support programs in order to gain synergies. The method is to organise meetings on a regular schedule with FTC’s Board and Committee members. Although they have busy schedules, with their commitments, they would be motivated to invest time, energy and experience. This will lead to initiatives to enhanced common understanding and boost the involvement in FTC’s activities. The most important should be: •

Presentation about SMEs profiles and their specific market or technology challenges;

Workshops to discuss market strategy and market trends issues;

Dialogue with international organisations, especially to address international cooperation and funding issues; or

Illustrate good praxis examples.

This entire set of events will make the SMEs conscious of their own effort and will invoke then optimising their work and results. The FTC’s specific tasks will be to use this methodology to: •

Effectively organise, share and store experience;

To support the enhancement of communication;

To let information flow; and

Preserve the identity of each partner.

The effective solution could easily be implemented and fit to many different scenarios. It could be implemented as a service which furniture companies would be willing to pay for.

33


3.4.5

Provide incentives for international collaboration

The FTC should develop strong market positions not only in the local market, at a European level. The SMEs do not have the expertise to participate in EU projects. The universities do have it, but are not able to invite the SMEs. The FTC could search for open calls and through UPIN and Tecminho bring partners from the universities to build a consortium. Thus, the so build consortium completes the circle of the different competences required. The integration of new EU members, e.g. Bulgaria, which has already established wood and furniture cluster, will bring additional advantages. Summarised, the potential parties that can participate and build the consortia, are: •

University of Porto

University of Minho

University of Aveiro

Católica University

INEGI

INESC

EGP (Business School, UP)

Portuguese SMEs

Clac (Cantu) with the Italian Universities

TeakOy (Teuva) with partners from Finland

Innovation Centre Denmark with partners from Denmark

US Design experts

Specialists from Spain and France

Bulgarian furniture SMEs

INI-GraphicsNet

Among the benefit for the SMEs is granted access to the international knowledge. Furthermore, over time, they learn how to implement this knowledge. One of the requirements for the SMEs by the project funding, is to bring 50% of the total costs. If the SMEs charge part of their management costs into their projects, the funding covers part of the management costs (50%). The FTC should communicate this important benefit to the SMEs.

34


Marie Curie program is another opportunity for international collaboration (e.g. starting design competition on European level), where the students can play a role. The Portuguese students should be interested in gaining international experience, in spending one year in a foreign country. Advantages can be achieved for: •

The market – when afterwards getting hired by a Portuguese company, they bring the international experiments and view; and for

The FTC which: -

Gets access to information that is generated on a international level;

-

Gets in deeper and closer collaboration with the tech centres; and also

-

Builds network of partners.

Universities

SME 1

SME 2

CEIMP

R&D Instittutes

PT Continuing Educational programs

Universities

R&D Instittutes

SME n

SME 1

Teak Oy

Universities

SME 1

SME 2 SME 2 R&D Instittutes

Clac

… Universities

FI Continuing Educational programs

SME 1

SME n SME 2 R&D Instittutes

Universities

SME n

Universities

SME 1

SME 1

SME 2 R&D Instittutes

BEAZ ES

Continuing Educational programs

SME 2 R&D Instittutes

SME n

SME n

INI DE

Continuing Educational programs

IT Continuing Educational programs

Latona BG

Continuing Educational programs

SME n

Chart 13: International collaboration network

35


Next Steps that we recommend to go:16 •

Establishment of international R&D Consortium to acquire CEC funding for furniture market oriented applications; and

Establishment of international exchange programs for know-how transfer in a global scale.

Universities will need the FTC because it will add the market view to their activities. The collaboration results between the FTC and the Universities will benefit the market, with the implementation of the technologies. Finally, the FTC should develop a pool of suitably qualified trainers and experts in order to increase skills and access, understanding and acceptance of new technologies, applications and research ideas.

3.5

QUALIFICATION AND QUALITY ASSURANCE SERVICES

In addition to the three business lines recommended and described in the previous chapters, another business line “Qualification and Quality Assurance” should be set up to offer this kind of orthogonal services.

Furniture Technology Centre

Innovation Center

Application Center

Information Center

Qualification, Quality Assurance

Chart 14: Qualification and Quality Assurance in an orthogonal business line

16

Please see a delivered analysis of the next steps to be achieved in order to bootstrap international collaboration in annex VIII

in part IV of this report.

36


3.5.1

Qualification Effort

Within its qualification and training activities, the training of management and workers/staff members of the furniture companies should be supported. The following tasks should be performed: •

Transform university system to better reflect corporate needs;

Support universities collaborating with industry;

Training to meet corporate needs;

React flexibly to economic and technological changes;

Offer retraining for staff members and managers; and

Reinforce cooperation between private and public sectors to train researchers.

The FTC should stimulate the collaboration between universities and companies through educational coordination. Professors should be hired into the FTC’s network of experts which will not only guarantee high level of training. Moreover, this can be used as an instrument to inform about new available technologies and to raise awareness and sensitisation for innovation. It is important to note that FTC should not organize its own programs. There are already existing programs offered to the sector and for the region, e.g., by CFPIMM17, Profisousa18 and by Polytechnic Institute of Viseu19. It is to recommend that as one of its first activities the FTC signs collaboration agreements with them and similar institutions and organises joint programs. FTC’s contribution should be to assist in taylorization and customisation of qualification programs, to provide its own experts as teachers and lectures and to offer the lectures and teachers of the collaborating schools membership in FTC’s expert network. Especially CFPIMM17, Polytechnic Institute of Viseu19 and Profisousa18 will be highly motivated to cooperate and to participate due to the given opportunity to raise the number of participants and the recognition for their own programs,

17 18 19

For details about the activities developed by CFPIMM see please the annex I of this report. For details about the activities developed by Profisousa see please the annex III of this report. For details about the activities developed by the Polytechnic Institute of Viseu see please the annex II of this report.

37


3.5.2

Quality Assurance effort and Aspects

During the interviews with experts in the region and sector it became obvious that it will also be necessary to implement quality issues in the furniture industry in order to promote the quality of manufacturing and to create high-end products. The aspects of quality assurance activities can be summarised as in Chart 15 bellow:

Chart 15: Aspects of Quality Assurance Activities

The FTC can contribute in the following lines of action: a. Branding There is a consensus among the professors that competition should not rely on price tags, but rather on customer-oriented, customised solutions. Good experience has been gained for example with simply adding a name plate on the furniture. To increase competitiveness, a brand should be created. Universities may focus on developing a “made in Europe”, or “made in Portugal” brand. Branding is thus required, and should be provided by the FTC. b. Design Lines Branding, associated with good design from renowned entities or designers increases significantly the acceptance and profitability of high-level furniture. The idea of creating design lines by one or more known architects is considered to be a potential success factor, and a big profit margin is expected here. c. Innovation Innovation on the products has also been referred to as important. The FTC should thus, support and promote product innovation activities.

38


d. Testing Various testing facilities at universities and other entities have been identified in the interviews. The universities can offer standard quality tests. The companies would have to come to the university, since they are forced to comply with quality issues. Testing systems may also be used to create / follow quality standards – e.g. inspection systems for quality control. e. Certification Certification is in general considered to be important and difficult at the same time. Although there are certification bodies, it is believed, that certification guidelines are not applied. One of the interviewed professors belongs to the Board of Standards Committee for wood. Thus, with his expertise and additional knowledge from his colleges and the associations, guidelines and recommendations should be developed. Even if quality levels could not be acknowledged as standards – at least it would take a very long time – the engineers could support the certification of products. Thus, with the support given by the patent lawyers from the expert’s pool, those products can be protected with Trademarks or Copyrights.

39


4

Marketing Concept and SWOT-Analysis

4.1

UNIQUE SELLING PROPOSITION (USP)

The FTC is going to play on a low-competitive market of the furniture technology and application centres. There are no direct competitors in Portugal that the Centre should fight by structuring clear USP and by niche-focusing strategy. However, in order to be strategically positioned and to insure sustainability, the FTC should take into consideration the marketing strategy and the business models of the other centres in Europe and to learn from the best praxis examples. Furthermore, it should go behind the standard services of a technology or application centre and put the priority on identifying and satisfying SMEs’ needs and requirements as well as supporting the strengthening of their competitiveness. Therefore, in order to operate successfully, the Furniture Centre should: •

Realise and communicate success stories in short-term;

Due to the key role of the internationalisation for this business field, to build strategic partnerships, strong networks and to act internationally;

Provide clear, if necessary emotional communication over the region and Europewide; and

Guarantee sustainability.

Before starting operations, some potential barriers for market entry should be taken into consideration and be overcome with appropriate marketing activities. These can be: •

The necessity of awareness rising among the research institutes and the SMEs;

The mentality and the traditional management structure of the small family-owned companies;

The low readiness for technology investments; and

The sceptical attitude regarding process improvement through implementation of innovative research results.

4.2

THE USE OF SCALING EFFECTS

By performing the demand analysis it came out as a result that a lot of the SMEs could not afford costly tests in the context of the product development. Thus, scaling effects could be obtained by need bundling of several companies and reducing on this way the individual

40


costs. From the other side, during the screening meetings, the universities and their research centres expressed already openness to provide access for the SMEs to testing labours and facilities that will benefit from the price advantage. The role of the centre in this regard will be the matching of the both researchers and SMEs willing to perform product testing and the contribution to a win-win situation.

4.3

SHORT-TERM ACTIVITIES

The organisation of awareness raising workshops and seminars should be among the first activities and tasks of the FTC by starting the operations. This will, from one side, support the efficiency of the other communication and promotion measures, and, from the other avoid misunderstanding of the functions and objectives of the Centre within its target groups. Significant part of the marketing costs should be planed to gain the SMEs’ recognition and to convince universities and SMEs that the most efficient way to reach and to collaborate with the other side (university with the SME and v.v.), is provided by the FTC. These PR measures can be reflected in the development of newsletters and press-releases. Furthermore, it should be insured that the PR information reaches also the potential collaboration partners (e.g. CLAC in Cantu, Italy, Teak Oy in Teuva, Finland) to make them aware of the operating of the centre. Therefore, providing communication measures for the clarification and sensitisation of the SMEs and researchers, but also promotion activities for the FTC’s image building should be one of the first activities.

4.4

SWOT ANALYSIS

In order to encourage the development of the universities’ prototypes and applications into products and their adoption by the SMEs, the so called "Enabler" must be created, producing a positive innovation climate, consolidate relevant parties, initiate the utilisation of the potential for new applications and finally guarantee the success by their active support. Without a doubt, the FTC belongs to these Enablers. Thus, the Furniture Technology Centre can take the role of a central regional and national Enabler for the market organisation and development in the area of furniture applications. The conclusions made so far out of the market analysis and the evaluation of the potential in the North of Portugal point out a numerous of strengths and weaknesses as well as chances and risks, which are essential for the future development of the centre, the region Northern 41


Portugal and the furniture market altogether. The most important strengths and weaknesses, opportunities and risks are described below.

4.4.1

Strengths

Uniqueness The FTC is the only one of this kind in Portugal, combining access to cutting-edge technologies and well known potential partners in Portugal and Europe-wide, interested to collaborate. Location The choice regarding the location of the Centre in the heard of the strongest furniture manufacturing area in Portugal is a crucial strength of the FTC. This concerns both its image and the motivation of the users to be in direct proximity to a facility which can be an important land mark. In addition, there is readiness of companies and universities to support the centre to an imaginary extent which still has to be defined. Furthermore, the highly evaluated furniture production concentration of the region can be concerned as an additional advantage. R&D Network Research facilities e.g. University of Porto, University do Minho are not far from the intended location of the centre and complement each other in their competences. Thus, they create an important pool of applications, ideas and technologies that can benefit the market. The effective "cross-linking" between the research facilities and the FTC is also a crucial communication element here, concerning both the science potential of the region and the value added of the centre. On this way, the FTC acts as the Linking Point between the knowledge and the market. Infrastructure The complex test and simulation environments are important for the invention and implementation of new applications. The former CTIMM centre offers an excellent infrastructure as basis for the bundled know-how further development. Using its facilities as a base, the FTC will offer to affordable prices access to the test and simulation labs. The SMEs will benefit from avoiding the need to build their own cost-intensive infrastructure.

4.4.2

Weaknesses

Management The critical success factor for the Furniture Technology Centre in each phase of the development is the management and personally the Manager. All goals and strategies set 42


are valuable only if they are taken seriously and are appropriately realised by the management. For the impact reduction of this weakness, it is recommended to use a strong advisory council (Steering Committee), which brings among others a high identification with the FTC. Reputation Due to the reason that the Centre will use the existing infrastructure from the former CTIMM Centre, in a short term after starting operations, there is the risk that the SMEs knowing CTIMM well will intuitively transmit the negative image on the new centre. Appropriate PR and marketing campaigns should avoid this and increase and accelerate the acceptance.

4.4.3

Opportunities

Political support Regional and international support measures aim to strengthen the competitiveness of the SMEs in the furniture industry. Furthermore, there are several relevant calls open currently in the new EU funding system started in January 2007. They offer opportunities for the FTC to build a consortium and to participate in the programs. It is recommendable to scan the relevant calls as soon as possible in order to identify relevant fields. Competition Currently, there are no direct competitors in Portugal, supporting the commercialisation of technologies for the furniture industry and offering comparable service portfolio. Phase oriented operation Setting up milestones and following phase oriented operation will reduce the risk and make market successes realistic by need-oriented resource planning. On the other hand, it will enable the estimation and the control of the level on which the goals are achieved. Therefore, in the first phase among the services offered, priority should have information services for the sensitisation and motivation of the market participants. Furthermore, a needoriented structuring of the services is reasonable, with potential flexibility to respond to very specific individual needs. Cooperation The FTC should take advantage of the readiness and openness of the successful wood and furniture technology centres in Europe to cooperate and work jointly on projects. Thus, the Centre will benefit from the synergies of the experience and know-how exchange and will achieve economy of scale, will shorter production costs as well as time to product and time to market. The FTC should also promote the co-operation of furniture companies belonging to different parts of the value generation chain. Thus, the SMEs can experience new impulses. 43


Especially since IKEA decided to establish a plant in the region, a lot of significant market opportunities and collaboration potential will be created. However, since IKEA will be addressing primarily the mass market with self-assembled furniture, the FTC should actively seek the collaboration with design experts to support high-end furniture products. Market development There are some positive changes in the industry: some companies are increasing in size, and newly created companies already start with considerable size; the number of companies with more than 20 employees is also increasing. Furthermore, the production increases continuously at a slow rate and the imports and exports are growing, compensating each other after some years of negative balance.

4.4.4

Threats

SMEs awareness level The level of awareness of the SMEs regarding the implementation and the benefits of new technologies is relatively low. Although this risk will be minimised with starting the sensitisation phase, it cannot be guaranteed that with higher level of satisfying information needs, a stronger commitment is resulting in a short time. Cultural resistance and inertia The resistance of the very small companies to change commonly cited way of work and management could be a significant barrier for the adoption of advanced technologies. Thus, the FTC should provide training and education services.

4.5

SWOT ANALYSIS CONCLUSION

Although there are some challenges and threats, the opportunities and the strengths strong overbalance. In long term, the FTC will increase the competitiveness of the SMEs and open the door for the Portuguese manufactures to the international markets and thus, generates positive economic impulses. For all these reasons, it is expected that the SMEs will understand the unused potential of the research and knowledge system to contribute toward achieving economy of scale, improving production processes and relations to customers. The development of the FTC should be not only focused on furniture made with wood, but also with other materials, as metal. 44


The FTC should try to keep and benefit from the opportunities and the strengths, but work to minimise the weaknesses. Summarised, it is to recommend that the Furniture Technology Centre should: •

Disseminate information and carry out sensitisation politics regarding the benefits of new technologies and applications coming from the universities;

Actively mobilise the research potential of the universities and research facilities in the North of Portugal in the area of the furniture applications and identify marketable ideas;

4.6

Support the network establishment of international furniture technology centres; and

Encourage and support the SMEs growth in this area.

MARKETING SUPPORT AS A SERVICE

Meeting the needs of the SMEs is clearly a vital component of a sustainable and profitable Technology Centre portfolio. Many of the FTC’s potential customers have an excellent knowledge of the technical aspects of their work. However, there are a lot that do not posses the experience of managing their business innovatively, of sourcing funding, of developing contacts, or of bringing products effectively to the market. Thus, within those areas, the existing experience of the FTC’s team can not only add value to the centre’s services and activities. Moreover, the marketing knowledge accumulated within the FTC should also be offered as a service adding value to the FTC’s target customers. For the SMEs, the costs of recruiting an experienced marketing and PR manager are usually prohibitive. So, unless SMEs are fortunate enough to have a voluntary Board member with such knowledge, then the business will require some help in getting the products to market. This support may be in form of hands-on marketing consulting, subsidised training or marketing opportunities via the FTC’s network.

45


The following examples are effective, low cost ways to help businesses succeed in the global market: •

Include attitude programs in initial advice which help SMEs think internationally;

Encourage and support then to make joint presentations at renewed trade fairs (e.g. joint booths supported and organised by the FTC in collaboration with APIMA20);

Help fostering inter-regional clusters or networks (e.g. arrange conferences where SMEs from the North of Portugal introduce themselves to potential partners and collaborators); or

Offer basic international services (e.g. offer introductions to internationalisation agents or internationally working idol models).

20

For more information about APIMA see please the annex IV of this report.

46


5

Organisation, Personal, Finances and Timeline

5.1

5.1.1

ORGANISATION

Legal Structure

Although we strongly recommend in our report to organise the service-portfolio in different business lines21, we also want to point out that it is important to establish the FTC as a unique unit within one single legal entity:

Furniture Technology Centre Qualification, Quality Assurance Innovation Centre

Application Centre

Information Centre

Other Services

Chart 16: Different business lines within one legal entity

The services offered have to be oriented to the actual requirements in the furniture market and as a consequence of immediate reaction to the market needs. Therefore, a flexible legal and organisational structure has to be achieved. Entrepreneurial management should lead into a sustainable corporate behaviour; on the other hand the public interest has to be guaranteed and there has to be a public mission. Thus, we recommend that the Centre should be set up as private-public-partnership with shared responsibilities as illustrated in the Chart 17 below:

Associations Operations Infraestructures

Universities

Industry

Municipalities

Chart 17: Allocation of responsibilities to stakeholders

21

Please see part II, chapter 2.2 of this report

47


The municipalities involved should have the majority participation in this structure, meaning minimum 25,5% each - in a total at least 51%. That leaves the remaining maximum of 49% to be distributed among other stakeholders, like local associations, the furniture sector associations and some of the key collaboration partners of the expert network to be built.

Shareholder Structure Paços de Ferrreira Municipality 25,5%

State, Local Associations and Furniture Sector Associations 49,0%

Paredes Municipality 25,5%

Chart 18: Allocation of shares to stakeholders

5.1.2

Location

Already during the work of gathering the information to prepare the concept, as illustrated in this study, it was obvious that an important decision has to be made regarding the location of the FTC. On one hand the Centre has to be very close to the organisations in the knowledge sector, which are the universities and research institutions. On the other hand, it has to be close to the many, many players in the market, the furniture companies. Therefore, it was discussed with the Municipalities of Paredes and Paços de Ferreira in a very early stage to evaluate the opportunity to re-use the facilities of FTC’s former Furniture Centre “CTIMM”22 as location. The advantages are:

22

Use / Re-use of existing knowledge;

Use / Re-use of existing facilities;

Use / Re-use of existing devices;

Established collaborations structures;

Animation / Re-animation of customers/clients;

CTIMM - Centro Tecnológico das Indústrias de Madeira e Mobiliário

48


Immediate neighbourhood to CPFIMM; and

Neighbourhood to the Municipalities and to the Associations.

Nevertheless, many discussions with companies in the market as well as some screening interviews showed that there is also a disadvantage coming along with the stated advantages: over the time, CTIMM has built up a negative reputation among the furniture companies. Thus, it was recommended to use and re-use the existing facility but to change the name for the new Centre immediately. Accordingly, a management decision was taken to assign an operational name to the FTC, which is CEIMP (Centro para a Excelência e Inovação do Mobiliário em Portugal).

5.1.3

Internal Organisation

The following critical success factors have already been mentioned earlier in this report: •

Services should be established in different phases;

Lean Management;

Active Outsourcing;

Focus on the Core Competencies;

Service orientation towards furniture market; and

Service orientation towards Universities and research institutes

Thus, it is not only recommended to outsource tasks to be performed within the service portfolio to networking partners, which will lead to a lean structure and a small number of personnel employed by the Centre. Moreover, the staff should be built up over a given period of time. This will guarantee that the total number of employees will be hired into a profile which is determined by the needs in the market. The last mentioned will guarantee that the hiring strategy can be based on revenues already generated by the Centre throughout services offered successfully in the market and accepted by the players in the market. It is in the interest of both, the FTC’s management team and the players in the furniture market, which links with external stakeholders are established and maintained. Therefore, the owners of CEIMP should send their representatives also into the Board of Directors. In 49


addition, at least two Board Members should be nominated, who are not appointed by the shareholders. This will guarantee a more independent evaluation of BOD decisions. A careful selection of Board Members can provide the management team with a unique and wide ranging set of skills and experience upon which to draw in order to form the overall strategic direction of the FTC. Furthermore, it also enables the FTC’s team to address the individual needs of the SMEs in the market. Especially the Steering Committees should be based on networks of experts, including scientific experts, financial experts, business plan experts, design experts, patent lawyers, and others. This will help to rely on a broad spectrum of expertise without having ongoing costs for the required consulting services. The FTC will benefit from the professional behaviour and the experience of Committee members, and it will be a significant step to facilitate the development of regional, national and international networks. We recommend to invite among others representatives from the following organisations into the Steering Committee: •

University of Porto (representatives from FEUP, FBAUP; FEP)

University of Minho;

University of Aveiro;

Católica University;

INEGI;

INESC;

EGP (Business School, UP);

ESAD;

UPIN;

Tecminho;

Associations;

Portuguese SMEs.

50


Shareholders Board of Directors Technical Manager

Techical Assistent

Business Manager

Steering Committee

BackOffice 1

Market Expert

BackOffice 2

Innovation Expert

Chart 19: Recommended organisational structure

5.2

PERSONNEL STRUCTURE

In the previous section of this report was already recommended to build up FTC’s staff over a given period of time. Accordingly, we recommend to hire a Business Manager and supporting staff (Administrative Assistant (=Back Office Function) immediately. The profiles should be the following: Business Manager: •

Representation of the FTC;

Performing tasks to meet the requirements and obligations given by the Shareholders, the Directors and the recommendations from the Steering Committee;

Performing tasks to meet the requirements and obligations pursuant the Articles of Incorporation and the By-laws of CEIMP;

Implementation and realisation of actions and tasks recommended in this report;

Establishment of collaboration agreements and co-operation schemes with external stakeholders; 51


Establishment of a partnership network;

Preparation of project proposals and consortium agreements to initiate collaborative projects and to generate revenues; and

Reporting.

The Administrative Assistant should be the communication hub within CEIMP that can be contacted at any time of convenience of interested partners and collaborators. In the second phase, a Technical Manager, a Technical Assistant, a Market Expert as well as a Business Innovation Expert should be hired with the following profiles: Technical Manager: •

Technical knowledge in the field of the furniture industry;

Ability to coordinate and manage projects;

Ability to perform Acquisition, to establish cooperations and to organise events;

Ability to establish and coordinate an Expert Network; and

Consulting know-how in the fields of manufacturing processes, composite materials, assembling lines, logistic, etc.

Market Expert: •

Ability to observe and identify the new trends on the market in the field of design, materials, etc.;

Experience in performing market research and analysing the market players, the industry challenges and the development trends; and

Ability to represent the Centre to the mass-media and the public organisations (PRactivity).

Business Innovation Expert: •

Coaching and consulting activities;

Ability to act as a communication and contact mediator with the different institutions, partners and external consulters; and

Awareness of the innovations within the furniture industry and ability to analyse the requirements of the SMEs. 52


From the third phase on a Business Innovation Expert, an additional Administrative Assistant (“Back Office 2”) and - as needed - additional staff should be hired. This will lead to the following capacity planning and staffing profile:

Year Personnel Planning

2007/2008 Start-Up Phase

2008/2009 2009/2010 2010/2011 Expansion Phase

2011 ++

Full Operations

Business Manager

1

1

1

1

1

Technical Manager Technical Engineer

1

1

1

1

1

1

1

2

2

Administrative Assistant Business Innovation Expert

1

1

2 1

2 1

2 1

1

1

2

2

5

7

9

9

Market Expert Total

3

Chart 20: Recommended staffing structure

5.3

5.3.1

FINANCES

Costs

After having illustrated the staffing strategy in terms of capacity planning as shown in the table above, now and as the next step we will assign the relevant costs. For the Business Manager we recommend an initial annual compensation of seventy-thousand (70.000) Euro, and for the Administrative Assistant we plan a compensation of ten-thousand (10.000) per year. Immediately at the end of the start-up phase a Technical Manager should be hired. We assume respectively a compensation of fifty-thousand (50.000) Euro – which are shown as costs from January 1st, 2008, on. For the Technical Assistant (Engineer) we plan a compensation of fifteen-thousand (15.000) Euro p.a., starting May 2008, and for the Market Expert twenty-five-thousand (25.000) Euro per year, starting July 2008. Furthermore we assume that the hiring process will be proceeded step-wise, which means the Business Manager starting July 1st, 2007, the first Administrative Assistant commencing on October 1st, 2007, etc. Thus we are planning the relevant cost in the different years according to the individual staff members’ full-time equivalence.

53


All salaries are based on an annual 3% increase of living costs from 2009 on. Thus, labour costs with a total amount of thirty-seven-thousand-five-hundred (37.500) Euro would have to be paid in the initial year and one-hundred-fifty-two-thousand-five-hundred (152.500) Euro in the following year. The table below reflects the labour costs according to the hiring plan.

Year Personnel Costs Business Manager Technical Manager Technical Engineer Administrative Assistant Business Innovation Expert Market Expert Total Salaries including employment costs

2007 Start-Up Phase 35.000

2.500

37.500

2008 2009 Expansion Phase

2010 2011 Full Operations

70.000 50.000 10.000 10.000 12.500

72.100 51.500 15.450 20.300 25.000 25.750

74.263 53.045 31.364 20.909 25.750 52.273

76.491 54.636 32.304 21.536 26.523 53.841

152.500

210.100

257.604

265.331

Chart 21: Recommended staffing structure

In addition to the labour costs we plan a minimum level of non-labour expenses, always under the assumption that more money will be spent, if additional projects will be acquired, which will have additional budgets. To give an example: since the FTC is built on a lean personnel structure, subcontractors (e.g. market experts) will have to be hired to support the deliverables required in the projects. As of now we do not assume that such projects are part of the planned scenario. Therefore the subcontractors’ expenses are set to zero. Furthermore, we are planning consulting fees hire in some expert opinion and expert support and we are planning expenses for professional services to pay legal fees, patent lawyers, tax advisors, etc. And we recommend estimating a relatively sound amount of marketing expenses to support building up the reputation and brand for CEIMP as the one and only furniture technology centre. Taking also some expenses for general administration (rent, utilities, supplies etc.) as well as for travel, accommodation, meals etc. in consideration the first years budget (starting July 2007) will count expenses with a total amount of onehundred-eighty-seven-thousand-five-hundred (187.500) Euro, being increased to a budget of min. four-hundred-thousand (400.000) Euros under the so called “full operations� level.

54


Year Costs Total Labour Costs Personnel Subcontractors Consulting General&Administration Marketing Travel Professional Services

2007 Start-Up Phase

2008 2009 Expansion Phase

2010 2011 Full Operations

97.500 * 10.000 20.000 50.000 4.000 6.000

170.000 * 20.000 30.000 75.000 7.000 6.100

210.100 * 20.000 33.000 60.000 8.000 6.300

257.604 * 22.000 40.000 60.000 10.000 6.500

265.331 * 22.000 45.000 60.000 12.000 6.800

187.500

308.100

337.400

396.104

411.131

TOTAL COSTS * project depending

Chart 22: Budget assumptions for the first five years

At the end of the three phases – from 2011 on - the FTC needs to build a general operational budget that guarantees sustainable future operations.

5.3.2

Revenues

The main sources of funding will be: •

Public Subsidy

Public Grants

CEC Innovation

CEC Specific Grants

Contracts from Industry

Commission

Fees

Especially at the beginning of its operations, the FTC will not be in the position to be financed out of external revenues. It will take some time to build up the brand and to generate income resulting out of and according to the services offered. E.g. if CEIMP starts negotiating shared licensing structures with some university professors now – as discussed earlier within this report The first royalty’s commissions will not be paid before 2009. Nevertheless, activities have to be initiated now and the brand has to be build immediately. Therefore, especially in the startup phase, the operations have to be run on a subsidy base. Also in a mid-term perspective the FTC will need public support to guarantee future income from private or semi-public sources (e.g. CEC – European Funds). However, the authors of this report strongly recommend letting the public subsidy decrease over the years to force the FTC into funding structure which is similar to privately managed organisations. 55


Thus we recommend to assign only a basic public funding as a subsidy (= “free money”) to the budget, and to provide additionally needed funding as grants. This would lead to the following advantages: Grants can be based on deliverables, timetables and milestones. Thus the funding sources (= public owners of FTC) will keep influence in the FTC’s activities by determining the level of services through their grant schemes and funding regulations. Public authorities can even go so far as to support the furniture SMEs with their grant schemes, structuring the funding regulations in a way, in which the SMEs then will be required to use the money at least partially to buy services from the FTC. This is illustrated in the chart below:

Influence level of Services

Grant Sheme Support

Industry (SME)

buy

Services

Furniture Technology Centre

Chart 23: Grant schemes to support the furniture industry as well as the services offered by the FTC

Following these recommendations in our financial planning we assume public subsidy provided with an amount of one-hundred-thirty-seven-thousand-five-hundred (137.500) Euro in the first year decreasing to zero in the fifth year. The public grants (requiring deliverables) that will have to be raised will increase from fifty-thousand (50.000) Euro in the first year to one-hundred-thousand (100.000) Euro in the fifth year. In the initial year of operations we do not expect the FTC to be based on external revenues. As already stated, the reputation has to be built and future revenue schemes have to be prepared. For instance, to support the furniture market in the North of Portugal with European grants, the funding will not impact the budgets before mid of 2008, if the Centre prepares and submits the proposals now and before the end of 2007. In our calculations we assume to get at least 2 proposals through and to run 2 consortia (with round about 20 000-30.000 Euro revenue for deliverables per proposal). Thus, by the end of 2011 we expect CEIMP partnering in at least five European projects. 56


After awareness for FTC’s value-adding services is built and after – for example – student collaboration programs are established, CEIMP may start charging its customers. This will lead to commissions paid by universities research institutions for technologies applied to the market, and to fees paid to compensate consulting services and information packages. The table below shows the details of our revenue estimations:

Years 2007 Revenues / Costs Start-Up Phase Revenues Public Grant 50.000 CEC Innovation Grants 0 CEC Specific Grants 0 Industry 0 Commissions 0 Fees 0 Total Revenues 50.000 Total Costs 187.500 -137.500 PROFIT/LOSS Public Subsidy 137.500

2008 2009 Expansion Phase

2010 2011 Full Operations

60.000 40.000 50.000 40.000 0 30.000 220.000 308.100 -88.100 88.100

100.000 60.000 70.000 50.000 40.000 14.276 334.276 396.104 -61.828 61.828

75.000 50.000 50.000 40.000 35.000 11.500 261.500 337.400 -75.900 75.900

100.000 70.000 80.000 60.000 80.000 25.000 415.000 411.131 3.869 0

Chart 24: Revenue assumptions for the first five years

According to what has been calculated the majority shareholders of the CEIMP will have to cover for the start-up activities with public support. However, if this support will be broken down in subsidy money and in grants and if the management of the Furniture Technology Centre will be motivated to run its operations oriented to private structures and philosophies, CEIMP can be operated in a way that will lead into long-term sustainability. 5.

57


Part II Conclusion and Recommendations

Darmstadt, May 2007


This report illustrates that a Furniture Technology Centre in the North of Portugal can be operated in a sustainable way. Services have to be offered which follow market trends, and skill levels in the companies have to be improved in order to raise the level of regional competitiveness. It is as well important to stimulate job and SMEs creation, transfer new technologies to industry partners and create an innovation climate in long-term perspective. To achieve this, CEIMP should focus on the following guide lines and objectives:

Furniture Technology Centre as the Enabler for Profiling the North of Portugal as core European Furniture Area;

Services to be provided should be structured in different business lines;

Information Gathering and Awareness Raising should be offered for the knowledge system as well as for the players in the market;

Active Mobilising of the Innovation Potential as USP;

Networking on a regional, national and international level as key success factor;

Qualification shall strengthen competitiveness;

Quality Assurance is key for Future Recognition.

The above mentioned guidelines can be followed through the accordingly structured service portfolio. It is sharply recommended by the authors of this report: •

To structure the service portfolio time-wise: -

Do not start providing the services all at once; moreover start offering service on a low-cost base, then internationalise and then grow.

• To bundle and centralise services: -

Do not start single actions, but collect core competencies.

• To bundle private energy with public goals, by clustering services: establish a public/private partnership. Examples for services towards the SMEs that can be started immediately: A) The SMEs in the furniture market are often too engaged with their individual projects that they isolate themselves from others. The FTC may introduce an easy to use method for furniture companies to keep in touch, exchange experience and allow collaborative access to support programs in order to gain synergies, namely to organise meetings on a regular schedule with FTC’s Board and Committee. 2


This kind of events will make the SMEs conscious of their own effort and will invoke then optimising their work and results. The FTC’s specific tasks will be to use this methodology to: •

Effectively organise, share and store experience;

To support the enhancement of communication;

To let information flow; and

Preserve the identity of each partner.

B) For the SMEs, the costs of recruiting an experienced marketing and PR manager are usually prohibitive. Thus, unless SMEs are fortunate enough to have a voluntary Board member with such knowledge, then the business will require some help in getting the products to market.

This support may be in form of hands-on marketing consulting,

subsidised training or marketing opportunities via the FTC’s network. C) As a result of the market analysis it turned out that the SMEs have very low IT-affinity and IT investment readiness. To this group belongs also the readiness to invest in the own internet presence. The reasons are: •

low awareness and missing information about the benefits

missing financial resources

missing IT staff at the companies to acknowledge the investment needs

low flexibility to change the existing technical infrastructure in order to respond to the new requirements

However, it has to be taken into consideration the crucial role of the ICT for the companies’ progress and the successful competitiveness.

The challenge and the opportunity for the FTC will be to identity the technology needs and to support the implementation of the appropriate solution based on the individual requirements.

A) The FTC can offer as a service the development of company home pages, presenting the product portfolio and offering possibilities for online purchases. It could also create a data base for all furniture SMEs in the region and implement it in a kind of portal, where the customers will be able to easily find the nearest located store or can compare prices of furniture items, can virtually design their living environment, choosing the desire colour or shape of the furniture, etc. 3


B) Cooperations with big players on the market should be established: Especially since IKEA decided to establish a plant in the region, a lot of significant market opportunities and collaboration potential will be created. However, since IKEA will be addressing primarily the mass market with self-assembled furniture, the FTC should actively seek the collaboration with design experts to support high-end furniture products. C) Cooperations with the Universities have to be initiated The authors of this report strongly recommend that this process is not organised within the FTC. Since the main source for innovative technologies for the furniture market will be University of Porto, University of Minho and the collaborating institutions, their technology transfer units, UPIN and Tecminho, should be in charge as well as responsible for the transactions within the commercialisation process.

4


Recommendations: FTC needs to develop collaboration concepts, describing the partnership with the professors. They are willing to offer applications, software, technologies, prototypes as well as humane resources for the needs of the furniture companies. For a successful implementation, the process should not only be built, but also coordinated by the FTC. On one hand, the FTC should start initiative to acquire the professors from the business schools and business departments to step into said collaboration. On the other hand, the professors from the engineering departments and R&D institutes should be attracted. The availability of facilities and knowledge suggests that the centre would have a very important, transversal role of clustering the existence of: •

Facilities – create a list of CAD software, prototyping systems, etc, throughout the involved institutions, to support the use of these resources;

Knowledge – Create and support a community of experts in several areas (CAD, training, etc); and

Dissemination activities like workshops for different subjects, which should be provided jointly with Profisousa.

The FTC should develop strong market positions not only in the local market, but also on European level. The SMEs do not have the expertise to participate in EU projects. The universities do have it, but are not able to invite the SMEs. The FTC could search for open calls and through UPIN and Tecminho bring partners from the universities to build a consortium. Thus, the so build consortium completes the circle of the different competences required. In regard to the knowledge exchange and the collaboration activities, the Centre should target achievement of the following goals: •

Increasing the number of exchange programs for researchers and engineers;

General collaboration with furniture SMEs;

Provide incentives for international cooperation through: -

Coordination of research projects on a regional, national and international level; and

5


-

Boosting

participation

in

bilateral/multilateral

technology

cooperation

programs. Next Steps that we recommend to go: •

Establishment of international R&D Consortium to acquire CEC funding for furniture market oriented applications; and

Establishment of international exchange programs for know-how transfer in a global scale.

Within its qualification and training activities the training of management and of workers/staff members of the furniture companies should be supported. Furthermore, the FTC should stimulate the collaboration between universities and companies through educational coordination.

Therefore, the following tasks should be performed: •

Transformation of the university system to better reflect corporate needs;

Supporting the universities collaborating with industry;

Training to meet corporate needs;

Reacting flexibly to economic and technological changes;

Offering retraining for staff members and managers; and

Reinforcing cooperation between private and public sectors to train researchers.

Professors should be hired into the FTC’s network of experts which will not only guarantee high level of training. Moreover, this can be used as an instrument to inform about newly available technologies and to raise awareness and sensitisation for innovation. It is important to note that FTC should not organize its own training programs. There are already existing programs offered to the sector and for the region, e.g., by CFPIMM, Profisousa and by Polytechnic Institute of Viseu.

It is to recommend to sign collaboration

agreements with them and similar institutions and organises joint programs.

The FTC should try to keep and benefit from the opportunities and the strengths, but work to minimise the weaknesses. If this can be put into operations, CEIMP will be recognized as the technology transfer entity which disseminates information and carries out sensitisation 6


politics regarding the benefits of new technologies and applications coming from the universities. This will lead to actively mobilise the research potential of the universities and research facilities in the North of Portugal in the area of the furniture applications and identify marketable ideas.

If additionally, the establishment of a network of international furniture technology centres can be supported, CEIMP will contribute to the economic growth of the region by encouraging and supporting the SMEs’ growth in the furniture sector.

7


/ini_gnf_final_report_utr