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GE Innovation Forum 2015 BRANDMAKER | 1

GE Innovation Forum 2015 The future of Work in Korea: A new strategy for growth

www.gereports.kr/futureofwork

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Marco Annunziata

Speaker

(마르코 아눈지아타)

Profile • 現 GE 수석 이코노미스트, 글로벌 마켓 인싸이트 부사장

• 볼로냐 대학교 경제학 학사 (이탈리아) • 프린스턴 대학교 경제학 박사 (미국) • 前 유니크레디트 수석 이코노미스트 • 前 도이치뱅크 동유럽, 중동, 아프리카 수석 이코노미스트 • 前 IMF 신흥시장과 경제선진국 자문 및 대출 협상 업무 담당 • 리브진스키 상 2회 수상 (경제 부문 최고의 논문) • 저서 ‘금융 공황의 경제: 교훈과 새로운 위협’

Imagination at work.

Marco Annunziata, Chief Economist July 2015

The Future of Work in Korea A new strategy for growth

Korea: success story now faces challenges

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Global competition intensifies as more countries chase high tech

Slow productivity holds back income growth

Slowing labor force growth

Economic growth has slowed Demographics are a headwind

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Industrial Internet Advanced

Manufacturing

Global Brain

Minds + Machines

Knowledge + collaboration

3D printing,

digitization, robots Wh

at

Re

sult

s

Productivity Democratization of

manufacturing

+ +

Crowdsourcing

Imp

ac

t

Jobs + Incomes

growth

Hyper charged

innovation

Future of work

Transforming industry and the way we work

Speed + Flexibility

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The benefits are here

Substantial benefits being achieved already

Wind Rail Aviation HealthCare

+ 10-20%

velocity,

- 10%

fuel burn

+ 20%

profitability,

+ 5% annual

energy output

Cut fuel

burns, cut

delays and

cancellations

Cut wait

times, reduce

radiation

dosage

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To succeed, need a new business model

Invest in

software

excellence

Integrate

digital &

physical

Collaborate

&

crowdsource

Data & analytics + a Platform

Interconnected Industrial Assets Advanced Manufacturing

Global Brain Ecosystems + Co-Creation The GE Store

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The Future of Work for Korea a tremendous opportunity

Reboot competitiveness of industry

Spark new generation of high-value services

Establish Korea as leader in digitally-driven services

Accelerate energy efficiency and sustainability

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Three pillars for a new strategy

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1

2

3

Home-grown innovation

Education

Collaboration

Innovation need more speed to market

11 Q4-4. Now we are going to present different views on the ideal innovation process, we would like you to

pick the one you feel is the truest or the most relevant in driving successful innovation. Base: Country

results N= 100–300 per market

71%

59% 59% 57% 57% 56% 55% 54% 54% 54% 54% 51% 51% 50% 48% 48% 47% 47% 47% 46% 44% 43% 42% 42% 41%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

WHEN INNOVATING, IT IS BEST TO GET TO MARKET AS QUICKLY AS POSSIBLE TO KEEP AN EDGE ON COMPETITION

Global average

50%

Stronger emphasis on speed to market

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Need better access to risk capital…

Availability of venture capital, angel financing still limited

Strongest in bio and medical sciences

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…to spur new opportunities

Slow rise in start-ups

SMEs under financial pressure focus on tactical, not strategic moves

Strong government support: incubators, ecosystems

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79% 76% 76% 75%

72% 71% 71% 70% 69% 68% 67% 66% 66% 65% 64% 64% 63% 61% 61% 60% 60% 57%

52% 50% 46%

41%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q13. Which of the following apply in your company? YES Base: Country results N= 100–300 per market

Less collaborative (under-index) More collaborative (over-index)

REVENUE AND PROFIT BY COLLABORATIVE INNOVATION ACTIVITIES HAS BEEN GROWING OVER THE LAST YEAR

Global average 64%

Collaboration not enough, and has decreased over past year

Need to boost SMEs SMEs can help drive innovation and growth

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21% 20% 19%

13% 11% 11%

3% 1%

SM

Es

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Q7. Who do you think are driving innovation the most today in your country?

Base: Global results N= 3,209

WHO IS DRIVING INNOVATION THE MOST TODAY IN YOUR COUNTRY? GLOBAL AVERAGE RESULTS

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Education strong, must get stronger

Strong education scores

# 2 in problem solving skills

but

Skills gap emerging

Labor market duality

Establish closer dialogue between schools and industry;

Increase emphasis on flexibility, adaptability;

Boost on the job training;

Leverage new learning technologies.

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Brilliant factory

• A digital thread linking the factory floor, supply chains and distribution

• Redefines competitive advantage & economies of scale

• Opportunities: re-shoring, micro-factories, ecosystems

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Manufacturing

systems design

Manufacturing

systems operations

Services operations

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Towards Korea’s Brilliant Factories

Virtual manufacturing

Advanced technologies

Sensor-enabled automation

Factory optimization

Supply chain optimization

Creating the manufacturing of the future

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Excellence in marine industry

Boosting Korea’s competitive advantage in high-end vessels

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Greater operational efficiency

Reduced unplanned downtime

Greener, smarter solutions for offshore activities

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Renewable energy: sustainable, competitive

1% energy efficiency gain = ~ $ 1.5 B annual savings

Cheaper energy = industry competitiveness & resilience

Fuel cells & Energy Storage Systems

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Renewable energy installed capacity target:

From 5.5 GW in 2013

to 10 GW in 2025

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Future of Work will transform Korea

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Brilliant Manufacturing Marine excellence

Renewable energy … and more