Presentation for Centre for Smart and Safe Wells, 12 th June, 2007 Torkil Bjørnson (NCE manager)

1. The Kongsberg cluster:- The established industry - Creating new companies (KI) - NCE - Processes leading to the NCE Presentation for Centre for Smart and Safe Wells, 12th June, 2007 Torkil Bjørnson (NCE manager)

2. Svalbard Norway Scotland Sweden St. John England Denmark Canada Vancouver Russia Germany Halifax The Netherlands France Mystic Seattle Italy Spain Greece South Korea Marocco Texas Florida China UAE India Singapore Peru Chile Australia The Kongsberg cluster is a node in national and international networks • 50-60 high tech companies (5 having >1BNOK/yr) • ≈10.000 employees world wide • - ≈5.500 in Kongsberg • Operations in ≈30 countries • - sales, support, R&D, production • Operations in 13 Norwegian counties, • Svalbard and Antarctic • Links to major national/international R&D inst.

3. Characteristics of the Kongsberg-industry • Supplying advanced systems world wide • The companies are users of common technologies and competence • Using technologies to achieve competitive advantages • Early users of new technologies and competence (“putting R&D into work”) • Customers having similar requirements: • Quality • Delivery on time • Long term relationships • Innovation • Compete to attract the best talents

4. The Kongsberg cluster • Competence based cluster, not based on raw material • Exceptional industrial development • 8-times increase of turnover last 20 years: • 2,5  20 B NOK • Doubled workforce last 20 years: • approx 5.000 new jobs world wide • Global industry flagging in, not out • Many high-tech disciplines for demanding applications / critical operations • Competing globally, having lead positions

5. Systems from sub sea to spaceadvanced solutions for demanding customers Maritime Subsea Aerospace/airplanes/defense Maritime Automotive Industry

6. Kongsberg in Norwegian perspective • Turnover approx. 20 B NOK (2006) • More than fish farming • Export approx. 13 B NOK (2006) • Approx. 25 % of Norway’s export of manufactured industrial products • 6-7 % of Norway’s export, excl. oil/gas • R&D approx. 1,3 B NOK • 10 % of all R&D financed by Norwegian industry

7. Kongsberg in global perspective • R&D in some European technology based companies: • Type competitors: B NOK • Some customers:

8. Kongsberg Innovation ASindustrial driven innovation centre

9. Kongsberg Innovation shall contribute to future growth … by creating new profitable companies with a total turn over of 1 B NOK within 10 years … focusing on market driven, technology based growth companies … based on ideas from internal or external sources … the companies shall be developed where the conditions are the best (no regional rqmnt)

10. Kongsberg Innovation:Industrial driven innovation centre • The industrial infrastructure represents unique added value to start-ups • KI has the right to make use of this “industrial capital” in new projects: • specialists in all business processes (technology, prod. development, market development, industrialization, internationalization, business devt.) • proven technology • international, commercial networks • special equipment • reputation

11. Potential Capital Internationalization Industrialization Commercialization Business idea Idea Competence/network The success of the Kongsberg cluster • Close cooperation with demanding customers • State of the art competences: • many technologies • systems engineering • advanced applications • industrialization • internationalization • Commercial focus • This can be transferred to new companies through Kongsberg Innovation

12. Concept development Demanding customer: User needs Willingness to pay Decision mechanism Competition Research resources: R&D results ”State-of-the-art” technology Strong business concept Industrial res.: Industrial experience Additional technologies International network

13. You are welcome to Kongsberg Innovation, if.. • …you have “something unique” which can be incorporated into a business concept with potential >50 MNOK/yr • …you have international ambitions • …you understand the value of our industrial experience and network www.k-i.no ”Turning technology into business”

15. NCE partners

16. NCE projects Raufoss / Lettvektsmaterialer og automatisert produksjon Instrumentering Trøndelag Maritim Møre Systems Engineering Kongsberg Undervannsteknologi Hordaland Microsystems Vestfold

17. ”Combining technologies into advanced products for the global market” Systems Engineering Technologies Systems from subsea to space Basis for continuous learning and improvement Important for success in markets, technology and economy

18. Internationalization User rgmt Industrialization Systems Engineering Knowledge Research Technology Value creation curve Value creation requires more than one technology

19. NCE Systems Engineering, Kongsberg NCE shall pro actively contribute to continuation of the successful development with increasing turn over, profit and export: • Make it attractive for talents and investors • Refine the “role model” for industrial development for the future • Improve the conditions for development of high tech industry in Norway • Strengthen education services/capacity relevant for the cluster • Improve “attractivity” and level of service (public & private) • Market the qualities and strengthen the brand Kongsberg • Stimulate cooperation and develop world class attitudes

20. 5 sub projects Competence development (HiBu) Basis for industr. dev’t. (KNH) New companies (KI) NCE SE Kongsberg Attractiveness development (City) Coop’n projects

21. Where will we be in 10 years ? • Strengthened industrial locomotives, globally leading positions • World class education and R&D within Systems Engineering • 1 – 2 new industrial locomotives established • A range of new market driven, technology based growth companies established • Industrial turnover increased from 15 to 30 B NOK, export increased from 60 % to 80 %, bottom line increased from 6 % to 10 %

22. Processes forming the NCE

23. The KI process • 1996: Strategic regional plan • 1999: Feasibility study science park • 1999-01: ”Coffee and waffles” • 2001: Pre-study industrial driven innovation center • 2000-02: Strategic positioning in the key companies • 2002: Acquired rights to use the ”industry capital” • 2002: Need for new funding tool (”FORNY-like”) • 2002: Invitation from government • (2002-05: Arena program Inno-tech) • 2002/03: Kongsberg Innovation established • 2003: “Innovasjonsrammen” operative • 2003: Accelerator program operative • 2004: Kongsberg International School

24. The NCE process • Continuation of the KI process (by industry - for industry) • 2004-05: applied for CoE-pilot • 2005-06: applied for NCE • Broad mobilizing on top management level: • large and small system companies • support/innovation organizations (KNH/KI) • city, Kongsberg-region, county, BTV-region • university college • Innovation Norway • national R&D/universities • international R&D/universities • Coordinating the areas of interest • Identifying area of focus • Determine organization • Develop application • Create ownership to the application’s content • Enter partner agreements

25. Partner meeting Board elected Project manager engaged Sub contracts Project management established (sub-contracts) NCE kick-off

26. Recommendations - conclusion • Identify most important industrial stakeholders • Strategic positioning more important than tempo • Define focused main goal • Define tasks (and CFS) related to the main goal • Use project management with proper position, experience, network and good relation to the industrial partners • Meet the milestones! • Communication activities is important • ………………………...…..”you can’t please them all”

27. Thank you for your attention! NCE Systems Engineering P.O. Box 1020 NO-3601 Kongsberg Norway torkil.bjornson@nce-se.no +47 920 37 160 www.nce-se.no