Strategic innovation imperative

Uday GillCEO - FIbers

Innovation is fundamental to industry transformation

Paradigm shifts leading to phase changes are happening over shorter periods

Industry 1.0 Industry 2.0 Industry 3.0 Industry 4.0 Industry 5.0

Steam GasLooms, gins

Electrical PowerAssembly Lines

Synthetic Chemistry

AutomationComputer Control

Process Control

Data AnalyticsMachine Learning

New MaterialsBio-Technology

1781 – Early 1900s Late 1990s - PresentMid 1900s – Late 1900s

Rate

of

Inn

ovati

on

Product Innovation

Digital-Man Innovation

Electronics Innovation

Process Innovation

Experience EconomyIntegrated Ecosystems

All C 2 B???

What Next

Meaningful and viable differentiation through product innovation is a slow process

Invention to market is a long road

Apparel Hometech Technical

Segment

Recycling

and Bio

Composites

Space & DefenseFashion

Blends

Filling fibers

InsulationRenewable fibers

Light weighting

1960s 1970s 1990s 2010s

Sustainability

Next Gen

Intelligent Textiles

Wearable devices

2020s

%

18.2 16.7 15.4 12.7 10.5 9.9

24.521.6

15.813.0

9.4 8.5

8.27.2

5.7

4.6

2.5 1.3

0

10

20

30

40

50

60

1960-70 1970-80 1980-90 1990-2000 2000-2010 2010-20

China India US

Textiles and clothing (% of value added in manufacturing)

Benefits of cost innovation tapering off

Scale and efficiency now providing nominal improvements

0.0

0.2

0.4

0.6

0.8

1.0

0

500

1000

1500

2000

2500

1960s 1970s 1980s 1990s 2005 2010 2014

Pla

nt

sc

ale

(T

PD

)C

ap

ex

Ind

ex

(19

60

s b

as

e)

2018

Resource Light

Exacting performance

On demand Supply

Green perspective

Experience over stuff

Internal process focus

Race to reduce costs

Product focused R&D

Economies of scale

Competition

Opportunity

Supplier FocusConsumer Preferences

Multi level innovation needed to facilitate convergence of expectations

Dilemma of divergent expectations

Resource Light

Exacting performance

On demand Supply

Green perspective

Experience over stuff

Internal process focus

Race to reduce costs

Product focused R&D

Economies of scale

Competition

AI

Robotics

Bio-synthesis

New Materials

Supplier FocusConsumer Preferences

New technology basics to facilitate convergence of expectations

Innovation / technology help bridge the gap

Consequences of inadequate innovation

Wasted capital, diminishing innovation capability

50%

60%

70%

80%

90%

100%

-10

10

30

50

70

90

110

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Perpetual Overcapacity

Utilization Rate

Mill

ion T

ons

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

1990-2000 2000-07 2010-17 2017 2018 2020-30

GDP Growth TFP Growth

Innovation imperative to counter declining productivityW

orl

d G

DP

Gro

wth

Wo

rld

To

tal F

acto

r P

rod

uct

ivit

y G

row

th

Innovation is aimed at increasing marginal returns and competitive advantage

Imp

act

of

Tech

Bo

om

TFP - Difference between the growth of output and the growth of a combination of all factor inputs, that reflects the contribution as a result of more efficient use of resources or adoption of new technologies

Imp

act

of

Seco

nd

Te

ch B

oo

m

Strategic innovation help capitalize on disruptive trends

Advanced Robotics –

Man Machine Interface

New

Sustainable Materials

Mass Digitization –

Advanced AI

Synthetic Biology

Mass

Customization

Universal

Computing

Bio

Economy

Physi

cal

Dig

ital

Bio

logic

al

Mega

Tre

nds

These challenges also offer an opportunity to innovate

Forging traditional innovation with customer insight and industry foresight

Time

Strategic innovation – to propel value growth

Strategic Innovation delivers

higher stakeholder value and

sustainably create competitive

advantage

Va

lue

/ G

row

th

Innovation in product and

process development

Cashing in on prior

innovation

Before Current Future

Emerging Initiatives that can change the game

Internal

innovation

Partnerships

for profit

Multi-modal

co-operation

Innovation

Ecosystem

Speedfactory

Disruptive Innovations

Engineered SilkColmar Graphene+

Individual innovations will fructify faster with the creation of alliances

Sewbots SpeedfactoryCredit: Agence Zoom

Structure for strategic innovation

Executing integration framework for a smart organization

Smart organization to:

Redefine markets and products

Reconfigure the value chain

Innovatively approach

differentiation

Products and

Services

Processes and

Technology

Critical Thinking

and Next Gen IdeasLeadership and

collective skills

Su

sta

ina

bility

Le

ns

Leadership role critical for mutually reinforcing innovation and performance

STRATEGIC INNOVATION

Strategic innovation alone is not enough

0

1

2

3

4

5

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

% ROA

Earn

ings

/ In

vest

men

t

Opportunity

Vision Execution

TimeVision vs Execution

Fast track execution is key to success

Imperatives for sustainable business strategy

Organization structure that encourages and invests in cross functional expertise

People processes to embed innovation culture

Build for agility and adaptiveness

Designing Smart Organizations

Safety of use

Resource Light

Designed for Next Life

Harmonize with the Ecosystem

Filter offerings from experience perspective

Must have feel good element

Attributes Intune with expectations

Leverage Customer Experience

Innovate and lead

Thank You