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CyPhERS

Cyber-Physical European Roadmap & Strategy

www.cyphers.eu

DELIVERABLE D5.2

CPS: Significance, Challenges and Op-portunities

Document Version: 1.0Document Status: FinalDate: December 12, 2014Dissemination: Public

Project co-funded by the European Union’s Seventh Framework Programme (FP/2007-2013)Coordination and Support ActionContract number 611430Project Start Date: 01 July 2013, Project Duration: 20 months

Project Consortium Information

Participants Contact

fortiss GmbH (Coordinator) María Victoria CengarleGuerickestraße 25 Phone: +49 89 3603522 2980805 München, Germany Email: [email protected]

Kungliga Tekniska högskolan (KTH) Martin TörngrenBrinellvagen 8 Phone: +46 8 790630710044 Stockholm, Sweden Email: [email protected]

Université Joseph Fourier Grenoble 1 (UJF) Saddek Bensalem621, Avenue Centrale, Domaine Universitaire Phone: +33 0456520371380410 Grenoble, France Email: [email protected]

Università degli Studi di Trento Roberto PasseroneVia Belenzani 12 Phone: +39 046128397138122 Trento, Italy Email: [email protected]

The University of York John McDermidHeslington Hall Phone: +44 1904 325419York YO10 5DD, UK Email: [email protected]

Siemens AG (affiliate partner) Thomas RunklerOtto-Hahn-Ring 6 Phone: +49 89 636 4001081739 München, Germany Email: [email protected]

Authors

Name Partner Contact

Responsible Author

Martin Törngren Kungliga Tekniskahögskolan

+46 8 7906307 [email protected]

Contributing Authors

Saddek Bensalem Université JosephFourier Grenoble 1

+33 0456520371 saddek.bensalem@

imag.fr

María Victoria Cengarle fortiss GmbH +49 89 3603522-29 cengarle@fortiss.

org

John McDermid The University ofYork

+44 1904 325419 john.mcdermid@

york.ac.uk

Roberto Passerone Università degliStudi di Trento

+39 0461283971 roberto.passerone@

unitn.it

AlbertoSangiovanni-Vincentelli

Università degliStudi di Trento

+39 335218403 alberto@berkeley.

edu

CyPhERS – Cyber-Physical European Roadmap & Strategy

Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1 Introduction 3

2 Approach for the SWOT analysis 5

3 Results from the SWOT analysis 83.1 Manufacturing SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.1.1 Manufacturing: European strengths and weaknesses . . . . . . . . . . 93.1.2 Manufacturing: Opportunities and threats as posed by the future and

European external regions . . . . . . . . . . . . . . . . . . . . . . . . 93.1.3 Manufacturing: Key strategies . . . . . . . . . . . . . . . . . . . . . . 11

3.2 Smart Grid SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143.2.1 Smart Grid: European strengths and weaknesses . . . . . . . . . . . . 143.2.2 Smart Grid: Opportunities and threats as posed by the future and Euro-

pean external regions . . . . . . . . . . . . . . . . . . . . . . . . . . . 153.2.3 Smart Grid: Key strategies . . . . . . . . . . . . . . . . . . . . . . . . 18

3.3 Healthcare SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193.3.1 Healthcare: European strengths and weaknesses . . . . . . . . . . . . . 193.3.2 Healthcare: Opportunities and threats as posed by the future and Euro-

pean external regions . . . . . . . . . . . . . . . . . . . . . . . . . . . 193.3.3 Healthcare: Key strategies . . . . . . . . . . . . . . . . . . . . . . . . 20

3.4 Transportation and Mobility SWOT analysis . . . . . . . . . . . . . . . . . . . 233.4.1 Transportation and Mobility: European Strengths and Weaknesses . . . 233.4.2 Transportation and Mobility: Opportunities and Threats . . . . . . . . 233.4.3 Transportation and Mobility: Key strategies . . . . . . . . . . . . . . . 24

3.5 Smart Cities SWOT analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 263.5.1 Smart Cities: European strengths and weaknesses . . . . . . . . . . . . 263.5.2 Smart Cities: Threats and Opportunities as posed by the future and Eu-

ropean external regions . . . . . . . . . . . . . . . . . . . . . . . . . . 273.5.3 Smart Cities: Key strategies . . . . . . . . . . . . . . . . . . . . . . . 28

Deliverable D5.2 – CPS: Significance, Challenges and Opportunities i


3.6 Cross domain analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303.6.1 Common SWOT factors and strategies: Technology and science . . . . 323.6.2 Common SWOT factors and strategies: Societal and cross-cutting aspects 333.6.3 Common SWOT factors and strategies: Programs . . . . . . . . . . . . 363.6.4 Common SWOT factors and strategies: Market . . . . . . . . . . . . . 37

4 CPS characterization and related concepts 404.1 Characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404.2 Relating CPS to Internet of Things, Systems of Systems, embedded systems,

mechatronics, and Big data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

5 Discussion 515.1 Work approach, domain delimitation and the domain SWOT analyses . . . . . 515.2 Cross domain analysis - concerns for further analysis . . . . . . . . . . . . . . 525.3 CPS characterization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535.4 Suggestions for further work . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

6 Conclusions 55

Deliverable D5.2 – CPS: Significance, Challenges and Opportunities ii


Executive Summary

This CyPhERS project deliverable provides a gap analysis of CPS for Europe as a basis for thefinal deliverable of the project, the Integrated CPS Research and Innovation Agenda.

The gap analysis refers to an analysis between the vision of “possible future scenarios andcapabilities” and “the current state in science and technology”. The following approach has beentaken:

• performing an extensive SWOT (strength/weaknesses/opportunities/threats) analysis forEurope, where European strengths and weakness are considered using two types of exter-nal factors: (I) Opportunities and threats referring to futuristic scenarios, thus correspond-ing to a gap analysis between “now vs. the future”, and secondly, (II) Opportunities andthreats referring to the rest of the world. This SWOT analyses extends what was initiatedin CyPhERS deliverable D5.1.

• further elaboration of the characterization of CPS, and by relating CPS to closely relatedconcepts such as IoT, Big data, Systems of Systems, Mechatronics and Embedded sys-tems. During the cross-domain analyses and assessments, it became evident that such anelaborated characterization of CPS was required to clarify the scope of the analyses. TheCPS characterization of CyPhERS deliverable D2.2 was therefore revisited and refined.

For each domain and steps of the SWOT analysis, strategies are proposed and discussed. Across-domain analysis is used to identify strategies found to be common among the domains.

Carrying out a SWOT analysis for Europe is a challenging endeavor which we have never-theless found to be rewarding. Given the available resources in CyPhERS we have chosen todelimit the SWOT to the following five domains: Manufacturing, Health, Smart grid, Trans-portation and Smart cities.

The technological shift represented by CPS clearly implies that the opportunities and threatsneed to be taken seriously. CPS will have impacts which can be considered to be evolutionary,transformative or disruptive, considering specific markets. The CPS technological shift has astrong impact not only on products, services, and processes but also on society as a whole, thusrequiring a broad set of perspectives and stakeholders to engage, from policy makers, legislation,education, to research and industry.

Deliverable D5.2 – CPS: Significance, Challenges and Opportunities 1


Common cross-domain strategies required to grasp CPS opportunities and deal with theidentifed threats encompass, (I) technological and scientific advancements (II) market strategies;(III) societal strategies including eduction and training, and innovation culture, and finally, (IV)funding strategies and mechanisms.

The set of strategies identified in the cross-domain analysis include the following:

• Quality design and trustworthy services and platforms for intelligent, adaptive andautonomous CPS.

• Human-machine interaction, as becoming more and more important.

• Interoperability and corresponding standards, referring to interoperability across theengineering life-cycle, and within - and across domains.

• Research and innovation leveraging CPS to deal with societal challenges, includingsustainability and an aging population.

• Education and training, considering the growing scope of desired skills and knowledge,encompassing not only engineering but also a broader span of stakeholders including end-users.

• Regulations, needing to evolve with CPS and with needs for harmonization in Europe.

• Risk taking for innovation and promoting innovation, in order to stimulate innovationin Europe.

• Safety, security and privacy, dealing with new risks and threats.

• Open data access and related procedures, to grasp opportunities of big data analytics.

• Program aspects, emphasizing the need for incentivising cross domain and disciplinefertilization, and addressing a broader set of stakeholders.

Future work along the lines of this deliverable is needed (and planned as part of forthcomingdeliverables) in order to

• consolidate and further validate the SWOT analyses.

• assess and cross-check that no main strategies were missed; the discussion section of thisdocument identifies some candidates and hints for further investigation.

• further investigation to sharpen and refine (some of) the strategies.

• prioritize among the identified strategies.



1 Introduction

This deliverable of the CyPhERS project has the purpose to provide “a comprehensive gap anal-ysis together with an assessment of economic significance of CPS for Europe”.

The concept of gap analysis is clarified as part of the CyPhERS description of work, wherethe overall goal for work package 5 (WP5) is described as a “the systematic comparison of thevision of a possible future and the baseline of the current state in science and technology”. Thiscomparison should yield an assessment of the potential of CPS, its economic significance forEurope and the necessary efforts in science, technology, legislation, and with respect to socialchallenges.

D5.2 naturally builds on previous work in CyPhERS, including previous deliverables in workpackages 2, 3 and 4, in particular referring to deliverables D2.1, D2.2, D3.2, D4.2 and D5.1 (referto www.cyphers.org). D5.2 also provides the basis for the final deliverable of the project, theIntegrated CPS Research and Innovation Agenda.

To achieve a comprehensive gap analysis, the following approach has been taken:

• performing an extensive SWOT (strength/weaknesses/opportunities/threats) analysis con-sidering both opportunities and threats in terms of future visions, and in terms of Europevs. the rest of the world.

• further elaboration of the characterization of CPS, and by relating CPS to closely relatedconcepts such as IoT, Big data, Systems of Systems, and mechatronics.

The SWOT analysis provides us with a gap analysis that encompasses a number of perspec-tives including from the viewpoints of technology, market and society.

We must emphasize that carrying out a SWOT analysis at the European level is a highlychallenging endeavor. SWOTs are more conveniently done for smaller systems, e.g. a product,that are limited to a specific industrial domain. Cyber-Physical Systems in addition to be poten-tially very large, cut across a multitude of industrial domains. As a necessary delimitation wehave therefore chosen a few but representative domains, i.e., manufacturing, smart grid, health-care, transportation, and smart cities. We briefly touch upon a number of other domains in thediscussion section, where we also analyze the validity of the results.

As a second step, and in preparing for the discussion, we worked to refine the CPS charac-terization presented in D2.2. In this refined characterization, we elaborate qualitative relations



between CPS and related concepts such as IoT and Big data. The purpose of this effort is toclarify "to what" the SWOT analysis refers to and to what extent it can be considered relevantfor related concepts such as IoT.

The outline of this deliverable is consequently as follows.Section 2 describes the approach taken for the SWOT analysis; essentially divided into four

steps: (I) European strengths and weaknesses were first identified corresponding to internal fac-tors of the SWOT. Step (II): Opportunities and threats, corresponding to external factors as posedby the future were then identified, with the visions largely stemming from D3.2 and D4.2, fol-lowed by, step (III): an assessment of opportunities and threats (as external factors) as posed bycompeting regions. Finally, in step (IV), strategies to deal with the opportunities/threats basedon the existing strengths and weaknesses were identified and elaborated. The work materialused for the detailed SWOT analyses is available for download at the CyPhERS project web-site [CyP14c].

Section 3 presents the overall results of the SWOT analysis, in terms of commonly identifiedstrategies, both within and across domains.

Building upon the results of previous CyPhERS deliverables, in particular D2.2, we providean elaborated characterization of CPS in Section 4.

We then provide a discussion of the results in Section 5, followed by conclusions in Sec-tion 6.



2 Approach for the SWOT analysis

SWOT is a strategic planning method. It consists of the consideration of internal and externalfactors such as, e.g., capabilities and influences respectively. The internal factors are classifiedas either Strengths or Weaknesses, the external ones as either Opportunities or Threats; hencethe name of the method. Its origin can be traced back to the 1960s, when a first version of theanalytical tool called SOFT was devised to find out why corporate planning failed: What is goodin the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault,bad in the future is a Threat. The F was replaced with W for Weaknesses, later on, S stood forStrength. As such, the method still lacked a crucial benefit namely sorting the issues into theprogramme planning categories of:

1. Product (what are we selling?)

2. Process (how are we selling it?)

3. Customer (to whom are we selling it?)

4. Distribution (how does it reach them?)

5. Finance (what are the prices, costs and investments?)

6. Administration (and how do we manage all this?)1

In 1982, the use of a 2x2 matrix was proposed that helps consider strategies in a systematic way2;see Figure 2.1. The method has since gained great popularity. Although initially conceivedfor companies, it can be used not only by for-profit organizations but also by non-profit ones,governmental units, individuals. The internal factors may include

• Human resources: e.g., staff, volunteers, board members, and target population;

• Physical resources: e.g., location, building, equipment;

• Financial: e.g., grants, funding agencies, and other sources of income;

1See http://www.businessballs.com/swotanalysisfreetemplate.htm.2See http://www.brighthubpm.com/methods-strategies/99629-history-of-the-swot-analysis/.



• Activities and processes: e.g., programs run, and systems employed

• Past experiences: e.g., building blocks for learning and success, reputation in the commu-nity

The external factors are not controllable and may include

• Future trends: in the own field or the culture;

• The economy: local, national, and international;

• Funding sources: e.g., foundations, donors, and legislatures;

• Demographics: e.g., changes in the age, race, gender, culture of those served or in thearea;

• The physical environment;

• Legislation;

• Local, national or international events3

The SWOT analysis carried out for CPS in Europe in this deliverable draws upon the obser-vations in Deliverable D5.1 [CyP14a]. Selected domains are considered in great detail, namelyManufacturing (see Section 3.1), Smart Grid (see Section 3.2), Healthcare (see Section 3.3),Transportation (see Section 3.4), and Smart cities (see Section 3.5). The internal factors consid-ered are the European capabilities. Two different external factors were considered: on the onehand, the envisioned future as described in Deliverable D3.2 [CyP14d] and D4.2 [CyP14b] and,on the other, the different regions competing with Europe. The strengths and weaknesses as wellas the opportunities and threats where identified taking into account engineering, market and so-cietal aspects. The strategies elaborated refer to those aspects and also to a program perspective,where “program” refers to funding policies and mechanisms. The results obtained were thencompared and contrasted, which in turn gave rise to the identification of domain-specific andcommon, cross-domain strategies; see Section 3.

The work material used for the detailed SWOT analyses can be found at the CyPhERSproject website [CyP14c]. At this point we believe it is worth mentioning the heterogeneityof Europe: as already brought up in D5.1 [CyP14a], the characteristics of the continent and thusthe internal factors identified do not necessarily apply to the region as a whole.

3See http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main.



Figure 2.1: SWOT matrix



3 Results from the SWOT analysis

This chapter presents the overall findings from the SWOT analysis. See the CyPhERS projectwebsite [CyP14c] for the detailed SWOT analyses per domain.

The findings are presented in the following order:

• The results of the SWOT analysis are summarized for each covered industrial domain:manufacturing, smart grid, healthcare, transportation, and smart cities. For each domain,we describe key European strengths and weaknesses, opportunities and threats as posedby predictions of the future, and opportunities and threats as posed by regions competingwith Europe. The analysis is concluded by presenting key identified strategies for thedomain.

• Findings corresponding to various SWOT combinations (e.g., a strength and an opportu-nity) and strategies that were found to be relevant across several domains. A special effortis devoted to a SWOT analysis from a market point of view, encompassing products andservices. The resulting highlighted common strategies are divided into engineering, mar-ket, societal and program perspectives, with “program” referring to funding policies andmechanisms.

3.1 Manufacturing SWOT analysis

The analysis of manufacturing draws on several sources, including recommendations for imple-menting the initiative Industrie 4.0 [KWH13], several roadmaps including the factory of the fu-ture roadmap, the roadmap for US robotics, the Spire association roadmap, and the EuMechaproproject roadmap [EFF13, Con13, TW13, pro07]. Complementary inputs have been receivedfrom experts at the CyPhERS workshops, from previous CyPhERS deliverables (in particularD3.2 and D4.2) as well as from the review by the Economist [Eco12].

Manufacturing is a highly relevant CPS domain that is evolving with new capabilities includ-ing reconfigurable production lines and additive manufacturing (3D printing). New technologiesalso pave the way for novel business approaches (see Cyphers Deliverable D4.2 [CyP14b]).



3.1.1 Manufacturing: European strengths and weaknesses

Manufacturing represents a major social and economical force in Europe, see for example [EFF13]which reports that EU exports consist mainly of manufactured products: their share has annuallybeen more than 80% of total EU exports.

European strengths include high levels of automation for mass production, a strong machinebuilding industry (in parts of EU), and general strong knowledge base in manufacturing. Manu-facturing outsourcing has mainly concerned low cost products, and even in the case where highcost products are manufactured outside Europe, manufacturing reference plants are still main-tained close to product development within Europe. Other strengths of Europe are the JointTechnology Initiatives and Private Public Partnerships in areas such as the Factories of the Fu-ture (FoF) 1 and Embedded systems/Electronics/Cyber-Physical Systems2 that provide meansfor collaborative research. Finally, European strengths in general include a high quality infras-tructure (communication, energy and transportation).

Among the weaknesses, there is a lack of a full integration between the life cycle stagesalong the manufacturing stages (from development over production and logistics, to aftermarketincluding service). This weakness is not specific to Europe however. European specific weak-ness on the one hand have to do with business, capital and innovation, referring to a culturerelatively reluctant to risk taking, tax policies not promoting investments, insufficient venturecapital, costly labor, and relatively low turn out from research investments. Other weaknesseshave to do with some of the skills required for full CPS exploitation. Europe has a shortage ofmarket leading internet companies and software platforms. European manufacturing is domi-nated by SME’s, among which there is limited knowledge of the potential of CPS, especiallysolutions based on software and internet. Deficiencies in the educational system represent a fur-ther weakness. Education has not generally been prioritized at the political level; the status of,and high-level support for, teaching is generally low. International evaluations (e.g., the PISAreports3) show deteriorating results over the years. Finally, Europe represents a multilanguage,multicultural, multipolicy environment, representing collaboration challenges.

3.1.2 Manufacturing: Opportunities and threats as posed by the futureand European external regions

The strong potential for growth in relation to CPS is clearly indicated by research and innovationroadmaps such as the Factory of the future roadmap and the McKinsey study on disruptive

1http://www.effra.eu/2These initiatives include the Artemis Industrial Association (http://www.artemis-ia.eu/) and the ECSEL joint un-

dertaking (http://www.ecsel.eu/web/index)3See http://www.oecd.org/pisa/



technologies [EFF13, MCB+13].Manufacturing provides an indispensable element of the innovation chain where CPS tech-

nology provides more and more opportunities for innovations involving goods, services andlife-cycles approaches that promise to resolve some of the societal challenges referring to asustainable society.

Opportunities are provided on the one hand by new technologies and by combinations ofnew and existing technologies, such as 3D scanners, 3D printers, business, enterprise and en-gineering integrated information systems, new materials, new manufacturing processes, andsmart components and manufacturing machines integrated into smart factories. Opportunitiesare also due to the use of new, and internet related, business models involving crowd-sourcingand where the new technologies pave the way for flexible and customizable distributed manufac-turing schemes. Adopting of business models, new in the area of manufacturing, have alreadybeen reported in CyPhERS deliverable D4.2. Another further example is that of using opencompetitions through web based technologies, for example applied by GE in developing new jetengines (http://www.ge.com/about-us/openinnovation).

These advancements lower the barriers for making business in manufacturing, thus providingopportunities for startups and SME’s. They also notably provide opportunities towards estab-lishing a truly circular economy [EMA12]. Synergies in human and robot collaboration schemesfurther promises to enhance manufacturing flexibility and performance.

Using CPS technology for making automation more flexible, providing cost-efficient andadaptive manufacturing, brings opportunities for increasing the level of manufacturing in Eu-rope. Together with innovation in products and services, opportunities lie in grasping new andemerging markets. Access to global talent is beneficial in terms of innovation. The developmentof international standards could also bring opportunities for Europe to establish technologiesin a global marketplace. Finally, there are opportunities to exploit manufacturing competenceand solutions in other domains. Representing a domain with early adoption of CPS technology,manufacturing technologies are being transferred to other domains; a prime example is that ofrobotics. The US robotics roadmap for example covers medical and service robotics, and thenavigation and sensing technologies used in autonomous car prototypes originate from robotics,thus representing applications of robotics outside the traditional manufacturing domain.

As with all technology shifts, there are also multiple threats. There is a risk that other coun-tries and regions may outpace Europe in innovation, including making use of the just mentionedopportunities. While Europe has a strong position in manufacturing, the US is making stronginvestments in manufacturing (e.g. through recent robotics and Industrial Internet4 initiatives)

4The confluence of the global industrial system with advanced computing, analytics, low-cost sensing, and new lev-els of Internet connectivity has been referred to as the Industrial Internet - see the Industrial Internet Consortium:http://www.industrialinternetconsortium.org/



with the benefit of close involvement of leading IT companies. In the US, an increasing useof robotics and higher levels of automation has enabled companies such as Apple, Lenovo andTesla to invest in new US factories, and in-shoring is expected to continue [Con13]. Relatedthreats includes a tendency towards commoditization of machines and manufacturing, due tothe entry of low-price competitors from e.g. China, and the risk that early adopters (EU) bearinitialization cost of new technology while fast adopters take the big market

Global scale threats are that (economic, social and environment) sustainability are not suf-ficiently taking into account, leading to a depletion of the earth’s natural resources, while theremaining resources are largely controlled by other parts of the world. Manufacturing consumesmaterial and energy and produces waste; it can be noted that about 14% of the total 2,652 milliontons of waste were generated in EU-27 countries in 2008 were due to manufacturing (estimatedue to [Eur11]). Europe may in the worst case contribute to such a scenario if counter measuresare not taken.

Future manufacturing will constitute increasingly complex systems (in terms of heteroge-neous interconnected CPS); the management of such systems including dealing with securityand safety risks, and systems interoperability pose barriers (threats) to their successful indus-trialization. Lack in competence similarly pose threats that may prevent successful industrialevolution. Such threats include declining interest by students in the area (and conversely, largebrain capital and stronger drivers for the young in developing countries, and inadequate user andgeneral involvement, leading to an increased digital divide and lack of adoption).

3.1.3 Manufacturing: Key strategies

The previous subsections summarized SWOT aspects for Europe in manufacturing. A number ofstrategies to grasp opportunities and deal with threats were subsequently elaborated. Several ofthe identified strategies correlate well with the findings of Industrie 4.0 [KWH13]. We thereforeinitially briefly summarize the Industrie 4.0 implementation recommendations and comment onwhere the two studies differ, and where CyPhERS identified complementary strategies. TheIndustrie 4.0 recommendations highlight the need for a dual strategy involving, (1) integrationof information and communication technology into traditional manufacturing solutions and sys-tems, and (2) creating and serving new leading markets for CPS technologies and products. Therecommendation further highlights the following three features for Industrie 4.0 implementation:Horizontal integration through value networks; End-to end digital integration of engineeringacross the entire value chain; and Vertical integration and networked manufacturing systems.

The Industrie 4.0 recommendations call for actions in the following eight key areas [KWH13]:

• Standardization and reference architecture.



• Managing complex systems.

• A comprehensive broadband infrastructure for industry.

• Safety and security.

• Work organization and design.

• Training and continuing professional development.

• Regulatory frameworks.

• Resource efficiency.

In the opinion of CyPhERS, these recommendations are relevant and well founded, and asstated before, many of these areas were also addressed in the CyPhERS SWOT analysis [CyP14c].In order to avoid too much repetition we therefore focus here on specific aspects the CyPhERSproject found in addition to the Industrie 4.0 recommendations.

Education, training and brain capital Although training and continued professional de-velopment was covered in [KWH13], we would like to emphasize the following aspects:

• There is a need to revise current CPS education programs to provide "T-shaped" engi-neers with life-cycle and sustainability "thinking". CyPhERS will be providing separaterecommendations for education.

• Strengthen links between early school system (high school and prior) to university andindustry, to stimulate interest. Initiate and promote open labs and maker spaces.

• Establish exchange programs with non-European countries and other incentives to attracttalent and for talents to come to Europe. Facilitate immigration for highly qualified engi-neers including accreditation/training programs facilitating their integration.

• Support machine building industry (including SME’s) in take up of CPS.

Risk taking for innovation, and promoting innovation CyPhERS believes that there isa need to stimulate and provide support measures to promote innovation and risk taking. Therecommendations are as follows:

• Establish close link between market needs and research activities and innovation. Re-search and innovation activities should include engineering, end-user as well as businessstake-holders.

• Support experiments and development proof of concepts with new manufacturing systemsand services.



• Promote risk taking, by considering e.g competitions, taxation and other incentive schemesincluding EU projects.

• Stimulate the development of and research into new business models including those usingsocial manufacturing and using "crowd-sourcing" engaging a wider audience for innova-tion. Take measures to further raise awareness.

Multi-stakeholder learning networks Future manufacturing systems will even more re-quire multidisciplinary and multi-stakeholder efforts. Promoting such "multi-x" efforts is facil-itated by establishing networks of different forms, and are known to create synergies. Whileformer NoE’s have been relatively successful, we believe that further stakeholders needs to beintegrated into such efforts.

• Form network of excellence and learning networks across domains to expand knowledge,exchange best practices, build required skills, and promote cross-domain innovation. Thenetworks should include industry and academia, and other relevant stakeholders.

• Establish links between ARTEMIS-IA/ECSEL, FoF and ICT labs in order to cover ad-vancement along multiple TRL levels.

CPS design There is a large potential in improving CPS design, from optimal manufacturingmachines to systems, which are more adaptive and easy to use, while still providing the desiredperformance and availability levels. This is a multidisciplinary endeavor that spans human ma-chine interaction, machine design, manufacturing system design, control, systems engineeringetc. Theories, engineering methodology and tool-boxes are required for these purposes. CurrentEuropean projects often provide separated entries and calls, e.g. manufacturing, systems engi-neering, human machine aspects. There is a need to develop mechanisms for cross-disciplinecollaboration in terms of projects which could be be foundational and applied; neverthelessdemonstrators will likely be very important for the purpose of integration. Robotics continuesto be an important field including manipulators and collaborative schemes (robots with robotsand/or humans).

Interoperabilty, platforms and standardization Integration is a key aspect of CPS and en-compasses multiple dimensions as emphasized by the Industrie 4.0 recommendations. Similarly,new integrations and services will require new software platforms. These opportunities lead tothe following recommendations:

• Utilize European strengths to take the lead in interoperability efforts encompassing engi-neering tools and databases for manufacturing system optimization and improved perfor-mance, as well as factory level platforms and interoperability approaches.



• Promote integration platforms to accelerate rate of innovation including promotion of opensource EU software platform initiatives.

• Investigate bottlenecks and key areas with potential for standardization. Projects to eval-uate proposed and existing standards, and to propose improvements. Promote harmoniza-tion or bridging among existing standards.

Sustainability Investigate, and develop incentives for Europe to drive sustainable solutionsincluding business aspects. Increase awareness. Fund research and innovation activities thataddresses life-cycle gaps and use of new CPS opportunities. There are already examples ofcompanies that voluntarily are supporting a circular economy.

Program oriented aspects and funding (research, innovation and venture capital): Withsome relation to the previous bullets, we here further elaborate funding aspects.

• Investigate and address gaps in the transition from research to industrialization, and cor-responding funding (including VC). Develop or target complementary funding measuresaccordingly.

• Establish links between ARTEMIS-IA/ECSEL, FoF and ICT labs in order to cover ad-vancement along multiple TRL levels.

• Research and innovation: Focus on added value, high quality and disruptive technologies

• Support the development of regional clusters, "innovation eco-systems"

3.2 Smart Grid SWOT analysis

The analysis presented below used a number of sources, including an analysis of the vision“future intelligent power grids” in the European Union and the United States [CMPL07], anassessment of the Smart Grid benefits and impacts in EU and US [GB12], the study about themigration to the Internet of Energy [AKM12], a comparison of the approaches to Smart Gridin US and Europe [Zha11b, Zha11a], a survey of smart grids concepts worldwide [Has11], andthe article on the importance of international hydropower storage for the German turnaround inenergy policy [HE13].

3.2.1 Smart Grid: European strengths and weaknesses

European strengths and weaknesses in the Smart Grid sector are of varied nature. Some of themare associated with a particular region, some of them have to do with technical capabilities orwith the geographic peculiarities. Among the strengths, the following can be mentioned:



• In the Basque region, meteorological prediction and mapping can be counted as strengths,namely geographical information systems, sensor networks and Internet. Also active man-agement for the energy distribution network, in particular smart measurements (air quality,etc.) and process conditioning systems.

• In North Denmark, companies are highly-skilled in the Engineering Design Process (fromidea to prototype). Moreover, global-minded companies devise solutions for internationalmarkets.

• In the Flanders region, among the strengths one finds low power electronics, mixed-signalcomponents, miniaturization, and wireless communication.

• Additionally, in Europe significant research base is located in electronics, sensors and in-formatics, in particular highly dedicated research institutions with focus on Smart Energytopics.

• There is a remarkable number of SMEs and manufacturers for, e.g., sensor technology,control, virtual power plants, as well as cluster-like initiatives (boost networking). Pilotand research projects on Smart Grids are given great importance.

• Another plus are the extent of regulatory requirements for energy environment and thedegree of liberalization of the energy market. Distributed intelligence and plug-and-play,on the one hand, and the share of nuclear renewable energy in energy mix, on the other,are considered advantages as well.

As a consequence, Europe possesses technical competence in the Smart Grid environment,and also a wide value chain from basic components to system integration, covering a large rangeof activities in micro- and nanoelectronics and its application domains.

Among the weaknesses, distributed energy generation (DEG), customer-side support, infras-tructure (in particular, both the physical and the market layers), high costs, inability to storageenergy, and insufficient capacity of existing line sections should be mentioned. Also the shareof nuclear power and of fossil fuels in energy mix can be seen as a disadvantage.

To all this one can add the heterogeneous European landscape, and a insufficient supply ofqualified specialists in the smart grid environment.

3.2.2 Smart Grid: Opportunities and threats as posed by the future andEuropean external regions

The identified opportunities, too, are of diverse nature. Related to particular regions, we haveGermany’s energy policy and its opt out of nuclear energy by 2020 as well as Denmark’s suc-cessful experiences with the integration of fluctuating energy sources into an electricity system



based on conventional generation and end-use structure. Regarding society and especially con-sumers, there is an environmental consciousness emerging, that includes increasing consumerwillingness to pay more for a better use of resources as well as consumption awareness. Thisin turn stimulates private investment in technologies providing Smart Grid services, and the up-grade of electric grids to Smart Grids opens new markets, market roles, value chains and jobs;this is global market opportunities open up. A further implication is thus the growth of R&Dactivities in, e.g., smart cities, due to the internationalization of research and development, andadditionally the standardisation of information, data and processes across Europe. Hence, tradeand transport of electricity all over Europe could become a reality, and therefore an increasedefficiency of power transmission and distribution.

Other opportunities worth mentioning are a modern pan-European network with the capabil-ity of integrating significant distributed energy resources (DER). Also energy could be used atany time, regardless of when it was produced, due among others to an efficient management plat-form that offers optimal routes dynamically changing depending on the constellation of each day(re-dispatching local loads, too, to take full advantage of real-time energy prices and networkstatus information). Renewable energies can be integrated. And industries devoted to electricityand to IT can converge.

Among the threats, we have the geographical prerequisites for wind power, for solar power,and for other renewable sources of energy. The speed of implementation of energy policy deci-sions can be unsatisfactory, as well as inconsistencies and incoherence of the different mandates.Power quality, reliability, and security can be issues difficult to address. The conventional gridis insufficient in terms length (kilometers) and power (high and extra high voltage power lines).The shift towards smart distribution networks is determined by pressure for change in the indi-vidual networks, which are very heterogeneous with respect to size, power and efficiency level(in particular, the shift does set minimum intelligence standards). This can imply inefficient net-work expansion (opposed to macroeconomical efficiency and commercial profit). On top of allthis, neither grid monitoring nor control capabilities are adequate yet, and the DERs (distributedenergy resources) are disaggregated.

Compared with the US, the EU focuses more on research and deployment plans. In con-trast, the US has developed more laws and regulations. Unlike the EU, the US hasn’t followedone set of long-term strategies or plan. Only recently has the US expended great resources onimplementing R&D. Italy is the leader in smart meter deployment, not only in Europe, but inthe world. The US is lagging behind the EU in smart meter installation. The EU does not haveprivacy laws specifically addressing smarter meter data. The EU focuses more on microgrids;the US on technology tools for sensors, and monitoring. Neither the EU nor the US offers acomprehensive plan for utility cost recovery.

The US is richer than Europe in resources (with petroleum as well as coal). That makes its



policy more focused on clean coal technologies, which differs from the European policy focuson renewable sources and high efficiency distributed generation (DG) technologies.

Energy markets have relatively strong support in both environments, at nation or state levelsas much as federal (or European) level. A difference between them is the more controlled wayin which Europe is going about the deregulation and privatization process, setting up regulationslike the 2003 EU Directive. Meanwhile, in the US, the Federal Energy Regulatory Commission(FERC) currently lacks clear jurisdiction over reliability issues and the North American ElectricReliability Council (NERC) has only voluntary rules which have proven largely insufficient. TheEnergy Policy Act (EPAct) of 2005 may change this situation.

In the US, bottlenecks have been identified in the power grid, which complicates wholesalemarkets and creates stability problems. In Europe, the main concern is in the interconnection in-frastructures between the countries. Although, after summer 2003, European and US electricitysystems proved to be equally vulnerable to both transmission and generation problems.

Another big concern in the US is security, including both blackouts and terrorist attacks.In Europe, a major concern is the growth of electrical infrastructures following very differentpatterns in the different countries.

Environmental concerns in Europe are driven by its high commitment in matching the en-vironmental targets of Kyoto, while in the US, efforts are driven by Environmental ProtectionAgency recommendations.

Regarding energy policy, in Europe, the high support to the renewables, demand side man-agement (DSM) and distributed generation (DG) results in policy supporting the development ofthese technologies, as well as the necessary reinforcement of transport and distribution capacityto support them and the reinforcement of the interconnection infrastructures between countries.The policy in the US is more focused on supporting coal clean technologies, with renewables,DSM and DG being a secondary focus.

Reliability in the transmission system in the US is addressed through preventive policy:disruption preparation and response. The EPAct 2005 calls for the creation of the Electric Re-liability Organization (ERO) that will enforce mandatory reliability rules for all stakeholders inthe transmission system. In Europe, reliability in the transmission system is still being handledat national levels; European level policy supports the creation of the European energy market.

The European Research Area aims to create a genuine “internal market” for research toincrease pan-European co-operation and coordination of national research activities. In the US,energy research at both the federal and state levels is strong and well established.

The research at European level includes the FP5’s Target Action: Integration of RES and DGinto European Electricity Networks. This encompasses projects dedicated to increasing powerquality (PQ), reliability and security. Also development of market technologies and laboratoryactivities as well as pilot installations and field tests are supported. Additionally, pre-regulation



activities take place. FP6 and FP7 support, for instance, the projects FENIX (Flexible Electric-ity Networks to Integrate the eXpected energy evolution), MORE MICRO-GRIDS (AdvancedArchitectures and Control Concepts for More Microgrids), and DER-LAB (Network of DERLaboratories and Pre-Standardisation). Research at the US federal level is directed at the electricdistribution program, the transmission reliability program, and the distributed energy program.In general, the US research in this field seems more dispersed across a variety of programs, whileEuropean research focuses on one target area.

3.2.3 Smart Grid: Key strategies

An expand strategy, addressing the strength of cluster-like initiatives (boost networking) andthe opportunity of integrating renewable energies is the hydropower storage in Scandinavia forCentral Europe and viceversa, depending on time of the year.

A consolidation strategy, addressing the strength of distributed intelligence (plug-and-play)and the threat of power quality, reliability and security is the development of intelligent networks.

A catch up strategy, addressing the weakness of customer-side support and the opportunityof re-dispatching local loads to take full advantage of real-time energy prices and network statusinformation, is research on demand side management (DSM) and demand response techniques.New energy services as, e.g., remote metering, remote control of appliances, real-time monitor-ing of homes (thus better care for the elderly and other vulnerable groups) can and should beoffered.

A further catch up strategy, addressing the weakness of the present infrastructure and theopportunity offered of efficient power transmission and distribution, is the development of tech-nologies as, e.g., high voltage direct current (HVDC), advanced high-temperature cables, high-efficiency transformers. However, European companies as ABB, a world leader, and Siemens,provide already the needed technologies.

In order to address the weakness of the inability to storage energy and the opportunity ofusing energy at any time, regardless of when it was produced, the catch up strategy can beresearch on stationary energy storage (batteries, flywheels, super-conducting magnetic energystorage, compressed air energy storage, super capacitors).

A strategy addressing the weakness of the reduced supply of qualified specialists in thesmart grid environment and the associated threat of the impossibility to make true the smart gridvision, is to integrate areas as, e.g., power system dynamics and stability, electric power qualityand concomitant signal analysis, reliability and risk assessment, analysis and planning energymarkets, into a “smart grid” curriculum (cf. [revised] Bloom’s taxonomy).

A further strategy that addresses the weakness of the heterogeneous European landscape andthe threat posed by inconsistencies and incoherence of the different mandates, is the elaboration



of technical standards (including glossaries) and regulatory framework, as a basis for interoper-ability promoting EU industry. Notice that this strategy, in fact, is domain independent.

3.3 Healthcare SWOT analysis

The analysis of the healthcare sector draws on several sources, including an analysis of theUS medical device industry [Hol12]; an analysis by Frost & Sullivan [Raj12]; a review fromADMET with contribution from several industry leaders [adm14]; a document published byworking groups of the European Commission [Bru10]; a paper by S. Saria on medical dataanalysis [Sar14]; a report from the UK government [HM 13]; and a report from the MedicalDevices Innovation Institute in Canada [Med11].

3.3.1 Healthcare: European strengths and weaknesses

Among the strengths, Europe is home of the second largest market size (after the US) and hasan increasingly older population that make it ideal for the adoption of advanced medical devicesand healthcare solutions. Member states have generally a high-quality medical infrastructure,with advanced government sponsored insurance programs, which may drive up the demand fordevices. Europe is also home to high quality and high level academic institutions, within an in-tellectually rich environment where informed patients demands quality life enhancing solutions.

Among the weaknesses, Europe has a highly regulated market. In addition, diverse regula-tions are adopted by different member states regarding healthcare, while business activities aresubject to EU laws and policies, leading to an uncertain regulatory environment. Europe is alsohome to a large number of companies related to medical devices, although it lacks large compa-nies able to drive investments and market, as well as venture capital and interest in taking risks.The cost of doing business is high, especially compared to other parts of the world.

3.3.2 Healthcare: Opportunities and threats as posed by the future andEuropean external regions

With respect to the future, the opportunities related to medical device adoption have to do witha growing and aging population, which can best take advantage of the new technologies. In ad-dition, medical insurance companies are constantly seeking for new treatments, which are moreeffective, and with higher impact, in order to reduce costs. In particular, there is an increaseddemand for a clearer understanding of costs and outcomes, or effectiveness of therapeutic treat-ments, for an increased real-time transparency. Advanced CPS based medical devices could bethe key to improve these aspects. Finally, there is a growing tendency of shifting care delivery



from inpatient to outpatient services and the home, requiring advanced health monitor technol-ogy.

These opportunities are balanced by an increasingly strict regulatory environment, whichmay require longer clinical trials before and after the certification process. Revenues in medicaldevices are not seen growing as quickly over the next five years as in the past, and the consolida-tion of industries and increased competition through globalization, and the emergence of grouppurchasing organizations (GPOs), may limit the pool of potential customers and drive pricesdown. Recalls may prove costly, and eventually reduce the trust that the general public has onmedical devices, and curb their adoption. These aspects are exacerbated by margin pressure dueto more complex product design, material testing and manufacturing, and an increasing cost ofmaterials.

When comparing against the rest of the world, opportunities lie in the extremely large marketsize and, especially from emerging markets, but also in the US, and, again, a growing andaging population. Access to global talent is beneficial in terms of innovation. The developmentof international standards could also bring opportunities for Europe to establish home-growntechnologies in a global marketplace.

Threats include a tendency towards commoditization due to the entry of low-price competi-tors from China, Turkey and Brazil, which may drive prices down, and less strict regulationsin emerging markets, which may attract medical device manufacturers. Regarding investments,the US has the global leadership, as well as leadership in policy settings through the FDA. Eu-rope, on the other hand, lacks a truly independent agency. Finally, innovation from developingcountries may outpace that of developed countries.

3.3.3 Healthcare: Key strategies

Given the above, we can provide some initial assessment of strategies to be implemented toachieve the full potential of CPS in healthcare. In general, the aim of the effort that is requiredfrom the commission is that of promoting an all-around approach that encompasses population,health and prevention strategies.

General approach

• Promote preventive care through the use of CPS, and in particular promote a proactiveattitude that maximizes value and patient experience. To achieve this, the EU should es-tablish pilot programs and living labs, to experiment with the technology in a real setting.In particular, both patients and medical insurance should be involved to achieve higherefficiency and take advantage of government sponsored insurance programs to increaseimpact.



• Evaluate consumer needs, push research towards user-centered development. Examineclinical and market needs, direct research toward filling those, expand market size. Havedevices that are intuitive.

• Leverage patient demographics to build up understanding and provide data for analysis.The EU can facilitate this process by: Create statistically relevant databases on effec-tiveness of treatments, based on patient demographics. Establish clear procedures to un-derstand quality of treatment taking advantage of the member states databases. Improveeffectiveness and efficiency of insurance programs with more transparency. Foster inno-vation in therapeutic evaluation through large programs. Build on the existing high qualitymedical infrastructure to reach patients in their homes, collect diagnostic and performancedata. Replace qualitative inspection methods with measuring machines that quantify datathrough automated means.

• Promote research that improves outpatient services and allows people, especially elders, tobe independent. Promote home care to reduce costs. Take advantage of remote monitoringto share facilities.

• Promote research into new design methods and into quality product development, alsoin view of certification. Provide incentives for companies and research programs thatstudy new materials and manufacturing methods that increase quality and simplify thecertification process.

Regulations

• Avoid unreasonably strict regulations, and use them to make the market more efficient.Develop regulations to increase transparency and promote understanding of costs and out-comes.

• Make regulations homogeneous among member states to avoid uncertainty and confusion.Coordinate health related (usually local) regulations with market related (usually Europe-wide) regulations.

Education

• Create network of excellence, interdisciplinary programs, linking technology, life science,business and computer science (including control, system engineering, design methods,algorithms, big data, etc.).

• Consider size and expand education programs to match growth in population. Adapt train-ing of healthcare professionals for effective use of new technologies, and towards a value-based treatment.



Market and industry

• Exploit market position to penetrate emerging markets.

• Attract talent from emerging markets.

• Promote channels to market products world-wide. Help companies with IP protection.

• Lower barriers to market entry of companies towards consumers. Facilitate entrance ofnew players that provide disruptive technologies.

• Promote platforms that are able to integrate the contributions from diverse companies.Have a repeatable, methodical and sustainable cost-effective supply network across dif-ferent medical areas.

• Conduct trials proving econometric value and improved outcomes in order to justifyhigher reimbursement levels.

• Provide incentives for higher impact products and development of cost effective treat-ments. Promote disruptive innovation able to provide alternative treatments.

To conclude, we can identify the following overall strategies:

• Need a better understanding of costs and outcomes and increased transparency. Europecan leverage its patient demographics and market size to achieve this goal. Companiesthat work towards better evaluation methods should be facilitated. Especially methodsthat provide quantitative methods through automated means. Big data analysis should befacilitated with the introduction of standards for medical records.

• Create network of excellence both for academia and for the industry. In academia thisis essential to spread knowledge, to form interdisciplinary curricula, and to spread bestpractices. In industry it is important to create common platforms, since Europe has lots ofsmall companies, rather than large ones, that need to get together to drive the market andinnovation forward. Create living labs.

• Improve quality and product innovation. Promote research into new design methods anddevelopment in view of safety and certification. Promote design approaches that Linktechnology, life science, business and computer science (including control, system engi-neering, design methods, algorithms, big data, etc.).



3.4 Transportation and Mobility SWOT analysis

The analysis of the transportation sector draws on several sources, including an analysis ofcurrent trends, technologies and challenges smart system technologies from National Insti-tute of Standards and Technologies (NIST) [SY13]; a deliverable from the European CPSoSproject [Ltd14]; a document published by a working group from the University of Washingtonwith contribution from several industry leaders [hct09] and documents published by workinggroups of the European Commission [UNI09, DOC11].

3.4.1 Transportation and Mobility: European Strengths and Weaknesses

Among the strengths, Europe has companies which are among the world leaders in conven-tional cars, trucks and buses. Air transport system and its supply chain, including the high-techaeronautical industry, are an important contributor to the European economy and to the competi-tiveness of Europe as a region. European airlines and airports are among the world leaders, as isthe European aeronautical industry. It will be increasingly challenging to maintain this positionin the global marketplace, owing to capacity constraints in Europe and massive investments inair transport infrastructure in other regions. Member states have generally high quality urbaninfrastructure. Europe has also a high quality and high level of academic institution.

Among the weakness, Europe has a heterogeneous regulations, no harmonization of bestpractices. The current business model for the deployment of Intelligent Transport Systems inroad transport in Europe, mainly based on private initiatives, has its limitations. Efforts ofthe industry are not always successful because of the difficulties in the demonstration and pre-commercial phases of the innovation chain. Also, the cost of doing business is high, speciallycompared to Asia and other parts of the world.

3.4.2 Transportation and Mobility: Opportunities and Threats

With respect to the future, the opportunities related to transportation and mobility have to do withthe market for European transportation industry and strengthen its competitive base, resource-efficient and intelligent transport system that meets the future demands of European citizens,stimulates economic growth, creates European jobs, and strengthens the position of the Euro-pean transport sector in global competition. In particular, in Europe, an important factor is the‘greying of the population’, which will require transport services to be adapted to an increas-ingly ageing population. Elderly people, aged 65 or more, will account for 29% of the totalpopulation by 2050 as opposed to 17% today. Quality, reliability, security and accessibility, no-tably for persons with reduced mobility, safety of public transport will be essential to the greateruptake of public transport. For many, personal transport will however remain the only alterna-



tive due to the complexity of their daily journey. Using more fuel-efficient vehicles will be anecessity. Advanced smart transportation systems could be the key to propose new solutions forthese problems.

These opportunities are balanced by the growing competition in world transport markets.European transport equipment manufacturers have for a long time enjoyed a comfortable leadover the rest of the world, sharing world markets with few, mostly American and Japanese,competitors. Today, this lead is shrinking as other countries are heavily investing in research anddevelopment (R&D) and infrastructure. China’s R&D spending has been growing for severalyears at double digit rate and this year China is expected to become the second largest R&Dpower in the world, well ahead of major EU Member States.

In high speed rail, the Chinese – so far relying on European, Canadian or Japanese technol-ogy – have developed their own trains. The EU needs to keep pace with global technologicaldevelopments and maintain its competitive advantage in high value-added transport industries.Delayed action and timid introduction of new technologies could condemn the EU transport in-dustry to irreversible decline. No major change in transport will be possible without the supportof new technologies to maintain its competitive position. Overall, ITS infrastructure invest-ments have a positive impact on economic growth, create wealth and jobs, and enhance trade,geographical accessibility and the mobility of people.

3.4.3 Transportation and Mobility: Key strategies

Given the above, we can provide some initial assessment of strategies to be implemented toachieve the full potential of CPS in transportation and mobility.

General approach

• Exploring more radical, environmentally efficient and innovative technologies that mightfacilitate the step change required for air transport in the second half of this century andbeyond.

• Promote Tools to convert social media information into a data source for traffic manage-ment and travel information. Develop new systems and services for an aging society.

Regulations Identify the necessary regulatory framework conditions through standardizationor regulation:

• Public procurement strategies to ensure rapid up take of new technologies;

• Rules on the interoperability of charging infrastructure for clean vehicles;

• Interface standards for infrastructure-to-infrastructure, vehicle-to-infrastructure, and vehicle-to-vehicle communications;



• Access conditions to transport data for safety and security purposes;

• A key issue for autonomous cars is risk and liability. Accidents are inevitable and whatprocess is adopted when accidents happen is important. Here there are issues of how isresponsibility apportioned among a myriad of suppliers and sub-suppliers and what dovictims have to do to get support for their loss and/or recovery , i.e. they should not needto battle through the courts for 10 years. Some research in this area is needed.

• Needs for protection from unscrupulous companies and state surveillance, and also secu-rity to provide protection from criminals and terrorists. This is something that needs tobe addressed at the European level as different countries have different views on privacywith different regulatory and political interests. For instance, at a political level in Ger-many privacy is a very important topic and technology cannot be used for tracking cars.In France there is a different point of view and so car tracking is also possible. We needto make regulations homogeneous among member states to avoid confusion.

Education

• Create network of excellence, linking transportation, technologies and computer science.

• Dynamic, multi-disciplinary education and training—will make possible sustained growthand innovation and spawn a new generation of entrepreneurs, as well as the next genera-tion of intelligent transportation systems.

Market and industry

• Based on technological advances, develop integrated, “greener”, “smarter” and safer pan-European transport systems for the benefit of the citizen and society, respecting the envi-ronment and natural resources; and securing and further developing the competitivenessand the leading role attained by the European industries in the global market.

• Develop technologies and intelligent systems to protect vulnerable persons such as drivers,riders, passengers, crew, and pedestrians.

• Improve the competitiveness of transport industries, ensuring sustainable, efficient andaffordable transport services and creating new skills and job opportunities by research anddevelopments.

• Leverage current surplus to consolidate market position with targeted investments

To conclude, we can identify the following overall strategies:



• Develop integration platforms where academic institution can channel innovation at lowcost

• Promote consolidation, create common integration platforms

• Other world regions are launching huge, ambitious transport modernization and infras-tructure investment programmes, it is crucial that European transport continues to developand invest to maintain its competitive position.

• Continuous investment in transport infrastructure and simplification of administrative pro-cedures are needed to contain this erosion of the importance of the EU as the world’s lo-gistics platform, without which European logistics companies will lose their global lead-ership.

• Rethink curricula towards the creation of professional figures with business background

3.5 Smart Cities SWOT analysis

A background paper of the UK Department for Innovation and Skills provides a good summaryof the challenges and opportunities that cities and business are facing when inserting digitaltechnology in cities [fBIotU13]. Here we take a complementary and sometimes aligned view ofthe challenges and opportunities.

Smart Cities involve the integration of many if not all domains of CPS research and tech-nology. In addition, they touch other domains such as architecture and legal, economics andsocial sciences. Hence, the fundamental strategies for smart cities cannot be but at the crossroad of several disciplines. Interdisciplinarity is a prerequisite to any meaningful approach fordeveloping new business models, technical and social infrastructure, and services.

3.5.1 Smart Cities: European strengths and weaknesses

In Europe, separating weaknesses and strengths for smart cities is difficult since they are some-times two faces of the same coin. Europe has cities that are rich in history and architecture.Some, if not most, of the cities date back to the Roman times and all of them have histori-cal monuments of different ages. This calls for an often chaotic layout of the downtown areaswith narrow and winding streets with the exception of Paris where the urban plan was designedwhen Napoleon was in charge. In addition, there have been several waves of urbanization andimmigration. Lately the pressure of immigration has created areas where even the elementaryservices for the population are at risk and safety is not guaranteed by the institution. Traffic is attimes unmanageable. In some cities, digging for infrastructure improvement and management



uncovers ancient remains that force stopping and delaying much needed work. This situationpresents challenges that in other areas of the world (for example the United States) are not assevere. These challenges present opportunities as well as seemingly unsurmountable difficulties.

The cultural level of the citizens of the largest cities in Europe is high and demands attentionto the cultural heritage. Thus any attempt at modernizing the administration from the pointof view of efficiency and business needs must be weighted against an underlying diffidence oftechnology. The city administrators are quite often unaware of and illiterate about technologyand whenever confronted with a plan to add a cyber-physical system driven infrastructure orservice, they may fall prey of unwise designs proposed by companies that do not have the levelof understanding needed to master European complexity.

Indeed, there have been examples of technology insertions that ended up in totally wastedmoney and effort since they do not take into consideration the needs of the population. Yetwithout technology insertion the liveability of European cities will approach an unsustainablelevel.

A clear strength of Europe is being able to maintain cultural identity and attention to maintainarchitectural heritage in the face of adversities. Involving the leading European architects suchas Eduardo Souto de Moura, Jean Nouvel, Pierre de Mouron, Jacques Herzog, Norman Foster,Renzo Piano, Rem Koolhaas, and Santiago Calatrava Vals in the plan for smart cities may yieldan exciting and novel view of what digital technology can bring to large cities. There are exam-ples of analyses of smart city opportunity for medium-size cities (see http://www.smart-cities.eufor the TU Wien led work) albeit the maximum leverage will for European cities will be in largecities.

The weaknesses are the relative ignorance and diffidence towards technology. Hence edu-cation and regulatory infrastructure are essential to succeeding in developing smart cities. Inaddition, financial planning for cities in Europe is often complex in view of the articulation ofthe various services and infrastructures that are needed for smart cities. The financial aspectcannot be overestimated. The risk is to waste a large amount of money with little or no return.

3.5.2 Smart Cities: Threats and Opportunities as posed by the future andEuropean external regions

Some of the threats have been already discussed in the previous section. However it is worthrepeating that liveability of European cities is deteriorating at a rapid pace when infrastructureand services are not upgraded to meet immigration, urbanization, ageing of the local population,and gentrification. The risk of having cities that are essentially non functional is real. It iscertainly true that technology and making cities smarter is not going to solve the problems if thepolitical agenda is lacking and ineffective but it is as certain that without the determined use of



advanced technology the situation will be unmanageable.The business threat posed by companies that have a dominant position in the cyber infras-

tructure is real. Europe runs the risk of having its cities run with USA technology with littleinput from the city administrators and European business. It is in fact easier to adopt a pre-cooked solution that has already been demonstrated in other environments rather than launchingin a new adventure. However, this is a great opportunity for innovation: balancing cultural her-itage, architectural complexity, heterogeneous urban layouts, transportation needs and energyefficiency is going to be the crux of the matter to have success in smart cities.

3.5.3 Smart Cities: Key strategies

General approach

• Favor the formation of heterogeneous expert teams to address the fundamentals of smartcities.

• Act as catalyst for collaboration among scientists, administrators and citizens.

• Fund interdisciplinary research teams that include architecture and social science experts.

• Establish training programs for city administrators to help selecting technologies and ser-vices that are indispensable to make European cities more livable.

• Involve citizens when deciding what the ideal model of a smart city should be.

• Encourage integration companies to look at new technologies and companies, and lever-age research with incentive programs aimed at a rapid deployment and adjustment aftertesting.

• Safety and Security are general concerns that should be included in all European researchand deployment programs. Specific programs aimed at safety and security analysis shouldbe encouraged. Any new smart city service and infrastructure should be tested for safetyand security.

• Favor the creation of experimentation mechanisms that involve living labs where the usemodel and the level of acceptance of citizens are tested.

• Develop an integration plan so that all EU investments adhere to a unified view of smartcities.

Regulations related to smart cities



• Establish a clearly articulated set of regulations for the safe and secure operation of smartcities.

• Regulations should be set to favor market openness and competitiveness among companiesof the European industrial ecosystem. To make the European offering in smart cities morerobust and competitive in the world and not only in domestic markets, companies notin the European Community should be allowed to play in the European market and theEuropean players should find ways of collaborating and synergizing their offer with theforeign entities.

• Regulations should be designed to favor innovation by setting requirements that push tech-nology towards new quality and cost standards.

• Regulations should be set at the European community level so that a sufficiently largemarket is available for companies to play in this domain.

• Make sure that regulations are not impossible to achieve but serve as a needed stimulus toprovide more efficient solution.

• Regulation should also include privacy as a primary right for citizens but with a numberof options whereby citizens can trade-off privacy and services.

• Regulations should be developed in international bodies so that experiences could beshared across different economic ecosystems and markets could be enlarged.

Education related to smart cities

• Create network of excellence, interdisciplinary programs, linking technology, life science,business, economics, law and computer science (including control, system engineering,design methods, algorithms, big data, architecture, safety, security, transportation, health,smart grids, internet of things, sensors, actuators, systems of systems).

• Establish European curricula for smart city experts in design and administration.

• Establish continuous education program for city administrators to create political and ad-ministrative substrate capable of making smart cities a livable reality.

Industrial Policies related to smart cities Smart cities are potentially a very large marketfor leading companies. The positioning of US industry in the area is strong and need to beanalyzed and compared with a European Community approach. US cities are quite differentfrom European cities due to historical origins and social priorities. For this reason US policiesmay not be adopted without a critical analysis involving also the impact on local industry. Some



industrial policy points have already been made in the previous sections; here we repeat the onesthat have specific impact on industry.

• Regulations should be set to favor market openness and competitiveness of the Europeanindustry without preventing players from other economic ecosystems to play in the Euro-pean market.

• Pre-competitive research and development programs should be established to form a solidbasis for future product and service offerings.

• Link industry with the scientific network to make sure that the industrial framework isaware of potentially destructive technologies and ready to leverage them.

• Encourage integration companies to look at new technologies and young companies forpotential adoption and acquisition.

• Leverage research with incentive programs aimed at a rapid deployment and adjustmentafter testing.

• Make sure that the strategies of the US companies are well understood and that Europeanindustrial policies are effective in countering the US approach. In particular, launch in-dustrial policy programs to develop approaches that are independent or marginalize thedominant position of US companies in Internet and software related services.

3.6 Cross domain analysis

This section provides findings from an assessment across the domain SWOT analyses. Theintention has been to identify patterns which are common across the domains, in particular withrespect to commonly identified strategies. The commonality aspect by definition means thathighlighted strategies that are mentioned only in one domain (such as "hydropower storage inScandinavia" for Smart grids) are excluded.

During the SWOT analyses and analysis of commonality we made a number of observations,as follows:

• the SWOT factors and strategies encompass a number of perspectives including

– technological and scientific aspects, for example referring to engineering methods toensure safety and security.

– market aspects, for example referring to business strategies.



– societal aspects, for example referring to education, impact on sitizens and legisla-tion.

– "program" aspects, referring to policies or mechanisms for how to fund research andinnovation.

• Market and business aspects were only indirectly covered by the respective SWOTs.

• While we identified several strategies that were common across several domains, we alsoidentified considerations and strategies that we thought might have been missed, i.e. theywere not identified in more than one domain. Such candidate strategies will be treated inSection 5.

Given the importance of technology shifts in the market, we decided to develop a sepa-rate SWOT analysis for market aspects. The resulting identified common strategies have beengrouped into: (I) Technological and scientific aspects; (II) Societal and cross-cutting aspects,(III) “Program” aspects, and finally, (VI) Market aspects.

Several common strategies relate to more than one of these perspectives; for example, safetyand security relates to technology but also to regulations, standards and public perception ofrisks. In some cases, therefore, the same topic is brought up more than once but emphasizingdifferent perspectives. The grouping is done to facilitate the presentation.

Before proceeding to an overview using this structure, we first - for the sake of overview -provide the complete set of common strategies identified across the domain SWOT analyses.

• Quality design and trustworthy services and platforms for intelligent, adaptive andautonomous CPS.

• Human-machine interaction, that is increasingly important.

• Interoperability and corresponding standards, referring to interoperability across theengineering life-cycle, and within - and across domains.

• Research and innovation leveraging CPS to deal with societal challenges, includingsustainability and an aging population.

• Education and training, considering the growing scope of desired skills and knowledge,encompassing not only engineering but also a broader span of stakeholders including end-users.


• Risk taking for innovation and promoting innovation, in order to stimulate innovationin Europe.





• Program aspects, emphasizing the need for incentivizing cross domain and disciplinefertilization, and addressing a broader set of stakeholders.

The review of the common strategies is kept short, and pointers are provided to the relevantdomains and previous CyPhERS deliverables where corresponding factors and strategies wereidentified.

3.6.1 Common SWOT factors and strategies: Technology and science

The technology and science area is used to group the first three of the identified common strate-gies, together with safety and security:

• Quality design and trustworthy services.

• Human-machine interaction.

• Interoperability and corresponding standards.

• Safety and security

Domain relevance: Relevant for all covered domains.Domains specifically highlighting this area in the corresponding SWOT analysis: Man-

ufacturing, Smart Grid, Healthcare, Smart Cities.Other CyPhERS deliverables specifically addressing this area: D4.2 and D2.2.Current approaches to CPS design and verification are already stretching the limits for cost-

efficient system development. A relevant example is that of autonomous cars involving advancedsensors, estimation and control components, being exposed to widely varying traffic conditions.New methodologies (methods and tools) are needed as enablers for cost-efficient developmentof such systems, paving the way for solid means for verification and certification. CPS designalso involves design-space exploration in terms of co-design, encompassing physical and cyberelements, enabling improved and novel designs. Products and services for the further mustmeet a range of requirements, which apart from core functionality and performance, includesustainability, safety and security concerns. Overall, there is a strong need and potential forimprovements of efficiency in CPS design, integration, verification and maintenance.

Given the emphasis on more advanced capabilities (adaptability, autonomy, etc.) and in-creased level of integration, the need to strengthen research in CPS design methodology iscommon across most CPS domains. Advances in CPS design methodology enables to grasp



new opportunities, while threatening European market shares if not undertaken. Several of theSWOT analysis suggested that Europe emphasizes

• CPS design methodology for the development of high quality and trustworthy servicesincluding for intelligent, adaptive and autonomous systems, providing desired end-to-endqualities.

• Platforms for CPS design that underpin design methodology, facilitating integration andestablishing desired system level properties.

• Multidisciplinary research, especially bringing disparate disciplines together, e.g. em-bedded systems AND internet/cloud disciplines together in projects, and, the previoustogether with human machine interaction specialists.

Another important emphasis is suggested on human-machine interaction, especially impor-tant with increasing levels of autonomy in products, services, as well as automation in engi-neering environments supporting their development and life-cycle management. Humans - inthe loop - as developers, operators, users, maintainers, etc. have to be considered in the designof the technical systems. It is thus important that competence in human aspects is included inresearch efforts.

Interoperability is directly or indirectly highlighted as a key topic by all SWOT analyses.This is natural given the increasing connectivity among components and systems, as a strong(and possibly inevitable) CPS evolution. Interoperability may take place within or across do-mains (see further Section 4.1). Making systems inter-operable is not only a technical endeavor,and it is important that technical solutions are considered in conjunction with for example busi-ness drivers and regulations to make sure that "standards" are developed at the right level. Europehas an opportunity to take the lead in interoperability efforts, paving the way for novel CPS ap-plications, and facilitating market expansion. It is thus suggested that Europe proactively takeslead in interoperability efforts.

Safety and security concerns are brought together within CPS (see further Section 4), andmoreover influence each-other. These concerns require a holistic perspective, from the systemand its context, down to the details of embedded software and hardware.

CyPhERS deliverable D4.2 in detail further elaborates and provides recommendations withregards to important aspects for CPS design.

3.6.2 Common SWOT factors and strategies: Societal and cross-cuttingaspects

The societal and cross-cutting aspects are used to group the following six identified commonstrategies, namely



• Research and innovation leveraging CPS to deal with societal challenges including sus-tainability and an aging population.

• Education and training considering the growing scope of desired skills and knowledge,encompassing not only engineering but also a broader span of stakeholders including end-users.


• Risk taking for innovation and promoting innovation, in order to stimulate innovation inEurope.



Domain relevance: Relevant for all covered domains.Domains specifically highlighting this area in the corresponding SWOT analysis: All

domains.Other CyPhERS deliverables addressing this area: D2.2, D3.2, D5.1 (and D4.2 indi-

rectly).Several SWOT analysis highlighted societal challenges where CPS provides technology that

promises to play an important role in providing solutions to sustainability, an aging popula-tion, e.g. in terms of outpatient services (home care, independence), and for smart cities. Thecorresponding strategy is to support research and innovation, including demonstrators and eval-uations, where CPS and domain experts are stimulated to collaborate. This strategy should berelevant for other domains as well, including transportation.

All SWOT analysis further emphasized education and training. The world is facing a tech-nical paradigm shift (regardless whether we use the term CPS, IoT, or Industrie4.0 - see furtherSection 4). This shift implies that the amount of knowledge and skills required for product andservice engineering is increasing along with the needs to continuously update your knowledgedue to the evolving technology and society. Engineers are already working in project based(and often international) teams, implying that communication and collaboration skills are in-creasingly important, and that cross-discipline and contextual understanding also becomes moreand more important. Excellence in education and a skilled work force will be of paramountimportance for grasping CPS opportunities. The strategies to reach there include the following(see [GT14]):

• Teaching has a low status in universities in Europe, and also in high schools and proceed-ing schools. Initiatives to improve the status of teaching and its management are urgently



needed; this is particularly valid for CPS but it is our understanding that this topic is partof a larger concern valid not only for CPS.

• Efforts should be stimulated and initiated to revise and improve programs, courses andtraining, considering the balancing required in educating CPS engineers, e.g. depth vs.breadth, theory vs. practice, and "profile positioning" of T shaped engineers5.

• Engineering programs need to provide engineers that are (i) ready to engineer, (ii) pro-vided with long lasting knowledge and with new knowledge (for industry), and, (iii) theability to learn. Universities should be stimulated and encouraged to take up best practicessuch as CDIO to reach these goals, see e.g. [GT14].

• Incentives should be provided to stimulate academia and industrial collaboration in educa-tion, combining best practices and addressing “non-academic" but nevertheless importantskills in industry (examples include configuration management and software build envi-ronments).

• Initiatives to develop and promote educational platforms should be supported. Open labsand maker spaces should be promoted.

• Special efforts are needed to promote CPS training for practicing engineers. For example,engineers and managers in a traditional mechanical engineering industry may not be welltrained in cyber/embedded parts of CPS. Likewise, embedded systems engineers may notbe skilled in Internet technologies, and vice versa.

Several SWOT analysis further highlighted regulations and regulatory frameworks, with theneeds to evolve standards that may be preventing or even blocking innovation. and needs toharmonize regulations across member states. Overall such needs were identified for the Smartgrids, Transportation systems, Healthcare and Smart cities. A corresponding strategy is to sup-port detailed investigations (e.g. as support or coordination actions) to investigate deficienciesand desired evolution of regulations. Such investigations should be carried out by teams knowl-edgeable in CPS technology, regulations and market aspects to increase the chance of striking asuitable balances.

Several SWOT analysis brought up the need to stimulate innovation in CPS, and also topromote the culture of risk taking. Corresponding strategies include to establish close linksbetween market needs, research activities and innovation. Following the successful model of

5The concept of T-shaped persons is a metaphor referring to a combination of skills, where the vertical bar of theT represents depth of knowledge and skills in a particular area, and where the horizontal bar refers to cross-disciplinary collaboration skills, implying communication and collaboration skills as well as perspective beyondthe depth of the vertical specialization. Traditional engineering education has emphasized the vertical specializa-tion [Tsh91, GT14]



the Silicon Valley based IDEO company, research and innovation activities should include ex-pertise encompassing the understanding of humans (anthropology, sociology), engineering andbusiness. These links could be established by supporting experiments and development proof ofconcepts, and through learning networks. Risk taking could be promoted for example throughcompetitions, taxation and other incentive schemes including EU projects. Research and inno-vation schemes should also stimulate the development of and research into new business modelsincluding those using e.g. social manufacturing and using "crowd sourcing" engaging a wideraudience for innovation. Bottlenecks in the innovation system should be further investigated,including domains as well as progression along the TRL levels (e.g. where access to fundingmay be limited) - see further the "Program" area.

Safety and security are emphasized by most domains, as very important when dealing withnew risks. From the societal point of view it is important that the opinions of the general publicand end-user stakeholders are considered in developing technological solutions, i.e. that solu-tions not only develop bottom up (from technology) but are also driven by societal concerns.Corresponding strategies are to recommend that Safety, security and privacy should be includedin all (larger scale) European research and deployment programs. Specific programs aimed atsafety, security and privacy analysis should be encouraged. The development of clearly articu-lated set of regulations for the safe and secure operation of CPS application domains, such assmart cities, should be supported.

CPS provides opportunities for big data analytics. This, however, requires that data can beeasily accessed, implying needs for well defined open data access and related procedures, whereconcerns related to interoperability, ownership, privacy, etc. have been addressed. A separateinvestigation should be launched to investigate key areas for developing and promoting opendata access including standards.

3.6.3 Common SWOT factors and strategies: Programs

The "Programs" aspect is used to group the last identified common strategy.Domain relevance: Relevant for all covered domains.Domains specifically highlighting this area in the corresponding SWOT analysis: Man-

ufacturing, Smart grid, Healthcare and Smart cities.Other CyPhERS deliverables addressing this area: Touched upon in D3.2 and D4.2.The first nine strategies (from CPS quality design to Open data) all refer to specific priorities

that are relevant to consider for strategic initiatives, including funding programs. Apart fromthese topics, a number of strategies were identified that related to how research and innovationprograms were formed; these will now be discussed.

As already highlighted regarding Technology and science, and Societal strategies, there is a



need to develop funding schemes that to a greater extent stimulate the creation of truly multidis-ciplinary consortia, breaking the gaps between traditional application disciplines (e.g. embeddedand complex systems vs. internet and big data), as well as between application domains. Corre-sponding strategies include to support networks of excellence among academic disciplines andindustry, and to stimulate and support learning networks among industrial domains (all sharemany CPS related challenges and can benefit by learning from each-other).

As noted in many of the domain SWOT analysis, there is also a need to provide a broaderperspective to the types of stakeholders that engage in networking and collaborative efforts suchas research and innovation projects. The extended set of stakeholders for example includesregulatory and administrative representatives, that constitute important stakeholders in a CPSeco-system.

Funding programs need to assure that CPS receives a balanced support through the progres-sion along the TRL scales, so as to avoid bottlenecks in the European innovation system.

Moreover, needs for further investigation were identified, e.g. in terms of support and coor-dination actions. Identified areas touched upon in the previous sections include

• Stimulating innovation through relevant program measures (as highlighted for the societalaspects).

• Regulatory frameworks recommendations and evolution to leverage CPS.

• Bottlenecks in the innovation system and corresponding counter-measures.

• Open data access including standards to leverage big data analytics.

3.6.4 Common SWOT factors and strategies: Market

As well as the detailed issues that affect (the SWOT for) each domain, there are broad effects ofthe European competitive position that cross individual markets. For this reason, a complemen-tary SWOT analysis is made considering market perspectives. The analysis builds on CyPhERSdeliverables D3.1 and D3.2. We consider the broad areas of products and services separately,as the situation, including the strategies for addressing the threats, are rather different. Howeverthe strengths, weaknesses, opportunities and threats can be considered generically and will betreated first in the following.

SWOT

Strengths. In many markets, e.g. aerospace, automotive, healthcare, railway signalling, Europehas world-class OEMs and tier 1 suppliers who make and integrate the classical embedded sys-



tems which are evolving to become CPS. In some market sectors, the strengths go deeper intothe supply chain or ecosystem.

Weaknesses. Europe has no major software (services) companies, such as Google or Mi-crosoft, and has lost its foothold in the telecommunications market, which is now dominated byAsia, e.g. Samsung, and the USA, e.g. Apple.

Opportunities. There are opportunities in many sectors for inter-operability standards, e.g.to enable road vehicles to communicate with roadside infrastructure. There are also possibilitiesfor inter-operability across sectors, for example for electric vehicles to interact with smart gridsto optimise the cost of charging. In many cases it may be possible to move from the delivery ofproducts to the delivery of services, enabled through the capabilities of CPS, e.g. an autonomouselectric car services, rather than vehicle ownership. A further possibility is to make it attractiveto house on-line services (e.g. cloud-based) in Europe, because of more appropriate policies andstandards for protection of data (security and privacy) than can be found in other jurisdictions,e.g. the USA. These generic opportunities “work” because they create new markets, make Eu-ropean markets more attractive than others, or mean that Europe is driving innovation, givingEurope an edge in marketing products internationally.

Threats. The major players in the software (services) and telecommunications markets havethe financial strength, and the strategic vision, to buy innovative companies (not just SMEs).This will enable them to both strengthen and broaden their position, e.g. by buying specialistmanufacturers or software (service) providers which enable them to move into the domain of,say, tier 1 suppliers. There is also a more general threat of “disintermediation” where the OEMs(and tier 1s) become “downgraded” to just providing mechanical parts to the dominant elec-tronics and software (CPS) suppliers who become the new OEMs, as it is the CPS that enableproduct differentiation and enable market penetration (or even dominance).

Products and Services

Products. Products refer both to small-scale CPS elements supplied into the broader market,e.g. smart meters, or full-scale products that rely heavily on CPS for their capability, e.g. cars.Although there is a cost in shipping, there is no intrinsic reason why products sold in Europeneed to be manufactured in Europe, nor why the IP and value generation in the supply chainneeds to be in Europe. The threat is twofold. First, to dilute the strength of the OEMs, andother major players in the ecosystem. Second, to lose completely the smaller, less financiallyindependent, companies in the broader ecosystem. Considering the size of the sectors whereEurope is currently strong, the economic threat runs into (at least) 10sBn Euro, and the threatto employment amounts to millions of jobs (directly and indirectly). There are relatively fewstrategies to address these threats, although there are at least three that offer some “protection”:



• Integration – providing high-value-added capabilities by effective integration of the CPS,in a way that exploits the product knowledge at the system or system of systems (SoS)level and which is available to OEMs and tier 1s, not to general CPS or software (service)suppliers;

• Commoditisation – treatment of the software (service) suppliers’ offerings as “commodi-ties” e.g. exploiting the cloud and open source software, to reduce the leverage that wouldotherwise be obtained by these competitors.

• Services – there is a possibility to move into services, e.g. providing urban transport asa service using fleets of autonomous (electric) cars, thus the strategies considered underservices could also be used here. There is then a question of who runs such a service– be it existing service suppliers such as Sixt or the car manufacturers in the case ofurban transport – but the move to a service model provides a partial counter to the threat,regardless. Perhaps the greatest “defence” against this threat is agility on the part of theOEMs and tier 1 suppliers to identify and exploit opportunities, matching the pace ofinnovation more typically the reserve of the software (service) suppliers. There is perhapslittle specific that the Commission can do in helping product suppliers to prosper giventhe threats outlined above. However it can help in general by supporting innovation andeducation and training initiatives that can keep Europe at the forefront in critical areas ofCPS design, development and application.

Services. Services refer to provision of value through use of CPS, e.g. Smart energy orassisted living. Unlike products, these services are necessarily located in Europe, as that iswhere the energy is needed, or where the citizens who need assistance live, and so on. However,these services might be based on CPS products developed outside Europe (and with the financialreturn being outside Europe). It is less likely that the major non-European companies will buythe service providers or disintermediate them, as the service providers are too far from “corebusiness” of the software (service) companies. Thus the threat here is more in terms of erosion ofthe supply ecosystem, rather than a direct threat to the service supply/value delivery. However, insome areas, it might be that services that are very largely IT-based, e.g. production optimisation,could be lost, as the (processing for the) service does not need to be provided in Europe.



4 CPS characterization and relatedconcepts

The previous chapter presented a SWOT analysis for CPS. In this chapter we present a refinedcharacterization of CPS (based on the work in CyPhERS deliverable D2.2) and provide examplesillustrating the use of these characteristics. We then turn to CPS-related terms such as the Internetof Things, embedded systems and systems of systems. During the CyPhERS project we havenoted quite some confusion regarding terminology. Characterization can help to counter someof this confusion by providing more insights compared to just a high-level labeling, and helpin assessing specific CPS contexts and situations. One example of such a situation would be toassess to what extent the just performed SWOT analysis would be relevant for example for IoTor Big Data. This chapter is naturally followed by the discussion chapter of this deliverable.

4.1 Characterization

The term Cyber-Physical Systems (CPS) was coined in the US in 2006, with the realization thatthe interaction between interconnected computing systems and the physical world could not beignored, nor considered of secondary importance, [Ref: D2.1]. CPS can be characterized as athematic subject (as opposed to a disciplinary topic). Multidisciplinary areas, like mechatronics,robotics and CPS, typically start as themes, and may then eventually evolve into disciplinaryareas which have evolved to a stage where they feature their own conferences, chairs, curricu-lum, etc. [Mec01]). It is interesting to note that Mechatronics was adopted and promoted fromelectrical or mechanical engineering disciplines. CPS has initially been driven from computerscience and electrical engineering directions. It is still to early to tell whether CPS will be ableto evolve from a thematic to a disciplinary area.

The CyPhERS project has in previous deliverables listed a number of CPS definitions (seee.g. D2.1 and D2.2), for example the following early definition from 2007, which nicely illus-trates both CPS in the small, as well as in the large: "CPS use computations and communicationdeeply embedded in and interacting with physical processes to add new capabilities to physicalsystems. These CPS range from minuscule (pace makers) to large-scale (the national power-grid)."



While the above (and many other) definitions make sense, they also leave a lot open sincethey are very general. Industrial representatives rightfully point out that CPS, according tothe above definition, are indeed not new but already existing and manifested by for exampleexisting industrial distributed control systems. Indeed, the case can be made that it is becomingmore and more difficult to identify systems which are not Cyber-Physical, given the increasingdigitalization and penetration of embedded systems. We are after a characterization that can beuseful in identifying different types of CPS.

The "dimensions" as introduced in D2.2 encompassed eight aspects. Upon reviewing these,we have added one more dimension ("degree of integration"), divided one of the original dimen-sions into two, and also slightly refined the interpretation of some of the dimensions - leaving10 dimensions. In the subsequent discussion we also briefly treat a number of additional typesof characteristics that are less specific to CPS but which may still be highly relevant when de-scribing and comparing systems.

Most of the characteristics can be seen to provide a (qualitative) scale, for characterizingsystems. The dimensions can however also be seen as prompts for developing or extending asystem, in which particular choices along the scales will have implications for many relevantsystem properties such as cost, reliability and performance.

• Physical vs. Embedded vs IT dominated: This characteristic emphasizes - at the oneend - traditional CPS as embedded computers integrated into physical systems. A mod-ern automotive engine provides a prime example, where the overall functionality - that ofproviding propulsion, is realized through a choice of technologies and their integration.Different choices on the physical side include the use of e.g. an electrical engine or a com-bustion engine, and support systems driven mechanically or electrically. The embeddedcontrol system performs a multitude of functionalities closely integrated with the physicalparts, and acting as a logical gateway to the rest the car. The design of such a systemclearly involves co-design of physical and embedded system parts. The embedded vs. ITdominated instead puts the finger on where computations are performed. In a modernaircraft engine, some of the computations may be performed remotely (e.g. the case ofdiagnostics as is the case for Rolls Royce jet engines). Another typical example is thatof vehicle telematics for trucks referring to logistics services and preventive maintenance.In most cases a CPS will include some degree of embedded and IT, thus bridging the gapbetween physical products and IT. In designing a CPS, an important question to ask ishow functionalities and services across the life-cycle are partitioned over the embeddedand IT systems. The physical aspects and emphasis in CPS will also be more importantfor innovation and business in some domains, where, e.g. existing sensing and mechanicalcomponents may not be enough. New robotics applications, e.g. for home assistance and



elderly car provide typical examples of this, where novel manipulators including graspingdevices ("hands") will play an important role for innovations.

• Single Domain vs Cross Domain: By domain we refer to application domains. Theadvances in connectivity make it possible to create new applications that span more thanone traditional application domain; consider for example assisted medical care devicesintegrated into a smart house. Cross-domain applications open up new business opportu-nities but also require that "gaps and barriers" across the domains, referring both to tech-nical (e.g. communication protocols) and non-technical issues (business aspects, liability,regulations) are dealt with.

• Open vs Closed: Traditionally, embedded systems have been closed systems, but they arenow increasingly becoming connected to external systems (cmp. for instance with a smartmeter) for enabling further services such as performance monitoring and remote upgrades.Open systems may encompass capabilities for dynamic (re-) configuration. Openness isgenerally driven by the ability to provide new services and business opportunities. Open-ness may not necessarily refer to openness for everyone. Security risks become moreemphasized with an increasing degree of openness, and especially with internet connec-tivity.

• Autonomy: Autonomy can be considered as the ability to operate without constant humansupervision/intervention. Automation has traditionally been introduced to relieve humansof dirty, dull, and dangerous operations; see [TJN08]. For various application domains,different levels of autonomy can be seen, as exemplified by the autonomy levels identifiedby NHSTA [Adm13]. At the highest level, no driver interaction is required nor expected.At lower levels, the driver always has to be available. An increasing degree of autonomytypically implies a more complex design, stressing verification and validation, posing im-portant design trade-offs. An autonomous system can be more or less adaptive, referringto how it can cope with varying contexts. This is why we have adaptability as a separatedimension.

• Adaptability. A typical CPS will face varying contexts, in terms of for example environ-mental conditions, system load and failures. Making a CPS adaptable implies that it hassome ability to cope with such varying contexts within given bounds, potentially provid-ing benefits in terms of reduced maintenance costs and increased availability. Enhancedadaptability will on the other hand increase the system complexity. Adaptability is relatedto dynamic reconfigurability as well as plug-and-play and self-x capabilities, for examplereferring to self-healing systems, which are able to detect errors or other anomalies andthen to resolve (some of) them.



• Distributed vs. centralized control: The increasing connectivity implies that most CPSalready constitute distributed computer systems (or are likely to become so), implying thatcontrol will be more or less decentralized. Control in this context refers to the decisionmaking within the distributed system. A CPS will thus as a whole, or in its various parts,be characterized by the degree to which control is centralized/decentralized. We note that"controllers" may well include both humans as well as computerized control.

• Governance. We use the term governance to refer to where responsibility lies for thesafe, efficient, secure, etc. operation of the system. In most cases the responsibility isdistributed; consider for example industrial robots used in manufacturing where the robotprovider, production line integrator, and operator are likely to have some share of respon-sibility. Industrial domains may have responsibilities that are well defined and regulated,such as for aircraft, or more or less completely left open (as is the case for cars today,where law suits will determine consequences).

• Single jurisdiction vs cross-jurisdiction: This aspect refers to applicable standards andlegislation. Generally, the more open and cross-domain a CPS becomes, the more com-plicated jurisdiction becomes. It can be noted that many existing CPS already face thischallenge, for example a truck, where “body builders” will add features such as cranes andpumps to a truck platform, implying that a number of standards and laws are applicable.The aspect has a number of implications referring to responsibilities, liability and businessmodels

• Human In/Outside the Loop: Traditional CPS come in two types; those that are more orless act independently of humans, but may be triggered by human inputs; for example astability controller in a car, and those with a much closer interaction with humans, includ-ing shared control. An example of the latter includes gear control in a car where the driverin an automated gearing system can choose to relay on the computer control or overrideit. In shared control, it becomes crucial to clarify who is in control at any point in timeand making sure that unintended control does not take place.

• Degree of integration. Connectivity paves the way for various types of integration - referto Figure 4.1. A CPS, in a certain context and application domain, will have a certaindegree of horizontal and vertical integration. Horizontal integration may refer to integrat-ing services and functions of similar type (at the same level of abstraction), for examplereferring to integration of factory floor sensor/actuator devices. Initial integrations of thistype were made already in the 1970s in the manufacturing domain. Horizontal integrationsometimes more specifically refers to integration across value chains [KWH13]. Verti-cal integration refers to integration across system hierarchies, as for example integrating



energy meters and heating/ventilation devices, with building control up to entire housesin smart buildings. A further aspect of integration refers end-to-end engineering, fromproduct inception over production to product use, maintenance and retirement. Extendedlevels of integration are likely to cut across domains and jurisdictions, thus involving sev-eral non-technical challenges.

Figure 4.1: Degrees of integration (source: German Agenda CPS [ADD REFERENCE])

Additional characteristics that will be relevant for CPS stakeholders include for exampleseries size, market profile (e.g. high-end/low-end in particular domains, mass-market), andproperties defined for Systems of Systems such as evolutionary Development and Geograph-ical Distribution of Elements, see [Tho14].

Table 4.1 provides a number of examples for the 10 dimensions. In the following we makesome observations both about the examples, and about some of the rather less obvious charac-teristics. First, there are similarities between several of the examples, e.g. Automated Highwaysand UAS in Controlled Airspace are the same (reading from the left) up to Governance, butthen have some differences, at least partly due to the difference between the National natureof roads, and the international nature of airspace. Other examples have strong similarities, e.g.Logistics and Distributed Manufacturing. It is quite likely that, if more examples were done,it would become apparent that there were groups of systems with fairly similar “patterns” ofcharacteristics. This might give some understanding of how to design generic mechanisms, how



to demonstrate safety and security, etc. This could potentially be useful in considering the de-velopment of CPS infrastructure, and in working out how best to assure the dependability ofCPS. Second, there are few examples that are “IT dominant”. However there are areas wherea significant amount of data needs to be processed (the so-called “big data”), e.g. maintenancesupport for aircraft engines, or environmental monitoring. Thus it seems that the IT vs Embed-ded distinction is valid, although CPS will, more or less by definition, have elements of both.Third, Governance is quite subtle. It is essentially concerned with where responsibility lies forthe safe, efficient, secure, etc. operation of the system. In many cases this is distributed, e.g. fordistributed manufacturing, the owners/operators of each printer have responsibility, but there isno overall management responsibility. For systems such as automated highways, the individualvehicle drivers do have responsibilities, as do the designers and operators of the control system;the governance responsibility lies centrally, as this is where the rules are set which define the“safe behaviour” of the vehicles. In some cases, e.g. Smart Cities, Control and Governance arestrongly aligned, but this need not necessarily be the case. Fourth, degree of integration is dis-tinguished from "cross-domain“ since integration across domains could take several forms, fromlimited information exchange all the way to close coordination. We further note that CPS perdefinition always encompasses integration which is cross-discipline and cross-technology. Inall practical cases, a CPS will also involve and relate to cross-organizational units and multipleorganizations.

Having introduced and exemplified the characteristics, we now turn to CPS vs. related con-cepts.

4.2 Relating CPS to Internet of Things, Systems of Systems,embedded systems, mechatronics, and Big data

The increasing connectivity and related opportunities have given rise to multiple terms that pro-vide different perspectives to the enabling technology and the connected society. In this sectionwe briefly contrast CPS with the Internet of Things, Embedded systems, Mechatronics, Systemsof Systems, and Big Data. The relations between the concepts are visualized in Figure 4.2. Weremark that the figure is a visualization where actual sizes of the sets should not be taken as rep-resentative but purely to illustrate relations between the concepts. The various concepts reflectdifferent and partly overlapping perspectives!

As illustrated in Figure 4.2, CPS is a broad concept which however does not encompassall of the others. We do however see an overall trend that the overlap between all the coveredconcepts is increasing. This trend follows from the increasing penetration of embedded systems,the increasing connectivity which drives more and more embedded systems and CPS to become



Big Data

CPS

CPS in the small

Embeddedsystems

IoTCPSoS SoS

CPS in the large

Mechatronics

Figure 4.2: Relating CPS to IoT, Embedded systems Big data and SoS

connected to the Internet (thus in a sense becoming internet of things and services), and wherebig data is becoming more and more relevant to apply to CPS. Large scale CPS are defactoalready SoS, and SoS cannot avoid the penetration of embedded and IT systems.

The following are two main takeaways from this exercise:

• All the concepts constitute relevant fields of technologies which contribute to the complex,cross-technology nature of CPS.

• CPS must draw on all results form these technology domains, but must specifically addressthe cross-domain/discipline-/technology aspects and find ways to intelligently combinetheir solutions to deal with this new form of complexity obtained by their combination.

In the following we will briefly elaborate each concept while relating to Figure 4.2 andproviding examples. We do not exhaustively cover all the sets mirred in the Figure but try toexplain our qualitative reasoning.

• CPS - according to previous definition and characteristics. CPS may or may not includethe internet. CPS has a stronger emphasis on physical and networking aspects compared



to embedded systems, and thus encompasses a broader set of aspects compared to em-bedded systems. The term mechatronics resonates very well with CPS! However, whilemechatronics - per definition - has an emphasis on electro-mechancial systems, CPS isnot limited such types of physical systems. Thus, again, CPS encompasses a broader setof aspects compared to mechatronics. Example: Intensive care ventilator without internetconnection but with local network connection to intensive care room. Large scale CPS aretypically SoS.

• Embedded systems - referring to software and electronics part of a CPS and/or IoT sys-tem/product. CPS adds a stronger focus on and inclusion of physical parts, and IoT addsinternet.

• Mechatronics - typically used to refer a synergistic combination of mechanical and elec-trical engineering, computer science, including control systems [JWH01], Mechatronicswas coined some 40 years ago of Japan, and has evolved to a stage where engineeringprograms, scientific journals and conferences are devoted to the topic. A core topic is thatof co-design of mechanical and control systems.

• Internet of Things (IoT) - emphasizes sensing of the physical world and internet connec-tivity (the term was coined in 1999 by Kevin Ashton [Ash09]. IoT moreover emphasizesuniquely identifiable things to provide data over internet with limited or no human inter-action. IoT can be seen as a bottom-up enabling technology, which can be used to createa special class of CPS, i.e. systems including the internet. Conceptually, "an internetof things" will be part of one or more CPS; however when referrring to the underlyingtechnology, we see this as different compared to a system - motivating to have a part ofIoT which is disjoint from CPS. Some visions of the IoT go beyond basic communicationand consider the ability to link “cloud” representations of the real things with additionalinformation (such as location, status, and business related data) and services. As seenfrom Figure 4.2, we consider all IoT systems to be CPS, while there are Cyber-PhysicalSystems that need not use the internet.

• Big data - referring to analytics using data. CPS and IoT enable an enormous amount ofdata related to physical systems to be made available for analysis. Big data is relevant fornon technical systems and IT systems, but becomes even more interesting when applied inthe context of CPS due to the implications of physicality in terms of capabilities, technicalrisks and costs.

• Systems of Systems (SoS) - as a term focuses on evolutionary large scale systems and co-ordination among involved systems, which may or may not include CPS (in practice, most



SoS will be CPS!). The term stems from the defense domain but is now increasingly usedin and across domains such as automotive, rail, aerospace, maritime and logistics. We canconclude that must SoS thus constitute a special class of CPS. Research in, and agendasfor SoS are thus relevant for CPS. Characterization efforts describe SoS as systems thatexhibit the following features (see e.g. [Tho14]):

– Large, often spatially distributed physical systems with complex dynamics

– Distributed control, supervision and management

– Partial autonomy of the subsystems

– Dynamic reconfiguration of the overall system on different time scales

– Continuous evolution of the overall system during its operation

– Possibility of emerging behaviours.

• CPS and IoT - example: Smart house with internet connection, enabling remote status andevent display as well as remote control.

• CPS and SoS - example: Vehicle platooning system with car2car wireless communicationand with GPS for positioning. A fleet management system using e.g. 4G is anotherexample.

• CPS, IoT, and SoS – example: Smart grid system - encompassing the monitoring andcontrol of a single device up to the trading of production and consumption volumes ofcomplete regions at the spot market.

• Big data with CPS (and IoT) - example: Big data applied to collected physical data, pos-sibly also in connection with decisional support. An example application is of that oftraffic modeling and monitoring using cellular phones and GPS as sensors, also distribut-ing information back to the phones in real time; see for example the Mobile Milleniumproject1.

1http://traffic.berkeley.edu/



Syst

emC

lass

Phys

ical

/E

mbe

dded

/IT

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le/

Cro

ssD

o-m

ain

Ope

n/C

lose

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omy

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uted

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trol

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ated

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hway

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ix,

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ngle

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ain

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ansp

ort)

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rthe

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em

Yes

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iver

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m

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uted

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ithso

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rthe

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em

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the

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cont

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ibut

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istic

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ial

ifth

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man

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tive

tech

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es/

3Dpr

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ers

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Cro

ss-d

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new

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tera

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s-po

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gy,

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ist

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men

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Rob

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cal

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and

embe

dded

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(de-

cisi

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Table 4.1: Characterization of example CPS systems – Part 1



Syst

emC

lass

Gov

erna

nce

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sdic

tion

Ada

ptab

ility

Hum

anIn

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utof

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ited,

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me

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ition

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hin

and

onth

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and

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ifica

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grat

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toga

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axim

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nefit

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istic

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een

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tiple

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ice

prov

ider

s

Mul

ti-na

tiona

lL

imite

d,as

pack

ages

will

have

free

dom

ofch

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tfe

wop

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ns

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ofth

elo

op,

ex-

cept

for

send

ing

and

rece

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gpa

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Sign

ifica

ntin

te-

grat

ion

toga

inm

axim

umbe

nefit

Dis

trib

uted

man

ufac

-tu

ring

,us

ing

addi

tive

tech

niqu

es/

3Dpr

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ers

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trib

uted

but

may

bequ

itelim

ited,

e.g.

just

toqu

ality

cont

rol

Syst

emm

aybe

mul

ti-na

tiona

lbu

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cal

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risd

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nlik

ely

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tant

ial

atea

ch3D

prin

ter

but

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all

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ofth

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cept

for

send

ing

and

rece

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gw

ork

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sein

tegr

atio

nas

each

prin

ter

will

op-

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eau

tono

mou

sly

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tCity

Dis

trib

uted

,pe

rhap

sw

ithov

eral

lco

ntro

lby

the

city

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le(l

ocal

orna

-tio

nal)

,but

ther

em

aybe

som

ese

para

teau

-th

oriti

es,

e.g.

traf

fic,

ener

gy

Subs

tant

ial,

toad

-dr

ess

leve

lofv

isito

rs,

chan

gein

wea

ther

,em

erge

ncie

s,et

c.

Inth

elo

opin

indi

vid-

ual

syst

ems,

and

inan

yco

ntro

lsys

tem

s

Sign

ifica

ntin

te-

grat

ion

toga

inm

axim

umbe

nefit

Rob

otic

s(i

na

broa

dse

nse)

Dep

ends

onap

plic

a-tio

n,bu

tlik

ely

tobe

dist

ribu

ted

New

inte

rnat

iona

lst

anda

rds

for

safe

hum

an-r

obot

colla

bo-

ratio

n.

Subs

tant

ial,

toca

ter

for

vari

abili

tyof

us-

age

cond

ition

s.

Syst

ems

with

hum

ans

in,

and

out,

ofth

elo

op,

with

age

nera

ltr

end

tow

ards

mor

eof

hum

anin

the

loop

.

Incr

ease

din

tegr

atio

nw

ithth

ero

bot

envi

-ro

nmen

t(o

ther

CPS

syst

emsa

ndhu

man

s).

Table 4.2: Characterization of example CPS systems – Part 2



5 Discussion

This section has the purpose to reflect on the performed analyses (SWOT and cross-domainincluding market) with the overall objective to identify avenues for further work.

In the following we treat,

• the work approach, domain delimitation and the domain SWOT analyses,

• the cross-domain analysis and concerns for further analysis,

• the CPS characterization.

We then conclude by summarizing suggestions for further work.

5.1 Work approach, domain delimitation and the domainSWOT analyses

As part of the approach, we chose to delimit the SWOT analysis to five domains: Manufac-turing, Health, Smart grid, Transportation and Smart cities. A complementary SWOT analysisfor market aspects was also conducted. We jointly defined the SWOT analysis approach andthen divided the domains among CyPhERS team members. The division was naturally doneaccording to how we in previous deliverables divided domains among us. The SWOT analyseswere difficult to accomplish, because of the broad scope of CPS and “Europe”1 as subject to theanalysis. Each application domain chosen is also very large by itself.

Several interactions took place to exchange experiences and refine the approach. The find-ings were also anchored with existing surveys (see references per domain SWOT analysis)including the ARTEMIS roadmap. Interactions with external experts took place through theCyPhERS experts and through individual contacts by CyPhERS team members. Interactionsalso took place with the CPSoS - a "sister" project of CyPhERS, investigating CPS from the SoSpoint of view.

While the approach was continuously synchronized among the team members, the details ofthe approach (e.g. coverage, depth, style) varies slightly among the domains. Further refinement

1The heterogeneity of Europe, as already brought up in D5.1, implies that the internal factors identified do notnecessarily apply to the region as a whole.



of the domain analysis could thus be relevant. More important is however to further validate thefindings with other experts.

Another consideration for further work is to assess whether one or more other domainsshould be analyzed. If a domain with different characteristics is chosen, this would also representa form of validation, and it cannot be excluded that other domains may reveal new opportunitiesand threats, and thus strategies. Examples of tentative domains include consumer devices, wear-able computing ("smart clothes"), entertainment and retail. Also within the covered domains,more subdomains could be covered, e.g. biomedicine, prosthetics and neural interfaces.

5.2 Cross domain analysis - concerns for further analysis

The following lists a number of aspects which may contain the seed for "potential missing cross-domain strategies". These were identified through strategies identified in a single domain, inrelated work or as part of previous deliverables, notably D3.2.

• Human machine collaboration. This topic was highlighted in the manufacturing SWOTanalysis, but more indirectly covered by the other domains. Humans will interact withincreasingly capable CPS in a number of ways, both physically and logically. Physicalinteractions include for example the use of exoskeletons, haptic devices and home robotassistants. Logical interactions will refer to dialogs (in some fashion) and the importanceof establishing a shared understanding.

• Work organization. Work organization and design was raised by [KWH13] and in themanufacturing analysis. It is clear that CPS will have impact on the society as a whole andimpact they way in which CPS are developed, produced, maintained, recycled and retired.This will require changes in, and possibly new, work processes and ways of organizingwork, including new responsibilities.

• Liability for autonomous systems. Liability was highlighted by the transportation SWOTanalysis, and in D4.2. It is evident that liability is currently unclear, especially whenit comes to fully autonomous CPS, such as autonomous cars. Liability issues deservefurther investigation.

• Privacy. Privacy was touched upon by a few domain analysis (in particular Smart cities)but not raised to a greater extent. Privacy was also highlighted in D3.2. We believe itdeserves further attention.

• Cloud computing and Big data analytics. Both these topics were partly touched upon,and in some sense covered by "design", "security", "interoperability" and cross-discipline



collaboration. The topics were specifically highlighted in D3.2. We believe the topicsneed revisiting to refine the currently proposed strategies.

• Infrastructure. Infrastructural aspects were mentioned by several SWOT analysis, butreferring to different types of infrastructure, from broadband to electricity across nationalboundaries. Altogether the combined analysis was a bit inconclusive. It would be valuablewith a follow-up investigation to more clearly pin-point bottlenecks and strategies forinfrastructure efforts. Apart from bottlenecks one might argue that a high quality andperforming infrastructure will act as a driver for new applications (just like new highwaystend to improve the turn-over of regions).

• From products to services. This trend was touched upon in a few domains and specificallyhighlighted in D3.2. Whether this trend will require any further actions (apart from thosealready identified) is not fully clear, but we have come across cases where new licensingand IP schemes will be needed. It would thus be relevant to further investigate the needfor EU actions in this area.

5.3 CPS characterization

CPS is still a relatively new term and it is thus not surprising that are different interpretations.Given the nature of CPS and the technological paradigm shift it represents, it is also not surpris-ing that a number of terms - such as IoT and Big data - emphasizing different perspectives orvisions have been put forward.

In this deliverable we have attempted to elaborate a characterization of CPS, enabling todescribe different types of CPS. We have also elaborated the relation between CPS and relatedterms.

5.4 Suggestions for further work

Future work along the lines of this deliverable is needed (and planned as part of forthcomingdeliverables) in order to

• consolidate and further validate the SWOT analyses. In a refinement, it would be valuableif each domain analysis could evaluate tentative disruptive changes and prioritize amongthe recommendations (also relating to D3.2). Validity also relates to the following bullet.

• assess and cross-check that no main strategies were missed. A number of potential strate-gies for further investigation were identified in the previous subsection. Also the cross-domain analysis needs refinement if the domain SWOT analyses evolve, and should be



subject to validation by expert reviews. CPS is relevant for a multitude of existing andnew domains. It is worthwhile to consider if one or more domains should be subjectedto a SWOT analysis. In this case, the domains should be chosen for complementarity incharacteristics. This may reveal both new opportunities and threats, and thus strategies.

• further investigation to sharpen and refine (some of) the strategies. As discussed previ-ously, some of the strategies are at different levels in terms of addressing very specific orvery high level concerns. Moreover, some of the strategies also require elaboration froman intended direction to more concrete suggestions.

• prioritize among the identified strategies. The strategies encompass both domain specificas well as cross-domain aspects, and a rather large number of recommendations. The nextnatural step is to attempt prioritization among these. Prioritization can for example beassisted by assessing and considering enabling factors (that must be in place - such aseducation), and expected disruptiveness of CPS (compare with the assessment in D3.2).

The final recommendations may be divided into two parts, (i) high level recommendations,as well as (ii) more detailed recommendations for specific parts.



6 Conclusions

In this deliverable we have provided SWOT analyses for five CPS domains. We also assessedcommon aspects of these analyses and identified 10 common strategies. During theses analysesit became evident that an elaborated characterization of CPS was required. The CPS characteri-zation of CyPhERS deliverable D2.2 was therefore revisited and refined.

We further assessed the various analyses performed, discussing validation and coverage. Bycross-checking with previous CyPhERS deliverables and state of the art, a couple of candidatestrategies that deserve further investigation were identified.

Finally, avenues for further work were identified, as follows:

• consolidate and further validate the SWOT analyses.

• assess and cross-check that no main strategies were missed; candidates for further inves-tigation were identified in the discussion section of this deliverable.

• further investigation to sharpen and refine (some of) the strategies.

• prioritize among the identified strategies.

The technological shift represented by CPS clearly implies that the opportunities and threatsneed to be taken seriously. CPS will have impacts which can be considered to be evolutionary,transformative or disruptive, considering specific markets. The CPS technological shift has astrong impact not only on products, services, and processes but on society as a whole, thusrequiring a broad set of perspectives and stakeholders to engage, from policy makers, legislation,education, to research and industry.



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