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SYSTEX - Coordination action for enhancing the breakthrough

of intelligent textile systems (e-textiles and wearable Microsystems)

Grant Agreement Number: 224386 IST Priority - CA: SYSTEX ICT-2007.3.6: Micro/nanosystems

26 March 2012 (confidential) SYSTEX_VisionPaper_public_v0.1LR.doc 1/47

SYSTEX - Vision Paper Final public version

The present document is a vision paper prepared by Plastic Electronics Foundation in the framework of the SYSTEX project, funded by the 7th Framework Programme of the European Commission. This paper is mainly based on previous deliverables within the project, including a SYSTEX stakeholder survey, SWOT analysis and strategy workshop for smart textiles in healthcare lead market. Beyond that a study on selected markets was performed within the limits of this vision paper. The views expressed do not necessarily reflect those of the European Commission.

Contributors: Mahidhar Mohan Reddy Byluppala, PEF, Eindhoven

Frank van Abeelen, Philips Research, Eindhoven

Lina Rambausek, UGent, Ghent

Anna Smaniotto, UNIPI, Pisa

Ed van den Kieboom, PEF, Eindhoven For further information regarding SYSTEX, please contact [email protected].





Contents 1 Executive summary ...................................................................................................................... 4

2 Objectives ...................................................................................................................................... 8

3 Rationale ........................................................................................................................................ 9

4 Introduction to smart textiles ..................................................................................................... 10

4.1 Key market drivers ............................................................................................................. 13

4.2 Key market barriers ............................................................................................................ 13

4.3 Trends in the smart textiles sector ................................................................................... 14

4.4 Vertical markets in smart textiles ..................................................................................... 16

Sports & wellness ....................................................................................................................... 17

Interactive clothing ..................................................................................................................... 18

Medical healthcare ..................................................................................................................... 19

Protective Clothing ..................................................................................................................... 20

4.5 Why this vision paper? ...................................................................................................... 21

5 Stakeholder Analysis ................................................................................................................. 22

6 SWOT analysis of Smart Fabrics and Interactive Textiles ................................................... 25

6.1 Strengths ............................................................................................................................. 27

6.2 Weaknesses ........................................................................................................................ 29

6.3 Opportunities ....................................................................................................................... 32

6.4 Threats ................................................................................................................................. 34

7 Industry analysis ......................................................................................................................... 35

7.1 Major stakeholders in the Smart textiles industry .......................................................... 35

Leading names in the respective vertical markets ................................................................ 35

Research institutions ................................................................................................................. 36

Textile and machine component manufacturers ................................................................... 36

Funding agencies or venture capitalists ................................................................................. 36

End users/user organizations ................................................................................................... 37

7.2 Key factors for the success of European smart textiles sectors ................................. 37

7.3 Road blocks or challenges ................................................................................................ 38

8 Recommendations ..................................................................................................................... 41

8.1 Roadmap towards implementation .................................................................................. 42





List of figures

Figure 1: Breakdown of textile production into 3 sub-sectors by volume of fibre usage ......... 10

Figure 2: Smart textiles: Convergence of various industries ....................................................... 11

Figure 3: Overview of the complexity and various actors involved in the textile-clothing business (Source: ETP EURATEX for the future of textiles and clothing: a vision of 2020) .. 15

Figure 4: Market potential of smart textiles .................................................................................... 16

List of tables

Table 1: Applications/products in sports and wellness market (Deliverable 1.3.2, SYSTEX) 17

Table 2: Applications/products in interactive clothing market. (Deliverable 1.3.2, SYSTEX) . 18

Table 3: Applications/products in medical healthcare market. (Deliverable 1.3.2, SYSTEX) 20

Table 4: Applications/products in protective clothing market. (Deliverable 1.3.2, SYSTEX) .. 20

Table 5: Applications/products in other smart textiles market. (Source: Deliverable 1.3.2) .. 21





1 Executive summary

The Vision paper for smart textiles sector in Europe is developed in order to identify the various challenges and barriers faced by the smart textiles stakeholders during the commercialization of smart textiles. This vision paper is also developed to identify the strengths, weaknesses, opportunities and threats faced by the European smart textiles sector and aids in developing strategies which can help the stakeholders of the sector in the commercialization of smart textiles and in gaining a global leadership position for the European smart textiles sector.

According to the definition of CEN/TC 248 Committee working on standardization, “Smart or intelligent textiles are functional textiles, which interact with their environment by responding to it. This response can be either a (visible) change in the materials properties or result in communicating the environmental trigger to an external read out.”

The European textile sector is regarded as one of the established sectors of the European manufacturing industry and according to the latest structural data1 available; it’s one of the sectors providing employment to 2.5 million people and generates a turnover of €190 billion. The textile and clothing sector accounts for 3% of total manufacturing value added in Europe.

According to reports of various market research companies, the global market for technical textiles is expected to grow to the tune of US$ 127 billion by the year 2010. While the US and EU continues to be the main manufacturers and consumers of functional textiles, China has emerged as a large manufacturer of the same.

The Technical textiles have found their ways into various vertical markets and have been classified into following categories which include Agro Textiles are used in gardening, landscaping, agriculture, forestry, animal husbandry etc; Construction textile used in the construction of buildings, sport arenas and halls; Functional textile used in clothing and footwear; Geo Textile used by the civil engineering industries like roads, bridges, tunnels and dams to provide support and stability below the ground level; Industrial Textile used for purposes such as filtration, cleaning, mechanical engineering, sealing, sound insulating, etc.

The drivers for the growth and development of smart textiles in various vertical markets are of social, economic, technological and strategic in nature. The societal drivers that drive the use of smart textiles are quality of life, population with increased chronic disorders who need continuous monitoring and care, aging population and, augmented demands and needs of the consumers. The business drivers are diversification in to other businesses, cut-throat competition in the established industries, high profitability, gradual development of high potential markets and increased public funding in the field of smart textiles. The sector drivers include transformation of mature industries like textiles, ICT and electronics industries, faster developments in the associated industries like Nano, Micro and electronic

1 http://ec.europa.eu/enterprise/sectors/textiles/index_en.htm





industries and emergence of specialized markets like continuous monitoring, neo-natal care, fire-fighters equipment etc.

The key market hurdles for development and subsequent commercialization of smart textiles applications are of technology, strategic and economic in nature. These barriers include strategic barriers like lack of standardization and regulations for the new products, lack of shared product development initiatives among the value chain partners and lack of funds with SMEs for new product development. The societal barriers include ethical and social issues like privacy and confidentiality, and safety issues. The technological barriers include reliability, durability and ease of use; slow development in the areas like flexibility of electronics, durability and power; and missing interconnection of components. The business barriers include high development and manufacturing costs; high retails prices leading to less consumer acceptance, scarcity of human resources to carry out new product development; lack of genuine understanding of customer requirements; immature business contexts; and limited market potential for smart textiles because of cheaper alternatives.

The recent trends in the smart textiles sector are growing vertical integration where many companies are either integrating backward to reduce the bargaining power of suppliers and to ensure a reliable supply of input material or integrating forward with the aim of improving profit margins; and Forming B2B strategic partnerships where the SMEs are finding it rather easier to convince the bigger OEM’s or brand owners, which have access to market and have got appreciation for the technology whereas they find it difficult in retail market where the SMEs have to convince on each retail sale and have to invest heavily to promote the technology and create awareness about the product.

SWOT analysis

The SWOT analysis will aims to give insights into the technology and market dynamics of the European smart textile industry which can be used as a basis for developing policies for the development of the smart textiles industry in Europe.

Strengths Weaknesses � Matured textiles, ICT and electronics

industries and faster developments in the cognate disciplines of smart textiles

� Substantial research at universities and research centers and presence of influential textiles networks and ETPs for long-term research

� Dominant SME sector involved in development of smart textiles

� Significant public funding for R&D in smart textiles

� Research, Technology and Development gaps in the value chain of smart textiles

� Lack of extensive knowledge or long-term vision of end-user markets

� Industry is dominated by SMEs with limited resources

� Lack of influential system integrators who have access to end-user markets and supply chains

� Lack of dedicated machines for pilot production or mass production of smart textiles

� Lack of clear Industry standards and certification requirements





Opportunities Threats � High potential verticals like protective,

healthcare, construction, automotive, sports & wellness, safety & security, etc.

� Opportunity to diversify into new and emerging markets

� Emergence of new role for integrators

� Electronics and textiles have completely different legacies and understanding about each other is missing

� Inadequate performance of the devices � Countries like Japan, US and China are

catching up in the technology development of smart textiles

This vision paper also identifies major stakeholders who play influential role in the development and subsequent commercialization of smart textiles. These stakeholders are identified based on the issues and the role these stakeholders play in solving those issues. These stakeholders also play a critical role in development of high performance and efficient prototypes. These stakeholders include leading names in the respective vertical markets, research institutions, textile and machine component manufacturers, funding agencies or venture capitalists and end users/user organizations. Detailed strategies have been developed for activating each of these key stakeholders and making them active partners in the process of development and commercialization of smart textiles.

Recommendations

The main objective of this vision paper is to give a clear picture of changing market and technology dynamics, issues, challenges and roadblocks faced by the European smart textiles industry. The vision paper will also presents some strategies to develop the European smart textiles industry and place in a position to attain global leadership in the field of smart textiles.

In the short term, the aim should be to promote and develop innovations based on existing technologies and leverage the expertise and technology available among the related industries and in Europe and across the globe. This helps in attracting investments internally and externally and also creates awareness among the industry stakeholders about successful prototypes and research activities in the European smart textiles sector.

In the medium-term the focus should be on scaling-up production of successful prototypes and manufacturing them at a competitive price. The auxiliary services like conditional requirements such as certification, rules & regulations, and human resource requirements should be concentrated by developing strategies.

Developing a long term vision and related strategies for the sector, looking 10-15 years ahead, is not part of this paper, where commercialization issues are at stake. It doesn’t mean to state that a long-term vision and technology roadmap are not important for the sector to survive. It is suggested to start a consultation process among European researchers and scientists in order to draft a strategic and long-term oriented textile research agenda.

Roadmap towards implementation





Below mentioned are some of the critical strategic issues and some actions suggested for overcoming those issues faced by the European textile stakeholder community. Overcoming these issues is of utmost importance if the European smart textiles sector has to achieve the global dominance in this field.

Strategic issues observed Actions Suggested Lack of lead role in the value chain in the area of smart textiles

� Stimulate key actors (Major OEM’s, integrators, etc.) to assume the leadership in the value chain.

� Encourage end-users and product designers to get involved in public funding projects and play a role in commercialization of smart textile applications.

� Implement awareness creation initiatives about existing expert networks and technology clusters, and information about various innovations in similar targeted markets.

Lack of identity and visibility of the smart textiles industry

� Establish platform with members for all smart textiles stakeholders and facilitate companies to find partners to form clusters of expertise.

� Develop an integrated marketing strategy of the sector as a public-private partnership project of the European commission and industrial partners jointly.

� Establish a special interest group by lead markets (including all major value chain representatives) and promote the innovations of the specific smart textiles applications.

Lack of vision and market orientation among the smart textiles developers

� Undertake detailed market research to find out various vertical markets potential and research developments in specific markets

� Link the smart textiles community to relevant and multiple ETP’s (such as EURATEX, EPoSS, Photonics21, etc.) in order to allow for cross-fertilization and the establishment of heterogeneous research projects where researchers and engineers from different disciplines are collaborating on a shared RTD objective to solve complex RTD challenges.

� Enable networks of these technology platforms to form strategic research partnerships.

Research, Technology and Development gaps in the technology and value chain

� Encourage researchers and developers to think innovative rather than to scout for conventional technologies alternatives.

� Define a clear strategy for projects with a shorter term focus and projects with a longer term focus. Projects which attempt to provide both in one are less irrelevant and ineffective.

� Conduct a survey to map vertical markets and





technology in those specific vertical oriented industries and identify the technological gaps for those industrial applications. Then design STREPS for bridging those technological gaps.

� Develop a detailed technology roadmap for guiding the research and development of various smart textiles applications.

Lack of investments in up-scaling

� Identify the successful prototypes from the industry. Fund those prototypes for validation and pilot production to check out the feasibility and performance.

� Identify the obstacles for large scale manufacturing of smart textiles applications. Invite and execute joint calls with concerned industries to fund the development of industrial components.

Upscale of successful prototypes of past European projects

� Scout for successful prototypes and IP generated in the past projects. Fund the schemes for commercialization of those successful prototypes and develop products based on the IP.

� Place a special research focus on issues that are directly associated with mass manufacturability of smart textiles.

Lack of human resources � Undertake a detailed plan on how to plug-in the human resources gap for the smart textiles sector with innovative university courses and knowledge migrants policies.

2 Objectives

The objectives of the vision paper are:

• To analyze and to identify needs and challenges of various stakeholder communities in the smart textiles sector in Europe.

• To understand about the strengths, weaknesses, opportunities and threats of the European smart textiles sector in Europe.

• To identify influential stakeholders in the smart textiles value chain and to design strategies to activate those stakeholders for the successful commercialization of smart textiles in Europe.

• To design and develop strategies to overcome the barriers and challenges of the smart textiles sector and for successful commercialization of smart textile based applications/products.





3 Rationale

SYSTEX will collect information on ongoing activities, people involved, from a market point of view. This information contains the information about key drivers, needs and bottlenecks for the successful implementation and commercialization of smart textile systems. After analyzing the information in view of these issues, the conclusions will be reported to decision makers and policy builders in the EC which might aid them in policy building and making decisions about future priorities for research and accompanying measures.

The vision paper is developed with the contents from the following sources

• Stakeholder survey of the smart textiles community

With Stakeholder survey, the challenges and bottlenecks faced by various stakeholder communities are identified. During the survey, stakeholders’ opinion is collected about what should be done in order to make the European smart textiles sector global leader, strengths and weaknesses of the European smart textiles sector, lead markets for the sector and their willingness to participate in the development of the sector.

• Desk research

Thorough research has been done about the various lead markets for the smart textiles; identify the trends, drivers and barriers for the sector. During the research, the most influential actors in the value chain are identified and recommendations are made on strategies how to activate those actors for the successful implementation and commercialization of smart textiles.

• Stakeholder workshop on strategies to foster the commercialization of smart textiles

In the workshop experts participated representing various stakeholder communities like universities, research organizations, industry associations, consultancy and the smart textile companies. The experts discussed about the various trends, barriers and challenges faced by the stakeholders and suggested some strategies on how to overcome those challenges and barriers for the implementation of smart textiles.

• Interviews with stakeholders in the industry

Stakeholders from different parts of the value chain were interviewed.





4 Introduction to smart textiles

The European textile sector is one of the mainstays of the European manufacturing industry and according to the latest structural data2 available, in 2006 there were 220.000 companies employing 2.5 million people and generated a turnover of €190 billion. The textile and clothing sector accounts for 3% of total manufacturing value added in Europe.

The manufacture of textile can be divided into three segments: Apparel, Home textile and Industrial/ Technical Textile. The ratio of Global textile production of these segments has been shown in the figure 1. The manufacture of textiles is done majorly for the apparel segment i.e. basic clothing segment with this segment consuming 43.5% of the total textiles manufactured. The interior or home textiles segment is the next biggest consuming 33% of the total textile manufactured. The third segment with 23.5% of textile consumption is Industrial and technical textile segment. Technical textile is high performance textile that is based on special functionality.

Figure 1: Breakdown of textile production into 3 sub-sectors by volume of fibre usage

According to the definition of CEN/TC 248 Committee working on standardization, “Smart or intelligent textiles are functional textiles, which interact with their environment by responding to it. This response can be either a (visible) change in the materials properties or result in communicating the environmental trigger to an external read out.”

The most commonly accepted definition of smart textiles is that intelligent materials and systems are capable to sense and respond to their environment around them in a predictable and useful manner. Smart or interactive textiles is a new market segment resulting from miniaturization of electronic components and the fall in price of components and manufacturing costs for both textiles and electronics3. The Smart Fabrics and Interactive Textiles (SFIT) sector in Europe is relatively young domain and the Research, Technology

2 http://ec.europa.eu/enterprise/sectors/textiles/index_en.htm

3 Ohmatex (2007), “ white paper on smart textiles- market overview”.





and Development (RTD) activities in the area of smart textiles, wearable electronics and functional textiles is gradually gaining momentum in Europe. Low cost manufacturing facilities in Asia and India has resulted in significant setback in the European textile industry and the European textile companies have to look for new kind of added value by adding electronics in textiles and clothing and at the same time generate high profits due to the uniqueness of the textiles and clothing4. Such technologies are immature and not proven, mostly promoted by the technology start-ups and research oriented companies.

A special category of smart or intelligent textiles are electronic textiles, being textile products, in which electronic devices (sensors, actuators, etc.) are integrated. The main focus of SYSTEX project is the electronic textiles, which is also called as wearable electronics. These textiles provide interactive properties such as electrical conductivity, ballistic resistance and biological protection5. Electronic textiles or e-textiles are used for manufacturing fabrics that have electronic interconnections within them. These clothings can be used in healthcare to measure blood pressure, heart rate, body temperature etc. and relay the data to a computer, cell phone or other device that could signal for help if the wearer experiences a health problem. MP3 player fitted in textiles and electrically heated seat kits are examples of a major commercial success in Electronic Textiles.

Figure 2: Smart textiles: Convergence of various industries

4 OhmaTex, “White paper on smart textiles”.

5 Industry overview @ http://www.teonline.com/industry-overview.html





The global market for technical textiles is expected to grow to the value of US$ 127 billion by the year 2010. While the US and EU continues to be the main manufacturers and consumers of functional textiles, China has emerged as a large manufacturer of the same. The Technical textiles may be classified into following categories6:

• Agrotech: Agro Textile are used in gardening, landscaping, agriculture, forestry, animal husbandry etc.

• Buildtech: Construction textile used in the construction of buildings, sport arenas and halls.

• Clothtech: Functional textile used in clothing and footwear • Geotech: Geo Textile used by the civil engineering industries like roads, bridges,

tunnels and dams to provide support and stability below the ground level. • Indutech: Industrial Textile used for purposes such as filtration, cleaning, mechanical

engineering, sealing, sound insulating, etc. • Medtech:Medical Textile used in health and hygiene applications for the medical

markets. • Mobiltech: Transport Textiles used in the construction, equipment and furnishing of

passengers and goods transportation (land, sea, air), civil and military. • Hometech: Home Textile used in the manufacture of furniture, upholstery, floor

coverings and carpets. • Oekotech: Eco Textile used in environmental protection, waste disposal and

recycling. • Packtech: Packing Textiles used for carriage, storage and protection of industrial,

agricultural and other goods. • Protech: Protective textiles used in personal and property protection. • Sporttech: Sports textile used for sport and leisure products.

6 Industry Overview @ http://www.teonline.com/industry-overview.html





4.1 Key market drivers The various drivers for the development and use of smart textiles in various vertical markets are of social, economic, technological and strategic in nature. These market drivers are mentioned in various reports published by private market research companies like Pira, VDC and White papers, reports and publications by public funded research and companies like OhmaTex in the field of smart textiles. These are mentioned as motivations behind the development of smart textiles based applications in various verticals. The key market drivers for the smart textile industry are:

Societal drivers: • Quality of life7 • Increasing population of the people suffering with chronic disorders and diseases

who need continuous monitoring and care • Aging population8 • Increased demands and needs of the consumers

Business drivers:

• Diversification in to other businesses • Increased competition in the established industries • High profitability9 • New and high potential markets • Huge interest in the field of smart textiles due to increased spending by local and

national governments Sector drivers:

• Rejuvenation of established industries like textiles, ICT and electronics industries • Faster developments in the related industries like Nano, Micro and electronic

industries • Emergence of specialized markets like continuous monitoring, neo-natal care, fire-

fighters equipment etc.

4.2 Key market barriers

The market barriers for development and subsequent commercialization of smart textiles applications are of technology, strategic and economic in nature. These barriers list is a result of desk research and multi-stakeholder workshop. These barriers are slowing down the emergence and further growth of the smart textiles sectors.

7 ITcares: Smart textiles for monitoring of patients

8 Ohmatex (2007), “ white paper on smart textiles- market overview”.

9 Smith W C, “The Technical textiles industry in North America”





Strategic barriers: • Lack of standardization • Lack of regulations for the new products • Lack of coordination and collaboration among the value chain partners • Financial constraints among the SMEs to carry on development

Societal barriers:

• Ethical and social issues like privacy and confidentiality • Safety issues

Technological barriers:

• Reliability, durability and ease of use • Slow development in the areas like flexibility of electronics, durability and power • Missing interconnection of components

Business barriers

• High production costs and selling cost • Less consumer acceptance of smart textiles due to high prices • Lack of human resources with specific expertise to carry development in the grey

areas • Lack of understanding of customer requirements • Immature business contexts • Limited market potential and high development costs

4.3 Trends in the smart textiles sector Growing vertical integration

The main form of vertical integration is forward integration - usually with the aim of improving profit margins. The cases of backward integration have occurred only to reduce the bargaining power of suppliers and to ensure a reliable supply of input material. However, base technology suppliers in the SFIT industry seem to possess relatively little bargaining power. This explains the trend in favors of forward rather than backward integration10 11.

Forming B2B strategic partnerships Another growing trend in the smart textiles industry are B2B partnerships and strategic partnerships with well known OEM’s. The main reason behind this being that the SMEs find it rather easier to convince the bigger OEM’s or brand owners, which have access to market and have got appreciation for the technology whereas they find it difficult in retail market where the SMEs have to convince on each retail sale and have to invest heavily to promote the technology and create awareness about the product. Moreover, the OEM’s with established sales and distribution networks to established markets, also have bargaining power in the value chain, and established supply chain, which increases awareness about

10

Chapman R, “Developments in smart fabrics”, Pira International Limited 11

Smith W C, “The Technical textiles industry in North America”





and visibility of the product in the retail space. One such fine example is the collaboration of Textronics and Adidas in smart clothing in sports & wellness category.

Figure 3: Overview of the complexity and various actors involved in the textile-clothing business (Source: ETP EURATEX for the future of textiles and clothing: a vision of 2020)

The value chain of smart textiles industry is more complicated than the traditional textiles industry as players from other industries like nano, ICT, materials, and electronics industries also occupy positions in the value chain. This makes the value chain more complex, too many value chain members and less bargaining power among the value chain members.





4.4 Vertical markets in smart textiles

Smart textiles is been regarded as one of the most interesting sectors for the next decade and forecasting reports from various market research organizations like VDC, BCC and Pira are raising the expectations of the market. But the market is falling short of expectations and is continuously failing to reach the forecasted potential of the smart textiles market. This is due to various strategic, business and societal barriers for smart textiles.

Year Global market in $ mio US market in $ mio

VDC study (2007)

VDC study (2004)

BCC study (2007)

VDC study (2007)

2004 248 64,4

2005 304

2006 369,1 308 70,9 143,7

2007 440,9 486 78,6 175,2

2008 553,4 642 225,1

2009 747,3 299 318,3

2010 1129,6 532,5

Growth rate 30% 27% 38,7% Figure 4: Market potential of smart textiles

Smart textiles have found potential applications in various fields ranging from healthcare to construction. Major application areas for smart textiles include:

• Healthcare • Sports and wellness • Safety and security • Automotive & Transport • Construction • Geo-textiles • Home and interior textiles • Packaging • Architecture • Telecommunications • Fashion • Security & industrial applications • Defense • Agro-textiles • Security • Lighting

• Promotional clothing • Personal care • Energy • Display





The SYSTEX consortium has identified medical, sports & wellness, automotive & transport and protective clothing as the lead markets for the SYSTEX project. Projects like Clevertex and market research companies like VDC, BCC and Pira have also identified and forecasted these markets as high potential growth markets for the future. These markets have also seen introduction of many smart textile products and these markets are showing the signs of growth. Here we look at these markets along with interactive clothing market, and various applications that have already reached the market in these individual vertical markets.

Sports & wellness Sports and wellness is one of the most interesting and exciting application areas for smart textiles. It’s also regarded as one of the most potential areas and fastest growing markets for smart textiles by various companies like BCC, VDC and Pira. Many of the companies like Adidas, O’Neill, Nike, Polar etc have already introduced products in this market.

Below is table with a list of companies and products already introduced into the sports and wellness market:

Table 1: Applications/products in sports and wellness market (Deliverable 1.3.2, SYSTEX)

Company Product Application

Adidas/Polar Women cardio long bra top Sport

women cardio bra Sport

men’s retail shirt Sport

running shoe (with Polar RS 800sd) Sport

Complete system Polar RS800+ Stride sensor+ adistar tops + running shoe

Sport

Adidas Adidas_1 Smart Ride W Sport

Interactive Wear/O’Neill

H.3 Series: Campack and Comm. Ent. Jacket Sport

Interactive Wear/O’Neill

The Hub (snowboard jacket) Sport

Rosner mp3 Blue (P100 Platform) Sport

Lodenfrey, Germany

“Pynamics” cooling vest for motorcyclists Sport

Miles Fashion ProGression jackets, vests, sleeping bag, belt with an integrated heating control

Sport





Nike Nike+ iPod

sport,

Interactive Wear with Solarc

iThermX platform for Solaris ski gloves Sport

Polar Adistar Fusion running shoe Sport

Wearlink trasmitter band Sport

Texsys GmbH& Swany

g.cell, a free motion communication glove (via bluetooth)

Sport

Toms Tauchshop diving shirt

Shirt with integrated heating to be worn under a diving suit. Power source is worn on the belt.

Sport

Warmthru Heating clothes Sport, outdoor


iSolarX

iSolarX with LED add-on

Sports

Interactive clothing

One of the first few products in smart textiles have been introduced in the area of interactive clothing and this sector has already seen many market introductions of new products. Most notable among them are interactive wear from companies like Eleksen, Fibretronic and O’Neill who has seen some success in this vertical market. Below listed are some of the market introductions in the field of interactive clothing:

Table 2: Applications/products in interactive clothing market. (Deliverable 1.3.2, SYSTEX)


Beaucre Jacket with QIO’s system Interactive clothing

Burton ASSystemTM (Audio solution System Interactive Clothing

Eleksen ElekTex Textile Touchpads Interactive clothing

Fibretronic The Fiddler Interactive clothing,

PPT system Interactive clothing

iPod Controller LX (IPLX) Interactive clothing

iPod Controller LX (IP30 Interactive clothing





Volume Controller (AC2) Interactive clothing

iPod Controller with Bluetooth (IPBT) Interactive clothing

Wireless iPod Controller (IPRF) Interactive clothing

Bluetooth Music Phone Controller (BTM) Interactive clothing

Keypad Sample Kit (SK2) Interactive clothing


iLight X Interactive clothing

O’Neill H4 Wearable Electronic, iPod Backpack Interactive Clothing

QIO Systems Universal Textile remote control (Elektex + Softswitch)

Interactive clothing

Elektex touchpad Interactive clothing

PANiQ controller for iPod Interactive clothing

Urbantool “advancedShirt” Interactive Clothing

Interactive Wear& Solarc

Zegna Sport Solar Jacket Interactive Clothing, Sports

Baybox mediaJacket

has a special pocket for a mobile phone and provisions for the headset in the collar. (also a version with integrated heating)

Sport, Interactive clothing

Medical healthcare Pira International market research report mentions healthcare sector as one of the key application areas for the SFIT sector in the near future. Forecasts from the US market research company, Venture Development Corporation (VDC), suggested in 2006 that sales of smart fabrics and interactive textiles (SFIT) for sensing and monitoring will grow by 49.3% a year between 2006 and 2010. NPD Group has predicted in 2004 that interactive apparel is likely to become a billion dollar business before long. And EU/FP6 Clevertex project has projected that the healthcare sector will be the largest sector using SFIT for the next decade. The medical healthcare has already seen some of the market introductions. Currently research is underway to find applications in the specific niche areas like continuous monitoring and neo-natal care. Below are some of the market introductions in the healthcare market:





Table 3: Applications/products in medical healthcare market. (Deliverable 1.3.2, SYSTEX)


g.tec - Guger Technologies

g.GAMMAcap-Head cap with provisions for mounting EEG electrodes

Medical

Innovation Santé Heating gloves clothes Sport, Medical

NuMetrex (from Textronics)

Heart rate monitoring Bra Sport, medical

cardio shirt for men Sport, Medical

Heart sensing racer tank Sport, Medical

Transmitter

Sensatex Smart Shirt system Sport, medical

Protective Clothing In 2008 the European Commission has defined the domain of personal protective equipment as a theme for its Lead Market Initiative. Thereby it recognized the potential of the European Industry to come up with innovative solutions providing personalized protection and performance for workers, hence increasing their safety and productivity at work. Some of the EU funded projects are already underway and most notable project being “Proetex” for building a firefighter jacket for the safety of fire-fighters and civilian victims.

Below are some of the market introductions in protective smart textiles vertical:

Table 4: Applications/products in protective clothing market. (Deliverable 1.3.2, SYSTEX)


WarmX warmX-neckshirt Protection, sport

warmX.-silverSun Protection, sport

warmX tights for Protection, sport

warmX – undershirt

WarmX-Electronic component

Minipower controller Sport, protection

O’Neill Navjacket (GPS snow-board jacket, integrated switches)

Sport, Protective

Gore& Associates Active Cooling System Protection

Dräger FPS-COM face mask including communication system

Protection





Brochier technologies, France

Lightex® technology Protection, Wellness

Other smart textiles application based products

Table 5: Applications/products in other smart textiles market. (Source: Deliverable 1.3.2)


Sefar SEFARpowerHeat,

SEFARpowerGlow,

SEFARpowerSENS

Medical, Protective, Architecture, automotive, Interactive clothing

Tencate Geodetect Geotextiles

ITP GmbH heating textiles Materials

4.5 Why this vision paper?

The last decade has been a challenging period for the smart textiles industry in terms of hype, exposure, funding and technological developments. But the industry has not witnessed any major breakthroughs in end products or smart textiles applications that would change the course of the textiles industry. The industry has never accomplished the success which was projected and predicted by various market research institutions and commissioned projects.

There was lot of hype surrounding the smart textiles industry and its visions of revolutionizing the society in general and rejuvenate the old economy industries like electronics and textiles. Yet the industry has not developed the applications that can live up to the hype and expectations of smart textiles as the innovation and commercialization of smart textiles is not so successful. This is supported by the fact that the smart textiles industry has seen very few successful applications in the market.

The market is now changing. Many people have realized that the conventional electronics are good enough for many applications and smart will only be accepted where they have a clear benefit. It is time to focus on the areas where these benefits do exist and create growth. Some market consolidation is already taking place and companies are getting more commercially minded.

This vision paper makes a new assessment of the challenges and barriers faced by various stakeholders in the industry. This paper looks at the developments so far and studies various strategic, business and societal barriers hindering the emergence of smart textiles and suggests strategies and actions to the EC and other governing bodies that might enable the development and commercialization of smart textiles.





5 Stakeholder Analysis

A stakeholder survey was conducted as part of SYSTEX work package 5 of policy making. The stakeholder survey iwa conducted to collect the stakeholder opinions about challenges and roadblocks for the commercialization of smart textiles in the Europe. The survey was done using an online questionnaire and approaching stakeholders at various smart textiles and related events like Smart Textiles Salon 2009 (Ghent), Plastic Electronics Conference 2009 (Dresden) and Flex-Stretch Event 2009 (Ghent). The objective of the stakeholder survey was to collect information about stakeholders’ views, interest areas for smart textile applications, future business opportunities, and stakeholders’ views about the risks, threats, challenges and roadblocks hampering the development of smart textiles. The stakeholder survey also collected input about the probable strategies and/or actions that can/should be undertaken to increase the European market share in the field of smart textiles and topics and themes that the stakeholder would like to discuss about the field of smart textiles with other SFIT (Smart fabrics and Interactive textiles) colleagues.

The SYSTEX stakeholder survey was conducted during the period of May 2009- November 2009 and a total of 69 stakeholder questionnaires were collected during the period. In the survey participated various sections of stakeholders like universities, companies, governmental agencies, research institutes and others like design and fashion consultants, industry associations, material researchers, publishers and other non-profit organizations. The stakeholders in the smart textiles industry were contacted through the SYSTEX database which was available. The database of > 800 individuals was initially contacted through e-mailing and responses through this process were slow and limited. The contacts were also followed-up by phone to improve the response rate. Then the strategy was changed to directly approaching the stakeholders at relevant smart textiles events like Smart Textiles Salon, Plastic Electronics Event and Flex-Stretch Event.

Below we summarize the results of the survey.

Background information

• In total, 69 responses have been received from across Europe.

• The participants in the survey include 30% from the industry, 25% from the research community who are involved in the development of smart textiles or relate components, 32% from the science and education community, and 3% of them represent government authorities. The remaining 10% represent the trade associations, individual fashion designers, non-profit organizations and publishers.

Main observations regarding the Status and Future of SFIT

• Most of the important businesses opportunities are perceived to be emerging in the field of body sensor networks/ bio-sensors, conductive yarns as sensors and actuators, followed by textile based light emitting technologies, power management, flexible displays/switches and sensors, heating/cooling systems and smart systems for communication and data management.





• The major risks/threats are perceived to be insufficient performance of the technology and insufficient budget, followed by insufficient know-how of the employees, miscalculation of business opportunities and discontinuation of support by the top management. The other risks/threats as perceived by the stakeholders are lack of collaboration in the EU, insufficient number of researchers, immature business contexts and time to market is too long.

• Most of the stakeholders’ organization interests are in the field of medical, automotive, protective clothing, sports & wellness, architecture, geo-textiles and telecommunications. The other fields which are also mentioned are fashion, defense, agro-textiles, lighting, promotional clothing, energy, displays and interior decoration.

• The stakeholder’s perception regarding the major opportunities that the smart textiles offer their respective organizations include diversification on research and/or business and technology leadership, followed by higher revenues and profits, and strengthening their market position.

• The most important hurdles for the commercialization of SFIT and creating more jobs in the SFIT sector are lack of investments in manufacturing, lack of collaboration between the industry and research, a fragmented research community and high cost structures, followed by lack of standardization and processes, no integrated marketing efforts for commercialization competence, weak innovation adoption and missing interconnection of components.

• Regarding suggestions on what could/should be done to increase the European market in the product/application areas, the stakeholders feel that the focus on stronger industry/science collaboration is the most important factor. The other important factors include stronger government funding on research and development, combined interdisciplinary marketing efforts, stronger government funding for innovation and commercialization, and private funding.

Networks- clustering and collaborating

• Approximately 70% of the stakeholders feel that the SYSTEX project’s objectives are very much relevant to their organization’s mission and 25% of the respondents say that they need more information regarding the project to answer the question.

• The respondents would like to be kept informed about the developments in SFIT and wearable systems in Europe through newsletters and websites, followed by conferences, workshops and online alerts.

Information flow

• 45% of the respondents have expressed their willingness to invest some time to discuss topics of common interest with SFIT colleagues and other stakeholders on a quarterly basis and 25% of them expressed interest to discuss it on an annual basis.

• 55 out of 69 stakeholders have chosen technology as their topic or theme of discussion, 37 out of 69 people want strategy as topic/theme of discussion, 27 out of





69 want funding as their topic and 20 out 69 want standardization as the topic to discuss with other SFIT players and colleagues.

Segments analysis (differences bwteen industry, research institutions, universities)

• 51% of the companies have chosen that their company is leader in innovation but that is contradictory to the actual market situation. Very few companies have actually succeeded in getting successful products to the market.

• One of the most interesting points is that more than 50% of the research institutions and companies do not have a definitive technology strategy or roadmap in place for the development of smart textiles applications, unlike universities. The reasons for this might be that the smart textiles industry is in its infant stages and all the companies might be waiting for others to develop before they enter into the industry with strategy and finances for development.

• More than 70% of the research institutions and universities, and 67% of the companies felt that the SYSTEX project is related to their organizations’ mission and objectives, while the remaining respondents said either they need more information or SYSTEX is not relevant to their organization.

• Body sensors or biosensors and textile electronic components or yarns as sensors or actuators are seen as top business opportunities for the next 3-5 years in the area of SFIT by all the three segments.

• Respondents from all the three segments see diversification in research or business as the most important opportunity that the SFIT technologies offer to their respective organizations. More than 50% of respondents from the companies said that technology leadership and higher revenues and profits are the other major opportunities that SFIT technologies offer to the companies.

• Companies mentioned managerial risks such as discontinuation of top management and miscalculation of business opportunities, and financial risks as insufficient budget as the top three risks the SFIT technologies create for their organizations, while the research institutions and universities felt that the technological risks such as insufficient performance of technology and insufficient know-how are the top two major risks posed by SFIT technologies.

• The respondents from all the three segments said that stronger science/industry collaboration and stronger government funding for innovation and commercialization closely followed by stronger government funding for R&D are the three major steps that should be taken by the government authorities to increase the market share in these product/application areas.





6 SWOT analysis of Smart Fabrics and Interactive Textiles

This SWOT analysis is a compilation of information that was collected through desk research, reports of various projects in smart textiles industry like Clevertex and Euratex, the SYSTEX stakeholder survey, a multi-stakeholder workshop and interviews with stakeholders in the industry. This SWOT analysis will aims to give insights into the technology and market dynamics of the smart textile industry. It will be a basis for developing policies for the development of the smart textiles industry.

Strengths Weaknesses

� Established textiles, ICT and electronics industries and fast developments in the disciplines supportuing smart textiles

� Considerable amount of research at universities and research centers and presence of networks like AUTex, EURATEX to support long-term development

� The SMEs, which dominate the smart textiles sector, are flexible and can act quickly

� Europe has good funding programs both at national and EC level

� Many Research, Technology and Development gaps in the value chain of smart textiles

� Lack of orientation on or long-term vision of end-user markets

� Too much focus on long term research while things that are possible with small innovation steps are overlooked

� Industry is dominated by small companies which have limited resources

� Textile companies are looking for business opportunities but not inclined to take large risks

� Lack of system integrators who have access to the markets and supply chains

� High production costs or no critical mass

� Lack of dedicated machines for pilot production or mass production of smart textiles

� Lack of clear Industry standards and certification requirements

� Lack of educational initiatives on specific know-how of smart textiles





Opportunities Threats

� Huge market potential in verticals like protective, healthcare, construction, automotive, sports & wellness, safety & security, etc.

� Diversification of businesses into new and emerging markets

� Emergence of new role for integrators

� Electronics and textiles have completely different legacies and knowledge about each other is missing

� Insufficient performance of the devices

� Insufficient consumer acceptance of smart textiles

� Countries like Japan, US and China are catching up in the technology development of smart textiles





6.1 Strengths

• Established textiles, ICT and electronics industries and fast developments in the disciplines supportuing smart textiles.

• Considerable amount of research at universities and research centers and presence of networks like AUTex, EURATEX to support long-term development.

• The SMEs, which dominate the smart textiles sector, are flexible and can act quickly.

• Europe has good funding programs both at national and EC level.

Established textile, ICT and electronics industries and fast developments in the disciplines supporting smart textiles The European textile sector is one of the mainstays of the European manufacturing industry and according to the latest structural data available12, in 2006 there were 220.000 companies employing 2.5 million people and generating a turnover of €190 billion. The textile and clothing sector accounts for 3% of total manufacturing value added in Europe. Another sector which is part of smart textiles is the ICT sector. It is among the leading sectors in Europe and the ICT sector share of the total business value added is 8.5 % and the ICT sector employment constitutes 3% of total business sector employment in the EU. A third important sector for smart textiles is electrical engineering which accounts for 3% of the production, value added and employment of the EU25. A total of 9,615 electrical engineering enterprises with 20 or more employees produced in 2004 €192,870 million worth of electrical apparatus and equipment, directly employing 1,237 million people. The EU electrical engineering market is the world's largest one (€181 billion). This industry is a key enabler for several dependent sectors and the European electronics is in the forefront of development.

12

http://ec.europa.eu/enterprise/sectors/textiles/index_en.htm

Level of technological development, by country.

Source: Canada Textiles Roadmap





The existing knowledge in all available textile technologies and the presence of the required specialists in production and development gives a head start for the smart textiles industry. Moreover, the European textile manufacturers are in the forefront of development of high performance technical textiles like electro-conductive materials or fibers, coated fabrics, electro-active polymers and piezoelectric materials.

The fast pace of developments and research activities in other industries related to smart textiles, like ICT, nanotechnology, material sciences, etc, is another positive cross-over effect for the smart textiles sector in Europe as it accelerates the development of prototypes by successfully bridging gaps in the value chain.

Considerable research activity in universities and research centers and presence of networks like AUTex and Euratex to support long-term development

A considerable amount of RTD activities are being conducted in the area of smart textiles at various universities and at research institutions. Many funded research projects at national level and pan-European level are activel in RTD of smart textiles and other technical textiles in Europe. Also a number of companies working on the integration of textiles and electronics are involved. Industry and expert networks like AUTex (a network of universities and engineering schools offering university-level textile programs), Euratex (a network of textile research centers) are creating awareness among the stakeholders of the smart textiles industry and help bridge the gap between the science and industry.

The SMEs, which dominate the smart textiles sector, are flexible and can act quickly.

The smart textiles sector in Europe is built around the existence of a large established base of small and medium sized enterprises and very few big companies. These SMEs are actively involved in research and development activities across the value chain of smart textiles and in various vertical markets. These SMEs are mostly carrying out these activities by using their own resources and private funding. As a result, they are flexible and can act quickly.

Good funding programs in Europe both at national and EC level.

European commission is funding projects for research and development of smart textile applications and applied research in the area of smart textiles. Some of the successful EC funded projects include Stella, Clevertex, MyHeart, PROeTEX to mention a few. These projects are funded to develop smart textiles applications in various verticals like protective clothing, interactive clothing and medical clothing. The FP7 programme is positively mentioned by many stakeholders.





6.2 Weaknesses

• Many Research, Technology and Development gaps in the value chain of smart textiles

• Lack of orientation on or long-term vision of end-user markets

• Too much focus on long term research while things that are possible with small innovation steps are overlooked

• Industry is dominated by small companies which have limited resources

• Textile companies are looking for business opportunities but not inclined to take large risks

• Lack of system integrators who have access to the markets and supply chains

• High production costs or no critical mass

• Lack of dedicated machines for pilot production or mass production of smart textiles

• Lack of clear Industry standards and certification requirements

• Lack of educational initiatives on specific know-how of smart textiles

Many Research, Technology and Development gaps in the value chain of smart textiles

A drawback of smart textile products/applications is that they still have major technological challenges such as power, wash-ability, reliability, durability, maintenance, integration and inter-connecting of components. In many cases the textile technology is not as good as the conventional technologies. It is a compromise that has to be balanced against the benefits of textile. The technological can easily result in a price/performance mismatch. This mismatch has made the smart textile products/applications less attractive for the end consumers.

Lack of orientation on or long-term vision of end-user markets

Lack of vision and strategy for end-user markets among the smart textile developers is one of the weaknesses of the European smart textile sector. The smart textile developers have insufficient understanding of the key market drivers and user requirements. This results in less consumer acceptance of the smart textile applications due to a price-performance mismatch. As seen in the SYSTEX survey, research and development is concentrating on a very large number of verticals at the same time. Smart textiles appear to be a overtly unilateral technology push development with only limited end-user involvement in the development process.





Problem is there is not yet a clear big need for smart textiles (lack of Killer application & market pull for functional textiles13). People have realized that conventional electronics is good enough for many applications. Smart textiles have to really bring a clear benefit over conventional alternatives. Even more so due to their often high price. Ideally, a smart textiles product is attractive to a large number of people at an affordable price.

Too much focus on long term research while things that are possible with small innovation steps are overlooked

The European smart textiles sector at present is concentrating on the long term and fundamental research and tends to overlook the small innovation steps with which new and innovative applications can be developed like it is often done in Asia. With too much concentration on research, the industry is lacking efforts in bringing the technological advancements to the market like transfer of technology from research to development, validation of the technological advancements and upscaling of technological advancements from research to pilot production to market introduction. This is resulting in less market introduction of new and innovative smart textile applications.

Industry is dominated by small companies which have limited resources.

The smart textiles sector is dominated by Small and Medium Enterprises. Large companies are not inclined to invest in technologies that move away from their core business. Companiesthat are strong in conventional solutions for which smart textiles may be a better alternative, are not willing to invest in competition for their existing products. If an SME involved in smart textiles becomes a success, the large companies can buy it.

SME’s have difficulties in accessing the markets due to less brand recognition and less awareness about the advantages of the smart textiles in the end consumer markets. Also handling of the many regulations is difficult for small companies, especially if there are differences between countries. The communication about funding opportunities by the EU, national and regional authorities was not overtly successful so far in generating the involvement of large numbers of SMEs. Reasons for the low participation rate of SME’s in public funded research & development schemes seems to be the substantial amount of administrative work which it involves. Also, they often lack experience in writing successful project proposals. Participation is possible for them but dependent on the presence of a strong project coordinator. National funding can often be handled more easily than EU funding.

Textile companies are looking for business opportunities but not inclined to take large risks.

The European textile industry is facing an uphill task of competing with low cost producing nations in the textile market as the Asian nations produce textiles at lower cost due to cheap labor. These textile companies are on a constant lookout for new business opportunities to utilize their production capacity and assets, and to differentiate their product from the regular textiles. But these often small or medium sized textile companies have only limited resources

13

Ohmatex, “White paper on smart Textiles”.





to invest in new innovations due to the tight budgets they operate in. Continuity is a priority and therefore they are not inclined to take large risks. They are not start-up companies which accept a higher risk (unlike some electronics-textile integrators).

Lack of system integrators who have access to the markets and supply chains

Larger OEM’s and brand owners in various verticals could take up the role of system integrators. The brand owners have good recognition in the market and have access to both the supply chain and to the end-user markets. They also possess the power to influence and involve other value chain members to invest in the development activities. In practice they are mostly neither assuming the leading role nor showing major interest in bringing smart textiles applications to the market for various reasons. Most important is their low estimation of business potential of these markets, which are considered niche markets.

There are successful smaller system integrators but their number is too small to drive the entire smart textiles sector.

High production costs or no critical mass

High production costs and no critical mass is hindering the process of commercialization. The development of smart textiles involves considerable extra research and development costs and the end-user markets for these applications are relatively small and mostly niche markets. The lack of critical mass makes it unattractive for large scale production and coupled with high development costs has resulted in higher pricing for the end-products which have made the product less acceptable for the end-user.

Lack of dedicated machines for pilot production or mass production of smart textiles

Lack of dedicated machines to produce the smart textile products on limited production basis for pilot testing and for mass production to produce smart textile applications at low cost is hindering the development and commercialization of smart textiles. The textile industry is not prepared for production of smart textiles.

Lack of clear Industry standards and certification requirements

The smart textile industry is in its initial growth stages and it does not have clear industry standards and certification requirements which are essential for the validation process of the product and for subsequent commercialization. Lack of clear industry standards and certification requirements are acting as entry barriers for companies which are interested in the smart textiles sector.

Lack of educational initiatives on specific know-how of smart textiles

The smart textiles industry in Europe lack educational initiatives with respect to the knowledge of smart textiles. It’s leading to a shortage of trained personnel for the research, technology and development of smart textile applications.





6.3 Opportunities

• Huge market potential in verticals like protective, healthcare, construction, automotive, sports & wellness, safety & security, etc

• Diversification of businesses into new and emerging markets

• Emergence of new role for integrators

Huge market potential in verticals like protective, healthcare, construction, automotive, sports & wellness, safety & security, etc

Smart textiles provide functionality combined with the benefits of textile. In wearable electronics a textile provides comfort; it is drapable, breathable, lightweight and at the same time robust. You do not feel that the technology is there. Moreover, (arrays of) sensors and actuators can be brought really close to the body and they are automatically in the correct position. In architecture, large textile substrates can bring the benefit of high production speed and low cost.

In the introduction of this vision paper many applications for smart textiles have already been mentioned. A lot of products presently on the market could be considered gadgets, but there are also many promising applications. In sports and wellness the measurement of physiological parameters is starting to become successful. Market entry is relatively easy for sports applications because customers there are constantly looking for the edge and there are few regulations. Successes in the sports market could aid acceptance in other markets.

Professional applications probably have the biggest potential. Functional protective clothing can significantly improve the safety and efficiency of disaster intervention personnel, like firefighters, and operators at chemical plants. In the military the safety and efficiency of soldiers can be increased. Healthcare is the largest potential market. Example applications here include continuous health monitoring for elderly people or patients. Heart rate monitoring has been successfully demonstrated. Increasing trends like healthcare awareness and prevention of diseases ask for functional clothing which can help people to live better, healthier and independent. In the healthcare market high prices for smart textiles may be a less severe problem.

Further, large area sensor systems based on a textile substrate are used for ambient assisted living and security applications. In the automotive market smart textiles can provide flexible and robust substrates for interior lighting and sensors and for integration of functionality in seats.

Aging population, increasing world population, constant pursuit for better quality of life and increasing spending power can also be considered positive driving market factors for the smart textiles sector. These drivers could aid the development of a new class of applications and products with the ability to disrupt existing markets and market positions.

Diversification of businesses into new and emerging markets





Low-cost countries have successfully attracted a large part of the manufacturing capacity of Europe’s traditional textile industry, competing with their European counterparts on cost and efficiency. The European companies have to look for other competitive advantages. An option is adding more value and functionality to the textiles to differentiate themselves. Smart textile applications offer the European sector a series of opportunities of re-establishing a strong position. This helps the European companies to increase the revenue streams and also compensate for the employment shake-out in the EU.

The advent and growth of smart textiles in Europe will gradually lead to rejuvenation of the textiles industry and bring new markets to ICT and electronics industries which are key enablers for several dependent industries. These three industries form a significant part of European manufacturing and services industry and also generate very significant part of GDP of Europe.

Emergence of new role for integrators

The emergence of smart textiles has given rise to new roles and responsibilities like smart textile system integrators. These integrators play vital role in the quality and efficiency of the final product. They have a strong position. There are still many challenges in making a natural connection between textile and electronics. The electronics and textile industry are very different and understanding of both, including their value chains, is needed. At system integration level the most work has to be done and the most skilled people are needed. These integrators could be large companies who have access to a lot of resources and established brand name in the consumer market or SME’s who have built up the required expertise.





6.4 Threats

• Electronics and textiles have completely different legacies and knowledge about each other is missing

• Insufficient performance of the devices

• Insufficient consumer acceptance of smart textiles

• Countries like Japan, US and China are catching up in the technology development of smart textiles

Electronics and textiles have completely different legacies and knowledge about each other is missing

Smart textiles or electronic textiles or wearable electronics are the result of integration of two major industries: textiles and electronics. Both industries have completely different industry structures, cost structures, value chains and supply chains. Integration of both industries will be successful only when one has good knowledge of the functioning of both industries. This particular knowledge on the both sides, which is essential for the growth of smart textiles industry, is missing. to a large extent.

Clusters of companies with different backgrounds could be the beginning of a solution but finding the best partners can be difficult.

For some applications there is also a lack of clarity about which sales channel should be used. One of the existing textile channels, one of the existing electronics channnels, or a completely different channel?

Insufficient performance of the devices

The technical challenges of efficiently bringing together textiles and electronics still exist and must be solved. Otherwise smart textiles will become a niche. Neither can the technology fulfill all application demands yet, in particular in healthcare.

Some supporting disciplines, e.g. batteries, are lagging in developments are slowing down the process of development of high performance and efficient prototypes.

Insufficient consumer acceptance of smart textiles

There is little response in terms of sales of the smart textiles applications because of low performance and inefficiency of the application due to lot of technological problems like wash-ability, durability and power. These technological problems have lead to price/performance mismatch which has resulted in meager customer response and consumer acceptance of smart textiles applications.





There is a lack of awareness about the possibilities of smart textiles. In particular for introduction into healthcare there is a huge barrier. Clinical end-users are slow to change their customs. This is hindering investments: private companies need the belief of the market before they are willing to invest.

Countries like Japan, US and China are catching up in the technology development of smart textiles

Countries like Japan, the United States and China are investing heavily in the development of smart textile applications. Companies are encouraged to innovate by means of a strong government technology policy and if applicable by direct government involvement in company operations if these are considered of strategic importance. . These countries are a potential threat to the European sector.

7 Industry analysis

7.1 Major stakeholders in the Smart textiles industry

The following are identified as major stakeholders who play influential role in the development and commercialization of smart textiles. These stakeholders are identified based on the issues and the role they can play in solving those issues and resulting in development of high performance and efficient prototypes.

Leading names in the respective vertical markets The European smart textiles sector is dominated by SMEs and spin-offs from research institutions. These companies lack knowledge of commercialization, have very little power to influence and involve other value chain partners, weak market linkages or access to end-user market, no brand recognition in the end-user market and lack supply chain and logistics capabilities. On the contrary, leading names in the end-user markets have all the capabilities for successfully commercializing a new product and overcome all the shortcomings of SMEs. But these big names are least interested in niche markets which have low potential streams and high development costs. The profitability and market potential do not justify their investment. These companies can be really influential in bringing the products to the market. One such instance is the acquisition of Textronics by Adidas. Adidas International, Inc. has acquired Textronics, a leader in the development of wearable sensors for use in fitness monitoring for sports and wellness market.

Strategies that can be followed to activate this stakeholder are:

• Involve this stakeholder in multi-stakeholder project or large Integration Projects (IPs) with public and open funding schemes.

• Develop vertical market oriented clusters and give these companies leading role in those networks

• Encourage them to participate in PPP projects in vertical markets like healthcare and defense, and motivate them to develop products by means of schemes like subsidies.





Research institutions Research institutions play a very major role in the development of the contributing technologies and the technology itself. They carry on research and development activities to solve the research, technology and development gaps in the value chain. These stakeholders are influential in effective transfer of technology from research to industry. They are an active partner in the research and development activities and do not need external motivation to involve them in the research and development activities. But these companies lack knowledge about the user requirements due to their position in the value chain and bringing them closer to the end-user might result in efficient applications.

Textile and machine component manufacturers Textiles and machine component manufacturers play a very important role in the development of smart textile products as they are one of the important suppliers in the value chain. For developing smart textile applications, it’s primary that the textile companies and textile machine component manufacturers should understand the new industry and participate along with other disciplines to develop the prototypes. Textiles industry on the other hand, is very conservative industry and mainly competes on cost. The textile companies are less keen on innovating new products but more keen on processes that can reduce the cost and help them manufacture the textiles at a competitive price. To involve textile companies in the innovation process is a major hurdle due to their profitability and business model.

• Joint calls and research initiatives with other sectors and European technology platforms to cooperate and collaborate in the research of developing OEM components and other materials which can use the existing technology of textiles companies.

• Encourage them to participate in various clusters and motivate them with funding to develop new products and applications

• Promote textiles as just a carrier or sub-component rather than the product itself as textile industry is not very keen on innovating by itself,

Funding agencies or venture capitalists These stakeholders play a very important role in the upscaling of successful prototypes and subsequent commercialization. Encouraging venture capitalists to participate in the commercialization of successful prototypes brings in market knowledge and huge capital investments required to test, pilot and large scale production of prototypes. These VC companies are mainly profit oriented and they concentrate only on commercialization of the prototypes. The VCs also bring in much needed contacts and expertise in market development and in developing strategic partnerships which will help the technology companies to achieve commercial success.

• Developing new kind of schemes to involve them in the actual commercialization of technology like IP rights for minimum royalty, subsidies, PPP projects with attractive terms for investment





• Encouraging them to participate in clusters and to closely follow the developments of prototype applications

End users/user organizations The end-users play a central role in the development of smart textiles applications as they are the decision maker. Involving end-users in the initial phases of technology development have advantages like continuous input of user requirements, participation in user tests and providing continuous feedback on the prototype. This will enable to increase the effectiveness and efficiency of the product and modify the product to match the consumer requirements. This saves a lot of money for the developers and reduces the time to market the product. For instance, the patient organizations play a very important and influential role in healthcare market and they also help the companies to translate the patient’s requirements into technical requirements and user feedback on the system or product.

• Involve user organization or consumer organizations who can translate the needs and concerns of the users in the initial stages of development and during user tests.

• Encourage these consumer organizations to become part of clusters representing vertical markets so that the companies can develop partnerships and collaboration with these organizations.

7.2 Key factors for the success of European smart textiles sectors

The need for killer applications and sound business cases :

Developing and supporting innovation

One of the key success factors for the success of European smart textiles sector is to develop innovations and support the innovation spirit among the European companies by providing access to public funding and other financing possibilities. The European smart textiles sector is dominated by small and medium companies and spin-offs from research institutions which are basically finance and resources constrained. Promoting and developing innovation in these companies is essential for the leadership of European smart textiles sector on global scale.

Strategic partnerships among the value chain members

One of the main impediments that is hindering the development of smart textiles applications in Europe is lack of cooperation and collaboration among the value chain members. For the European smart textiles sector to achieve global leadership, the coordination among the value chain members has to be improved. By establishing networks and clusters, the strategic partnerships among the stakeholders with similar interests can be developed. This solves the issues like lack of cooperation among the value chain members and results in better understanding of requirements of the members up and down in the value chain.

To compete on the global smart textile market, European smart textiles sector have to develop Unique, sophisticated and high performance products/applications that meet the consumer requirements and has match between the price and performance. This can be





done by Quality Function Deployment matrix which can help the companies in identifying a product that can match with customer requirements, performance and price.

Accessibility of capital for testing, validation, pilot production and upscaling of large scale production

The SMEs developing the smart textiles based applications are resources constrained and should be provided with additional capital or funding for conducting user tests, validation and certification of the product and, and pilot production to check the feasibility and performance of the product. The user tests will provide the feedback which can be incorporated and modified according to the market requirements. The financial funding should also be made available for the up-scaling of production facilities which can enable the smart textiles developers to produce the products at optimized production price.

Identify high potential vertical markets and drive innovation in those respective markets

The European commission should set up a committee of experts from industry and research to identify the high potential vertical markets. Then the EC should provide funding to those vertical markets so as to drive innovation among the smart textile developers in those vertical markets.

Promote smart textiles industry and vision

The European commission should promote the smart textiles industry and the vision and roadmap of the smart textiles industry to create awareness among the smart textiles stakeholders. This will help in creating a positive image among the stakeholders and drive innovation among the smart textiles industry.

7.3 Road blocks or challenges

Below are the list of major challenges and roadblocks identified in the multi-stakeholder workshop conducted by SYSTEX partners. Excerpts from the workshop:

The smart textiles industry is in it infant stages and there is no established value chain for the industry. For developing smart textiles and to achieve commercial success, it’s important that the smart textiles integrators should have the lead in the value chain. It’s also necessary to include the value chain members in the initial stages of R&D and motivate them to invest in R&D of the products. But most of the individual value chain members are interested in having power over the value chain which makes it more complicated for the smart textiles integrators to take lead in the value chain. If the smart textiles integrators are SMEs, it is difficult for SMEs to take lead in the value chain and motivate other members to participate and invest in the product development. Consideration of different kinds of innovative business models should solve this problem to an extent.

The second biggest issue is that there is no good business case existing. Having a good business case which makes the product or application a commercially viable one is the most important and even more important than having a good technology. There is no need to





have a great working technology, but to have a good, decent working technology that can evolve and improve over a period of time is essential.

For achieving commercial success with the smart textile based solutions/applications, it’s essential to develop smart textiles based solutions that can be used by the users or consumers in the same way they used traditional textiles.

Lack of direction or vision or lack of market orientation or lack of clarity about the applications of smart textiles or end-user markets among the smart textiles developers is considered to be one of the important issues that are hindering the development and subsequent commercialization of smart textiles.

The smart textiles industry is comprised of mostly SMEs and spin-offs that are ventured out by universities and applied research institutes. These companies are not able to succeed in commercialization of smart textiles based applications due to lack of financial and personnel resources, expertise outside their specialized field, access to the end-user markets, lack of value chain members who are interested in collaborating in the innovation and brand name in the retail market. This should start by identifying lead companies that agglomerate small high tech start-ups.

The smart textiles industry is still in its infant stage of technology development and there is no clear industry or market structure for the development of technological applications based on textiles and subsequent commercialization of applications. The industry is mostly surrounded by the presence of SMEs which are very specialized and very few established big names. These companies are carrying out research on smart textiles applications in random manner. The smart textile industry has also characteristics like no established value chain and supply chain, less interaction and collaboration among the various value-chain partners for the development of smart textile applications, less understanding of requirements of the end-users in the respective markets, no clear specifications about the applications, lack of industry standards for the smart textiles and applications mostly developed are only catering to very small potential markets and niche markets.

Lack of lead by the established companies and big names in the market is also one of the biggest drawbacks in the non-commercialization of smart textiles. Companies with established brand name and efficient supply chain are showing less interest in entering into the markets as the markets are mostly niche markets, low profitability and less consumer acceptance of the products which are already available in the market. These companies are waiting for the killer application which can generate pull from the market.

The other issue that is also mentioned was due to lack of lead by the textile companies which are not interested in accepting the lead role and like to be in the role of just a carrier or sub-component supplier. The textile industries are characterized by mass production, highly efficient, competing on costs, established supply chain and value chain relations, conservative in nature, huge competition among the companies, less risk-taking, less in house R&D facilities, very low on innovation, mostly vertical companies owning most of the supply chain, very specialized and low profitability. Because of this conservative nature, the textile industry is not willing to take a lead role and wants to be recognized as a carrier of technology rather than being at the centre of development. Lack of interest and less





willingness to collaborate and invest in the development of smart textile based applications by the value chain members of the textile companies is also one of the obstacles for the investment and collaboration among the value chain members of textiles towards smart textiles. Due to low profitability (because of niche markets) and high risk in the development, many of the value chain members of the textile companies are very less inclined to invest in the innovations in textiles.

The other issue is considered to be funding to those SMEs which do not have in-house R&D capabilities and basically have to buy the expertise from outside. These SMEs are less effective in developing the innovations and they carry out development activities surrounding hype, and this type of funding is also leading to false competition.

Lack of commercialization of smart textiles in the medical market is basically due to the nature of the health care industry. The healthcare industry have the following characteristics like state owned, bureaucratic, too many decision makers like insurance companies, medical professionals, government and other parties like patient organizations, need for highly reliable and tested technologies due to huge legal and responsibility issues, long term trials for collecting medical evidence, huge financial resources required for the validation of the product and conducting clinical trials, ethical and social issues like privacy and confidentiality, stringent governmental guidelines for the introduction of the product into the market, low technology adoption, less technical orientation of medical professionals and reimbursement issues. These characteristics of the healthcare market make it more difficult for the new and emerging technologies like smart textiles to be commercialized in healthcare market.

One of the suggestions made was regarding the protection of IPR. The government has to bring in stricter and stringent guidelines regarding the protection of IPR and guard the interests of the companies investing in the development of new innovations.





8 Recommendations

The main objective of this vision paper is to contribute to the improvement of the efficacy and innovative strength of the European smart textile sector in selective lead markets in the short term. To provide strategies for building a strong manufacturing infra-structure for the sector in Europe, in which application oriented research and engineering should be the core drivers. And to foster the establishment of leadership positions in the smart textile global markets in medium term.

Short term

In the short term, the aim should be to promote and develop innovations based on existing technologies and to actively leverage the profile of the sector in and among the related industries and in the global marketplace. This helps in attracting investments internally and externally and also in creating awareness about successful prototypes and research activities underway in the European smart textiles sector. This creates confidence and a sense of a direction among the stakeholders and attracts more resources to develop and innovate the sector.

• Develop the new smart textile applications based on available existing technologies such as (textiles) material technology, ICT and electronics;

• Promote the smart textiles industry to gather mass and create awareness among the end-users;

• Promote innovation in the leading and emerging markets by identifying the lead markets and guide the innovation in those markets by concentrated funding;

• Invite for joint calls with the textile machinery manufacturing industry for building or developing machinery for large scale production of smart textiles;

• Bridge the technological gaps in the smart textiles value chain by STREPS;

• By IPs (integration projects), build new applications in the lead markets;

• Develop and establish networks and clusters to promote partnerships among the value chain.

Medium term

In the medium-term the concentration and aim of the authorities should be focused on up-scaling production of successful prototypes. Additionally attention should be given to conditional requirements such as certification, rules & regulations, and human resource requirements.

• Provide capital for pilot production, testing and upscale of the successful prototypes and products to cater to larger markets;

• Design strategies for developing the human resource requirements of the industry;





• Change to growth path by industrialization of the smart textile prototype applications.

Long term

Developing a long term vision and related strategies for the sector, looking 10-15 years ahead, is not part of this paper, where commercialization issues are at stake. It doesn’t mean to state that a long-term vision and technology roadmap are not important for the sector to survive. In an industry, which is founded and driven by technology, fundamental research for innovative materials with enhanced functionalities is of utmost importance. Fundamental and break-through oriented research for processes at the nano-scale and the connection with and integration into micro systems and components deserves major attention. It is suggested to start a consultation process among European researchers and scientists in order to draft a strategic and long-term oriented textile research agenda.

• Invest in the fundamental and long term RTD of smart materials and processes.

8.1 Roadmap towards implementation

In the previous sections efforts were given to state a clear notion about the various issues and roadblocks stakeholders in the smart textile sectors in Europe are currently encountering and the various impediments hindering the commercialization of smart textile applications. It is an example of what Clayton Christensen (professor and innovation guru of the Harvard Business School) has come to define as “The Innovator’s Dilemma”. Major brand-owners in and related to the textile sector (as in other market-oriented industries) with excellent market research departments, constantly checking their customer’s demands, are missing opportunities offered by disruptive innovations, because their end-users/customers haven’t signaled any demand for it. This is a phenomenon, which is typically related to and based on technology advancements, and is characterized by an abundant number of demonstrators and prototypes created by stakeholders further back in the value chain. This dilemma is equally bothering the smart textile sector, and it is pre-dominantly this dilemma that should be overcome. Below are some of the suggested actions for policy making at the level of the European Commission and representative organizations of the European textile stakeholder community. It might be the beginning of a strategy development process in which eventually all European stakeholders in the sector should be involved.





Strategic issues observed Actions Suggested

Lack of lead role in the value chain in the area of smart textiles

� Encourage the major stakeholders (Major OEM’s, integrators, etc.) to take the lead in the value chain. This starts with identifying and approaching the OEM/Brand-owners in the major lead markets. Communication channels within these selected vertical lead-markets should be exploited. Networking sessions should be focused on vertical lead-markets and organized in workshop settings.

� Stimulate the involvement of end-users as well as product designers in project consortia, to drive the technologies to the market. These end-users will quickly note when textiles really bring a clear benefit for the customer. Moreover, remaining technology challenges can probably best be solved for a particular application, instead of going for very general technology. Early involvement of end-users also accelerates acceptance by professional end-users, e.g. clinicians.

� Create awareness about existing expert networks and technology clusters, and information about the various stakeholder communities carrying out innovations in similar targeted markets. Define feasible and short term goals with a clear aim of commercialization of the prototype.

Lack of identity and visibility of the smart textiles industry

� A platform is requested with members for all smart textiles stakeholders (this could be a continuation of SYSTEX) that helps companies find each other to form the necessary clusters of expertise. SMEs recognize the value. The platform can take up the additional task of increasing awareness of the possibilities of smart textiles in potential end-user groups. It can provide information, organize demonstrations, promote smart textiles at conferences and fairs, etc.

� Develop an integrated marketing strategy of the sector as a public-private partnership project of the European commission and industrial partners jointly. Part of the marketing strategy should be to support the visibility of and for the sector across the global markets.





� Establish a special interest group by lead markets

(including all major value chain representatives) with a clear goal of promoting the achievements of the specific smart applications.

Lack of vision and market orientation among the smart textiles developers

� Conduct a detailed market research regarding the potential of various vertical markets and various research developments under development. This awareness regarding the research accomplishments and information about vertical markets potential will help the companies to have definitive strategy regarding the end-user markets. It also gives the companies information about the companies leading the development of specific technology which can help the companies in forming strategic partnerships.

� Link the smart textiles community to relevant and multiple ETP’s (such as EURATEX, EPoSS, Photonics21, etc.) in order to allow for cross-fertilization and the establishment of heterogeneous research projects where researchers and engineers from different disciplines are collaborating on a shared RTD objective to solve complex RTD challenges.

� Exploit the network potential of these technology platforms for establishing strategic research partnerships.

� In addition to the dominating longer term fundamental research, promote shorter term development and market creation. This is successful in Asia. It can prevent that things that are possible with smaller innovation steps, are overlooked. And successful products can stimulate the acceptance of smart textiles, also in other sectors that the sector that the product was developed for. The short-term work could be in line with a technology roadmap that describes small steps from discrete components attached to textile towards full integration.

Lack of a coherent validation strategy

� Funding schemes and provisions for conducting the validation tests for the prototypes and research for end-user requirements. This can support the companies to develop an user-oriented product that might appeal to the consumer/end-user. Funding these validation tests should become part of the





overall funding for the project. Proving the effectiveness or benefit of a product or service is time-consuming and costly. In particular for medical applications. For SMEs it is very difficult to carry this burden. Most of the public funding schemes do not include the validation process as part of a grant. Inclusion will help commercialization.

Lack of cooperation and collaboration within and among the value chain partners

� Create stakeholder networks and technology clusters for the development of smart textiles applications based on lead markets and enable the stakeholders to form strategic partnerships.

� Get people and companies involved from other fields than textiles and electronics only, so that all available technical and scientific knowledge can be used to solve the technical challenge of a natural connection between textiles and electronics. One example of another field is mathematical algorithms. Extra intelligence and/or self-testing in a device allows the use of slightly lower quality components. A clever algorithm could allow the use of a large number of inaccurately positioned sensors instead of a few exactly positioned sensors. The involvement of other fields could be encouraged by favouring proposals from consortia that bring together partners from a number of different fields.

� Develop an industry competence matrix with the details of all the companies and their expertise in the area of industrial smart textile applications. This industrial directory about smart textiles companies will give the information about potential partners for the design, development and commercialization of smart textiles.

Research, Technology and Development gaps in the technology and value chain

� Stimulate researchers and developers to think in new ways, rather than to look for alternatives for conventional technologies.

� Make a clear distinction between a strategy for projects with a shorter term focus and projects with a longer term focus. projects which attempt to provide short- and long-term results in one are often unfocussed and ultimately less relevant. For the longer term projects a ‘proof of feasibility’ should be considered a success. For the shorter term the consortia should be stimulated to work beyond the ‘proof of feasibility’ stage towards an actual product





that can be commercialized.

� Conduct a detailed survey regarding specific vertical markets and mapping the technology in those specific vertical oriented industries to identify the technological gaps for those industrial applications and designing STREPS for bridging the technological gap by funding the research.

� Develop a detailed technology roadmap for guiding the research and development of various smart textiles applications. Develop detailed TRLs and map for commercialization of prototypes.

� Promote efforts on standardization. The CEN/TC 248 standardization committee is a good example.

Lack of SME involvement in public funded projects

� Facilitate the involvement of SME’s in public funded RTD projects, by including conditionally an OEM (with established sales and distribution channels). The OEM should be the core within large IP’s, along with a number of SMEs. In case the OEM would not take up responsibility for the project, they could be directly involved ( as observer and/or advisor), but without commitment or responsibilities.

� Create higher awareness among smart textile SME’s stakeholders regarding the availability of public funded .

� Further stimulate SME participation in project consortia of companies that have not participated before.

� Create clear regulations facilitating SMEs with low volume to distribute products in the EU and beyond. Harmonize regulations between different countries. Organize regulations so that registration in one country is sufficient for doing business in the entire EU.

� Establish STREPs, specifically promoting SME participation, to carry out targeted research or innovation that might bridge the gap in the research and result in successful market-ready prototypes.

Lack of investments in up-scaling

� Identify the successful prototypes and fund them for validation and pilot production of those prototypes to check out the feasibility and performance of the





prototypes.

� Identify the impediments for large scale manufacturing of smart textiles applications and invite for joint calls with those industries to fund the development of those industrial components.

Upscale of successful prototypes of past European projects

� Identify the successful prototypes and IP generated in the past projects and design funding schemes for commercialization of those successful prototypes and bring products based on the IP.

� Place a special research focus on issues that are directly associated with mass manufacturability of smart textiles.

Lack of human resources � Develop a detailed plan on how to fulfill the human resources gap for the emerging smart textiles sector with new university courses and knowledge migrants.

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