The Eco-Innovation Challenge

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The Eco-Innovation Challenge

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30

20

10

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eco-innovation

observatory

future price increases. Criticality of materials adds to this outlook and gives further pressure

to innovate, especially in the electronics industry, automotive and others.

The preferred business strategies to reduce material costs within the last 5 years seem to

vary, comprising purchasing more efficient technologies (56%), developing more efficient

tech nologies in-house (53%), increasing recycling (52%), better supply chain management

(46%), substitution of materials (38%), outsourcing (30%) and changing business models

(27%). Those measures taken to reduce material costs differ among sectors (Figure 4.8).

Figure 4.7

Material costs as a percentage of company's total costs

Food services

Manufacture

Water

50 % or more Between 30 % and 49 % Between 10 % and 29 % Less than 10 % DK/NA Not applicable

Source: EC 2011b; Q1: What percentage of your company's total cost - i.e. gross production value - is material cost?

Purchasing more efficient technologies was mentioned as the most popular change by

companies in the agriculture and fishing (69%), manufacturing (57%) and construction (56%)

sectors. Developing efficient tech no lo gies in-house was commonly cited by companies in

the manufacturing (58.1%) and agriculture and fishing (57%) sector. Recycling was the most

often cited method by companies in food service (59%), construction and manufacture (both

52%). No big inter-sectoral differences can be poin ted out for the strategy of improving the

material flow in the supply chain, it is re a li zed by 40 to 50% of the respondents over all

regarded sectors. Substituting ex pen si ve materials for cheaper ones is especially mentioned

in the agriculture and fishing sector (45%). The stra te gies of out sour cing and of changing

the business model are the least favourites and are im ple men ted by about 20 to 35% of the

respondents.

Construction

Agriculture and fishing

Annual Report 2010

Purchasing more

efficient technologies

was mentioned as the

most popular change

by companies in the

agriculture and fishing,

manufacturing and

construction sectors.

45

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