GCE NODE NEWSLETTER DECEMBER 2014

GCE NODE NEWSLETTER DECEMBER 2014

WHAT A YEAR! Tor Henning Ramfjord Chairman of the board GCE NODE 2014 stands out as one of the greatest years for NODE and the companies that comprise the cluster. Congratulations, everyone and well done! In June, NODE was awarded status as a Global Center of Expertise. This is, in the words of Minister of Trade and Industry, Monica Mæland, the Champions League of business clusters. In other words: The very highest level. Considering that NODE already has a Gold Label from the European Cluster Excellence Initiative, it is safe to conclude that NODE is one of the most successful business clusters in the world. A lot of hard work and determination goes in to building a cluster like NODE. In order to stay in front, it is important to keep moving. We should always strive to develop better procedures, products and services. There should be a strong emphasis on research, development and innovation (RDI). Only weeks ago, the University of Agder, NODE and several partners were given an outstanding tool for increased RDI, as the Research Council of Norway awarded us a Center for Offshore Mechatronics. The idea is to build world-class research facilities and attract world-class researchers to a region where a leading global technology cluster is already located. This is an excellent opportunity for us to create the next big thing for the industry. The university will host the center, located in Kristiansand/Grimstad, which aims to become the international knowledge and research hub for the next generation offshore technology. Center for Offshore Mechatronics will enable NODE companies to maintain global competitiveness and to extend existing technology and competence to new markets. However, we need a pilot test lab to test and qualify new products for the market. I sincerely hope our leading politicians will find funding for Mechatronic Innovation Lab (MIL), the missing part in our industrial puzzle. MIL is still top of NODE s and the Agder region s agenda. Whenever I tell new acquaintances the story of NODE, they always struggle to understand how and why we cooperate with our fiercest competitors. As NODE has proven for almost ten years, it is the ability to both cooperate and compete that is the successful formula. The growth of the NODE companies, and consequently the cluster, is unprecedented and serves as a living documentation of the power of clusters. I would like to extend my gratitude to all who have contributed to making 2014 a highly successful year for NODE. A special thanks to the administration led by CEO Anne-Grete Ellingsen. We do notice the long hours and hard work she and her staff put in to NODE. To all members and friends of NODE: Merry Christmas and a happy new year. I look forward to a busy, challenging and rewarding 2015. Tor Henning Ramfjord Chairman of the board GCE NODE

- NODE REPRESENTS A GREAT TRANSFORMATION OF AN ENTIRE REGION The godfather of Norwegian clusters, Torger Reve, is glad to see NODE as a Global Center of Expertise. - I was not surprised when NODE was given status as a GCE, nor when NODE and the University of Agder were awarded a Center for Offshore Mechatronics. Both are in line with my recommendations based on research on clusters, says Reve, Wilh Wilhelmsen Professor in Strategy and Industrial Competitiveness at BI Norwegian Business School. In his book, Et kunnskapsbasert Norge (2012), Reve describes a new level of clusters, supplementing the two existing levels: Arena and Norwegian Center of Expertise. - We saw that a few clusters, in Kristiansand, Ålesund and Kongsberg, had an international dimension, which was not covered by the current cluster program. This led us to suggest the introduction of a new level we labeled it Global Center of Expertise to cater the needs of the most globally focused clusters, says Reve. Within a year after his book was published, the idea was carried out. Applications for the GCE-level were accepted and in June 2014, NODE and Blue Maritime were promoted to this new level of business clusters. In his book, Reve also argued that public funding should be funneled to a few rather then spread out to many. - The effect what we as a society get in return from our investments is greater if we reinforce already strong entities. Research suggests that Centers for Research-based Innovation, and other public measures - No surprise, said Professor Torger Reve when NODE was promoted to Global Center of Expertise. to support business, should be given to our strongest clusters. Therefore, I am happy to see that both GCE NODE and GCE Blue Maritime received such centers. This is textbook stuff, says Reve. Now, the professor expects good results from the GCEs. - NODE companies will be measured by how they are able to adjust to a changing market. Lower oil prices will affect many companies as projects are postponed or cancelled. The technology cluster must expand the industrial base from drilling and cranes to other market areas. Innovation is key, says Reve. Reve expects NODE and NODE companies to become even more internationally oriented. - The cluster should connect with leading global universities and research institutions in Houston, Rio and other areas of the world. Companies should also cooperate more internationally. Whenever I talk to representatives for NODE companies in Singapore, it is clear that the idea of a cluster is much stronger in Agder then abroad, says Reve. He has followed the development of the oil and gas industry in Agder for three decades. - NODE represents a great transformation of an entire region. Agder has grown a group of companies that have made a big impression on the global scene. Nobody would have been surprised to see this happen in Stavanger. But to see it happen in and around Kristiansand and to see this cluster surpass Stavanger, and even Houston, in certain areas, is both surprising and impressive, says Reve. - Most of the work is of course done in the companies. The cluster organization should only facilitate the development and play a role in strengthening the companies, says Reve. www.gcenode.com

AWARDED A NATIONAL RESEARCH CENTER Rector Torunn Lauvdal and Dean Frank Reichert at the University of Agder celebrated when the Center for Offshore Mechatronics was awarded to the university, NODE and partners. The new Center for Offshore Mechatronics will be a national research facility within its field of expertise. - We will attract scientists from all over the world. In Kristiansand and Grimstad they will do research at an international level in cooperation with and on equipment from world-leading companies, says Frank Reichert, Dean at the Faculty of Engineering and Science at University of Agder and Center for Offshore Mechatronics Coordinator. In November, The Norwegian Research Council announced that the university, NODE and Norwegian and international partners were awarded a Center for Research-based Innovation. This will in total result in MNOK 192 for research in the center over an 8-year period. - An entire region is promoted to the top international level of research, development and innovation. This is outstanding news for the university, the industry and the region of Agder, says Torunn Lauvdal, Rector at University of Agder. - The research center will enable us to sustain and further develop our position as a global technology cluster. We can now lead the way as the oil and gas industry takes a technological leap into the next era. Key words are automation, robotics, remote handling and big data, says Anne-Grete Ellingsen, CEO of GCE NODE. - We will create a world-leading scientific hub on remote control of heavy machinery and objects, the information systems handling those operations, and effective distribution of that information, says Reichert. The university will host the center, located in Kristiansand/Grimstad, which aims to become the international knowledge and research hub for the next generation offshore technology. - NODE companies came together and agreed on a future strategy. That gave us a platform on which to write the application for the center. Without it, it would have been impossible to get public funding, says Ellingsen. The start-up date for the project is April 1, 2015. CENTER FOR OFFSHORE MECHATRONICS Location: Kristiansand/Grimstad Host: University of Agder Budget 2015-2023: MNOK 192. Funding is provided by The Norwegian Research Council (50%), industry and research partners. Industrial partners: Cameron Rig Equipment, MH Wirth, National Oilwell Varco, Skeie Technology, Lundin Norway, ABB, Devoteam, Lockless, Stepchange, Applica, GCE NODE, GCE Blue Maritime. Research partners: University of Agder, NTNU, Teknova, Ålesund University College, Rheinisch-Westfälische Technische Hochschule (Germany), Aalborg University (Denmark).

OPTIMISTIC ON BEHALF OF MECHATRONIC INNOVATION LAB Two standing committees have submitted notices to the National Budget arguing for funding for the Mechatronic Innovation Lab in Grimstad. - These notices are important. We are now more optimistic as we await the Revised National Budget in March, says Anne-Grete Ellingsen, CEO of GCE NODE. Both in NODE companies and at the University of Agder, which will host the lab, there was disappointment when the National Budget was presented in October, with no funding for the Mechatronic Innovation Lab (a.k.a. Sørlandslab). Representatives for several political parties argued for public funding for the lab, which needs MNOK 20 in the first year and an additional MNOK 80 to purchase the equipment needed to perform pilot tests. - Unfortunately, the negotiations between the ruling political parties and their supporting parties did not produce any money for the lab. However, both The Standing Committee on Business and Industry and The Standing Committee on Education, Research and Church Affairs have submitted strong notices, which increase the likelihood of funding for the lab in the revised budget, says Ellingsen. In a notice, The Standing Committee on Business and Industry says it considers the establishment of a test and demonstration facility an important instrument to stimulate growth. The initiative is important for strengthening value creation, increasing adaptability and giving small and medium enterprises access to pilot test facilities that are usually reserved for larger corporations. ( ) The initiative is an important contribution to strengthening competitiveness in the oil sector, but also in moving more skills and technology from the petroleum sector to the renewable sector. The Mechatronic Innovation Lab is planned built in Grimstad. The Committee notes that MIL should be a common arena for research, innovation, development and education, and is a high priority for the Agder region. The Committee notes that MIL will help to meet industry needs for advanced laboratory facilities and will strengthen cooperation with leading research institutions in Norway as well as internationally. - We have identified a gap in the Norwegian innovation system, a gap MIL could bridge. We continue to work relentlessly for a lab which would solidify our world-leading position and support a technological transition, says Ellingsen.

FROM ALL-TIME HIGH TO HIGH Anne-Grete Ellingsen CEO GCE NODE The price of oil plummets, but CEO Anne-Grete Ellingsen of GCE NODE is not worried. - The media paints a picture of a huge industrial crises but the truth of the matter is that the oil and gas industry is coming down from an all-time high to a high level. Yes, investments will go down on the Continental Shelf in 2015, from a historically high level to a 2012 level, says Anne-Grete Ellingsen, CEO of GCE NODE. - It is important to differentiate between what Statoil is doing in the North Sea and the rest of the global energy markets. Statoil have had a period with very high investments in drilling and new projects and at the same time, they want to pay high dividend to their shareholders. This gives a very tight cash situation, which leads to postponement of projects, says Ellingsen. She thinks most NODE-companies have had a healthy approach to the boom in recent years. They are now able to scale down operations by terminating short-term laborers, says Ellingsen. Most of the NODE companies are suppliers to the global market and have an order book for deliveries. Four drillships with equipment from National Oilwell Varco side by side. Ellingsen follows the development in oil prices closely. - The two big questions now are whether the US can continue to produce high volumes of shale oil at high cost, and how long OPEC countries are able to live with oil prices well below the level several OPEC members need to balance their national budgets, says Ellingsen. Lower prices represents an opportunity and a necessity for the industry to think differently and implement new technology. Suppliers have new, cost cutting solutions that oil companies are hesitant to make use of. - Now is a perfect time. It is also time for a closer customer-supplier cooperation to reduce costs even more and rebuild the North Sea as a laboratory for innovative cost effective technical solutions. This will be beneficial both for the North Sea and the Norwegian-based supply industry as well as exporters of products from Norway to the global market, says Ellingsen.

NODE-STAND AT OTC GCE NODE will be part of the Norway stand at OTC in Houston in May 2015. NODE to host a stand at OTC 2015, the world s largest oil and gas expo. - For the first time, NODE has been granted space by Innovation Norway at the OTC Norwegian Pavilion. We are excited for the opportunity to showcase the NODE cluster at this global venue, says Project Manager Ann Marchioro at GCE NODE. Based on the success of the joint NODE-stand at ONS 2014 in Stavanger, NODE would have preferred to invite NODE-companies to a joint stand at OTC 2015. - Unfortunately, we were unable to arrange this. However, Innovation Norway has agreed to appoint a committee to see how business clusters can be part of major international expos like OTC and Rio Oil & Gas from 2016, says Marchioro. At OTC 2015, NODE will host a workshop on big data, in cooperation with partners from Silicon Valley, universities and research institutions. NODE will also participate in the annual reception at the Wynden on Sunday, the day before OTC opens. The reception is hosted by Kristiansand municipality. - We encourage NODE-companies to attend and to bring customers and partners to the event, says Marchioro. A detailed program for the Agder delegation s visit to OTC is being put together in cooperation with Kristiansand and Arendal municipalities, Aust-Agder and Vest-Agder counties and the University of Agder and will be released after the holidays. All NODE companies are welcome to participate in one of more of the planned events. The Agder delegation plans to travel to Houston on April 30th. If you have any questions about OTC, please contact Ann Marchioro at am@gcenode.no.

50 SCHOOLS WANT NEW FACES 50 schools in Aust-Agder and Vest-Agder have asked for a visit from NEW Faces. - We hope to be able to visit all of them, but we need more volunteers. This year we have support from the STYRKE project (Knutepunkt Sørlandet). They appreciate the important work NEW Faces do, and love the way NEW promotes work possibilities in Agder, says Ann Marchioro, Project Manager in GCE NODE. Juliane Gundersen from NEW Faces visited the British International School in Stavanger (BISS) in December. The school was really happy to hear from NEW and the possibilities Juliane presented. John Gibbs at BISS wrote this to Juliane after the visit: - Thanks very much for a fine workshop/presentation to our students last Wednesday. I, and the students, particularly valued your willingness to include your own path of career choices and your willingness to discuss that. It s exactly what they needed and your ability to tune in with them and put them at ease was impressive. Juliane was also very pleased with the visit: - I had a great trip to Stavanger, and how talented the kids were! Very exciting! AUGUST 2015: GLOBAL OUTLOOK AND NODE CONFERENCE Implementation of new technology and cost cutting efforts will be in focus at Global Outlook Norway and the NODE Conference in Arendal in August 2015. More than 350 people attended Global Outlook Norway last August. The first edition of the conference was initiated by the three Norwegian business clusters GCE NODE, Arena Eyde and Maritimt Forum, and was funded by the Norwegian Ministry of Foreign Affairs. Inspired by the huge turnout, organizers were determined to repeat next year. - Our goal is to establish Global Outlook Norway as an important arena for discussing key global challenges and how they influence business. We are looking for top international speakers to come to Arendal on August 17th, says Anne-Grete Ellingsen, CEO of GCE NODE. The day after, August 18th, GCE NODE and Norwegian Oil & Gas will host the NODE Conference. - NODE Conference will be build as one of the most important Norwegian conferences for the industry, says Ellingsen. Both conferences are held in conjunction with Arendalsuka, a well-known, week-long political and societal debate oriented event. NEW Faces needs more volunteers to visit more schools. More than 350 people attended Global Outlook in 2014.

MERRY CHRISTMAS! Season s Greetings from the administration of GCE NODE (left to right): Anne-Grete Ellingsen, Ann Marchioro, Bente Løvaas and Audun Skare. Absent: Thomas Quist.

CONTACT US www.tressdesign.no GCE NODE Postal address: P.O. Box 505, 4664 Kristiansand S Visiting addresses: 7th floor in Handelens Hus, Rådhusgata 3, Kristiansand post@gcenode.no - ANNE-GRETE ELLINGSEN CEO age@gcenode.no ANN MARCHIORO Project Manager ann@gcenode.no BENTE LØVAAS Administrative Leader bente@gcenode.no AUDUN SKARE Controller audun@gcenode.no THOMAS QUIST Project Manager thomas@gcenode.no