OPPORTUNITIES IN
THE AgE OF DIgITAL
TRANSFORMATION
ICDK.UM.DK
SILICON VALLEY
Industrial Internet could
drive USD 7.1 trillion in MUNICH
incremental revenue in The German Government
the U.S., resulting in a has allocated EUR 200
2.3% GDP increase in million to Industrie 4.0
2030. as part of the High-Tech
Strategy 2020 Action
Plan. Over a 10-year time
span, the German
industry will spend
EUR2.5 billion on key
R&D automation and
manufacturing areas.
SAO PAULO
100% of manufacturing
industry directors perceive
Industry 4.0 as important
for their organization,
according to a recent
survey, and a majority
rate Industry 4.0 as
extremely important.
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tEL AVIV
Over 260 multinational
companies have SEOUL
opened R&D centers
South Korea is instal-
in Israel; in many
ling robots at a pace
cases, the first R&D
that is about four
center outside of their
times the global
country of origin.
average.
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MUNICH
4
MUNICH
RES
FACTS AND FIGU
investing the
an y is the EU-country
G er m mpanies
rie 4.0, and co
most in Indust ropes front
are among Eu
from Germany n of
implementatio
runners in the
Industrie 4.0.
ents
erman Governm n Plan,
Within the G 20 Ac tio
tegy 20
High-Tech Stra located to
m ill io n has been al
EUR 200
Industrie 4.0
, German
ear time span
Over a 10-y ing automotiv
e, automa-
, in cl ud
indu st ry and plant
te ch no lo g y and machine
tio n R 2.5
, will spend EU
manufacturing
R&D areas.
billion on key
are European
from Germany
Companies le of
the use and sa
leaders within
ts.
industrial robo
In Germany, the Industrie 4.0 concept that Industrie 4.0 will mean a fundamental
receives strong support from both research change in the industrial processes and will
facilities, the industry and the government. last for the next 10-15 years. Industrie 4.0
Their collaboration is one of the corner is closely tied to the need to secure the
stones of the German Industrie 4.0 strategies. future of German industry. The starting
point in Bavaria is the digitization of the
Since 2006, the German government has entire industrial sector. This cannot be left
been pursuing a High-Tech Strategy, to to the market itself, and the Bavarian
ensure Germanys strong competitive government therefore invests in new
position through technological innovation. technology, as well as puts frameworks in
The latest policy initiative, the High-Tech place to ensure that the technology is also
Strategy 2020 Action Plan, revolves used at the SME level.
around 10 strategic initiatives, of which the
Industrie 4.0 project is seen as a major op- The Bavarian government basically belie-
portunity for German industry and R&D. ves that companies have two options: To
continue status quo and not invest in new
Initiatives in South Germany developments, whereby they lose. Or, to
take advantage of digital opportunities
and the Munich area and invest in new technology.
Although all 16 German Lnder focus on
Industrie 4.0, the agenda is particularly With Bavaria Digital, the Bavarian State
strong in the southern Lnder Bavaria and Government has issued a policy with a
Baden-Wrttemberg, which are traditional strong notion that development of applied
strong manufacturing and production research must be strengthened in order to
regions. accelerate the implementation of R&D
results in products and services. The
Industrie 4.0 is a prime concern in Bavaria government invests in universities, re-
and deeply intertwined in its ICT efforts search facilities, and technology transfer to
and investments. The view in Bavaria is SMEs. The strategy for Bavaria Digital has
three focus areas:
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MUNICH
CASE
ITS OWL
In February 2012, the German Federal systems. The cluster makes a signifi-
Ministry of Education and Research cant contribution to the innovation
announced the Its OWL (Intelligent and competitiveness of manufacturing
Technical Systems OstWestfalenLippe) and production in Germany.
high-tech strategy as one of the
winners of its Leading-Edge Cluster Its OWL is currently the largest
competition. Its OWL is a science and Industrie 4.0 project in Germany, with
industry technology network, which solutions being developed in 45
aims to set international standards in different projects and a budget of
the field of intelligent technical around EUR 100 million.
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MUNICH
CASE
trUmPF
7
NEW DELHI
MAKE IN INDIA
8
NEW DELHI
9
NEW DELHI
CASE
BOSCh & INDUStrIES 4.0 SmArt belief that not all Industry 4.0
mANUFACtUrING INDUStrY, mADE IN solutions are capital intensive. In Ban-
INDIA galore, Bosch associates have smart
watches that warn them of impending
A 3000 people strong manufacturing machinery malfunctions.
plant, in Nashik, Maharashtra is
powering Boschs implementation of At Gangaikondan, the company uses
Industry 4.0 across India. It serves as smart phones to control heating,
a pilot environment and supports ventilation, & air-conditioning units
deployment of the companys techno- and improve energy savings.
logy in the country. Mr Pravin Pathak,
head of Industry 4.0 for Bosch India, By improving cycle and mean repair
estimates that 13 of the 15 Bosch times, the company is striving to
factories in the country have already achieve better productivity and
implemented smart manufacturing to quality. At their manufacturing plant in
varying degrees. Chakan, Bosch has achieved a quality
level of almost zero defects. The
Bosch is bringing wearable tech to company is well on its way to build
industries, reinforcing Mr Pathaks connected and smarter factories.
10
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SO PAULO
DIGItALIZAtION IN mANUFACtUrING
INCrEASED PrODUCtIVItY IN BrAZIL
Brazil has the seventh largest economy Notwithstanding the challenges of an
worldwide and the worlds sixth largest economic crisis, the development also
labor force. However, from 2000 to 2010, poses opportunities. More than ever
the Brazilian labor productivity within Brazilian industry is now forced to adjust
manufacturing grew by only 0.6% a year to a more competitive environment and
in average. This is a relatively low growth companies are very much aware of the
rate compared to other countries such as potential of new digital technology and
U.S, France, Japan, UK and South Korea, solutions to cut costs and increase
which all record an annual growth rate productivity.
between 3-8% during the same period.
Industry 4.0 focus in Brazil
The low productivity in manufacturing is a
key concern to both government and The public universities and ICT research
industry organisations as Brazil is strugg- centers provide the backbone for Industry
ling to tackle the current economic crisis. 4.0 developments in Brazilian manufactu-
OECDs economic survey for Brazil 2015 ring, for example facilitating both the use
points out that economic growth in Brazil and the development of automation and
will increasingly depend on productivity. robotics. The Brazilian National Confedera-
High trade protection and weak competiti- tion of Industries has formulated the
ve pressures has been holding back ambitious goal to ensure an average
productivity and Brazil has not benefited annual productivity growth rate of 4.5%
from the productivity gains associated between 2011 and 2022 by becoming a
with global trends that have shaped vital player in global robotics both as a
industrial production elsewhere. producer and user. According to the
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SO PAULO
RES
FACTS AND FIGU
das
FIESP (Federacao o)
According to Sa o Pa ul
tado de
industrias do es ro bo ts ha s increased
s of
Brazilian import t since
te of 20 percen
at an annual ra
2013.
rvey amongst
In a recent su s in
industry director
manufacturing on de nt s perceive
the resp
Brazil, 100% of eir
important for th
Industry 4.0 as te d
d a majority ra
organization, an rt ant.
extremely impo
Industry 4.0 as
arket
th largest ICT m
Brazil is the fif pe nd itu re.
rms of ex
worldwide in te
s increased
strial robots ha
Import of indu % since
owth rate of 20
at an annual gr
2013.
13
SO PAULO
CASE
14
SO PAULO
CASE
although benefits are perceived as high, engaging with the Brazilian market for
most companies still expect to implement digital solutions in the manufacturing
new digital solutions. In fact, in a survey industry need to have a well prepared
conducted by Siemens, all manufacturers business plan they should develop
had already conducted an ROI (Return on business models that showcase the
Investment) assessment even though benefits in terms of increased productivity
digital solutions had not yet been imple- and lower costs; acknowledge the limited
mented. possibilities for large technology invest-
ments; and provide viable solutions for the
Nevertheless, the concerns raised by the manufacturer to handle the lack of skills or
Brazilian industry regarding the barriers to lack of external support services needed to
implementation of Industry 4.0 solutions maintain and promote investments in new
suggest that any company considering digital solutions.
15
SEOUL
16
SEOUL
RES
FACTS AND FIGU
ish 10,000
plans to establ 20.
South Korea 20
s in Korea by
smart factorie
ts at a
or ea is installing robo
Sou th K the global
ce th at is ab out four times
pa
average.
n rate is
rnet penetratio
Wireless inte mobile
h Korea has 4G ent.
. Al l of So ut
103% lopm
is under deve
network and 5G
vast number of SME manufacturers that in the manufacturing sector. The vision is
suffer from poor efficiency. that by decreasing productivity cost, South
Korea will maintain the position as a
In order to enhance South Korean SMEs global manufacturing hub. This comparati-
competitiveness, the government has ve advantage on manufacturing cost, via
decided to focus on increasing automation robots and automation of process, builds
17
SEOUL
on the competences within ICT and other Challenges and critical issues
high-tech related technologies. In 2015 IoT
was selected as one out of 13 new growth in South Korea and how they
engines in the South Korean economy. are being addressed
As part of South Koreas industrial
In 2014, South Korea had gained the
conversion plan creative economy the
highest robot density in the world due to
government has launched 17 new Centres
continued installation of a large volume of
for Creative Economy and Innovation
robots especially in automotive and
(CCEI). These 17 centres have been
semi-conductor industries. The average
established across the nation, to serve as
global robot density is about 66 industrial
The State level Innovation
robots installed per 10,000 employees in Centre a platform spearheading regional
innovation and entrepreneurship each
will
the lower
global the entry
manufacturing barrier
industries; thefor
targeting a specific industry and
most automated markets are South Korea,
Start-Ups and inspire
Japan and Germany, and South Korea is
mass technology area. Each centre is matched
innovation in the cash intensive with one of the South Korean
leading the race with 400 robots per
conglomerates.The CCEI in Gyeongsang
10,000 employees. According to Boston
robot industry
Consulting Group, South Korea is installing
focuses on smart manufacturing. This is
mainly due to the region being traditionally
robots at a pace that is about four times
Wang Bin, Director, Beijing based Cloud Minds Start-up a manufacturing area, as Samsungs and
the global average. As a result, robots in
LGs semi-conductor manufacturing plants
South Korea are projected to perform
are located here, along with a large number
around 20% of tasks by 2020 and 40% of
of sub-suppliers.
tasks by 2025.
Samsung Electronics is partner in the
The two South Korean conglomerates
Gyeongsang CCEI with the aim of using
Samsung Electronics and SK Telecom
their expertise in improving manufacturing
announced in May 2016 that they will
processes and enhancing the
jointly build a network for the IoT that will
competitiveness of SMEs in this region.
cover all of South Korea. The two
companies claim that this is the worlds
The original target for 2015 was to
first nationwide IoT network. Samsung
transform 100 pre-existing SME factories
Electronics and SK Telecoms IoT network
into smart factories, but the
will be available throughout South Korea
implementation rate has been faster,
by the end of 2016. It will be rolled out in
resulting in 140 conversions within six
Daegu first, the countrys fourth-largest city
months. Now Gyeongbuk CCEI is aiming for
with 2.5 mill inhabitants, where it will
a total of 400 smart factories by 2017 and
connect hardware for self-driving cars,
500 factories by 2020.
renewable energy, cloud platforms,
healthcare Big Data analytics, as well as
The key to this success is that Samsung
street-lights that collect air pollution
Electronics provides a customized solution
information and automatically adjust
for each selected SME factory with a
brightness based on weather conditions.
thorough analysis of the current status of a
company. Based on this analysis the
Together with the high speed broadband
relevant solution is developed and
and connectivity in South Korea this makes
implemented. Gyeongbuk Provincial
the perfect foundation for the use of IoT in
government and Samsung Electronics
the manufacturing sector. Especially to
provide 50% of the smart factory project
reduce development cost and time to
costs, while the rest is covered by the SME
market for SMEs. Sophisticated solutions
by itself.
for SME factories are in focus which
provide Danish system integrators with
good opportunities as it is the same kind
of manufacturing sector as in Denmark.
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SEOUL
CASE
HANJUNG NCSY
(Manufacturing Execution System) to
The company HanJung NCSY has a build real-time intellectualization.
yearly profit of 377.4 million DKK and
328 employees. It is operating in the The outcome of this process has been
sector of automotive components a reduction on storage management
manufacturer (WCS, lamp shields, (0.35 million DKK, 23%),
etc.). The starting point for its Industry improvements on productivity, better
4.0 transformation was that the distribution, work site safety by
management had difficulties in manufacturing site innovative
managing the work site, and activities, 56% time saved (from 120
information through barcode systems minutes to 53 minutes a day),
resulted in inefficient handling of improved work standardization (from
manufacturing plastics used for 75% to 90%), and finally a reduction
automotive connection. A wider of investment in resources and
analysis suggested implementing MES products (0.17 million DKK each).
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SHANGHAI
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SHANGHAI
RES
FACTS AND FIGU
ribution
% - th e internets cont
Up to 22 2025.
in as pr od uc tivity growth by
to Ch
s leading
To da y, Ch in a is the world
robot market.
The following 9 strategic tasks have been A clear indication of closer industry-acade-
identified: mic cooperation is that an increasing
number of universities are now moving
1. Encourage innovation entire sections of their applied research
departments out to companies and
2. Promote the use of integrated, digital
manufacturing facilities in order to engage
technology-focused manufacturing
directly in collaborative R&D.
3. Strengthening of the industrial base
4. Improve awareness of global Chinese Opportunities for Danish
brands and product quality business and R&D
5. Increased focus on green manufacturing From a Danish business and R&D perspec-
6. Achieve technological breakthrough in tive, a number of opportunity areas have
the 10 priority sectors emerged with the MIC 2025 initiative.
Some of the main opportunities are
7. Improve efficiency and output in the expected to appear within the following
industries themes:
8. Improve service-oriented manufacturing
and manufacturing-services Export of high-end manufacturing
equipment to China, i.e. within robotics
9. Globalize Chinese manufacturing
Standards, testing, compliance and
In order to accelerate the development certifications a necessity for global
within the identified areas, the Chinese aspirations
government has established a number of
funds and supporting programmes. These Collaborative R&D and product
include Innofund, a public funding pro- development
gram set to support domestic R&D activiti- Environment & Green Tech. incl.
es, and funding reserved for upgrading alternative energies and waste
manufacturing capabilities of state-owned management
enterprises (SOEs).
21
SHANGHAI
Investments from Chinese investors into millions of unskilled factory workers. This
Danish tech. companies concern is further reinforced by the general
low-productivity and the relatively high
Education and vocational skills training
proportion of poorly managed mega-sized
For Danish stakeholders, the most relevant State Owned Enterprises (SOEs) in China.
MIC 2025 priority sectors are:
This can potentially disturb the order and
1. Maritime Engineering, including high-
stability of China and is therefore a focal
tech marine equipment, marine
point of industry transformation. The
materials, ocean/deep-sea exploration
reform of SOEs has actively been slowed
and offshore renewable energy
down in order for China to be able to
The State including
2. Agriculture, level Innovation
high-end Centretransfer the laid off workers into other
will lowerequipment,
cultivating the entry barrier
high-end food for areas.
production & processing and large-scale
Start-Ups and inspire mass
farming systems
innovation in the cash intensive Global opportunities for the
3. Biomedical & advanced medical equip- Chinese manufacturing
robot industry
ment, including R&D and clinical trials,
products testing & compliance, digital ecosystem
health,
Wang high-end
Bin, Director, medical
Beijing baseddevices
Cloud Minds Start-up Just like Chinese consumers and busines-
4. High-End Robotics, including computer ses have embraced modern information
numerical control tools, robotics, and technologies leading China towards
high-end machine tools becoming a global leader within E-commer-
ce, fintech and mobile services, China also
sees great opportunities in digitalizing the
Chinas Industry 4.0 challenges manufacturing ecosystem to better serve
and opportunities the global market and reinforce its compe-
titive advantage.
Chinas large scale manufacturing eco-
system involves 150 million factory With advanced information technologies,
workers, five times the supplier base of fast and agile prototype capabilities, and
Japan, and has a modern infrastructure to its world-class manufacturing ecosystem,
reach global markets. China has become a very strong player in
the global markets and has the potential
These characteristics mean that China has a to disrupt value chains.
supply-chain with significant cost-advanta-
ges, making China the undisputed leader of Technical designs can be accessed and
production within industries such as solar modified from multiple locations around
panels, mobile phones, and electronics. the world and sent directly to manufactu-
rers for fast prototyping at relatively low
In the transformation of its manufacturing costs with all processes monitored and
capabilities towards automatization and supervised remotely.
digitalization aiming at higher-quality and
higher-value products, China is facing This is not just interesting for larger
tremendous challenges. corporates but certainly also for SMEs and
start-ups around the world as it no longer
A major concern of the Chinese requires a physical presence in China in
government is how modern manufacturing, order to utilize its manufacturing ecosy-
based on automatization, will affect stem.
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SHANGHAI
CASE
23
SILICON VALLEY
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SILICON VALLEY
RES
FACTS AND FIGU
have been
26 5. 00 0 m an ufacturing jobs st 7
e U.S. in the pa
re-shored to th g a significant
tin
years, represen
increa se .
prox.
uf ac tu ri ng w orkers make ap tio-
Man the na
year, topping
USD145.000 a
nal listings.
not using
companies are
87% of U.S.
turing.
smart manufac
Innovation (NNMI), the National Robotics Big Data through firms such as Amazon
Initiative (NRI), the National Nanotechno- and Google. As Big Data is one of the
logy Initiative (NNI) and Investing in prerequisites for realising the Industry 4.0
Manufacturing Communities Partnership possibilities, the U.S. market has a key
(IMCP) to name a few. All of them are advantage should industry players be able
instrumental in accelerating and revolutio- to leverage the synergies between tech and
nizing U.S. manufacturing into its own manufacturing corporations.
version of Industry 4.0, from which an
array of benefits can be derived: In 2014, AT&T, CISCO, General Electric, IBM
and Intel founded the Industrial Internet
Increased productivity, enabled by more Consortium (IIC), which in many ways is
flexible and efficient manufacturing equivalent to Industry 4.0 platforms in
processes to deliver higher quality Europe. The IIC is a global not-for-profit
products at lower costs. partnership of industry, government and
Automation of value chains, including academia, consisting of 251 members
internal logistics and transportation varying from small and large technology
innovators, vertical market leaders,
Greater coordination and management of researchers, universities and government
manufacturing workforce institutions. The platform aims to
Improved accuracy of forecasting coordinate and prioritise for the Industrial
capabilities Internet of Things (IIoT), and to enable the
technical applications required for the IIoT
Interdisciplinary collaborations between by bringing together operational systems
different tiers of industry players and i.e. machines, industrial plants and
public institutions information technology. The ICC also
Stronger integration and better focuses on software and integration in a
application of data flows global marketplace. The outcome will be
more advanced communications networks,
Unlike other industrial hubs around the multifunctional sensors and complex data
world, high-potential opportunities reside in analytics software.
the U.S. economy with its unique access to
25
SILICON VALLEY
Academia and research institutes are also As a stepping stone, Danish or American
heavily involved in innovating U.S. universities as well as networks and
manufacturing. One of the latest initiati- consortiums, such as the IIC, can be used
ves, the ninth manufacturing hub awarded to tap into the US market as sources to
by the Obama Administration, is The new technology, human resources and
Smart Manufacturing Innovation Institute. know-how. Some of the key areas of
Almost 200 partners: universities, non-pro- interest, and suggested ways into the US
fits organizations and industry partners market, are these:
focuses on accelerating the development
Danes are respected in the USA when it
and adoption of advanced sensors, data
comes to being flexible, delivering
analytics, and controls in manufacturing,
quality and working with a global
while reducing the cost of these technolo-
mind-set. USA thinks global and seeks
gies and radically improving the efficiency
partnerships globally as long as soluti-
of U.S. advanced manufacturing
ons provided are flexible, cost efficient,
and high quality.
Business opportunities Join networking and consortiums, such
The trajectory towards Industry 4.0 not as the Industrial Internet Consortium
only offers opportunities for American
companies to prosper, but certainly also Find ways to test and experiment fast
for Danish corporations to tap into the and in collaborative environments. The
positive wave. The American way of doing American way of doing business,
business, especially out West is based especially out West is based on
on openness, collaboration and sharing, a openness, collaboration and sharing.
way of working that fits the Danish Danes fit well into this way of working.
mentality well. Although the USA is home Tap into Danish or American universities
to many of the worlds leading technology and use that as a stepping stone into
companies, the more traditional the market as sources to new techno-
businesses, including manufacturing, are logy, human resources and know-how
in need of upgrades. Thus, Danish compa-
nies should proactively seek customer Learn from re-shore initiatives as a
opportunities and product and technology proactive way to not just regain jobs,
partnerships. but to rethink production.
CASE
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SILICON VALLEY
CASE
27
TEL AVIV
ISrAEL - AN INtErDISCIPLINArY
INDUStrIAL INNOVAtION HUb
With more than 6,000 start-up companies, that these two countries should
Israel is known for being an innovation collaborate in making their technologies
world leader within various technologies. and know-how accessible to multiple
Multinational corporations have opened industries, all of which are seeking
hundreds of R&D and innovation centers financial, as well as environmental
in Israel, either by acquiring an Israeli sustainability.
start-up, or by establishing a R&D center
from scratch. The thriving Cleantech ecosystem in Israel
includes alternative and renewable energy
While there is no central, government- solutions (from creation, to collection and
initiated plan encouraging the Industry 4.0 distribution) and supporting technologies
revolution, the Israeli expertise in the (e.g. decreasing the amount of water
fields involved in this venture e.g. IoT, waste in solar panels cleanup, by using
Big Data, Robotics, Communications, special brushes developed by an Israeli
Automation, Sensors, E-Health, and Cyber company), as well as smart sensors, which
Security - creates a great diversity of help decrease the usage of energy in
supply and collaboration opportunities for homes, offices, and factories; Big Data
a broad spectrum of interested and analytics solutions, tracking and
stakeholders. optimizing energy-related processes;
Innovative Digital solutions, replacing
With Denmark and Israel spearheading the physical waste and its effect on the
Cleantech Innovation, it is only natural environment etc.
28
TEL AVIV
RES
FACTS AND FIGU
million
la tio n exceeding 8
With a po pu companies,
e th an 6,000 start-up
an d m or r of start-
highest numbe
Israel has the
The traditional in the world.
ups per capita
industry can be the mpanies have
ultinational co
Over 260 m ers in Israel; in of
many
catalyst of growth, if open ed R& D ce nt
tside
R&D center ou
it will integrate more cases, the first
of origin.
their country
R&D and innovation up companies
raeli IoT start-
Over 400 Is al s an d 23 sub-vert
icals,
e ve rt ic
Avi Hasson, Chief Scientist at the within fiv y of which
in Israel - man ise/
Economy Ministry, Israel. are operating er pr
Industrial/Ent
focuse on the ct or s.
Science se
Cleantech/Life
CASE
29
Innovation Centre Denmark helps
Danish businesses with research,
provide educational institutions
with access to international
knowledge and innovation
environments, as well as create
and develop connections and
business cases with an
international perspective.
30
31
GLObAL PrESENCE
MUNICH
Royal Danish Consulate General
Sendlinger-Tor-Platz 10/IV
80336 Munich, Germany
Tel. +49 89 54 58 54-0
NEW DELHI
Royal Embassy of Denmark
11 Golf Links, 110 003 New Delhi, India
Tel. +91 11 4209 0700
SO PAULO
So Paulo Consulate General
Rua Oscar Freire 379, cj. 31, Cerqueira Cesar
01426-900 So Paulo, Brazil
Tel. +55 (11) 2127 0750
SEOUL
Royal Embassy of Denmark
501-ho, 272, Sowol-ro, Yongsan-gu
140-775 Seoul, South Korea
Tel. +82 2 795 4187
SHANGHAI
Innovation Centre Denmark, Shanghai
Shanghai International Trade Centre
Room 3101, 2201 Yanan West Road,
Changning District, Shanghai, 200336
Peoples Republic of China
Tel. +86 21 8025 0600
SILICON VALLEY
Innovation Center Denmark, Silicon Valley
200 Page Mill Rd, Ste 100
94306 Palo Alto, California, USA
Tel. +1 (650) 543-3180
TEL AVIV
Royal Embassy of Denmark
Museum Tower, 11th floor
Berkowitz Street 4, 6423806 Tel Aviv, Israel
Tel. +972 (0)3 608 5850
icdk.UM.DK