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Wind industry urged to adopt a networked approach to deal with slowdown and boost innovation

There needs to be less vertical integration in the wind industry and companies in the sector need to start working together better, according to Jukka-Pekka Mäkinen, President and CEO of wind turbine generator supplier The Switch, based in Finland.

“We strongly believe that a networked approach is the only way to move the wind power business to the next level with world-class expertise, agility and speed,” Mäkinen said in a statement published today by the supplier of megawatt-class permanent magnet generator and full-power converter packages. The adoption of an industry-wide networked model would overcome “the rigidity of the vertical integration that still stifles the entire industry”.

The fallout from the global economic downturn has been significant for the wind industry, with the market experiencing a general slowdown alongside a geographic shift from Europe and the US towards China and emerging markets, Mäkinen explained. Vertical integration, he says, has made it difficult for the sector to adjust rapidly to this and maintain a high level of innovation.

However, “We’re finally seeing signs of this industry opening up to the benefits of networking, with large turbine manufacturers selling off component manufacturing operations to other specialist players to better compete by concentrating on their core strengths”. Now, Mäkinen said, more wind firms need to do the same.

He pointed out that the networked approach has long been used in the automotive and telecommunications industries, leading to deeper specialist expertise, the ability to add scale where necessary and faster time to market. This has meant they are better prepared for fluctuations in the market that can come from business cyclicality, market volatility or even geographical shifts, he said.

“For the wind power industry, a networked approach takes companies to where the market is – to be in the right geographical location, to make rapid product changes, and to survive at a time of major economic and market upheavals.” Wind power companies should therefore now focus on being good at their chosen core competences. “Through specialisation, you can tap into cumulative experience, which leads to significantly improved quality, ensuring a world-class solution with bigger and better wind turbines.”

Scalability, or being able to ramp up or down rapidly, is another benefit, according to Mäkinen. “A company can develop something new for six months, use it for two years, and then move on to new products, if the market so demands. This gives a company unrivaled agility when it comes to designing new technology and being on the innovative forefront.”

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