Growth drivers

External drivers and trends

SKF’s strategy is developed and refined through an understanding of the external drivers and trends which impact, or have the potential to impact, the many markets, regions and industries in which the Group operates. SKF’s
business is highly diversified from a regional and industry perspective. Specific, detailed analysis of these drivers and SKF’s approach is only possible at industry level. More information is found in the section SKF's business per customer industry.

The table below gives a high level overview of the main external drivers and trends relevant to the Group as a whole.

Driver 

Impact

SKF's approach

Population growth and increased wealth per capita

The global population is expanding and the middle class is growing in fast developing economies. Fulfilling the increasing expectations and demands puts pressure on constrained or finite resources like materials, minerals, food, land,energy and water, and constitutes a major driver for efficiency and productivity in all aspects.

SKF is set up to capitalize on this driver by enabling efficiency and productivity gains for its customers along the full value chain; from optimizing machine design to assuring asset efficiency and productivity for end-users. Application driven innovation is applied so
that the technologies and solutions developed by SKF are based on a solid understanding of customers' specific needs to become more efficient, productive and – ultimately – more competitive.

Globalization

Economic power continues to move, particularly towards the East. This brings a rebalancing of industrial activity, increasing competition in all aspects and higher levels of economic volatility.

SKF continues to adapt the footprint and organization of its sales and manufacturing activities in order to
best serve the rebalancing global industrial context. The focus is on being physically and intellectually
close to the customers with sales, support, R&D and production. SKF’s focus on capturing customer value and application-driven innovation capitalizes on the demands placed on customers working in an increasingly competitive and volatile business environment. SKF’s world-class manufacturing strategy is being deployed in order to make sure its
manufacturing operations are competitive and able to thrive in the shifting global economy.

Urbanization

An increasing percentage of the global population will live in cities. This creates demand for related infrastructure such as energy, water and transportation.

SKF is focusing on helping customers meet the related demands through products, solutions and innovation
aimed at the energy, utilities and mass transportation sectors.

Environmental constraints

Increasing global concern on the impacts of climate change and other forms of envi-
ronmental degradation leading to legal and other stakeholder demands for action to reduce or avoid these impacts.

SKF’s BeyondZero strategy puts a strong focus on enabling customers to reduce their environmental impacts with products and solutions included in the SKF BeyondZero portfolio. At the same time the Group focuses on energy and resource efficiency in its own operations and those of its suppliers.

Digitalization

The rise of big data and smart systems creates huge potential to better address
many of the challenges described above.

SKF is focused on making use of this trend to create competitive advantage both in the products and
services offered and the way they are produced. Smart solutions are being integrated into SKF product offers such as SKF Insight. SKF is investing in further automation and the use of intelligent systems within its manufacturing operations through the Technology step-up programme.

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