“Digitising industry” should be more than wishful thinking and a catch phrase for eurocrats as “Europe’s pride” – traditional manufacturing and production methods have not proved immune to digital transformation; and this is for the best. Over the past year, private sector executives and decision makers from Davos to Washington D.C. have been using their brain power and time to discuss the impact of new technologies for the development of products and the future of the manufacturing sector at global level.
With the EU focusing on growth and jobs in order to maintain its competitiveness, Commission officials are no strangers to the concept of the digitisation of the European Industry. This new space, nonetheless, holds both challenges and opportunities; this is where the “Digitising European Industry Package” comes in.
In case you missed it, the Package, which was published on 19 April, is made up of four non-legislative communications and three accompanying staff working documents covering issues such as Cloud Computing, standardization, internet of things, and funding.
Making Europe strong again
In line with the Commission’s priorities and the pressure from global competitors two trends run through the documents. Firstly, the Commission identifies ‘areas where progress is to be made’ in European digital services and explains that urgent EU-level support is needed to ‘coordinate national and regional initiatives to digitise industry’. Interestingly as well, while European technology companies are trying to take over the world, there is an underlying protectionist sentiment in the texts. The Commission refers to a need to ‘open the door for new competitors’ in some data and web platforms as European businesses are concerned about being locked in with a ‘few suppliers or platform owners. An earlier draft of the package went even further, saying that European digital services had ‘major weaknesses compared to major competitors in the US’ which is why EU-level support is needed for Europe to ‘stay in and win the digital industrial race’.’
Is there space for engagement?
As with every Commission non-legislative proposal, there is an opportunity for the manufacturing sector to engage on some issues that will have a long term strategic and business impact.
Development of common standards and interoperable solutions: This is one of the Commission’s priorities and will be key for the development of the Internet of Things (IoT). New standards will cover areas such as 5G, Cloud Computing, IoT, Data technologies, and Cybersecurity; harmonised standardisation will complement internal market mechanisms and could enable European manufacturers to make their products more competitive. eHealth, smart energy, intelligent transport systems and connected and automated vehicles, including trains, advanced manufacturing, smart homes and cities, and smart farming could be some of the sectors that will benefit in the short to medium term. However, the Commission also acknowledges that standards should continue to be industry-led, voluntary and consensus-driven. This leaves space for prompt engagement, both at EU and national level.
Data protection – The Commission will propose a legislative initiative in 2016 to remove or prevent unjustified localisation requirements introduced by national legislation. Data ownership, access and re-use rules, particularly in relation to data generated by sensors and other collecting devices will be at the centre of the proposal. These are elements that are key for producers of smart devices, especially in the energy sector. The Commission also highlights possible obstacles to data flow, such as uncertainty regarding the distinction between personal and non-personal data and obstacles regarding data interoperability and reliability.
Promoting innovation – The Commission acknowledges that innovation will drive growth. For this reason it encourages new innovative research services, such as data mining, and breakthroughs in supercomputing and secure networking through the European Open Science Cloud and the use of quantum technologies. Alongside the European Data Infrastructure, the Commission believes this will contribute to the digitalisation of industry. With the manufacturing sector driving European excellence, smart cities, smart living environments, driverless cars, wearables, and mobile health will be some of the sectors that are expected to grow thanks to digitisation. Dedicated zones will be set up across Europe to test new technologies, free from some of the regulatory burdens that these sectors face when scaling up projects. As for those complaining about the lack of financial resources, the Communication mentions a number of areas where the Commission will invest Horizon 2020 funds. For example, these include €500 million focused on digital innovation hubs. This will give a boost to companies, mainly SMEs operating in these technology spheres.
Is more coming up?
Digitising the European Industry will be the gift that keeps on giving for the next few months. The next peak in activity will take place at the end of the year when the Commission will publish its initiative on the ‘free flow of data’ which could impact companies using private or public data. The Commission also makes sure that industry stakeholders stay on the bench as observers. The time to start thinking about cybersecurity implications for your firm is now, as the deadline for industry stakeholders to draw up ‘practical guidelines’ on cybersecurity in ICT standards has been set for the end of the year.
The new industrial revolution is happening now and the Commission is aiming to have the manufacturing sector at its side in order to improve the environment in which “traditional” European companies operate. Smart value chains will be at the heart of this revolution, embracing a much higher level of both automation and digitisation. While cybersecurity and data protection concerns could leave executives skeptical on the added value for the industry, the future of European manufacturing is fortunately at the mercy of tech geeks. So better start to talking to DG CONNECT in order to harness the opportunities digitisation brings along.
Image by Malte Helligsøe
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