Brussels seeks €50 billion to digitalise Europe’s industry

The European Commission unveiled its long-awaited strategy to support the digitalisation of industry on Tuesday (19 April), aiming to mobilise around €50 billion by 2021 to help manufacturers catch up in the global race for the fourth industrial revolution.

The conjunction of cutting edge technologies such as artificial intelligence, combined with the spread of cheap sensors and advanced robotics are all pointing to the arrival of a new industrial era.

But compared to the United States or Japan, the traditional industrial base in Europe is slow to adopt these technologies and reap the benefits of digitalisation.

“It will be complex, it will take time but it is very necessary,” said Andrus Ansip, the Commission Vice-President for the Digital Single Market. “The Industry has asked us to build the foundations of our industrial future and there is no time to lose,” he told reporters in Brussels as he presented the new strategy.

“We have to hurry up,” he stressed.

A European Parliament study estimates that €40 billion in investments will be needed every year in Germany alone to digitalise the industry. In Europe, the figure could reach as much as €140 billion.

The figure looks impressive but the promises are equally high. Across Europe, PwC and Boston Consulting Group estimate that the digitalisation of industry could create an additional €110 billion per year over the next five years.

In order reap the benefits of the transition to “Industry 4.0” (as the Germans labelled this new manufacturing paradigm), a more coherent approach and deeper cooperation is required across Europe, with a more granular implementation at regional level, and common standards for manufacturers from Lisbon to Helsinki.

A coherent approach

To that end, the EU executive proposes measures to link up existing national initiatives in various member states and support investment in key technologies that are expected to fuel the next industrial revolution.

According to the Commission, there are currently more than 30 national and regional initiatives related to the digitalisation of industries, including in Germany, The Netherlands, France, Italy, Spain and Slovakia.

In order to better screen and coordinate those, the Commission will organise various meetings every year — two roundtables and one annual major stakeholder meeting.

On top of that, EU authorities will invest €500 million to set up digital innovation hubs in technical universities and research organisations across European regions. These hubs will help power the digital transformation from the bottom-up by supporting SMEs and other initiatives at regional level.

In order to support the transition towards this fourth industrial revolution, the EU will rely primarily on public-private partnerships (PPPs), by investing around €22 billion.

These initiatives will support the industrial transformation in areas where Europe is well-positioned, such as the automotive industry, health or energy. The private sector will contribute €17 billion, while an extra €4 billion and €1 billion will respectively come from EU funds and national governments.

The Commission also urges member states to add another €15 billion over the next five years to support these PPPs. EU authorities recommend the national governments to look for financing under the European Fund for Strategic Investment (EFIS), the new EU guarantee scheme to support investment in the 28-country bloc.

Together with €5.5 billion from national and regional investment in the digital innovation hubs and €6.3 billion committed for the production of the next generation of electronic components, EU authorities expect €50 billion investment in the digitalisation of industry over the next five years.

The EU has already launched a PPP focusing on the next generation of wireless connectivity (5G) and the manufacturing industry, as Europeans want to prioritise the industrial dimension of the next generation of mobile internet.

Standardisation and clear regulation on the flow of data, the new ‘oil’ of this fourth industrial revolution, are seen as critical to facilitate the involvement of high-tech manufacturing.

Günter Oettinger, the EU’s Digital Agenda Commissioner, stressed that Europe needs “fewer but common standards for the industry, and we need to fix them quickly”.

Regarding data management, the EU executive will put forward a free flow of data initiative later this year to examine in greater detail the issue of data ownership and rules for data re-use in an industrial context.

Carlos Moedas, the EU’s Innovation Commissioner, said that “data should be open by default” but warned that Europe should at the same time protect companies’ ideas.

“I am totally for opening knowledge by default but [also] protecting the ideas,” he said. As an example, he mentioned the Human Genome Project, with open knowledge upon which different firms have developed their own business projects.

To respond to the rise of smart cars and ‘intelligent’ robots, the Commission will also look into the rules that should be applied to autonomous systems, new safety rules and clearer liability principles.

Meanwhile, the Commission also intends to mobilise up to €6.7 billion to create a super-computer in order to support a new European Open Science Cloud. This will become an open environment for 1.7 million researchers and 70 million science and technology professionals to store, share and re-use scientific data and results.

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