Written by Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs
As the global economy shifts to take advantage of digitalisation, so does the European Union have to change to stay competitive. Digital transformation of industry is an opportunity. The European Commission’s Strategy for Digital Single Market is central in the move towards the digital economy. We have to remove barriers to businesses and at the same time ensure that the benefits of the new economy are widely spread, ensuring that a new generation of workers have the skills they need to fully take part in the digital economy.
Industry is going through a global change. Digitalisation is changing manufacturing and the businesses that take advantage of that change will be the winners. We in Europe need to be in the winning team. If we seize the opportunities now in front of us, are ready to adapt and innovate, we will see increased competitiveness and productivity. If we do not, we sentence ourselves to decline, confined to the low profit segments of the value chain.
We are falling behind our competitors. Over the last decade, productivity growth in the EU has been 0.7% per year, while the USA has seen growth of 1.2%. We need to quickly embrace digital technologies to help our factories reduce waste and make the most efficient use of resources, whether those are raw materials, machinery or people. Greater efficiency will allow us to deliver first class products and services at competitive prices.
Digital transformation of industry will take place. We can already see examples of smart, connected factories around the world. Businesses must take the lead in this transformation. But also governments have a vital role to play. We have to create an environment which will allow the transformation, everywhere in Europe. We are not there yet.
More than twenty years ago the European Union created the internal market for goods and services. While it is still far from perfect, it has meant a boost to industry as goods and to a lesser extent services could reach a market that now counts 500 million people.
Now we are aiming to do the same for the digital economy. The Digital Single Market strategy aims to give Europe a regulatory environment fit for a 21st Century economy. Currently the EU has 28 different regulatory structures for information processing and telecommunications. Moving data around the EU means having to satisfy 28 different data protection regimes. We need a single space in which companies can grow and become globally competitive.
Like the internal market, the digital single market has to be open. New standards for digital technology will open the door to new players, particularly SMEs, aiming to contribute to the value chain. And the digital economy needs skilled workers. The European Commission will launch an initiative to develop ICT skills training, so that more people can reap the benefits of the digital transformation.
As well as cutting red tape, we have to look at what new areas of activity need regulation to protect the rights and interests of new industries.
One example is Big Data. Vast amounts of information are now available; Big Data is the next strategic raw material. It is anything from the accumulation of supermarket shoppers’ preferences to the huge streams of data flowing from the Copernicus satellites. It can be the inspiration for new services or the raw material for new products. But it can also be stolen, manipulated or corrupted. Individual solutions are expensive and lock out SMEs. A clear regulatory framework backed up by enforcement can help all businesses and protect the public.
Standards remain key to the construction of a digital economy. Whether these are standards for electronic invoicing or the protocols for controlling machinery, standards will help to maintain an open, competitive market. This is why the Commission is mandating the development of standards in areas which are essential to industry.
Digital transformation of industry will change our economy and have an impact on the society. Just like in every previous industrial revolution some of today’s jobs will disappear. But new jobs will be created, if we create the right environment for innovation and creativity. Governments have to make sure that people can acquire the skills to fill those jobs, whether directly through education or by encouraging industry to create the apprenticeships and training schemes to attract new workers or help existing workers adapt.
Change is challenge, change is opportunity. Let us work together to make digital transformation of industry a reality.