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Digitalization and new technologies are changing the world more rapidly than ever. This is not only a challenge for companies, but also for lawmakers. In Brussels, the EU is looking for ways to create dynamic regulation for Industrie 4.0.

By Hanna Blankemeyer

Parliament's vote in favor of a new agreement.<br> © European Union 2016 - European ParliamentLawmaking in democratic institutions has many merits - however, inclusive and balanced decision making often comes at the cost of speed and spontaneity. The EU, with its complex set of institutions, is no exception - it often takes years for regulation to make its way from the European Commission through the Parliament and the Council to the member states. However, whilst the EU institutions need enough time to make decisions, the world continues to change at a rapid pace. Leaps in technology, for instance, disrupt existing business models and pose new challenges not only for companies, but also for lawmakers. In the digitalization era, many people in Brussels are asking themselves: how can the EU keep up in an ever advancing (technological) environment?

This question is especially relevant for the mechanical engineering industry. In the times of Industrie 4.0, big data and the Internet of Things, products and business models alike are evolving. Many companies are currently experimenting to explore what digitalization could mean for them. They therefore depend upon a political framework that provides both the freedom to innovate and the legal certainty. In an already complex and diverse industry like mechanical engineering, the task of finding an appropriate scale of regulation therefore becomes more and more challenging.

Renaissance of an old idea

In Brussels, the debate surrounding "good regulation" is not entirely new. The EU had already come up with the invention of the "new approach" 30 years ago - an approach that would accommodate technological development without necessitating continuous changes to the law. The basic idea was to keep regulation neither product-specific nor full of technical detail. It merely states the final goal: a machine should be safe. Policy makers are asked to debate, negotiate and decide on the public interests which are at stake and set objectives. Products placed on the single market should then comply with these accordingly. However, it is left up to the manufacturer - using the industry-driven norms and standards - on how to achieve this.

But since it first appeared, the new approach has come under scrutiny. Critics argue that this style of regulation would give too much freedom to businesses. A second criticism that also often comes from companies relates to insufficient market surveillance. For authorities, it has simply become too expensive and complex to control whether the solutions that companies come up with actually meet the given requirements.
Nevertheless, the new approach could be celebrating somewhat of a renaissance among lawmakers. To keep up with an ever-changing world, pursuing the idea of leaving some freedom to companies while entrusting them with responsibility seems to be a reasonable way.

Good laws, bad laws

Indeed, there are already examples of where the EU has met its target to make lasting legislation - for instance in the field of machine safety. For machinery used in production processes, EU legislation requires that there is a "guard" installed protecting the worker from any risk emanating from the movement of the machine. In the past, industrial robot applications were placed in a cage thus creating a guard by means of a physical barrier between the worker and the machine.

Nowadays, collaborative robots are technically advanced enough to interact directly with the worker. At the same time, the law still requires a "guard" to be in place. However, a change to the law is not necessary. Today, safety is provided not by a cage, but through sensors detecting human motion and, if necessary, by stopping the robot’s movements. Likewise, a recent evaluation conducted by the European Commission confirmed that the basic principles underlying the EU’s health and safety legislation are still up to date - 30 years after its adoption.

Room for improvement

But still, there is room for improvement for EU lawmakers. Proof of inconsistency when it comes to product- and technology-neutrality is the Ecodesign Directive. This has come under attack for being too intrusive and for steering technology. In fact, Ecodesign is a hybrid between a new and old approach to lawmaking, prescribing technical details for specific product groups.

However, this means that Ecodesign only works under certain preconditions: it requires a homogenous group of products in one market with different performance levels of energy efficiency. In other words: it works for coffee machines but not for industrial ovens. As a result, after many years, the Commission still has not found a suitable rule for machine tools - and increased digitalization is set to complicate matters even more. Industrie 4.0 promises the constantly evolving mechanical engineering product, possibly breaking the boundaries of the Ecodesign framework. Against this backdrop, it seems anachronistic to pursue prescriptive product rules rather than setting generic objectives and leaving the technical implementation to the manufacturer.

VDMA has made the case for the new approach time and again. Setting goals instead of regulating product details, along with a reliable market surveillance to prevent a distortion of competition, has proved to be an efficient form of regulation. That is not to say there is no need to evaluate the adequacy of legislation regularly. It also does not mean the current system is flawless. However, it does show that there is merit in building upon parts of existing legislation rather than discarding it completely.

Hanna Blankemeyer, VDMA European Office.