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04.06.2019

JUNCKER’S DIGITAL LEGACY

The President of the European Commission has spent a good part of his five-year term in crisis mode. But in the long term, his Presidency might be remembered for its progress in building a European Digital Single Market.

By Eike Radszuhn

How will history remember Jean-Claude Juncker's five-year Presidency of the European Commission? Probably as a time of constant crisis management, specifically while handling Brexit or relations with US President Trump. Perhaps as a period of big (and sometimes too big) visions, for example when it came to plans to reform the structure of the European Union or bold political approaches to challenges such as migration or climate change.

However, industry might recall Juncker's term for a different achievement: its significant progress in the building of a European Digital Single Market. Initiatives such as measures against geo-blocking, protection of personal data and a new directive on copyright are intended to make the European Single Market fit for the digital age. With respect to industry, plans on cybersecurity, 5G, artificial intelligence, high performance computing and free flow of non-personal data were published to create the right framework for Industrie 4.0 in the EU.

A recent study by the European Parliament showed the Digital Single Market as one of the areas in which the Commission has submitted the most proposals. The think tank ECIPE came to the conclusion that the Digital Single Market strategy has indeed seen a number of significant successes - but also stressed that the work was "by no means complete."

With these efforts, Juncker kept a promise he made at the beginning of his term. When the Luxembourger took office in 2014, he laid out ten priorities that the Commission would pursue during his time at the top of the EU administration. "I believe that we must make much better use of the great opportunities offered by digital technologies, which know no borders," Juncker said. "Enhancing the use of digital technologies and online services should become a horizontal policy, covering all sectors of the economy and of the public sector."

Successes after a slow start

However, the first steps that Juncker and his team took towards a Digital Single Market were rather a disappointment. The Commission presented its first strategy regarding this issue in May 2015, but focused mainly on the needs of customers and start-ups. "The Commission has missed the opportunity to improve the framework conditions for Industrie 4.0 in Europe," criticized VDMA in a statement, and called on the EU to improve its plans with respect to investment goods and the application of digital technologies in industry.

It was the German Commissioner Günther Oettinger, responsible for the digital portfolio, who finally addressed the needs of industrial companies. "Industrie 4.0 was not on the Commission's agenda at the beginning of this term. But Oettinger has changed that now," remarked Holger Kunze, head of the Brussels office of VDMA. In 2016, the Commission published its Communication "Digitising Industry," which focusses specifically on creating a favorable environment for the use of digital technologies in industry.

One step forward is the initiative for the free flow of data within the European Union. A connected industry will only tap its full economic potential if non-personal data can cross borders without friction. This is why the EU has taken first steps to create a framework that allows companies to store and process data wherever they choose in the EU. VDMA has also repeatedly argued that the EU must not end up with a patchwork of 28 different sets of data regulation, but instead provide opportunities to scale up innovations across the Single Market.

A second significant improvement is the creation of a constant dialogue between European and national lawmakers, industry and the science community on how to shape the details of regulation of a Digital Single Market for industry. As soon as "Digitising Industry" was published, for instance, the Commission introduced round tables to "facilitate coordination and cooperation between European, national and regional initiatives on digitizing European industry." This approach aims to ensure that differing national conditions in member states can be addressed while still creating holistic legislation for Europe.

Setbacks and work to do

However, there are also areas in which the Commission has failed to deliver practical solutions to foster Industrie 4.0 in Europe - the Cybersecurity Act being one example. With this initiative, the Commission wants to introduce certificates for cybersecurity, indicating the level of protection likely to be controlled and issued by a third party. In the view of VDMA, this approach will actually slow down innovation, since third party certification costs companies a lot of money, but is too slow to keep up with the rapid changes in the digital age. Instead, the mechanical engineering industry advocates self-declaration by manufacturers - a concept that has already proven its worth in the field of safety requirements for machines.

Finally, there is still a lot of work to be done to make sure the Single Market is (and remains) suited to the digital transformation in industry. This is particularly true with respect to artificial intelligence, for example. The Commission has already published plans for research and innovation, preparations for socio-economic implications, and an appropriate ethical and legal framework for the use of AI. However, it will be up to the next Commission to turn these ideas into practical actions.

In the months following the election, the next President of the European Commission - whoever it is - is expected to define his or her priorities for the next five years. In the view of the VDMA, it is clear that the digitisation of European industry must again be one of them.

Further information

VDMA European Office

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Contact
Eike Radszuhn, VDMA European Office.