© Fotolia / Gina Sanders

29.03.2016

DIGITIZING EUROPE'S INDUSTRY

When Günther Oettinger became EU Commissioner for Digital Economy and Society in 2014, his nomination raised eyebrows all across Europe. Aged 60 at the time, Oettinger neither offered a track record in tech policy nor had he shown noteworthy interest in this sector before. From the point of view of his critics, Oettinger clearly seemed to be an awkward choice for leading the EU into a bright digital future. After 16 months in office, however, Oettinger has proved the pessimists wrong...

By Eike Radszuhn and Kai Peters

© European Union 2014 - European ParliamentGünther Oettinger undoubtedly rates among the most active Commissioners in the team of President Jean Claude Juncker and today impresses with sometimes surprisingly detailed knowledge of the rather complex world of digital technologies. The engineering sector in particular can be satisfied, since the industry is at the center of what is probably Oettinger's most ambitious project: the Digital Commissioner has set himself the goal of making the European single market fit for Industrie 4.0.

At the Hannover Messe from 25 to 29 April, Oettinger will present his action plan called "Digitizing Industry", a communication that is intended to be the first step towards a single market for Industrie 4.0. No less than six EU Commissioners and President Juncker will be present at the fair in Germany – a clear sign that the engineering industry and Industrie 4.0 has gained the attention of European politics. However, Oettinger's plan can only do the groundwork. Making the European single market fit for Industrie 4.0 is expected to be a marathon rather than a sprint.

Current single market not sufficient

For a long time, VDMA has warned that Europe would be putting its economic future on the line if politics failed to focus on timely digitization of industry. "In the years ahead, digital technologies will fundamentally change the way our society produces and consumes," says Hartmut Rauen, VDMA Deputy Executive Director, in an interview with VDMAimpulse. This is also a huge opportunity for the mechanical engineering industry. According to a study by the auditing company PwC, German industry alone plans to invest around 40 billion euro per year in Industrie 4.0 technologies.

"However, we assume that current EU legislation only has limited suitability for this industry of the future," says Rauen. Certain countries already have national political programs to forge ahead with Industrie 4.0, such as Germany, France or the Netherlands. In the long term however, a patchwork of national initiatives will not be sufficient for the mechanical engineering industry.

A good example is the exchange of data, which will exponentially increase in the years ahead. Modern machines send and receive nonstop information in order to make production processes more efficient and flexible. But for manufacturers, it is crucial that this frequently sensitive information is well protected. Today, there is no legal security in Europe with respect to the question of who owns the vast amount of data produced by Industrie 4.0. Is the owner of the machine allowed to use the information? Or the producer of the machine? The software developer? The maintenance company? As long as this and other questions remain unanswered on a European level, it will pose an obstacle to the development of Industrie 4.0 in Europe. In a paper named "Industrie 4.0: Mastering the Transition", VDMA has laid out ten key recommendations for a European framework for the digitization of industry.

Since Europe is not the only place that has discovered the potential of digitalization in industry, time becomes a factor. "Companies in the USA or China operate in huge domestic markets," says VDMA's Deputy Executive Director Rauen. "By contrast, Europe is fragmented from an investor's point of view." Though a strong industry proved to be the backbone of the European economy for decades, politicians in the EU should not take this situation for granted and must adapt the current European single market to the new technologies. "Every day that is lost on the way towards a single market for Industrie 4.0 will cost us prosperity, competitiveness and jobs."

First step in the right direction

The initiative "Digitizing Industry" which Oettinger will be presenting at the Hannover Messe is hardly expected to be a comprehensive solution – but it can be considered at least as a first step in the right direction. "Since the start of my mandate, I have emphasized the need to reinforce our digital industry while ensuring the full digitization of all economic sectors," states the Digital Commissioner in an interview with VDMAimpulse. "The package will include a European cloud initiative, priorities for ICT standardization and measures to boost digital innovation capacities, appropriate regulatory framework conditions and addressing the digital skill gap," promises Oettinger.

While "Digitizing Industry" is yet to be published, information is already available on what such communication might look like. A presentation published on the Commission's website suggests that Oettinger's action plan consists of four main pillars: access to technology for any industry in Europe, European leadership in platforms and preparing the workforce for the challenges of a digitized industry. The last point is called "smart regulation for smart industry" and sums up issues such as data ownership, cyber security and the question of liability for autonomous systems. In addition, the Commission wants to improve coordination and collaboration between the different national initiatives such as "Industrie 4.0, L'industrie du future" or "Smart Industry".

"Our plans not only support a wider uptake of technology:  we also aim at a stronger supply industry and closer interaction between users and suppliers across the value chain," says Oettinger. "Therefore the mechanical engineering industry is of course a strategic sector that plays a key role in networked production."

But although the EU's interest poses a major opportunity for industry, mechanical engineering companies also warn that innovation must not be restricted by regulations that are too tight. Today, even experts only have a vague idea of the technology that we will use in fifteen or twenty years. A European Single Market must not limit the industry's options. A second danger might be that the approach for industry could be watered down due to different priorities within the Commission. "We are fully aware of the speed at which the digital world develops," says EU Digital Commissioner Oettinger. "Be assured that our approach to the digitization of industry will be futureproof."

Only a starting point

So far, the Commission has kept its promise. Oettinger has had several meetings with representatives from industry, companies and NGOs to discuss the best way to tackle Industrie 4.0 on a European level. VDMA also took part in the discussions. On February 23, VDMA President Dr Reinhold Festge met personally with Oettinger in Brussels to explain the view of the mechanical engineering industry. Right from the start, the association has proposed to implement a high level working group on a European scale, similar to the "Plattform Industrie 4.0" in Germany, where politics and business can exchange views on a regular basis.

Initial documents of Oettinger's action plan will probably be made available on April 6, well before the official presentation in Hanover. Afterwards, concrete measures regarding the different aspects of communication will follow in the course of the next few years. "I expect Digitizing Industry to be a roadmap. The plan must channel the exchange between politics and industry," says VDMA's Deputy Executive Director Rauen. "However, it is clear that the initiative can only be the starting point. We still have a lot of work to do."

 

© VDMA
The Authors
Eike Radszuhn, VDMA European Office.

Kai Peters, VDMA European Office.