“We are in the middle of a true revolution—the fourth industrial revolution,” declared Commissioner Oettinger in a speech to German business, “Like our revolutions of its kind, it will change all our industries, it will change our economy and it will change our lives.”
He continued, “This revolution is digital and it is high on the political agenda, not only in Germany with Industrie 4.0 and in the Netherlands and elsewhere but also at the level of the European Union.”
While the digital strategy will be unveiled next month, Oettinger echoed VP Ansip’s remarks in Brussels, saying digital borders needed to come down and business and the consumer would benefit from the digitalisation of the economy.
Despite accusations of being more comfortable talking about trade than technology, Oettinger continued, “Industry is a central pillar of the European economy – the EU manufacturing sector accounts for 2 million companies and 33 million jobs.”
He added, “Our challenge is to ensure that all industrial sectors make the best use of new technologies and manage their transition towards higher value digitised products and processes, commonly known as ‘Industry 4.0’.”
Reporting that industrial manufacturing was 15% of Europe’s GDP, Oettinger noted that the EU had a target of raising that to 20% by 2020, “However, the reality is that the share of industry in GDP has declined in recent years.”
Oerttinger said, “We need to act quickly and become the avant-garde of digital manufacturing.
He added, “We have to do this together, and at the right scale if we do not want to lose the game as we have done to some extent with the Internet business so far.”
He then issued out a dramatic warning, “What is at stake is not just Europe’s industrial position in smartphone production or Web applications. It is about the competitiveness of Europe’s industry right across all sectors: from automotive and energy to household appliances and the agro-food business.”
He added, “These are all at risk if they do not rapidly adopt digital technologies.”
The rewards of taking up the digital approach were practically limitless, he said.” Opportunities arising from embedding digital technology in any product and artefact are almost infinite.”
He also praised ‘smart manufacturing’ where innovation is in all parts of a product’s life.
He said, “The use of digital technologies leads to radical and disruptive changes in business models including well-established industries such as automotive, lighting or textiles.”
Warming to his familiar theme of the automobile industry, Oettinger asked, “For example, will we sell only cars or also the whole range of new digital services that come with the car? This is going to be all the more important as cars become increasingly connected and automated.”
He continued, “If we do not pay enough attention, we might invest in producing wonderful cars but those selling the new services for the car would be making the money. It would be a big risk for our entire economy if industry in Europe did not take advantage of these new business models while others do—such as those who dominate web service platforms today.”
He also said “Opportunities are huge and there is a good chance that the next Google and Apple may come from traditional sectors such as textile, construction, energy, watch-making,” adding, “and of course the automotive industry.”
He saw “Big challenges that we need to address urgently, for example concerning disparities in digitisation, for example digital platforms and also regarding digital skills. These will require seriously upgrading our digital industrial strategies all across Europe.”
He stressed, “Business as usual will not work!”
There was a great deal of room for improvement in how business uses technology, “A mere 14 percent of our SMEs use the Internet as a sales channel,” Oettinger announced, following with a more devastating figure, “Only a tiny 1.7 percent of all EU enterprises use advanced digital tools to innovate in products and processes.”
Calling for a more eurocentric technological future, Oettinger said to the business audience, “A great challenge is also Europe’s position in the development of the next digital platforms that will gradually replace the current Internet and mobile platforms.
“We have so far missed many opportunities in this field and our online businesses are today dependent on a few non-EU players worldwide: this must not be the case again in the future.2
He also said that “we need an additional 150,000 IT experts every year.”
Oettinger reminded his audience, “No single Member State can resolve the related issues alone, or has the resources to respond to global challenges.”
The digital commissioner did have some plans. to increase access to technology “for any industry” and he advocated technology hubs in every European region, “They should be specialising to rapidly provide world class expertise and digital skills for their local and regional economy. They should connect with other centres to share knowledge and complement their expertise.”
Saying that the EU was planning to spend €500 million over the next five years, he added that his goal was to leverage that by a factor of 10, “from additional sources, including notably EU structural funds and national programmes. I also see a huge opportunity in this area with the new European Fund for Strategic Investments (EFSI). I am thinking in particular of the parts devoted to SMEs and mid-cap companies.”
He asked for leadership in digital platforms, adding, “It is essential to have common standards and interoperable solutions throughout the products and services life cycles. The “data economy” should not develop in locked environments and platforms.”
He asked industry to contribute to “the next generation of digital platforms that will replace today’s Web search engines, operating systems and social networks.”
Perhaps Nils Torvalds MEP could help, he is the father of LinusTtorvalds,who build Linux, the open source operating system that Android, for example, is built from.
The Commissioner announced, “The European Commission would like to enter into a dialogue with industry to explore a European platform initiative in digital manufacturing.”
He added that “My ambition is to upscale developments of European platforms from 2015 onwards with the launch of at least 5 large-scale platform projects per year until 2018.”
He pledged to speak to education ministers about training more IT specialists that are already needed.
Oettinger said that “We need to ensure that existing and new regulation is fit for purpose in the digital world.”
He concluded, “Our strategy for the full digitisation of Europe’s industrial fabric must be bold and at a scale that matches the challenge. What is at stake is far beyond building a strong digital industry in Europe: it is about the future of all our industrial sectors and our economy.”