Brussels seeks € 50 bln for “Industry 4.0” plan
The European Commission unveiled its long-awaited strategy to support the digitalisation of industry on Tuesday, aiming to mobilise around EUR 50 bln by 2021tch up in the global race for the fourth industrial revolution.
The conjunction of cutting edge technologies such as artificial intelligence, combined with the spread of cheap sensors and advanced robotics are all pointing to the arrival of a new industrial era.
But compared to the United States or Japan, the traditional industrial base in Europe is slow to adopt these technologies and reap the benefits of digitalisation.
“It will be complex, it will take time but it is very necessary,” said Andrus Ansip, the Commission VicePresident for the Digital Single Market. “The Industry has asked us to build the foundations of our industrial future and there is no time to lose,” he told reporters in Brussels as he presented the new strategy. “We have to hurry up,” he stressed. A European Parliament study estimates that EUR 40 bln in investments will be needed every year in Germany alone to digitalise the industry. In Europe, the figure could reach as much as EUR 140 bln.
The figure looks impressive but the promises are equally high. Across Europe, PwC and Boston Consulting Group estimate that the digitalisation of industry could create an additional EUR 110 bln per year over the next five years.
In order reap the benefits of the transition to “Industry 4.0” (as the Germans labelled this new manufacturing paradigm), a more coherent approach and deeper cooperation is required across Europe, with a more granular implementation at regional level, and common standards for manufacturers from Lisbon to Helsinki.
To that end, the EU executive proposes measures to link up existing national initiatives in various member states and support investment in key technologies that are expected to fuel the next industrial revolution.
According to the Commission, there are currently more than 30 national and regional initiatives related to the digitalisation of industries, including in Germany, The Netherlands, France, Italy, Spain and Slovakia.
In order to better screen and coordinate those, the Commission will organise various meetings every year — two roundtables and one annual major stakeholder meeting.
On top of that, EU authorities will invest EUR 500 mln to set up digital innovation hubs in technical universities and research organisations across European regions. These hubs will help power the digital transformation from the bottom- up by supporting SMEs initiatives at regional level.
In order to support the transition towards this fourth industrial revolution, the EU will rely primarily on public-private partnerships (PPPs), by investing around EUR 22 bln.
These initiatives will support the industrial transformation in areas where Europe is well-positioned, such as the automotive industry, health or energy. The private sector will contribute EUR 17 bln, while an extra EUR 4 bln and 1 bln will respectively come from EU funds and national governments.
The Commission also urges member states to add another EUR 15 bln over the next five years to support these PPPs. EU authorities recommend the national governments to look for financing under the European Fund for Strategic Investment (EFIS), the new EU guarantee scheme to support investment in the 28-country bloc. Together with EUR 5.5 bln from national and regional investment in the digital innovation hubs and EUR 6.3 bln committed for the production of the next generation of electronic components, EU authorities expect EUR 50 bln investment in the digitalisation of industry over the next five years.
The EU has already launched a PPP focusing on the next generation of wireless connectivity (5G) and the manufacturing industry, as Europeans want to prioritise the industrial dimension of the next generation of mobile internet. Standardisation and clear regulation on the flow of data, the new ‘oil’ of this fourth industrial revolution, are seen as critical to facilitate the involvement of high-tech manufacturing.