Ref. Ares(2021)2714736 - 22/04/2021
Key messages
1.
Use an ecosystem / sector-based analysis to identify enabling technologies and key actions to unlock benefits for strengthening the Single
Market and Europe’s place in the world
2.
Digital transformation requires key actions on public policy and regulatory frameworks to unlock technology enablers
3.
Digital transformation of all industries (MNEs, SMEs and start-ups) and of public sector (health care, education and social services)
leads to new business models, improved productivity & efficiencies and value for money for all citizens
4.
Technology enables the green transition (decarbonisation, energy efficiency, electrification, green fuels, circularity)
5.
Strong competitive European companies are needed to secure Europe’s future - based on leading role in Industrial Digitisation & AI –
and to deliver on the twin transitions
6.
ERT Member companies are investing €60 billion a year in R&D, mainly in Europe and are ready to invest even more in
conjunction with the right policy actions
2
ILLUSTRATION
Manufacturing Industry - Vision for the future
In 2030, Europe will lead the industrial platforms, fully connecting and integrating the virtual
and physical world, while creating more sustainable and resilient supply chains
• Move from mass production to additive manufacturing for more individualised products
• Move from offshoring to near-/on-shoring to increase resilience and driven by access to affordable energy
Main
• Move from chains to circular value chains to reduce resource consumption
transformations:
• Digital twin of products and manufacturing to reduce time-to-market
• Digitisation of products and services to increase value and utilisation
• Decarbonisation of manufacturing (energy efficiency, electrification, green fuels)
WHY? Benefits of the transition
WHAT? Key technology enablers
•
Business: increased productivity, flexibility, competitiveness and growth
There is an opportunity for Europe to lead the industrial platforms to strengthen
opportunities
competitiveness, while creating more sustainable and resilient supply chains.
•
Society: more & better jobs, increased sustainability, more resilient value
Technology enablers:
chains, technologically sovereign economy, stronger competitive position vis-à-
• 5G – for reduced latency and increased capacity
vis US & China
• IoT – for collection of industrial data
• AI – for adding intelligence and optimisation of value chains
•
Citizens: access to better products & affordable energy, cost reductions,
• Edge Computing – for local intelligence and optimisation
improved health care management, education & social services, and more trust
• Secure Cloud – for optimisation across value chains
in digitalisation
• Competitive clean energy & low carbon technologies
•
Cost of not transforming: Technological dependence on other regions, loss
Current challenges from European perspective:
of competitiveness & prosperity, continued acceleration of climate change,
• Late in 5G roll-out
destruction of European jobs and business fabric (including SMEs), decrease
• No sharing of data across borders
of innovation & new business models
• Lack of investments in AI
4
A summary of overarching, essential technology enablers
WHAT? Main overarching enablers driving the EU’s competitive position
Industrial Digital Transformation
• Ultra-broadband (5G & fibre)
• Leading role in AI & Quantum Computing
• Secure Cloud infrastructure in Europe / GAIA-X
• Leading role in IoT and Edge Computing
• Leading role in Micro / Nano electronics
Lead Green Transition
• Leading role in renewable energy (offshore wind, energy distribution, smart grids, advanced solar)
• Innovation leader in clean Hydrogen and Power-to-X
• Electrification
• Energy efficiency technologies & practices
• Energy storage
• Raw materials recyclability (including batteries)
• Microelectronics
• Low carbon alternative products and solutions
• Biotechnology
7
Key Actions on Industrial Digital Transformation
‘Delivering next generation digital infrastructure’
HOW? Key actions necessary
Deliver European framework that attracts private investments
Adopt policies to foster the digital transformation:
in Fibre and 5G roll-out:
• Invest in digital education & skills
• Ensure Next Gen EU funds support fast and competitive roll-out of very
• Accelerate digital transformation of SMEs and Public Admin including implementing
high-capacity networks and services, while not crowding out private
Industry 4.0 concepts
investments
• Support key technology ecosystems & industries (AI, Data, Cloud, Edge Computing)
• Enable wide availability of spectrum without levying excessive fees
through spectrum auctions
Consider (human-centric) AI also as an opportunity
and not just as threat:
• Enable in-market consolidation & network sharing
Adopt a risk-based approach of AI regulation, avoiding rigid legislation that hampers
• Create level-playing field for infrastructure & service companies, by using
uptake of AI in EU
horizontal frameworks instead of sectorial, and by effective supervision &
enforcement to address dominant digital platforms
Ensure confidence in technology as prerequisite for digital
• Limit regulation of access strictly to non-replicable infrastructure
transformation:
• Improve security of digital solutions and services
Strengthen European Data Economy & Cloud Infrastructure
• Create trust in AI algorithms & data-based business models and sharing of
ecosystem and avoid duplication:
healthcare data
Accelerate – with the private sector in the lead – the European Alliance for
• Reinforce European cybersecurity framework, with New Legislative Framework as
Industrial Data & Cloud, GAIA-X, and the creation of an IPCEI
strong basis
9
Key Actions on Industrial Policy Frameworks
‘Innovation-friendly environment to accelerate the future’
HOW? Key actions necessary
•
Boost strategic investments in the Industrial Digital Transformation,
•
EU competition policy needs to be modernised and adopt a global market
funding for R&D in key enabling technologies,
entrepreneurship &
perspective
skills development (especially for SMEs & start-ups) through MFF &
Next Generation EU
•
Provide (harmonised)
fiscal incentives for innovation, e.g. tax credits for R&D
•
Enable scaling up of new technologies, especially by
improving access
• Pursue
“innovation principle” and
“better regulation”, promote use of
to equity/venture capital through acceleration & strengthening of the
regulatory sandboxes
Capital Markets Union
•
Foster education & skills by means of public-private partnerships and address
•
Tackle fragmentation & strengthen the Single Market through
re/upskilling
removing barriers, applying stricter culture of compliance & enforcement,
•
rejecting protectionism
Improving the overall competitiveness of European companies and
quantitatively benchmarking progress against other geographies
•
Level Playing Field: promote open markets & fair competition
11
Key Actions from Business Leaders – ERT Pledges
‘Strengthening Europe’s Place in the World’
HOW? Key actions necessary
•
Growing investment – ERT Member companies are investing €60 billion
•
Developing skills – ERT companies will significantly increase the business-
a year in R&D, mainly in Europe and are ready to invest even more in
education partnerships for lifelong learning traineeships, apprenticeships and first
conjunction with the right policy actions.
employment opportunities and train the current and future workforce with the
required skills in digital, automation and artificial intelligence
•
Creating value to society – ERT Members have signed a pledge to
promote inclusion and diversity throughout Europe. ERT will strengthen its
interactions with society and develop best practice policies
•
Furthering the Digital Transformation – ERT Member companies will
accelerate their own digitalisation, data and artificial intelligence
strategies.
•
Delivering energy transition and tackling climate change – ERT
Members fully support a climate-neutral Europe by 2050 and the 55%
reduction target by 2030, backed by a robust industrial policy. ERT
Members will work with policymakers at EU and country level to agree on
the policies needed
•
Supporting trade and commerce – ERT Member companies will actively
support the EU to effectively conduct commercial diplomacy to deliver fair
and free trade and inclusive global growth.
12
TRACK : Measuring success
EU needs Key Performance Indicators (KPIs)
to benchmark global competitiveness
TRACK KPIs to measure success
• Strong & competitive companies are needed for the EU to achieve open strategic autonomy and to build up more resilience
• The EU needs to be competitive to be a credible geopolitical actor
• The EU can not succeed the twin transitions when competitiveness is backsliding
• Therefore, international benchmarking - not just ‘intra-EU’ - is key to track the EU’s performance to steer future policy & investment decisions
• Neither the Commission nor the EU Member States can carry full responsibility on reaching targets.
• However, they jointly hold responsibility for monitoring, measuring, adjusting and tackling opportunities
Recommendations
• Develop KPIs (and targets for 2030) as part of the update of the Industrial Strategy,
on a wide range of horizontal indicators (not just for the eco-systems)
• Publish annual “Competitiveness Reports” that measure EU competitiveness with
other geographies
• Discuss these findings within the Competitiveness Council and with stakeholders
from the business community
13
