Digital Transformation of Industry: Challenges and opportunities for Europe

Digital innovations are changing the way we design, produce, commercialise and generate value from products and related services. Advances in technologies such as the Internet of Things (IoT), 5G, cloud computing, data analytics and robotics are transforming products, processes and business models and ultimately reshuffling global value chains in all sectors.

To maintain their competitive edge companies in any field have to fully embrace digitisation not only by making the best use of latest digital technologies but by integrating digital innovations as key elements of their development strategies. Next digital champions can emerge in any sector of the economy from construction and textile to health or energy equipment. In Europe, many companies, especially in the high-tech sector, are already grasping the opportunities of this new industrial revolution, and studies show that digitisation of products and services could increase EU industry revenues by €110 billion a year.

However, many traditional sectors and small and medium-sized enterprises (SMEs) are lagging behind: less than 2% of them use advanced digital technologies to innovate in products and processes. In addition, a large disparity exists between Member States and regions creating a new “digital divide” which can ultimately hurt all economies in Europe.

To tackle these challenges, the European Commission launched the Digitising European Industry initiative in April 2016. Its overall objective is to put in place the necessary mechanisms to ensure that every industry in Europe, in whichever sector, wherever situated, and no matter of which size can fully benefit from digital innovations. The initiative focuses on actions with a clear European value-added. It builds on, complements and ensures the scaling up of national initiatives. Of particular importance are four action lines: the European platform of national initiatives, Digital Innovation Hubs, Digital Industrial Platforms, and Digital Skills. The European platform of national initiatives
is a governance structure to ensure a continuous EU-wide dialogue with all stakeholders from the public and private sector, academia and civil society. Its main objective is the coordination of different initiatives and exchange of best practices of EU and national initiatives on digitisation.

More than 30 national and regional initiatives for digitising industry have already been launched across Europe in recent years. Examples at national level are Plattform Industrie 4.0 in Germany, Industrie du Futur in France, Smart Industry in the Netherlands, and Produktion der Zukunft in Austria. Each Member State implements its national initiative in a different way. Therefore, national and regional initiatives can learn from each other’s experiences by exchanging best practices at EU level.