European industry is set to become more digitalized and more environmentally friendly. The EU has published an industrial strategy in which it describes how European industry will occupy a leading global position.
EU industry is set to become more digitalized and more environmentally friendly together with a new culture of innovation.
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Published in March, the EU industrial strategy supports the EU’s target of making Europe the first carbon-neutral continent by 2050. According to the EU, increased digitalization of industries and the transition to carbon-neutral technologies are two sides of the same coin.
Digitalisation: good foundations but a need to catch up
During the digital transition in industry, Europe intends to remain sovereign and occupy a leading role in the development of digital technologies. The EU Commission considers the current foundations for the transition to be good: thanks to the large single market, economies of scale for new technologies can be achieved quickly. Competitiveness can also be increased by establishing EU-wide standards and technical regulations. The EU Commission nevertheless recognises that there is a need to catch up. This urgently requires greater investment in key technology sectors such as artificial intelligence, 5G networks and data analysis. Only one in four businesses currently use cloud computing services, and only one in ten use big data analysis. The EU additionally wants to expand capacity for critical digital infrastructures for industry, including a secure and state-of-the-art 5G network. If it wants to play a leading role in 6G, Europe has to start investing now. The EU intends for young businesses adept at using digital technology to support established industrial businesses through the digital transition by helping to implement new digital business models or new forms of digital working, for example. Start-ups will also be supported in creating a platform economy.
Commitment to fair competition
The EU wants to champion a global level playing field. To this end, it is due to issue a white paper in mid-2020 which will clarify how subsidised businesses in non-EU states will be dealt with, for instance. The Commission is thereby addressing the problem of unequal market access, for whilst state-owned businesses from non-EU states are often active on the EU single market, EU businesses are often disadvantaged when it comes to market access in those countries themselves.
Steel is the key to carbon-neutral industry
The EU expects the transition to carbon-neutral industry to pose a challenge for energy intensive industries in particular. These industries are vital for the European economy, which is why their modernisation and decarbonisation is a top priority for the EU. Because the steel industry has a key role to play here, the EU wants to support the development of technologies to enable steel production to become carbon-neutral. In addition, the EU wants to mobilise 100 billion euros to help regions with carbon-intensive industries to transform their economies. Renewable energies are set to expand with the help of a new strategic approach and improved links between European energy networks. Improved energy sector coupling will also enable electricity, gas and fuels to be used more efficiently. If necessary, the EU wants to take measures to put a stop to carbon leakage to countries with less ambitious environmental policies.
Circular economy to create more jobs
The EU estimates that the systemic introduction of a circular economy in all sectors and industries by 2030 has the potential to create 700,000 new jobs. Initial measures are designed to reduce the amount of waste from electronic devices, batteries and textiles. Additionally, consumers will be provided with transparent information to support them in their decision to buy reusable, durable and repairable products.
EU calls for new culture of innovation
According to the EU Commission, EU businesses have reduced the amount they spend on research and development over the past five years, whilst businesses from the USA and China have increased their investment in these areas. The EU industrial strategy explains how an awareness of common development objectives can help to restore increased investment. The coming together of physical, digital and biological worlds offers the potential for this. However, in order to occupy a strong position in this area, a new culture of innovation is needed. Minimisation of risk cannot be the basis for investment decisions; instead, a willingness to take risks and tolerate undesirable developments and course corrections is essential. The industrial strategy then mentions technologies that are strategically important for Europe’s industrial future and should therefore be funded by the EU. These include robotics, microelectronics, high-performance computers and data cloud infrastructure, blockchain, quantum technologies, photonics, industrial biotechnology, biomedicine, nanotechnologies, pharmaceuticals, and new materials.