EU Industry Days 25 February 2021

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Introduction

Good afternoon everyone. The EU Industry Days are always a special occasion, a time for us to reflect, to think big and focus on the road ahead.

That’s true every year. With all that has happened in the past 12 months, it’s more true than ever.

Will COVID change European industry? Will it change our lives?

There can be no doubt that yes, a lot of things have changed. But as President Von der Leyen said at the beginning of this event, what has not changed is our ambition to have EU industry lead the digital and green transitions. Now with change coming faster, updating the industrial strategy is about making sure our industries are equipped to drive this change.

Nowhere is that more true than in the shift to digital. In today’s plenary debate we asked what kind of a digital future we wanted, and [the consensus was clear: we want the digital future to be fair, accountable, inclusive, and above all, within our control].

The Triple Investment Approach to Digital

This latter part is really a trick. For me, a good approach is to think of this as an investment decision. And I see three different types of investment.

Investing in People

First and foremost, we must invest in people. With so many exciting innovations coming at the same time – Self-driving cars, supersonic flight, even houses made out of mushrooms – it’s easy to lose sight of the fact that technology, no matter how advanced, is always about the people: The people who use it, and the people who build it.

If our European industries are to lead in the digital future, Europe’s workforce needs the skills to get the job done.

Investing in people is more than just an economic question. The fact that we are doing this virtual event right now means we enjoy a certain level of digital competence. It’s something we take for granted and it’s easy to forget that millions of Europeans don’t know how to convert a file from Word to PDF, or even how to send a simple email.

If we continue the digital transition without addressing this digital divide, we are creating new threats to social cohesion and sowing the seeds of political division. On the other hand, this transition can be an opportunity to drive better social outcomes: By equipping disadvantaged regions and communities with the skills to build in the new economy, digital can become a powerful tool for social convergence.

The Recovery and Resilience Facility, a key part of our European Recovery Plan, gives us additional financial firepower to make sure this happens. Through the ‘Reskill and Upskill’ flagship, Member States can tap part of the 671 billion euros in financial support to foster digital skills for our citizens.

And remember this comes on top of the EU’s multiannual budget, which includes funding under the European Social Fund Plus that supports programmes to build basic digital literacy.

Investing in Technology

This goes hand in hand with the second kind of investment – investment in the technology itself. In a market economy like ours, the private sector will drive most of the necessary investments; the public sector’s job is to support that work.

Still, there are times when the private sector cannot generate enough investment on its own, for example connectivity, where coverage has to be complete, even in areas when the economic incentive to invest is lacking. Public investment is also needed when technologies rely on public infrastructure – for example electric cars only make sense when they have access to a network of charging stations on Europe’s streets.

This is why we are devoting such a substantial portion of the recovery and resilience facility funding to digital – 20% of the total envelope, amounting to 140 billion euros. Again, this is in addition to spending under the EU’s multiannual budget, which includes the Digital Europe Programme and its 7.5 billion euro envelope, as well as spending on research and innovation through the EU’s Horizon Europe programme.

Investing in a sound regulatory framework

But the third type of investment is arguably the most important thing we, as public policymakers, can do. That is investing in the right regulatory framework for the economy to operate fairly and efficiently.

Of course we are not starting from scratch. One of the reasons the Single Market is as strong as it is today is because we have competition rules. These rules stop governments and businesses from putting back the barriers the Single Market rules removed. The end result is a win-win for businesses and consumers alike; producers gain access to the widest markets under fair conditions, consumers get lower prices and more choice.

When you think of the massive challenges we are facing, it’s no surprise that we need to review and update those rules, so they continue to protecting consumers and the Single Market.

A lot of the innovations needed to green our economy involve risks too big for just one Member State or one company to take alone. Which is why we need tools to pool public and private knowledge and resources, bringing together economic actors from across Europe.

Our review has shown that the current State aid rules to enable such Important Projects of Common European Interest work well overall. They have enabled three projects for more innovative and sustainable batteries and microchips, which are now underway. But we want to further facilitate the participation of small and medium-sized enterprises in such projects and ensure they are truly open and transparent to all Member States that wish to participate. That’s why we have just launched a public consultation to seek views on targeted changes to our rules.

Another regulatory change is our proposal for a Digital Markets Act, which sets out rules of practice for large gatekeeper platforms. We want these digital titans to act responsibly, in a way that safeguards competition and provides a place for all businesses to operate.

Alongside this comes the Digital Services Act, which creates a safer digital space in which the fundamental rights of all digital users are protected, and in a way that is harmonised across the Union. It also brings certainty to SMEs who want to take advantage of the reach that digital markets give to their business.

Regulation also has to take account of the special role data plays in the digital economy. That may mean some changes to the competition rules, but it’s also about ways to encourage greater data sharing, something that can bring huge benefits in areas like the new Internet of Things.

Much of our work is also about building trust. Maybe it’s in the name, maybe it’s because of too many science fiction films, but when many European hear the words ‘Artificial Intelligence’, their first reaction is fear and mistrust. We want fair and transparent rules so that we can say confidently, ‘no, Artificial Intelligence AI isn’t about allowing robots to take decisions that go against our values; that discriminate or do social harm. It’s about allowing people to take decisions, with the aid of the best possible technology’. We’ll be coming forward with a proposal in this area very soon.

Digital and Green

If we get this right, if we make these three kinds of investment now, I’m convinced our industry will be competitive in a more digital future.

It also pays a double dividend: greater efficiency will help us achieve our environmental goals. In the Commission, we like to say the green and digital transitions are ‘twin challenges’ and I think the analogy is the right one. Like twins, the digital economy and the green economy are growing up together. They need to be nurtured together. And just like sisters, they depend on each other.

To understand how true this is, go back to the example of Artificial Intelligence. In manufacturing, when we use AI and machine learning to optimise production, we need fewer inputs and less energy to make the same amount of product. The better our industries use these technologies, the more the environment wins, and the more we sharpen our competitive edge. The same logic applies to traffic management, and crop planning for farmers … the sky really is the limit!

Conclusion

The EU was built with common values and a common vision of peace and prosperity in mind. But you always need something concrete to build with. So when the founders looked for a starting point, they turned to European industry – that’s what the European Economic Communities were.

Today, as we consider our industrial future, the same holds true. Technology has moved on, and is advancing rapidly, but our Single Market still gives us the concrete substance upon which to build. With the right industrial policy, with the right kind of cooperation, we can use this to overcome even the most stubborn challenges.

Thank you.