Europe is experiencing the Fourth Industrial Revolution, driven by advanced technologies, notably Digital and Key Enabling Technologies (KETs)1.
Digital and Key Enabling Technologies bring about radical transformation across value chains in all aspects of development, production and commercialisation of products and related services. Together with new business models, they can drive the existing and potential competitive advantage of European industry. For SMEs in particular, digital technologies and KETs provide an unmissable opportunity to enter the market with specialised, differentiated and smart products and services.
This structural change requires a modernisation effort to ensure that Europe’s industry is well equipped to overcome the challenges it faces and to stay competitive in global markets. These challenges include the need to develop a truly digital entrepreneurial culture, to stimulate investments in new technologies, and to improve the market base for the commercialisation of KETs developed in Europe.
To help European industry meet these challenges, the European Commission has implemented a range of policy initiatives aimed at supporting industrial modernisation and the technological transformation that companies must undergo. Most recently, the European Commission presented its updated Industrial Policy Strategy (September 2017), which aims to ensure that EU businesses take advantage of the many opportunities that modern technologies offer. It is centred around European Commission President Jean-Claude Juncker’s policy priorities and includes initiatives such as further promoting the protection of industry against cyber-attacks, creating a ‘big data’ ecosystem, or again promoting the enforcement of intellectually property rights.
Technological transformation is also key to revitalising regions by tapping into their pockets of excellence via the implementation of their Smart Specialisation strategies (RIS3). Smart Specialisation is a place-based policy approach for the development of research and innovation regional strategies based on regional strengths and potential. These strategies guide regions in establishing investment priority areas, as a prerequisite to receiving funding from the European Regional Development Fund (ERDF) under the European Commission’s Cohesion Policy. The EU’s Smart Specialisation Platform (S3 Platform) provides advice to EU countries and regions for designing and implementing their RIS3 strategies. Specifically, the Smart Specialisation Platform for Industrial Modernisation (S3P-Industry) aims to support EU regions in the generation of industrial investment projects, through interregional cooperation, cluster participation and industry involvement.
Smart specialisation is based on wide stakeholder involvement, including local authorities, academia, businesses and civil society. Among these, clusters are powerful mobilisers of resources to accelerate industrial transformation. Clusters are groups of specialised enterprises (often SMEs) and related innovation actors that cooperate in a specific location to implement projects involving businesses, investors, universities and research centres. Currently, there are approximately 2000 clusters throughout Europe, 150 of which are world-class clusters known as innovation and business hubs. Innovation regarding Digital and Key Enabling Technologies is often created and brought to the market thanks to clusters. European cluster policies aim to coordinate clusters’ efforts towards innovation creation and diffusion, and to improve the framework conditions for cluster operations. In this context, the European Cluster Collaboration Platform acts as an important service facility for clusters to fuel trans-national collaboration and to make efficient use of networking instruments.
Industrial renaissance led by technological transformation is not possible without the right skills for industry. For this purpose, the EU is carrying out a far-reaching set of actions and policies, from benchmarking policies to monitoring and best practice scale-up. Specifically, the New Skills Agenda for Europe, launched in 2016, includes a set of 10 key actions to be taken in the next two years. Among these, the Digital Skills and Jobs Coalition provides a strategy for upskilling through training and education, stimulating private investment and ensuring a coordinated use of EU and national funding programmes. The support of training partnerships is also part of the European Commission actions on KETs.
Industrial digital transformation usually means integrating advanced digital technologies in a company’s production process or business model, with the final goal of creating innovative, efficient, and specialised products and services. Digital transformation represents an enormous opportunity for the growth of EU companies. It is estimated that digital technologies – such as Big Data Analytics, Artificial Intelligence (AI), or the Internet of Things (IoT) – have the potential to add 1.5 million jobs to the EU’s digital economy, and that SMEs can grow two to three times faster when they integrate digital technologies into their business models.
Nonetheless, the current state of digitisation among EU businesses varies greatly across sectors and regions. There are also disparities between large companies and SMEs.
The European Commission has established a focus on a range of digital policy areas. As part of its Digital Single Market strategy, it is carrying out a series of policy actions to reinforce competitiveness on digital technologies and empower businesses with useful tools to embrace the digital era.
Among the most important of these actions one can cite the Digital Transformation Monitor, that provides EU- and sector-wide coverage on the state of digital transformation, including statistics, key trends and relevant policy analysis. As part of the Digital Transformation Monitor, the Digital Transformation Scoreboard provides an annual snapshot of current progress on digital transformations and country-specific policy recommendations.
Upcoming actions are also envisaged on Big Data. A specific action under COSME (WP 2017) will be dedicated to accelerating the uptake of data-driven economy by – to cite some of the objectives - monitor the creation and evolution of B2B industrial digital platforms, explore feasibility of investments in new cyber-secutiry solutions, and develop common guidelines on safe data usage.
The Digitising European Industry (DEI) initiative constitutes the framework for coordination between national and EU-level initiatives, specifically related to investments in digital innovation capacities, the acceleration of ICT standards’ development, and the adaptation of the workforce to new skills for the digital era. One of the pillars of the Digitising European Industry effort is the development of a network of Digital Innovation Hubs, including the development of a Digital Innovation Hubs catalogue available online.
Key Enabling Technologies
KETs, a group of six technologies that enable a wide range of advanced products, are a priority for EU industrial policy as they fuel economic growth and job creation. These technologies include:
- Advanced manufacturing systems
- Advanced materials
Today, KETs are responsible for 3.3 million jobs in the EU, or 11 % of all manufacturing-dependent jobs. In particular, KETs represent a massive potential for SMEs – with 10 000 EU SMEs basing their businesses on the development and commercialisation of KETs. As KETs enable an array of advanced products – including low-carbon energy solutions, more energy- and resource-efficient manufacturing, and new medical products – they also play an important role in stimulating GDP growth and innovation at the regional level. KETs are therefore a priority for European industrial policy. The EU’s strategy for KETs aims to increase the exploitation of KETs, reverse the decline in manufacturing and, as a result, stimulate economic growth and jobs. In support of this strategy, the European Commission offers a number of initiatives and tools, including the following:
- Supporting investments in KETs, to ensure that key funding programmes such as Horizon 2020 and the European Structural and Investment Funds (ESIF) offer specific support for projects related to Key Enabling Technologies.
- Helping SMEs access KETs’ technology infrastructures, through for example, the SME instrument of Horizon 2020, or the web tool to locate services for SMEs to innovate through KETs.
- Promoting multidisciplinary KETs-related skills, by boosting training partnerships, and creating a Knowledge Innovation Community (KIC) on added-value manufacturing managed by the European Institute of Innovation and Technology (EIT).
- Providing up-to-date information for policymakers and businesses on the state-of-play and deployment of KETs through the KETs Observatory.
- A specifc COSME action (WP 2017) will be supporting the access for SMEs to advanced manufacturing with the establishment of a virtual European advanced manufacturing support centre.
- The Nanomaterials Observatory, provides businesses, SMEs, wokers and consumers with relevant information on nanomaterials on the market, one of the six key enabling technologies recognised by the EU.
WATIFY: putting the spotlight on EU policy
As the awareness-raising campaign for modernising European industry, WATIFY puts the spotlight on the EU’s actions for technological transformation. It does this through:
- WATIFY Boost – over 240 events taking place in at least 20 EU Member States that promote technological transformation success stories, best practices and EU policies;
- WATIFY Connect – matchmaking events that bring together public and private stakeholders from different regions with the aim of exploring how to translate national and regional policies on technological transformation into joint projects and smart investments;
- WATIFY Inspire – a collection of success stories highlighting how real companies and industries have benefited from the technological transformation process.
By promoting technological transformation and the uptake of advanced technologies, WATIFY is at the vanguard of EU policies to transform European SMEs into the global leaders of the digital marketplace.
1Advanced manufacturing, micro-/nanoelectronics, photonics, advanced materials, industrial biotechnology, and nanotechnology are identified as the EU’s six Key Enabling Technologies (COM(2009)512).