Industry 4.0 is Europe’s for the taking

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This article is part of our special report European Business Summit 2015.

Europe’s manufacturing sector has always been the envy of the world in delivering high quality products. With the digital transformation of Industry – or Industry 4.0 – it now has the potential to lead the world in a new kind of tech transformation, writes Erich Clementi.

By Erich Clementi, IBM Chairman and Senior Vice President, Europe.

In the technology world, the search is constantly on for the next big thing. People are looking to the future – trying to predict needs and trends. Start-ups strive to become the next global disruptor.

There’s a technology revolution being talked about in Europe and this one is focused largely on turning the heritage of the past into a game-changer for the future. Europe’s manufacturing sector has always been the envy of the world in delivering high quality products. Despite weathering a generation of turmoil, premium manufacturing in Europe remains a significant asset – that the three best selling luxury car brands in the world are designed and manufactured in Europe exemplifies this.

Europe is looking to Industry 4.0 – or the Digital Transformation of Industry – as the opportunity to lead the world in a new kind of tech transformation. With over 20 national initiatives underway, governments and industry across Europe are taking action to move manufacturing into an era a long way from the grimy factory floors of the past.

Using analytics, mobile, cloud, security and social technologies, manufacturing pioneers such as Bosch, Daimler, ThyssenKrupp and PSA Peugeot Citroen are working together with technology experts to implement Industry solutions.

Allowing devices to communicate has many benefits including improved decision-making, increased productivity, more efficient energy management, better inventory management and lower cost product individualization. And there’s more in the pipeline: for example the University of Sheffield’s Advanced Manufacturing Research Centre in the UK has developed, together with IBM, a mobile maintenance, repair and operations prototype that is designed to help manufacturers and companies supplying and maintaining high-value machinery in sectors such as aerospace, oil & gas and shipping.

At a recent business leaders’ conference in Brussels in which I participated, Industry 4.0 was a core theme of discussions between business and EU politicians. European Commissioner for Digital Economy and Society, Günther Oettinger has since said “the fourth industrial revolution… will change all our industries, will change our economy and will change our lives”.

While I often hear the rhetoric that Europe does not compete with the US on tech innovation, I am convinced that Industry 4.0 is Europe’s for the taking. Europe needs to play to its strengths – it HAS the skills and the experience and must capitalize on that.

The benefits are clear: European Commission Vice-President Andrus Ansip, sees Industry 4.0 as having, “the potential for increasing flexibility, efficiency, productivity, competitiveness – all helping to create jobs.” As industry we can play our part in innovating and investing, but to do that we need the support of the EU policy makers in Brussels and national governments.

To succeed, Europe needs a coordinated and harmonized European approach. The publication tomorrow of the EU Digital Single Market Communication by the European Commission will be an important first step. We also strongly welcome the announcement of the launch of a roundtable with high-level industry representatives in June to explore a European platform in digital manufacturing. This is a good way to develop “smart regulation for smart industry” as said by Commissioner Oettinger.

In addition, with data and data flows being the foundation of Smarter Industry, we will need a clear legal framework for processing data. The current proposed Data

Protection law unfortunately does not provide this — a rethink is essential.

Finally, we need to acknowledge the need for harmonized technical standards so that services, software and hardware are interoperable across the board.

Industry 4.0 is a fantastic opportunity for Europe. I am optimistic that Europe will grab it and run with it.