Decentralised ‘Silicon villages’ needed instead of a Silicon Valley

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

Digitisation will have environmental benefits, as smart buildings cut CO2 and reduce emissions. [Gary Ullah/Flickr]

The digital age has opened up all sorts of new possibilities for innovators. With unprecedented amounts of data and constantly evolving means to make sense of it, the search for the next big thing becomes more and more intense, writes Erich Clementi.

Erich Clementi is a member of the European Commission’s High Level Roundtable on Digitising Industry and is chairman of IBM Europe.

Sometimes, though, the key to the future lies in the past. Europe’s industrial base, a historical strength of the continent, is taking a huge leap forward through digitisation. The transformation has spectacular promise for industry and its customers. For example, data-based predictive maintenance of production equipment prevents breakdowns – reducing production down-time, saving time and money. Additionally, intelligent buildings worldwide leverage data analytics to improve energy efficiency and productivity, reducing CO2 emissions.

Europe’s big industrial players are already forging ahead with digitisation. The challenge now is to ensure that Europe’s stronghold of SMEs can ride the wave by getting access to the smartest technologies. Reflecting the diversity and spread of SMEs across Europe, a decentralised approach is needed. Not just one Silicon Valley but rather a network of silicon villages.

In a strategy paper issued this week on ‘Digitising European Industry‘, the European Commission calls for the development of Digital Innovation Hubs. The Commission’s strategy here is spot on.

A research paper by Mark Muro and Bruce Katz from the Brookings Institute The New “Cluster Moment”: How Regional Innovation Clusters Can Foster the Next Economy  finds that such hubs are zones of focused productivity, collaboration and competition and are most likely to be export focused and have lower carbon emissions.

Digital Innovation Hubs are hugely effective catalysts for regional economic development. These shared innovation platforms generate increased inward investment and improve alignment of education with market needs, and create an exciting environment of creativity.

Developing Digital Innovation Hubs requires an ambitious government vision infused with a healthy dose of pragmatism. Some recommendations:

  • Build on small existing hubs rather than starting something from scratch;
  • Roll in multiple partners from the wider community – with education institutions playing a key role as a provider of skilled workers;
  • Be completely open to the private sector as a co-pilot – and sometimes captain. And let competition flourish.

Public policy plays its part too. Accompanying the European Commission’s digitising industry paper are policy measures that are all part of the EU’s Digital Single Market strategy.

Importantly these policy measures address standards. Governments continue to grapple with how to deal with technical standards. The solution could not be clearer: harmonised technical standards across Europe, based on international standards, are an absolute “must” for a successful digital transformation of industry. This is essential so that services, software and hardware all are interoperable across the board. Openness is crucial, from infrastructure to platform services.

Thinking ahead: digitisation on its own may not be enough for industry players to get, and stay, ahead. Industry needs to become cognitive if it is to ingest huge volumes of unstructured data, understand its meaning through sensing and interaction and turn insights from that data into competitive advantage.

Creative thinking and innovation will help industries go cognitive – yet another reason to push forward with nurturing hubs of creativity throughout Europe.

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