Somewhere between a glorified list of upcoming regulatory initiatives and a forward looking strategy, the Communication of decarbonisation of transport will be the first official position by the Commission on aligning transport and climate objectives after the publication of the White Paper on Transport. Here are some elements to keep in mind ahead of its official publication on Wednesday.
All about efficiency
The key to the future of the European transport system is expected to be based on increased efficiency – at system, fuel, and vehicle level. This includes efficiency across transport modes.
Such objective is closely linked to a reduced focus on specific types of emission; ultimately, the Commission would like to see the transport value chain optimize its energy use, while improving its CO2 and air quality performance.
Is the Communication promoting technology neutrality?
In its Communication, the Commission is undertaking a very delicate balancing act. The intent is clear that zero-emission mobility is the preferred way forward both on the vehicle and fuel side; yet the understanding remains that much needs to be done to develop technologies that will be financially attractive both to consumers, Member States and industries.
Fact of the matter is that the EU is one of the global leaders in the development of transport technologies and that a “reset” will be difficult – not to say impossible; both for operational and competitiveness issues. For this reason the Communication is expected to commend EU innovation and underline the value of bridge technologies, including more efficient internal combustion engines.
What is going to fuel the future?
According to the Commission, the future will be all about advanced energy sources. This includes advanced biofuels (central to the strategy), renewable electricity and synthetic fuels. While “well-to-emissions” are not expected to be mentioned explicitly, it has become clear that a life-cycle approach for emission savings would be the winning approach on the fuel side in order to address issues at every level of the value chain.
However, what remains to be seen is how the Commission is planning on addressing efficiency improvements and emission savings in its two relevant Directives: the Renewable Energy and the Fuel Quality Directives. Post 2020, the Fuel Quality Directive could become the governing instrument to provide a framework for the provision of incentives to produce and market low-emission, high quality, and energy efficient fuels.
The promotion of advanced low-emission fuels is also addressed from an infrastructure angle. The Commission clearly aims to put pressure on Member States and companies to speed up the roll-out of alternative fuel infrastructure both at urban and national scale. But is the message reaching investors’ ears?
“Show me the money”
The Commission understands that developing the technology to reduce emissions and creating economies of scale will require significant investment by the European transport industry, across its different value chains. By presenting its main lines of action for the coming years, the Commission aims to increase investor confidence in “promising” sectors, such as low- and zero- emission vehicles and low-emission energy sources.
Investors are expected to be supported by three financing streams: the European Fund for Strategic Investment, Horizon 2020 (for research and innovation) and the European Structural Funds (for sustainable urban mobility). These will hopefully help bridge the 3 billion euro investment gap currently required for Europe transition to low-carbon mobility.
Nonetheless, private investment will also be required. At the moment, the Commission does not provide a clear signal to its transport industry that it will support the improvement of existing technologies (which are widely accepted by consumers) in order to facilitate the transition to a low-emission transport system. In order to mitigate risk it would have been beneficial to underline the added value of putting all technologies, both new and existing, at the same footing, based on their emission reduction potential. This would increase certainty and reinforce the message that companies throughout Europe wouldn’t need to radically change their production and endure costs in order to achieve results.
The Communication will include an action plan with policy instruments that will support the roll-out to low-emission mobility. The Communication as a whole will be presented in the Parliament and Council and specific Commission initiatives will start to come out as of the autumn; they will cover a multitude of issues covering all modes, such as a master plan for intelligent transport systems, a proposal for the certification of CO2 emissions from heavy duty vehicles, to the Revision of the Regulation on rail for freight.
For anyone working on issues impacted by transport policy, the time to be concrete about your policy asks is now. Get your technical teams to the table and provide Commission services with data and recommendations; your objective would be to emphasise your role in the value chain, how your solutions can contribute to achieving the Commission’s objectives and what the socio-economic impact would be to potentially change your modus operandi.
Ilektra Tsakalidou, with help from Laura Rozzo and Michael Stanton-Geddes
July 19, 2016
As the UK referendum on EU Membership is taking place, FleishmanHillard looks into the potential impact of a “Brexit” or a “Bremain” on the European Parliament and the Council. As you are reading our pieces, remember one thing: as of tomorrow, nothing will be the same in Brussels.
WHAT IF – Council of the European Union
WHAT IF_European Parliament
FleishmanHillard Institutional Research Unit
June 23, 2016
Yesterday was one of those days for Commissioner Andriukaitis; a day where he finds himself defending the Commission’s position on endocrine disrupters*(ED) in front of Members of the European Parliament (MEPs).
Yesterday was a little bit more special than usual though as he came with the long-awaited proposed ED criteria. Heated exchanges were expected. All the protagonists were in the room, ready to play their part. Mr. Poc for the S&D, Mrs. Grossetête for the EPP, Mrs. Girling for ERC and Mr. Eickhout for the Greens. They all came and told our Commissioner what they thought of his criteria. Spoiler alert! They are not happy.
And then something a little strange happened. Commissioner Andriukaitis told them he was “happy” – happy to see that no one really agreed with the Commission’s proposal. He saw the absence of consensus as the sign that we are all moving in the right direction.
Are we really?
I could not say from a scientific or safety perspective. I am no toxicologist or risk assessor. Yet, I would like to share a few observations on how we got and how, despite what he says, we may not be moving in the right direction as far as public decision making is concerned.
The EU relies on the capacity to reach compromises. All parties have to agree to make some sacrifices. In return they gain something, preferably more valuable than what they gave up. In a perfect world everyone is happy, to a certain extent at least.
Reality could not be more different when it comes to ED. Shortly after the publication of the proposal, reactions piled up. Industry, NGOs and Members of the European Parliament, all rapidly issued statements expressing their disappointment. Cefic and their partners regretted the absence of potency while NGOs such as ChemSec and HEAL – and a number of MEPs – blamed the Commission for disregarding the possibility to categorise ED and limiting the observation of adverse effects to human health. In short, NGOs blamed industry lobbying, industry blamed NGOs and both criticised the European Commission.
All this… for that? Years of debate (both at scientific and political level), a legal case brought before the European Court of Justice against the European Commission, and no one is happy.
Could things have been different? My answer is yes. A better outcome could have probably been reached provided all parties had behaved a bit differently.
Let’s start with industry. The chemical industry and its partners underestimated the political and emotional ramifications of this debate. Science is critical of course. Public decisions must rely on solid data and scientific knowledge. Still, as much as some may dislike it, values and in this case emotions also play a role in decision making. This is called politics. If you don’t play the game, get out of your comfort zone and engage, you cannot win. It does not mean one has to agree with all claims and allegations, but one must enter the debate, answer questions decision makers ask and prepare for a negotiation. It is all the more important when the agenda is set by your opponents, as it was the case here.
NGOs… Are we allowed to criticize them? I think so, in particular in this dossier. NGOs who engaged on ED played their role perfectly. They raised awareness, set the political agenda and turned an obscure scientific issue into a societal debate – as they should do. They may however have gone too far from time to time using (creating?) fears that make it all the more difficult for public authorities to take serene decisions.
Finally, a few words about the scientific community, both an actor and a tool in this debate. The “fight” between toxicologists and endocrinologists has certainly played an important role in this dossier. The first ones defended their own corner against the new kids on the block advocating for a new approach of toxicology. Eventually some consensus was found, in particular on the question of potency. Still, it took a long time and their opposition deeply shaped the debate I believe, also at policy level.
Put all these ingredients together and what do you get? A “dead end” debate, with everyone standing on its positions and making it almost impossible to reach a good compromise.
This is not the end of the story of course. The proposal will now go to the European Parliament and Member States. And if they oppose it (the Environment, Public Health and Food Safety committee will most likely do), the end is nowhere to be seen.
One can only hope that one day someone reminds everyone that the point of all this is to make a decision that would actually protect people’s health and the environment – not stick to stubborn positions of principle that make you look good.
I know, this is most likely wishful thinking. Well, hope springs eternal!
*Endocrine-disrupting chemicals are substances that alter the functions of the hormonal system and consequently cause adverse effects to humans and/or to the environment.
June 17, 2016
It’s a cliché, but time really does fly when you’re having fun. I arrived in Brussels last September, one of nine hopeful (and nervous) undergraduates embarking on a ten-month internship at FleishmanHillard. It’s been a year full of new experiences, big and small – everything from attending COP21 in Paris to getting lost (a little too often) in the corridors of the European Parliament. I’ve worked with some great people and learnt a lot about EU policy, public affairs and what it‘s like to live and work in the heart of the European project, Brussels.
My fellow interns and I are almost at the end of our time in Brussels, but for anyone considering doing a similar internship, here are five insights into the “Brussels Bubble” and EU public affairs to help you on your way.
- Don’t be shy – Break into the Brussels Bubble. Brussels is a small place and the EU quarter where decisions take place is miniscule. In fact, within the EU sphere everyone knows pretty much everyone. I once heard someone compare the city’s EU quarter to a university campus, which is not far from the truth. To make the most of your time here, both professionally and socially, networking is key. Whether it’s at a work event or over Thursday drinks at ‘Plux’ (Place du Luxembourg), don’t forget your business cards, push past the awkwardness of introducing yourself to a total stranger, and get talking about that latest POLITICO article or whatever is going on in the Bubble at the moment.
- To tweet or not to tweet? The answer is easy – tweet. Social media like Twitter and LinkedIn are big in Brussels and can be very helpful, especially if you work in communications. They are good sources of information and an easy way to connect with people. So, create a Twitter account and update your LinkedIn profile now because you’re going to need it. Also, think about how you want to present yourself – do you want to keep it personal or profile yourself professionally? Many EU public affairs professionals use their social media platforms to discuss their chosen policy area. Whether or not you do the same, it’s always good to have a clear idea of what you want to achieve with your digital presence.
- Stick your neck out. There’s a lot of room for initiative and creativity in EU public affairs. Don’t be afraid to find your niche and voice your ideas. Public affairs professionals in Brussels are an open and dynamic bunch, ready to embrace new ideas (even from newbie interns). Take this opportunity to get the most out of your internship and learn about your strengths and weaknesses in the work place.
- Embrace your inner nerd. Working in Brussels is a great opportunity to get bogged down in a particular policy area (energy, financial services, food and health etc.) or the intricacies of European politics. It’s a city full of knowledgeable people, so don’t be afraid to ask questions and develop your particular area of interest (even if your friends may tire of hearing you drone on about the Energy Union, the Juncker Plan or the intricacies of the European Parliamentary groups…).
- Learn by doing. Having studied European politics at university was a great help for me when I started my internship. However, you quickly realise that many of the ins and outs of EU politics are best understood by experiencing them first-hand as well. If you’re an EU geek like me, who loves the academic side of EU studies, an internship is a great way to get practical knowledge to complement your education. Brussels life puts everything you’ve theorised about into perspective. For example, there is nothing like following a legislative dossier for months through the different institutions to really appreciate the dynamics of how the European Commission, Parliament and Council interact with each other. Working in public affairs in particular is a unique experience, in that it gives you a birds-eye view of EU policymaking while allowing you to take an active part in the process yourself. So, make the most of this opportunity and learn by doing!
By: Louise Olander
June 17, 2016
Circular Economy aficionados are busy in June. Both the legislative proposals on waste and the broader circular economy action plan are on this month’s institutional agenda!
Today the Industry Committee (ITRE) discussed the draft opinions on the waste proposals. Tomorrow, the Environment Committee (ENVI) will discuss the draft reports. Next week, the action moves to the Council where Member States will discuss and adopt conclusions on the Circular Economy Action Plan on Monday 20 June. If you have had your ears open, you’ll have an idea of what is in those conclusions.
Make sure to follow our blog and @fleishman_eu Twitter stream
And of course, take a look at our Circular Economy Timeline and let us know whether you have any questions!
June 14, 2016
With only a couple of weeks left until the referendum on the UK’s membership in the EU, articles and analyses on Brexit make the headlines almost every single day. For the tech industry a potential Brexit is a major issue, given that every aspect of the economy and of our lives has been digitised, and we are dealing with an increasingly cross-border market. Through the Digital Single Market (DSM) strategy, the European Commission wants to put Europe on the digital map and remove the borders for the online world in order to boost the economy, and open up cross-border trade for businesses and consumers. However, countries outside of the EU will not be able to reap the benefits of full market access that Member States enjoy and will likely fall into a legal limbo.
Britain is already in the process of taking advantage of the benefits of the digital economy, so what would the UK tech sector look like if the UK leaves the EU?
London could lose its status as Europe’s tech hub
London is currently Europe’s tech hub and its tech sector is one of the success stories for the UK. According to the European Digital City Index, London is the number 1 city in Europe for supporting digital startups and scale-ups. Research by KPMG also shows that hiring in the UK tech sector has been growing in the last three years, and the business activity growth in the tech sector exceeded that of the entire UK economy.
The tech sector has a lot to gain from not being isolated from the advancement in the rest of Europe. According to Tim Farron, the leader of Liberal Democrat party, “Brexit would be a disaster for the UK’s tech sector … London’s status as the digital capital of Europe would be at risk if we shut the door on the world’s largest market”. If the UK leaves the EU, tech companies looking for opportunities could choose not go to London, but to other capitals with a high focus on technology, such as Berlin. One of the key reasons will be the high level of legal uncertainty and risk attached with a potential Brexit.
Tech companies in London have already shown their support for remaining in the UK. A poll of members of techUK, an association representing more than 900 tech companies in the UK, mostly SMEs, reveals widespread support for staying in the EU. Approximately 70% of its members favour remaining in the EU because EU membership makes the UK more attractive to international investment, more globally competitive and gives the UK a better position in trade relationships. They believe that leaving the EU could increase uncertainty for their businesses. Recently, Microsoft has also showed its support for the UK to remain in the EU. In a letter to its 5,000 British staff and to 25,000 businesses in its network, Microsoft UK CEO, Michel Van der Bel, wrote that the UK being part of the EU has been one of the main reasons why it is an attractive place for Microsoft investment in Europe. The company has been investing in Britain since it opened its first office there in 1982 and is the first US tech company to make a statement on the referendum.
British citizens might not get to benefit from a European digital single market
The European Commission launched its Digital Single Market (DSM) strategy in May 2015, aimed at positioning Europe as a tech leader and at creating a unified set of rules for all 28 Member States.
In the event of a Brexit, the legislative areas being harmonised by the DSM will no longer apply to the UK. This will leave businesses around the world in a state of legal uncertainty when working with companies in the UK. For instance, the Commission is currently working on creating EU-wide rules on e-commerce, which aim to make it easier to sell digital goods and content across the EU. If the UK leaves the EU, the British online shopping industry will lose access to the cross-border market of 27 other countries in the Union, and could risk missing out on online cross-border trade.
Regular citizens also have a lot to gain from the DSM. Take roaming charges for example, which will be abolished in the EU as of June 2017. The UK government has assured British consumers that they would still benefit from the drop in roaming charges even if they choose to leave the EU. However, after a Brexit, negotiations will have to take place to determine the conditions of the future EU-UK trading relationship. These are very likely to be extremely difficult negotiations, which will only be made worse by any moves from the UK to try and exclude freedom of movement from any EU-UK deal.
UK consumers will also benefit from one of the Commission’s latest reforms to allow for Europeans travelling anywhere in the EU to still have access to online services, such as Netflix, which they have paid for in their home country. British Prime Minister David Cameron has praised such reforms by saying they are one of the reasons why his country should not leave the EU: “The UK has been pushing for a digital single market that delivers for consumers across the EU … These proposals deliver just that.”
Data transfers between the EU and the UK could become illegal
Data protection and data transfers are very sensitive subjects in Europe, as the EU defends high standards on privacy. This became clear in October last year when the European Court of Justice invalidated the ‘Safe Harbour’ data transfer agreement with the US, on the basis that the US does not provide adequate protection for EU citizens’ data. Should Britain choose to leave, this situation could set a precedent for a similar call for the UK to demonstrate it protects EU citizens’ data. Proving this could be a particularly challenging task given the current reforms the British government is pushing through on government monitoring and access to data. These measures have been criticised by privacy activists and legal experts, who claim they do not meet EU data protection requirements. Recently, more than 200 senior lawyers signed a letter saying that the proposed Investigatory Powers Bill ‘compromises the essence of the fundamental right to privacy’ set out in EU law and fails to meet international standards for surveillance powers. In this context, it could prove difficult for the European Commission to credibly negotiate a data transfer agreement with the UK, leaving many companies in limbo or, worse, isolated from the European digital single market.
Technology is global, and it will impact every one of us, regardless of physical borders. As such, the impact of Brexit on the tech sector is also not simply contained to the UK. A potential Brexit will mean that the UK will not be able to influence EU legislation anymore, certainly not to the same extent as it does now, taking its pro-market, pro-technology voice out of the EU debate. Given the importance of tech legislation like the ones in the DSM strategy and the benefits of the digital economy, this opportunity should not be missed.
By Andreea Ghita, Technology Practice
June 6, 2016
The International Organization of Securities Commissions (IOSCO) was born 33 years ago, when 11 regulators from North and South America got together as markets were beginning to look global. Today, there are 126 securities regulators from across all continents, who are members of IOSCO. IOSCO’s raison d’etre is to set global standards for securities regulation. It meets every year to review priorities; however, the annual AGM in Lima, Peru, earlier this month, was a bit different.
Ex-US FINRA Paul Andrews had just succeeded long standing EU Commission servant David Wright as Secretary General, Hong Kong SFC Ashley Alder was elected as new chair of the IOSCO Board, replacing Australia’s ASSIC’s chair Greg Medcraft, and JP Servais provided the dose of Europe in the new IOSCO leadership, coming in as Vice-Chair.
While much of the focus was on market liquidity and the opportunities and threats of FinTech on securities markets, there were also some new items on the agenda:
- New powers granted to IOSCO members to more effectively deter cross-border misconduct and fraud in markets;
- New mandates relating to retail investors: to review industry practices on investor vulnerability; to apply insights from behavioral economics to investor initiatives; and to run a pilot world investor week in 2017;
- New working group on infrastructure finance;
- New mechanisms for securities regulators to gather and share information on cyber risk/security issues; and
- New ways for the financing of SMEs
New Challenges & Opportunities
- Award-winning costume designer Ed Stevenson once said: “Standards only move in one direction. At the beginning of the world, standards were established and they’ve been slipping ever since.”By contrast , IOSCO’s standards have got better and better over the years. Witness the recent EU negotiations on Benchmarks regulation, where the majority of public and private sector actors involved praised IOSCO’s work in that space (i.e its Principles for Financial Benchmarks and for Price Reporting Agencies). Will this be the new “benchmark” by which IOSCO standards are judged going forward?
- Not only does the EU Benchmarks legislation, adopted last month, reproduce (word for word at times) most of the IOSCO principles, it also places, for the first time in EU Regulation history, compliance with such principles at the heart of the Third-Country regime (i.e the ability for non-EU benchmarks to be used in the EU). Will IOSCO seek to promote this precedent in other areas? And could the fact that IOSCO standards increasingly gain the force of law through national/regional copy and pasting impact the dynamics within IOSCO?
- Certain provisions of the Benchmarks legislation were markedly influenced by central banks, given the potential financial stability implications of a benchmark (in particular a critical one) ceasing to exist. Central banks are also driving the global initiative to improve conduct in FX trading, which one might have expected to be classic securities regulators’ territory. It is of course, but it is also seen as a source of systemic risk. And so is market liquidity, the rise of electronic and algorithmic trading, bond funds redemptions, and many other traditional securities regulators’ topics. This year’s motto for the IOSCO AGM in Lima was “Strengthening global bridges for financial development”. Could next year’s be “Strengthening global bridges with central bankers?”.
- One final new challenge, coming from Europe at least, is the growing call for “democratic accountability”. Recall French ALDE MEP Sylvie Goulard’s recent own-initiative report on the EU in international fora, calling all global standard setters to be more transparent and establish a transparency register similar to what Brussels has, but also now taken on by Paris and Dublin. If Europe’s flexibility to develop its own rules is diminished as a result of an increased recognition of global standards agreed “upstairs”, is this a sacrifice worth making for international standard setters, and might this impact the future quality of their standards?
Ed Stevenson’s numerous film and television credits included Citizen Kane (1942), which is often cited as being among the greatest films of all time. FleihmanHillard is honoured to host Citizen Andrews, new IOSCO Secretary General, at a Roundtable in Brussels on 31st May, where we will hear Paul’s thoughts on some of the issues and questions listed above, as well as his priorities and broader vision for IOSCO going forward.
By Bertrand Huet, Senior Vice President & Partner.
May 30, 2016
The Benjamin Franklin quote above is increasingly becoming true, even to the old ‘certainty’ in the EU that common tax policies – demanding unanimous decision-making between Member States – will only move at glacier speed through the negotiations.
Corporate taxation currently features big on the European policy agenda, and is unlikely to lose ground any time soon. A combination of heightened media attention, revelations of tax evasion through Luxleaks or Panama Papers, budgetary constraints in many countries and increased awareness by the public have created unprecedented momentum for a more coordinated EU corporate tax policy.
The undeniable truth (?) of the Hart quote notwithstanding, this opportunity to be civilised in itself comes at a prize. The changes to tax rules that already have been and will be discussed have the potential to substantively impact how businesses pay and report taxes, how the companies are structured and not only how they do tax planning, but how they do business as such, in Europe.
Rules on interest deduction limitations, hybrid mismatches and controlled foreign companies, whilst seemingly ‘just’ an implementation of OECD guidelines might have further reaching consequences than any parties imagined when these issues where negotiated – in the context of voluntary guidelines – at the august Paris based institution.
In parallel, companies’ own corporate taxation policies are increasingly scrutinized by the public, with possible impact on reputation and side-effects on the ability to influence public policy not limited to taxation – and with layers to be further applied, if the Commission’s proposal on public country-by-country reporting gets tailwind through legislative negotiations.
Nevertheless… the time for thinking of EU tax policy is now! Work on greater harmonization of corporate taxation rules in the EU and to close loopholes stemming from different national tax laws is on full throttle as no EU government – or anyone else for that matter – wants to be seen as blocking the crack down on tax evasion. And rightly so!
Automatic exchange of tax rulings between EU Member States’ tax authorities and sharing detailed information on companies’ revenues, profits and taxes paid have already been agreed on – in both cases within only a few months after publication of the Commission’s legislative proposal.
Currently, EU countries – pushed forward by the ambitious Dutch Council Presidency – are working hard on the abovementioned issues of the anti-tax avoidance to tackle base erosion and profit shifting – where substantive changes to interest deductibility or hybrid mismatches are expected to be agreed on soon. A new proposal to increase tax transparency of multinational companies has also just been brought forward and later this year more work on a harmonized EU corporate tax base is expected.
But whilst the pace in acting affirmatively towards tax avoidance is laudable, the speed of the legislative process – leaving only a narrow window for the business community and experts to provide input – entails the risk that whilst the starting point and pace was benevolent and laudable, the end result might lead to unwarranted damages – as is always the risk, when regulation is hastened forward.
May 4, 2016
“The future belongs to those who wake up early,” say the French. The discussion during our roundtable on the Circular Economy Action Plan, which was unveiled last December, proves exactly that.
On 27 April, we had the pleasure to host Mrs. Pietikäinen, the European Parliament’s rapporteur on the 2015 Circular Economy own-initiative report, Mr. Radziejewski from European Commission Vice-President Katainen’s cabinet, as well as industry and NGO representatives for a roundtable discussion on the practical implementation of the Action Plan.
The roundtable clearly showed that no action will move forward without input from civil society and industry. Institutions – including the Council whose role was emphasised – will be looking at concrete case studies as well as proposals, in order to ensure that “Europe closes the loop”. Policy makers underlined they need to know how policy and regulation can support competitive and resource efficient business models.
Speakers and all participants who expressed their views showed genuine commitment to the Circular Economy agenda. Some of them however insisted on the extraordinary challenges that such transition present for both industry and society. These challenges will need to be addressed in the coming months.
“The future will be for those who get it & want to act” will be the institutions’ motto in the coming months, as they consult and work on turning the Action Plan into reality. The roundtable demonstrated a clear interest and commitment to enhance dialogue between stakeholders. At FleishmanHillard we are therefore planning further roundtables, focusing on specific actions, issues and sectors in order to mirror the institutional agendas.
Should you want to engage on this dossier or have a recommendation as far as next roundtables are concerned, don’t hesitate to get in touch with us – with Robert Anger to be precise at Robert.email@example.com.
The FleishmanHillard Circular Economy team
April 29, 2016
“Digitising industry” should be more than wishful thinking and a catch phrase for eurocrats as “Europe’s pride” – traditional manufacturing and production methods have not proved immune to digital transformation; and this is for the best. Over the past year, private sector executives and decision makers from Davos to Washington D.C. have been using their brain power and time to discuss the impact of new technologies for the development of products and the future of the manufacturing sector at global level.
With the EU focusing on growth and jobs in order to maintain its competitiveness, Commission officials are no strangers to the concept of the digitisation of the European Industry. This new space, nonetheless, holds both challenges and opportunities; this is where the “Digitising European Industry Package” comes in.
In case you missed it, the Package, which was published on 19 April, is made up of four non-legislative communications and three accompanying staff working documents covering issues such as Cloud Computing, standardization, internet of things, and funding.
Making Europe strong again
In line with the Commission’s priorities and the pressure from global competitors two trends run through the documents. Firstly, the Commission identifies ‘areas where progress is to be made’ in European digital services and explains that urgent EU-level support is needed to ‘coordinate national and regional initiatives to digitise industry’. Interestingly as well, while European technology companies are trying to take over the world, there is an underlying protectionist sentiment in the texts. The Commission refers to a need to ‘open the door for new competitors’ in some data and web platforms as European businesses are concerned about being locked in with a ‘few suppliers or platform owners. An earlier draft of the package went even further, saying that European digital services had ‘major weaknesses compared to major competitors in the US’ which is why EU-level support is needed for Europe to ‘stay in and win the digital industrial race’.’
Is there space for engagement?
As with every Commission non-legislative proposal, there is an opportunity for the manufacturing sector to engage on some issues that will have a long term strategic and business impact.
Development of common standards and interoperable solutions: This is one of the Commission’s priorities and will be key for the development of the Internet of Things (IoT). New standards will cover areas such as 5G, Cloud Computing, IoT, Data technologies, and Cybersecurity; harmonised standardisation will complement internal market mechanisms and could enable European manufacturers to make their products more competitive. eHealth, smart energy, intelligent transport systems and connected and automated vehicles, including trains, advanced manufacturing, smart homes and cities, and smart farming could be some of the sectors that will benefit in the short to medium term. However, the Commission also acknowledges that standards should continue to be industry-led, voluntary and consensus-driven. This leaves space for prompt engagement, both at EU and national level.
Data protection – The Commission will propose a legislative initiative in 2016 to remove or prevent unjustified localisation requirements introduced by national legislation. Data ownership, access and re-use rules, particularly in relation to data generated by sensors and other collecting devices will be at the centre of the proposal. These are elements that are key for producers of smart devices, especially in the energy sector. The Commission also highlights possible obstacles to data flow, such as uncertainty regarding the distinction between personal and non-personal data and obstacles regarding data interoperability and reliability.
Promoting innovation – The Commission acknowledges that innovation will drive growth. For this reason it encourages new innovative research services, such as data mining, and breakthroughs in supercomputing and secure networking through the European Open Science Cloud and the use of quantum technologies. Alongside the European Data Infrastructure, the Commission believes this will contribute to the digitalisation of industry. With the manufacturing sector driving European excellence, smart cities, smart living environments, driverless cars, wearables, and mobile health will be some of the sectors that are expected to grow thanks to digitisation. Dedicated zones will be set up across Europe to test new technologies, free from some of the regulatory burdens that these sectors face when scaling up projects. As for those complaining about the lack of financial resources, the Communication mentions a number of areas where the Commission will invest Horizon 2020 funds. For example, these include €500 million focused on digital innovation hubs. This will give a boost to companies, mainly SMEs operating in these technology spheres.
Is more coming up?
Digitising the European Industry will be the gift that keeps on giving for the next few months. The next peak in activity will take place at the end of the year when the Commission will publish its initiative on the ‘free flow of data’ which could impact companies using private or public data. The Commission also makes sure that industry stakeholders stay on the bench as observers. The time to start thinking about cybersecurity implications for your firm is now, as the deadline for industry stakeholders to draw up ‘practical guidelines’ on cybersecurity in ICT standards has been set for the end of the year.
The new industrial revolution is happening now and the Commission is aiming to have the manufacturing sector at its side in order to improve the environment in which “traditional” European companies operate. Smart value chains will be at the heart of this revolution, embracing a much higher level of both automation and digitisation. While cybersecurity and data protection concerns could leave executives skeptical on the added value for the industry, the future of European manufacturing is fortunately at the mercy of tech geeks. So better start to talking to DG CONNECT in order to harness the opportunities digitisation brings along.
Ilektra Tsakalidou, Catherine Armitage, with the help of Crispin Maenpaa
Image by Malte Helligsøe
April 22, 2016