Europe's most important tool in the age of Industry 4.0 is its Common Market

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EESC conference warns against fragmentation of the Single Market and calls for upskilling Europe's work force

An EESC conference on the adoption of Industry 4.0 technologies discussed the most pertinent issues that will shape the medium to long-term future of Europe. It particularly looked at the future of manufacturing and service industries and the necessary changes in our society. Moreover, it reflected on strategic options for Europe moving forward.

On 20 November, the European Economic and Social Committee (EESC) held a conference on Europe's future in the coming era of artificial intelligence and policies such as Society 5.0. The Consultative Commission on Industrial Change (CCMI), which was in charge of the event, addressed a series of issues such as the workplace of tomorrow, the future of labour in Europe and the scenario of Europe finding itself cornered in an unfavourable position as European digital companies struggle to compete with overseas competitors.

The "fourth industrial revolution" has begun to transform traditional business models in noticeable ways. The main impact of Industry 4.0 is changing value chains from the traditional linear ones to value networks with integrated solutions. "In the future, services are at the centre," explained Vincenzo Renda, senior policy manager for digital transformation at DIGITALEUROPE, "and services are a big part of the economy both in terms of GDP and for the labour market. Therefore, we need to promote this social market model by working together with our social partners".

The Japanese government is responding to this development with the Society 5.0 initiative, aimed at creating a society in which citizens' daily lives can be enhanced through close collaboration with artificial intelligence systems. This project tries to create an integrated model to promote more flexible working conditions, give space to human creativity and create an industrial ecosystem where start-ups and SMEs work together with large companies on research and innovation.

"We cannot expect that Industry 4.0 alone will lead us automatically to a transition towards a Society 5.0 type of system," warned Sebastiano Toffaletti, Secretary-General of DigitalSME. The digital revolution represents an incredible opportunity, but it comes with its own set of challenges and threats. It has brought about a profound transformation of our society, from education to healthcare, to market-based benefits. This change is affecting our competitive position towards the rest of the world. Moreover, digitalisation poses new challenges to the single market, threatening fragmentation. "We need to make sure that our biggest asset remains in place and functions properly," stressed Tonnie de Koster from DG CONNECT.

Fostering SMEs and competition

A group of very large American and Chinese companies is leading the industrial revolution and putting pressure on the world economy. The current developments have offered many opportunities in terms of services, but these companies are very good at creating barriers to competition. The panel explained that, through the single market, the European Union has the power to influence their behavior when it comes to regulating and defining the ethical aspects of competition. At the same time, the EU should also have a role in protecting and empowering SMEs in the Industry 4.0 age by creating and supporting a European ecosystem based on creativity and innovation, in which SMEs and larger companies can work together to share the benefits of the revolution.
The social dimension of Industry 4.0

At the same time, "the main challenge remains the social dimension," stated Luc Triangle, Secretary-General of industriAll. Mr Triangle went on to say that, "We cannot mess around with our human capital; we need them to be ready for this process". The EU should support the workforce in the process of retraining and upskilling by introducing funding and new skill-forecasting tools. "We are moving towards a society that needs to be smarter," said André Richier from DG GROW, "and we are facing a transformation of an economy from carbon to green, which requires the participation of key industrial players, but also of citizens".

Human oversight over artificial intelligence systems

There is a strong link between digitalisation and artificial intelligence. Behind the changes in AI systems, there are people. In this context, the anticipation issue is key: if we can shape this evolution in the right direction, it will not lead to social disruption. "Europe accounts for 25 % of AI presence," explained Dana Eleftheriadou, policy coordinator for digital transformation at DG GROW, "but the revolution moves very quickly so we do not have the luxury to be complacent". However, this 25% is for the most part connected to research and not industrial deployment, which still represents untapped potential in Europe.

Irina Orssich, DG Connect and member of the OECD expert group on AI, proposed a strategy for Europe to lead the way in the AI sector to ensure an appropriate ethical and legal framework and strong single market. She stressed the importance of fostering acceptance of AI solutions with ethics, security and privacy as core components, and of showcasing the economic and societal benefits of AI in order to better prepare for the socioeconomic changes and the impact on human beings.

Europe on the international stage

The main takeaway from the discussion is that the EU needs to assume a position of technological leadership so that European standards can become global standards. "It is important to continue having these discussions to reflect on how to best reconcile European values with EU competitiveness at the international level. The EU perspective is not wide enough. We need a strong global outlook to develop regulations on an international scale," concluded Lucie Studničná, the CCMI president.