The Guest Blog

Guest blog post by Erich Clementi, Chairman IBM Europe.

Predicted for some years as Europe’s next big opportunity to be a global digital frontrunner, the pace of the digital transformation of industry is really accelerating as we start the new year.

Europe’s political leaders are driving noteworthy progress. This year, I look forward to seeing Europe’s 2015 Digital Single Market strategy evolve into concrete actions that will boost digitization across multiple industries. The European Commission’s roundtable on digitizing industry, hosted by Gunther Oettinger, EU Commissioner for Digital Economy and Society, met for the third time this week. As part of that dialogue, a team of policy makers and industry leaders, including IBM, is developing a clear Industry 4.0 action plan.

The first recommendation in this plan is to develop a digital innovation hub in every region. This will help provide any business, especially SMEs, access to the most important digital technologies and competences to master the digital transformation. Such hubs require large-scale investment. In December, IBM announced that Munich will be the global headquarters for IBM´s Watson Internet of Things (IoT) business, bringing the power of cognitive computing to billions of connected devices, sensors and systems. Industries that are at the forefront of the region’s Industry 4.0 efforts – automotive, electronics, healthcare, insurance and industrial manufacturers – are among those best positioned to benefit from this technological revolution.

The IBM Munich site – with its 1,000 developers, consultants, researchers and designers – will also attract more digital innovators. Not least because they can directly access IBM’s open, cloud-based IoT platform to test, develop and create new technologies. As IBM’s largest investment in Europe in two decades, this is an example of what can be done when conditions are optimized to attract high-tech growth. Policy makers at the European, national and regional levels must further develop the right investment environment for digital innovation hubs. At IBM, we have taken a first step.

Another recommendation is to develop smart regulation for a digitized smart industry. This covers a broad spectrum of potential legislation. A particularly critical topic is preserving the smooth and secure flow of data both within and outside the EU. Industrial transformation in Europe will require that data be treated and analysed by the best experts at a cost that will not cripple businesses’ ambitions. We look forward to the implementation of a new Safe Harbour agreement and the Free Flow of Data Initiative – both of which will keep data flowing to drive growth in the digital economy. Likewise, it is also important that the EU’s General Data Protection Regulation is implemented in a way that boosts smart industry.

Skills development is another area for action. In 2016, an Industry 4.0 Bachelor Degree course will launch in Stuttgart – the result of a partnership between IBM and Duale Hochschule Stuttgart. Students will, for example, learn about the IT and business requirements to build a smart factory. The curriculum consists of 75 percent business administration and 25 percent IT specific content. This complements IBM’s work with education institutions across Europe to develop the right mix of in-demand high-tech skills.

Europe’s industry players are starting to see the early signs of industrial digitization. Whether it’s car manufacturers using analytics to increase output and quality of component production. Or, the semiconductor industry enhancing inventory management by analysing data from across the production process – the benefits are far reaching.

But really, we’re only scratching the surface. With 90 percent of the data that is gathered by all sensors lost or thrown away, huge opportunities remain to be seized by Europe’s industries. The challenge for 2016 is to accelerate the pace of the Industry 4.0 transformation. Policy makers and business must continue to team up, invest and push forward. Positive steps are being taken, and 2016 can be the year for turning potential into reality.

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