Production in the digital era

The European digital single market and its impact on production processes.

Approximately 415 billion euros per year and likely to double the growth rate of the EU’s GDP over the next 10 years. These are the expectations fostered by the creation of a so-called digital single market, scheduled to be completed by the end of 2016 thanks to a series of actions announced by the European Commission in May 2015. The strategy aims to remove regulatory obstacles in order to merge the current 28 national markets into one.

“The consumers must obtain tangible and immediate benefits”, said European Commission Vice President Andrus Ansip. Not surprisingly, the new rules increase security for online purchases and the possibility of accessing a much broader range of goods and services based on a review of the methods and costs of deliveries in the various countries of the EU. And we all stand to gain by it.

Small- and medium-sized companies, start-ups and entrepreneurs will benefit from clearer laws that are the same across all countries of the EU (the European Commission estimates that the current fragmentation costs anyone intending to comply with regulations of markets other than their own around €9,000). They will also benefit from a standard tax system, calibrated on the requirements of e-commerce. “We have to promote investment in startups and make it easier to start afresh after a failure”, Ansip added. 

Piracy control systems will be reinforced and copyright laws updated. There will also be new regulations for the telecommunications market and the upgrading of digital networks. Uniform laws on confidentiality will help exploit technologies such as online data storage (cloud) and real time analysis of vast amounts of data (big data) produced by the interaction of single subjects connected via the internet (internet of things). Each of these elements can help to make the industry more flexible, as documents provided by ANIE Automazione bear out.

This is a chance for ‘inclusive growth’ for all EU regions, according to the European Council. The foreseen measures will increase productivity: faster information transfer will come to the aid of service industry companies and, as a consequence, the focus of the economy will shift from manufacturing to knowledge-based business services, which in Europe already generate €1.5 billion of added value, employ over 20 million people and, according to the European Commission, are essential if we are to achieve the growth and employment objectives of the European 2020 strategy.

As Confindustria’s Research Centre points out, the manufacturing sector is crucial for economic growth because its revenue fund all the other sectors, including the hightechnology and knowledge-based sector to which business services belong. Not surprisingly, the EU has also announced, with its industrial compact document, that it will increase the weight of manufacturing over GDP from the current 15% to 20% by 2020.

We are therefore witnessing a much closer connection between industry and services, and a digital single market has the potential to achieve a revolution on all fronts. It will affect raw material provisioning and engineering, technical services and communications along with post-sales services for consumers. It will also promote shareholder participation mechanisms in companies via crowdfunding (fundraising from private sources via social networks) and crowdsourcing (systems that help to organise the work of freelancers), both currently penalised by the fragmentation of national markets.

And there’s more! The improved telecommunication infrastructure foreseen by the digital single market plan dovetails perfectly with industrial technologies that are increasingly shifting towards automation. Consider 3D printing applications, initially conceived as tools designed to speed up product development times but which are now becoming key to the production of new materials and, in the future, could even render the concept of stock obsolete, replacing it with on-demand industrial production. Are we getting ahead of ourselves? Not really. If everything pans out, the revolution will be upon us by the end of the year.