Digitizing industry New Rules of the Game

Germany's carmakers and machine builders are putting pressure on the E.U. Commission to set out clear laws for the new digital economy that will ensure their safety and competitiveness.
New drive for unity.

Having Germany ask for more regulation from Brussels happens about as often as winning the lottery jackpot.

But the new networked digital future and drive to automate factories – or Industry 4.0 as it is called in Germany – is a wide-open field that requires new ways of thinking.

“We are not calling for more regulation to shackle us,” Reinhold Festge, president of the German Engineering Association, told Handelsblatt. “But we need Europe-wide rules for data security and for liability law, to advance the digital networking of industrial production.”

Matthias Wissmann, president of Germany's automotive industry association, has made a similar argument. “It is Europe’s duty to ensure common development of the law in the areas of data and liability,” he said in Brussels.

Currently, there is a constant stream of industry representatives at the E.U. Commission trying to make their cases about Industry 4.0 to the digital commissioner Günther Oettinger and industry comissioner Elzbieta Bienkowska.

And the clock is ticking as the U.S. is racing ahead in this area.

In 2016-2017 already up to 80 percent of new cars will be networked. Matthias Wissmann, President, German Automotive Industry Association

German industry will have much to gain in this new digitized economy.

A study conducted by the Fraunhofer Institute, a research organization, and the information technology association Bitkom concluded that by 2025, there would be potential for an additional €78 billion ($88 billion) in machine building and automobile manufacturing, electrical engineering, the chemical industry, agriculture and the communications industry.

“The competitiveness of small and medium-sized businesses depends on Europe’s courageous action,” said Mr. Festge.

The automotive industry is facing massive changes due to the fusion of driving and IT technology. “In 2016-2017 already up to 80 percent of new cars will be networked,” said VDA president Mr. Wissmann.

He said fully automated driving has long stopped being a pipe dream. As an example of the need for clear, new laws, he said it would not make sense if the occupant of a self-driving car would have to put his newspaper away when he crosses the border to France because that country had different liability laws than Germany.

Mr. Wissmann also advocates uniform rules for guaranteeing the privacy of data recorded while driving.

For the second largest German industry, machine building, the challenges primarily involve the securing of data – for example when machines communicate across borders via the Internet for remote maintenance and data analysis.

That currently takes place through cloud services of major U.S. corporations such as Apple. Small and medium-sized businesses especially are asking themselves how to safeguard their products and know-how when more and more data is flowing through the network.

“The E.U. must ensure a security structure,” said Mr. Festge. He said a European data platform like the cloud would be desirable. “Europe should not make itself dependent on major U.S. corporations in the IT industry,” he said.

Industry 4.0 will be a litmus test for the E.U. Commission. “They have given their word to put in place the important and necessary framework for increasing Europe’s competitiveness,” said Mr. Festge. “With Industry 4.0, Brussels has the opportunity to prove that.”


 The author reports for Handelsblatt from Brussels. To contact the author: [email protected]