10-Point Plan for Europe

POSITION | DIGITALISATION | DEMANDS

10-Point Plan for Europe Towards a Digital European Economy

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V.20.03.24.15.57

Position | Digitalisation | Demands 10-Point Plan for Europe

Table of contents

Table of contents Foreword ................................................................................................................................................................................ 5 10-Point Plan for Europe.................................................................................................................................................. 6 01 Enabling European data cooperation................................................................................................................. 7 02 Creating a single EU data area: innovative – legally secure – value-based...................................... 8 03 Harmonising spectrum allocation across the EU and ensuring secure networks ....................... 9 04 Building European High Performance Computing capacities ............................................................. 10 05 Creating a European Cloud Architecture........................................................................................................ 12 06 Ensuring consistent cyber regulation for Europe....................................................................................... 13 07 Making the EU the world‘s leading location for digital industrial value creation........................ 14 08 Using digitisation as a catalyst for sustainability....................................................................................... 15 09 Strengthening the strategic promotion of AI and ensuring an innovation-friendly regulatory framework ............................................................................................................................................ 16 10 Identifying and promoting Key Digital Technologies................................................................................. 17 Imprint.................................................................................................................................................................................... 18

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“Europe must be a leader in the data and platform economy, pursuing its own path based on European values�.

Michael Ziesemer Co-Chairman of the BDI Committee Digital Economy, Telecommunications and Media President ZVEI e.V. Vice Chairman of the Board of Directors Endress+Hauser Management AG

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Position | Digitalisation | Demands 10-Point Plan for Europe

Foreword

Foreword The future of the European Union crucially depends on how the course is set for the successful digitisation of the economy and society in the coming years. The economic structures within the Union must be geared up so that Europe can compete with the US and China. The European Commission must give top priority to intensifying the Digital Single Market. Europe also needs cross-border, state-of-the-art digital infrastructures, high-performance computing centres, a common approach to the implementation of artificial intelligence in the economy, and uniform innovation-friendly standards for data security and data protection. German industry, with its innovative strength, is at the centre of these efforts.

The ten key European policy demands of the BDI on the EU‘s digital policy are intended to provide impetus for discussions and political measures. The BDI and its members are committed to five overriding objectives of a European digitisation strategy:

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smart data policy sustainable digital infrastructure digital sovereignty sustainable, efficient value creation strong key technologies

Iris PlĂśger

Dr Wolfgang Hackenberg

Michael Ziesemer

Member of the executive board Federation of German Industries

Co-Chairman of the BDI Committee Digital Economy, Telecommunications and Media

Co-Chairman of the BDI Committee Digital Economy, Telecommunications and Media

Spokesman of the Management Board Nokia Solutions and Networks GmbH & Co KG

President ZVEI e.V. Vice President of the Board of Directors Endress+Hauser Management AG

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10-Point Plan for Europe Smart data policy 1

Enabling European data cooperation

Barriers to competition and antitrust law must be removed so that companies can cooperate throughout Europe and develop data-based business models. Data access to the public sector, the use of this data, and public cooperation must be expanded.

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Creating a single European data space: innovative – legally secure – value-based

Data protection rules must be applied in a uniform manner across Europe and encourage innovation. The free and secure flow of data, interoperability and use, based on balanced ethical guidelines, are central prerequisites for a functioning common European data space.

Sustainable digital infrastructure 3

Harmonising spectrum allocation across the EU and ensuring secure networks

Harmonised and coordinated spectrum allocation, EU-wide standards, and secure networks for mobile communications are essential for the interconnected Digital Single Market and coordinated connections at national borders.

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Building European High Performance Computing capacities

The setting up of High Performance Computing capacities in the EU must ensure that European companies and research institutions have access to an infrastructure for research, innovation and the development of new business models.

Digital sovereignty 5

Creating a European Cloud Architecture

In the EU, the creation of an interoperable platform for cloud services that is open for future technologies has to be promoted. This platform should match existing cloud services to the demands of cloud users. It is also important to ensure compliance with European requirements for data security and data protection.

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Ensuring consistent cyber regulation for Europe

Coherent cybersecurity requirements across Europe are needed to strengthen cyber-resilience. Cyber security requirements should always follow a risk-based approach.

Sustainable, efficient value creation 7

Making the EU the world‘s leading location for digital industrial value creation

The EU has an industrial base that contributes significantly to the economic success of the Community. The technological leadership of European industrial companies, particularly in the B2B sector, is the basis for making Europe the leading location for digital business models in B2B domains.

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Digitisation as a catalyst for sustainability

Digitalisation and innovation offer enormous opportunities for promoting sustainability in the EU and to make a strong EU contribution to achieving the Sustainable Development Goals (SDGs). As a prerequisite, a high degree of innovation-friendliness is to be ensured politically. At the same time, increased public and private investment in research and development of sustainably-relevant key technologies is necessary.

Strong key technologies 9

Strengthening the strategic promotion of AI and ensuring a regulatory framework open to innovation

Europe can only survive within the international competition for artificial intelligence if national efforts to promote AI are expanded and brought together at European level. In this context, support that is consciously oriented towards Europe’s strengths and values is crucial. Moreover, the debate on the ethical and legal challenges of AI must not lead to hasty, all-encompassing regulation. So far, no critical AI application is known that has not already been adequately regulated through existing German or European law.

Additional regulations may only be considered if there is a concrete need.

Identifying and specifically 10 promoting digital key technologies In addition to, and expanding on the KETs (Key Enabling Technologies), digital key technologies with a high broad impact for Europe must be identified and specifically promoted at EU level. Close interaction between EU institutions, business and science is crucial in this respect.

Enabling European data cooperation Machine-generated data increasingly represent a central competition factor for German industrial companies and are a motor for economic growth and innovation. In principle, the high economic potential of the data economy develops optimally when economic players have access to data from other economic players, or exchange and mutually use such data in the form of cooperation. This applies to the data from the private sector and also to the access to and the use of machine-generated data in the public sector. It is time to create a legal framework in which the digital transformation of the industry can take place.

European antitrust law is currently proving to be an obstacle to innovation for data cooperation between private companies. In particular for companies that are in mutual competition, there are antitrust concerns regarding the permissibility of data partnerships.

This legal uncertainty for companies is due to the abolition of the formal notification system for potentially restrictive agreements and the introduction of the directly applicable exception system in European antitrust law.

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From then on, companies have had to assess antitrust law risks on their own, which leads to a reluctance to innovate, especially in view of the threat of high fines in the event of an incorrect assessment under antitrust law. In practice, many companies refrain from data cooperation projects solely because of the legal uncertainties under antitrust law. The currently applicable horizontal and vertical block exemption regulations, in conjunction with the guidelines issued by the European Commission, do little to remedy this situation, as their scope of application is very narrow. In order to better harness the great innovation potential of data cooperation, EU antitrust law must be opened up, more than in the past, to cooperation between competitors.

In the area of access to public sector data, there is a need to extend the so-called open government data concepts. For private companies, such data has a great economic value, as it can be used to optimise their own processes, or to develop new business models.

A free, and at the same time, uniform framework for access to public sector data throughout the Union is therefore of great importance for the entire European data economy.

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Creating a single EU data area: innovative – legally secure – value-based

Even after almost two years of becoming law, the European Data Protection Regulation (GDPR) still leads to legal uncertainties in the application practice of companies. Although the GDPR creates a uniform, value-based legal framework for all member states, companies are faced with considerable uncertainty and differing interpretations in the actual application of the law within the member states. This can be seen from the fact that the number of requests for advice from the supervisory authorities has increased dramatically. A large number of the legal requirements in the GDPR is very succinctly formulated and therefore requires interpretation.

In the course of this legal interpretation, national supervisory authorities within the European Union have come to a very inconsistent interpretation.

Examples of this are the currently unclarified questions of the scope of the permissible offences, or the legally secure anonymisation of personal data and thus the distinction between personal and non-personal data.

In order to prevent the GDPR from becoming a locational disadvantage for European companies, the European Data Protection Committee should ensure that the GDPR is handled in a uniform and legally secure manner throughout Europe. The high fines of 4 percent of annual revenues, which could be imposed in the event of a breach of the GDPR regulations, further increase the uncertainty on the part of the company in its legal handling of data. The bureaucratic burden caused by the many information and documentation obligations and numerous decisions to be weighed up is still an everyday challenge, especially for small and medium-sized enterprises (SMEs). On the other hand, in view of the above findings, the Union legislator is also called upon to address the existing problems of companies in the context of the forthcoming evaluation of the GDPR 2020 and to make targeted legal adjustments to facilitate the application of the law. Only through legally secure and unbureaucratic application, will the GDPR have the potential to establish itself as a worldwide standard in the future.

“An innovative EU data space is the basis for a successful European platform economy. It is the basis for the integration of people, analytics and business processes and therefore for sustainable added value and competitiveness”.

Gerhard Baum Chief Digital Officer, Schaeffler AG 8

Harmonising spectrum allocation across the EU and ensuring secure networks In addition to the decisions of implementation already taken by the EU Commission on technical harmonisation and uniform allocation of all three pioneer bands for wireless broadband (700 MHz, 3.4-3.8 GHz and 26 GHz), the EU Commission still needs to harmonise and coordinate the allocation of the bands for 5G that will become available in the future. The technical conditions for all already harmonised bands for wireless broadband should be rapidly adapted by the EU Commission.

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a certification scheme for 5G technologies should be developed as soon as possible. In the case of schemes relating to specific products, these should cover both the interplay of hardware and software and processes such as update management and the traceability of software developments. Regional safety certifications must be based on international standards and be compatible with international mutual recognition regulations.

In order to achieve rapid results, the expertise of German industry should be included in the development of the cyber security certification schemes.

In order to ensure the security of 5G networks, there is also a need for uniform security standards across Europe. In the context of the EU Cybersecurity Act,

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Position | Digitalisation | Demands 10-Point Plan for Europe

Building European High Performance Computing capacities

Megatrends, Zukunftsfelder und Innovationstreiber Building European High Performance Computing capacities

Besides gigabit networks, data centres are a central component of the digital infrastructure and thus guarantee Europe‘s digital sovereignty

Computing capacities Infrastructure Quantum Computing

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Position | Digitalisation | Demands 10-Point Plan for Europe

Building European High Performance Computing capacities

Scientific progress and successful new business models are increasingly based on the analysis of large amounts of data. The availability of High Performance Computing (HPC) capacities is therefore essential to ensure the EU’s long-term competitiveness. The setting up of HPC capacities must ensure that European scientific institutions, as well as companies, have access to a high-capacity infrastructure that empowers them to carry out highly innovative research and to develop new business models. From the outset, the infrastructure must be open for future technologies, especially quantum computing.

In order for Europe to remain competitive in the field of supercomputing, important decisions have to be made in different areas. These include in particular, the further strengthening and promotion of European supercomputing co-operations such as PRACE and Euro HPC in order to continue to successfully pool the resources and know-how of EU member states in the field of high-performance computing in the future. It is also of particular importance that - in the context of the ongoing negotiations on the EU multiannual financial framework for the years 2021-2027 - the expenditures proposed by the EU Commission for research into quantum computing do not fall victim to the red pencil.

The a ­ vailability of High ­Performance Computing ­capacities is an essential precondition for ensuring the long-term competitiveness of the EU.

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05 Dr Christoph Wegner Chief Digital Officer, BASF SE

“Digital sovereignty means that we retain complete control over our data. And at the same time, not be restricted in our global competitiveness.�

Creating a European Cloud Architecture Cloud-based services are among the central enablers of the digital transformation of the economy and society. Against this background, Europe must now build up its own capabilities in the cloud-based processing of large amounts of data at a rapid pace, in order to strengthen its own competitiveness in the long term and meet its own security requirements. However, the aim cannot be to build a European hyperscaler based on existing US and Chinese models. Rather, the EU must press ahead with the creation of an interoperable platform for cloud solutions that is ready for future technologies. It should bring together existing cloud offerings with user needs in line with market requirements and should be based on open interfaces.

For the strengthening of European cloud computing capabilities to be successful in the long term, the following principles must be ensured: First, the EU needs its own open platform for cloud solutions with clear governance. The offers and services provided via such a platform must be based on standards that fully comply with the European legal and value system and guarantee the highest degree of digital sovereignty. These offers and services should also follow an open source approach, if possible. Their functionalities should be oriented towards the requirements and needs of users.

Every market participant which meets these criteria (including objectively justifiable security requirements) should be allowed to offer its cloud services on the platform, after the platform for cloud solutions has been established.

Secondly, a European model must be market-based, efficient and flexible.

Like all offerings on the market, a European platform for cloud solutions would be subject to supervision by public authorities. However, the operation and organisation of such a service must be exclusively market-based.

In order to counteract lock-in effects, users must be able to link different offers or switch between the offers of different providers at any time and without much effort.

Thirdly, the European platform for cloud solutions must be based on a general public framework and private sector funding. If necessary, it should be initiated as a public-private partnership. It is also important to harness the demand potential of the public sector by making use of the offers of the European platform for cloud solutions by the EU institutions and public authorities in the individual member states. For Europe to become attractive as a location for cloud solutions, an appropriate ecosystem is also needed.

For example, energy and climate policy instruments must also be taken into account and targeted investments in digital education must be sought.

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Ensuring consistent cyber regulation for Europe European companies strive to offer products, processes and services that possess a degree of cyber resilience adequate to the likely risk. At the same time, however, one hundred percent cyber security cannot be achieved, let alone guaranteed, because attack vectors are constantly changing, new vulnerabilities are identified, and human error can never be completely avoided. This makes it all the more important for companies to ensure that their efforts to strengthen cyber-resilience are not thwarted by inconsistent regulations, national unilateral approaches or one-sided requirements. Since often more than one rule applies to products, consistent and coherent requirements are essential for maintaining the international competitiveness of companies. Against the background of an increasing fragmentation of legal requirements for cyber security for products and services, coupled with a growing need to strengthen the cyber resilience of products, processes, services and systems, the following principles are needed, and should be taken into account in current and forthcoming cybersecurity legislation by both the EU and national governments: Firstly, it is important to ensure coherent regulatory requirements to strengthen Europe’s cyber resilience, while avoiding competitive disadvantages for European companies. It is important to avoid hasty additions and extensions to legal requirements on cyber resilience.

Rather, an approach is required that takes into account that products, processes, services, and systems often fall under more than one regulation.

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Secondly, regulators should give precedence to European requirements over national unilateral regulatory approaches in order not to endanger the success of the European internal market. For example, the introduction of a national IT security label is not appropriate.

Instead, a European solution is needed from the outset. Only an IT security label that is uniform throughout Europe, easy to understand and accompanied by efficient market supervision will be able to make a contribution to strengthening cyber-resilience.

Thirdly, products, processes, systems and services do not all require the same level of protection. Hence, a risk-based approach is needed to ensure adequate and effective protection.

Fourthly, German industry recommends that European standardisation bodies should be involved in the development of cyber security requirements according to the principles of the New Legislative Framework (NLF).

The successful regulatory model of the European Union – the New Legislative Framework – with its established processes and high temporal efficiency, is suitable for addressing the challenges posed by maintaining cyber security, while at the same time ensuring system coherence. The legislator should merely define the protection objectives, which should then be concretised in European harmonised standards. Finally, all stakeholders – from hardware and software manufacturers to commercial operators and private users – should be actively involved to holistically strengthen the cyber resilience of products, processes, systems and services.

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Making the EU the world‘s leading location for digital industrial value creation

The EU has an industrial base which contributes significantly to the economic success of the Community. The areas of mechanical engineering, the electrical industry, aviation or the chemical industry, are examples of numerous other sectors in which European companies are among the world market and technology leaders. European companies possess a particularly strong position in the business-to-business (B2B) sector, where the interfaces to the customer are often not occupied by non-European players, but by European industrial companies.

The technological leadership of European industrial companies - particularly in the B2B sector - is the basis for making Europe the leading location for digital industrial value creation.

Numerous examples from Industry 4.0 illustrate the potential that European companies have in this area.

Our access to industrial data, combined with our knowhow in areas such as automation technology or embedded systems, can ensure a leading position in the industrial sector in the future, too. In order to achieve this

goal, a number of political decisions are required. This includes, on the one hand, the completion of the Digital Single Market, for example, by removing barriers that impede the cross-border data exchange (free flow of data). It is also essential to ensure a modern and innovation-friendly data policy that differentiates between the processing of personal and non-personal data and that is based on the principle of data sovereignty. In addition, Europe must strengthen the B2B sector when it comes to platform regulation. In this context, over-regulation must be avoided, particularly in the negotiations on a Digital Services Act and the associated revision of the e-Commerce Directive. Strengthening Europe as a research location is also of fundamental importance in order to secure Europe’s long-term innovative capacity.

To this end digital key technologies need to be clearly anchored and promoted with an adequate budget in Horizon Europe’s programme Pillar II.

“The digital integration into value chains with state-ofthe-art IT technologies such as Cloud, Blockchain and AI offers great opportunities for the German industry, when combined with cyber and data security”.

Dr Dirk Stenkamp Chairman of the Board of Management of TÜV NORD AG 14

Using digitisation as a catalyst for sustainability Digitisation and sustainability are the two megatrends of this century. Although there are many correlations between the two developments, they have so far largely been considered and discussed separately. For German industry, both topics - digitisation and sustainability - are crucial for the future. In an environment characterised by massive global competitive pressure, it is essential to quickly develop and use new digital opportunities for value creation (networked production, Internet of Things, smart services, industrial platforms, artificial intelligence, etc.). At the same time, especially in Germany and the European Union, societal expectations and legal requirements for companies to handle data and new technologies, as well as environmental resources, responsibly are increasing. Digitisation of the economy and sustainability goals are not mutually exclusive, but can, and should complement each other positively.

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A sustainable Europe will only succeed if we reconcile economic, social and environmental objectives while remaining competitive. German industry needs adequate national, European and international framework conditions so that it can develop innovative, competitive and, above all, sustainable technologies that bring about ecological and social progress worldwide.

In order for digitisation to act as a catalyst for achieving the Sustainable Development Goals (SDGs), an ambitious and future-oriented industrial strategy is needed that focuses on investment and the promotion of innovation. In addition, significantly more investment is needed in key technologies relevant to sustainability, such as artificial intelligence, networked driving or biotechnology, digital infrastructure and trans-European transport and energy networks.

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Strengthening the strategic promotion of AI and ensuring an innovation-friendly regulatory framework AI funding should focus on industry-related fields of application in order to give Germany and Europe an advantage in international competition

Politics Society AI Application

Europe can only survive within the international competition for artificial intelligence if national efforts to promote AI are expanded and brought together at European level. The “Coordinated Action Plan” drawn up by the EU Commission is a step in the right direction and should be pursued in a consistent manner. Support should be consciously oriented towards Europe’s strengths and values. One focus of support should be on the transfer of know-how to small and medium-sized enterprises. To this end, the Digital Innovation Hubs must be expanded and supplemented with specific KIK know-how. In addition, the EU Commission should draw up a coordinated research roadmap in close cooperation with the European member states as a supplement to the “Coordinated Action Plan”, in order not to jeopardise the overall good starting position in AI research. It must also be ensured that AI applications can develop as freely as possible. Intensive debates are taking place in politics, business and society about the ethical and legal challenges of AI. 16

This debate is right and important. However, it must not lead to the hasty horizontal regulation of AI. This would pose major challenges for SMEs, in particular, and unnecessarily restrict their scope for innovation.

Previously known critical AI applications can already be effectively regulated by using existing national or European law (e.g. DSGVO, anti-discrimination law, product safety directive). Additional regulations and procedures may only be considered if there is a concrete need. It should also be noted that the ethical and legal challenges of AI vary greatly depending on the purpose and context of use. All AI applications that do not make critical decisions about humans should be exempted from any regulation.

Identifying and promoting Key Digital Technologies Key Enabling Technologies (KETs) are drivers for innovation in various industrial application fields. Key technologies are knowledge-based and enable innovations in processes, goods and services. In 2009, the EU identified the following technologies as key technologies: Advanced manufacturing technologies, advanced materials and nanotechnologies, life sciences (including biotechnology), micro- and nanoelectronics and photonics.

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In February 2018, the definition of the above-mentioned analogue key technologies was extended by the EU High Level Expert Group on Industrial Technologies, headed by Jürgen Rüttgers, to include the digital key technologies artificial intelligence (AI), cybersecurity and connectivity.

These new digital key technologies must be adequately financed and promoted in the sense of basic sponsorship. A European roadmap must also be developed for Key Digital Technologies. Competencies must be strategically developed and coordinated across Europe. Public funding must be consistently provided for the development of these key technologies. For example, the EU must increase public investment in R&I-intensive sectors and allocate at least 8 percent of the budget of Horizon Europe (HEU) to projects related to key technologies.

In addition, the HEU missions should also place a clearer focus on Key Digital Technologies (e.g. by focusing on artificial intelligence in HEU mission area four (“Climate Neutral and Intelligent Cities”). It is essential that the promotion and coordination of key technologies go far beyond lighthouse projects in order to have a real impact and contribute significantly to European industrial competitiveness.

Lars Reger Senior Vice President (SVP) Technology and Chief Technology Officer (CTO), NXP Semiconductors Germany GmbH

“Europe has the chance to achieve a clear competitive advantage by developing the most innovative, safe and energy-efficient solutions”

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Position | Digitalisation | Demands 10-Point Plan for Europe

Imprint Publisher BDI – Federation of German Industries Breite Straße 29 10178 Berlin T.: +49 30 2028-0 www.bdi.eu Editorial team Dr Thomas Koenen, Head of Department Department Digitalisation and Innovation Carolin Proft, Senior Manager Department Digitalisation and Innovation Design & Implementation Vicharah Ly, Senior Manager Department Marketing, Online and Event Management Layout Michel Arencibia, Art Director www.man-design.net Print Das Druckteam www.druckteam-berlin.de Publishing Company Industrie-Förderung Gesellschaft mbH, Berlin Bildnachweis P.1: 73669739 © Grecaud Paul | stock.adobe.com P.4: fX-D68esJz4 | unsplash.com P.9: 7nrsVjvALnA | unsplash.com P.10: 158449702 © Michail | stock.adobe.com P.15: NN9HQkDgguc | unsplash.com P.16: I4YsI1zWq_w | unsplash.com Date and Number March 2020 BDI-Publications-Nr. 0100

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