To compete with the USA and China, Europe requires a Digital Single Market

Europe's digital weaknesses, but also its enormous potentials became apparent during the Covid-19 crisis. Therefore, Europe needs a strong Digital Single Market. This entails strengthening its capacities in areas such as cloud computing, platform economy and the usage of big data. In order to keep pace with the global players USA and China, providing an innovation-friendly regulatory framework is of utmost importance.

Germany and Europe will only be able to survive in global competition with a clear focus on the development and operation of digital innovations and other future technologies. The digital transformation already offers huge opportunities for German companies: Almost sixty percent of industrial companies with more than 100 employees in Germany are using Industrie 4.0 applications. The Corona pandemic also spurred the digital transformation of many businesses as companies recognised the added value of digitalising internal processes or developing smart services and products.

While Europe has failed to drive the first wave of digitalisation of the economy vigorously enough, German companies are frontrunners in the Business-to-Business (B2B) platform economy. Currently, four of the world's 14 leading Industrial Internet of Things (IIoT) platforms are "made in Germany". While these digital solutions are not comparable in terms of market size and users with the large Business-to-Consumer (B2C) platforms, these B2B platforms make a decisive contribution to the twin transition: on the one hand, they support the development towards Industrie 4.0, i.e. an increasingly networked economy. On the other hand, they contribute to significant reductions of CO2 emission while simultaneously increasing productivity.

Regulatory certainty and innovation-friendly approaches required

An innovation-friendly regulatory framework that is as harmonised as possible across the EU Member States is indispensable, especially for the scalability of data-driven business models. Studies show: Completing the Digital Single Market would unleash a growth potential of around €110 billion per year. Therefore, the EU Commission, the European Parliament and the member states should work towards strengthening the Digital Single Market by developing an innovation-friendly digital policy framework and a smart data policy. The interoperability of data and de facto standards are important in this regard. Furthermore, the dismantling of existing barriers, such as legal uncertainties in data protection law need to be tackled. Three out of four companies currently identify legal uncertainty in data protection law, e.g. in the anonymisation of data as a concrete obstacle for digitalisation.

Strengthening Europe’s digital sovereignty

Europe should also focus on an attractive policy framework that supports digital sovereignty at all levels. German industry is calling on the German federal government and the EU institutions to strengthen the resilience of Europe as a whole by promoting key technologies as well as building and expanding competencies. Since German industry is highly integrated into international value chains, it is a proponent of globalisation and a determined opponent of protectionism and the fragmentation of economic areas. A sovereign digital transformation requires a sustainably higher capacity for innovation and investment. Europe's digital policy must be closely interlinked with European and national innovation, research, economic and industrial policies in order to sustainably promote key technologies at the location and to develop its own competences. A high degree of digital sovereignty is a fundamental pillar for a successful Single Market.

Encouraging the uptake of Artificial Intelligence based on innovation-friendly regulation

Artificial intelligence (AI) is one of the most important key technologies in industry and Europe must gain a decisive advantage in international competition in this field. Against this background, unbureaucratic and innovation-friendly framework conditions for the use of AI are a prerequisite for securing the innovation and competitiveness of German and European industry in the long term. In the ongoing regulatory efforts, which primarily relate to the use of high-risk AI systems, it is important to avoid overregulation of industrial application of AI. Otherwise, there is a considerable risk that the development of innovative AI-based solutions will take place in other areas of the world, and thereby, lead to an erosion of Europe’s digital sovereignty and long-term competitiveness.

Strengthening Europe’s cyber-resilience to sustain the long-term successful digital transformation

Cyber-resilient infrastructures, public administrations and products as well as a high level of cybersecurity know-how among society is the prerequisite for a secure digital transformation. A regulatory framework that provides a high degree of EU-wide harmonisation with regard to cybersecurity requirements is of paramount importance, especially for German industry with its international outlook. BDI therefore welcomes the European Commission's proposal for a NIS 2 Directive, but sees the need for far-reaching adjustments to ensure that the NIS 2-Directive introduces practical requirements that can be smoothly implemented by essential and important entities. In addition, we urge the EU Commission to publish cybersecurity requirements for networkable products within the framework of a product-related horizontal NLF-based EU legislative act.