News EurEta Issue of May 2016

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1 News EurEta Issue of May 2016 Summary : 50 billion to digitise Europe s industry UK Industry s take on Brexit Dramatic lack of qualifications for construction industry trainees despite skills shortage in the UK 1

2 50 billion to digitalise Europe s industry In the context of implementing the Digital Single Market, the Commission has recently unveiled its plans to help European industry, SMEs, researchers and public authorities to make the most of new technologies. The European Commission presented this past month of April a set of measures to support and link up national initiatives for the digitisation of industry and related services across all sectors as well as for boosting investment through strategic partnerships and networks. The Commission also proposes concrete measures to speed up the development of common standards in priority areas, such as 5G communication networks or cybersecurity, and to modernise public services. As part of these plans, the Commission will set up a European cloud that, as a first objective, will give Europe's 1.7 million researchers and 70 million science and technology professionals a virtual environment to store, manage, analyse and re-use a large amount of research data. Andrus Ansip, Vice-President for the Digital Single Market, said that "The industrial revolution of our time is digital. We need the right scale for technologies such as cloud computing, data-driven science and the internet of things to reach their full potential. As companies aim to scale up across the Single Market, public e-services should also meet today's needs: be digital, open and cross-border by design. The EU is the right scale for the digital times." Günther H. Oettinger, Commissioner for the Digital Economy and Society added "Europe has a very competitive industrial base and is a global leader in important sectors. But Europe will only be able to maintain its leading role if the digitisation of its industry is successful and reached fast. Our proposals aim to ensure that this happens. It requires a joint effort across Europe to attract the investments we need for growth in the digital economy." Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs ended by saying: "The digital economy merges with the real economy. We need leadership and investment in digital technologies in areas like advanced manufacturing, smart energy, automated driving or e-health." 2

3 The position of the European Commission is that while many parts of the economy have been quick to take up digital technologies and processes, European industry across sectors and regardless of a company's size must fully use digital opportunities if it is to be globally competitive. Traditional sectors (like construction, agro-food, textiles or steel) and SMEs are particularly lagging behind in their digital transformation. Recent studies estimate that the digitisation of products and services will add more than 110 billion of revenue for industry per year in Europe in the next five years. Several EU Member States have already launched strategies to support the digitisation of industry. According to the Commission, there are currently more than 30 national and regional initiatives related to the digitalisation of industries, including in Germany, The Netherlands, France, Italy, Spain and Slovakia. A comprehensive approach at European level is however needed to avoid fragmented markets and to reap the benefits of digital evolutions. As part of this approach, the Commission will: Help coordinate national and regional initiatives on digitising industry by maintaining a continuous EU-wide dialogue with all actors involved. A governance framework will be set up with Member States and industry. Various meetings will be organised every year two roundtables and one annual major stakeholder meeting. Focus investments in EU public-private partnerships and strongly encourage the use of the opportunities offered by the EU Investment Plan and European Structural and Investment Funds. Invest 500 million in a pan-eu network of digital innovation hubs (centres of excellence in technology) where businesses can obtain advice and test digital innovations. Set up large-scale pilot projects to strengthen internet of things, advanced manufacturing and technologies in smart cities and homes, connected cars or mobile health services. Adopt future-proof legislation that will support the free flow of data and clarify ownership of data generated by sensors and smart devices. The Commission will also review rules on safety and liability of autonomous systems. Present a EU skills agenda that will help giving people the skills needed for jobs in the digital age. The European cloud initiative is also a part of this package and will help Europe lead in the data-driven economy. Overall, today's plans should mobilise over 50 billion of public and private investments in support of the digitisation of industry. 3

4 In the future Digital Single Market, billions of connected devices including phones, computers and sensors should be able to communicate safely and seamlessly, regardless of their manufacturer, technical details or country of origin. For this they need a common language: standards. The EC proposes concrete measures to speed up the standard setting process by: Focusing on five priority areas, when asking industry and standardisation bodies to work on standards. These areas are: 5G, cloud computing, internet of things, data technologies and cybersecurity. Co-financing the testing and experimentation of technologies to accelerate standards setting including in relevant public-private partnerships. This will ensure timely delivery of standards to spur innovation and business growth. This faster, more focused approach will also speed up the development and take-up of technologies such as smart grids, mobile health services, connected vehicles and other sectors. The EU plans to support participation of European experts in international standardisation decisions, to help ensure European ideas contribute to global solutions. For more information, please follow the links here under: mmission-sets-out-path-to-digitise-european-industry You are always welcome of course to directly contact our secretariat. 4

5 UK Industry s take on Brexit In approximately one month from now, on the 23th of June, the referendum on the United Kingdom s future within the European Union will be taking place. What impact would a Brexit have on UK s industrial sector? The Engineering and Technology Magazine (E&T) asked both sides (the pros and cons) their take on this issue. It seems that Britain s engineering sector is split on what would be the best. A poll by EEF (The Manufacturers Organisation) found 61 per cent of their members wanted to stay and just 5 per cent sought to leave. Yet more than a third of those responding to a survey by The Engineer magazine thought that pulling out of the EU would free up UK manufacturers from regulation. Please find bellow the positions of several key actors in the British industrial sector: On Access to Market: A recurrent argument for staying in the EU is that it gives access to a single market made up of 500 million potential customers. EU countries buy 44 per cent of everything the UK sells abroad, making it the country s biggest trading partner by far. There is simply too much at stake for the UK to leave the EU, says Matt Ainscough, chief executive officer at Ainscough Industrial Services. Mr. Ainscough says: A vote to leave would seriously risk jeopardising the expansion and commercial viability of UK engineering companies like AIS, currently thriving by supporting manufacturing projects on the continent. Ton Van Keken, senior vice-president of operations at Interface in Europe (a division of US-based Interface Inc, which designs and makes floor coverings) agrees. He says: Great Britain deciding to leave the European Union in June will have significant implications for engineering, with the sector being arguably the most exposed to the referendum result. Given the employment opportunities, economic stability and trading relationships borne through membership of the EU, coupled with the benefits of an open market not to mention the significant influence it has on policy-making membership is absolutely crucial for the British manufacturing industry to excel long-term. 5

6 If the UK did leave, he adds, the global reach of engineering companies based here will be at risk and re-establishing trade relations will take time, causing a possible business void in the interim. However, Ian Brown (MD of Portsmouth-based electrical and mechanical engineering company Industrial Maintenance Services Ltd) argues that time is on their side. We certainly won t lose the market. Anyone who thinks we re going to stop trading with the EU when we leave is just being silly. ( ) For two years nothing s going to happen anyway there s a negotiation period of at least two years. In the Lisbon Treaty it says that any country that leaves the European Union must have a trade agreement. We will write a trade agreement which will be very similar, if not identical, to what we ve currently got because that s in the interests of everybody. He also stated that outside the EU, the UK would be free to write its own trade agreements, which will open up markets far beyond Europe, The EU has been trying to do a trade deal with India now for seven years, and it still hasn t got there. We can do a trade deal with India and other countries much quicker on our own, and that can only benefit our economy and our exports. On the contrary, Peter Rolton, chairman of Rolton Group (a construction and engineering specialists), believes Brexit will leave the nation isolated and vulnerable. I cannot see where the UK fits globally as a stand-alone country outside of Europe, there are not enough manufacturing companies left in the UK, and the reason that many are here is so that they have access to the European markets and customers. If we vote for a Brexit, the trade door will be closed and bolted behind us. On EU standards Do technical standards applied across the 28 Member States make it easier for professionals, or are they a barrier for business? The EEF represents more than 5,000 businesses. The message we hear back from members, and one I would support, is that EU-wide standards are a good thing, says CEO Terry Scuoler, chief executive officer of the EEF 6

7 James Dyson, the founder of the Dyson vacuum cleaner business, disagrees. He told that in our particular field we have these very large German companies who dominate standards-setting and energy-reduction committees, so we get the old guard and old technology supported and not new technology. The argument was answered by Vicky Ford, MEP: The message for Dyson is that if we leave and he wants to keep exporting his products to the EU, he would still have to comply with these rules, but he wouldn t have a chance to influence them. I think that the answer is not leaving the EU, but getting more involved in discussions at an early stage. We need to get better at scrutinising EU laws, and firms who want to sell into the EU should get involved in setting these rules. For Mr. Rolton, without such standards and foreign investment it is possible that we could see a decrease in not only the high levels of service and expertise that we are able to offer to the rest of the world, but also the demand for these skills. On Skills and immigration In a potential post-brexit Britain, curbing European immigration might well become an apple of discord. Free movement of people, one of the core principles behind European integration, has enabled a massive surge of low-skilled workers to enter the UK. According to the Office for National Statistics, in the 12 months to June 2015 the UK saw a net rise in immigration of 82,000, of which 42,000 arrived from the EU and 36,000 from non-eu countries. Hence, some Brexit proponents believe that abolishing free movement would allow the UK to better cherry-pick who it lets in focusing on the skills and talents it needs to plug its well-documented skills shortages and leave low-paid bar-tending and house-cleaning jobs to local people or those that are already in. In practice, it is expected that the system would issue work permits to EU workers in a similar way to what is currently done with applicants from outside the European Economic Area (the EU plus certain other states). However, industry and academia alike are very much against such a solution, which, they say, is placing excessive financial and administrative burdens on employers. 7

8 The ability to recruit a non-eea worker, because of the framework that we have in the UK, is restrictive, says Tim Thomas, director of employment and skills at the manufacturers organisation EEF, which is a vocal supporter of EU membership. If we want to apply the same framework to other workers from the EU, then it would be very difficult indeed to recruit the skilled workers that our sector needs. The most common way to import non-eu engineers is via the Tier 2 route for skilled workers with a job offer at graduate level or above. Tier 2 also covers employees of multinational companies who are being transferred to the UK. The current cap only allows 20,700 visas to be awarded every year for jobs that pay at least 35,000. But there are other obstacles. You have to conduct the Resident Labour Market Test to prove that you can t recruit those people in the UK, which is quite frankly just a burden and a delay, says Tim Thomas. You then have to apply for a certificate of sponsorship from the Home Office just to bring in an engineer. For the full article of E&T please check here: 8

9 Dramatic lack of qualifications for construction industry trainees despite skills shortage in the UK Information obtained through a Freedom of Information Act (FOI) request (the Freedom of Information Act 2000 provides public access to information held by public authorities) made by the UCATT union (Union of Construction, Allied Trades and Technicians) revealed that the majority of the 167,000 young people studying for construction qualifications will not get the qualification needed to work on site, unless they secure an NVQ (National Vocational Qualification) - that is best achieved through studying an apprenticeships. Of the 167,970 students who started a construction course in 2014/15, 136,960 were at General FE colleges and tertiary colleges, 19,780 were in private colleges funded by the public sector, and 11,240 were social enterprises. Despite a shortage of skilled workers only 18,000 people (12%) secured an apprenticeship in the construction industry last year. Labour MP Teresa Pearce said: These figures show that the Government is standing by while the construction industry suffers a skills crisis and while young people's futures are put at risk. The Government urgently needs to get a grip on this situation, and work with the construction industry, colleges, and students to ensure that we have a construction sector capable of providing the homes we desperately need she added. 9

10 UCATT Acting General Secretary, Brian Rye, concurred: I m horrified by these figures. What a waste of talent and Government money, to take these young people through a course and then have them ignored by the construction industry. We have a well-documented skills shortage in the construction industry and we have major constructors failing to take on apprentices. This is a calamity for the British construction industry. Young people are being thrown to the wind. Hundreds of thousands of talented, enthusiastic young people are having their career hopes dashed by a complacent and self-serving industry, Mr Rye ended Meanwhile, the Government will announce plans to reform Britain s universities. These will include allowing more colleges to apply for university status. Please find the full article here 10

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