Home IssueArtificial Intelligence Event Recap: What Should Europe Do To Embrace AI-Powered Manufacturing?

Event Recap: What Should Europe Do To Embrace AI-Powered Manufacturing?

by Eline Chivot

On February 6, the Center for Data Innovation hosted a conversation to discuss what the European Union can do to embrace AI-powered manufacturing. However, the EU’s success in AI-powered manufacturing will depend on its success in AI.

Although Europe is lagging in the global AI race, AI can still create a competitive advantage for European manufacturers. According to Dario Rea, director of research and innovation at IMA Group, an Italian manufacturing company, there are several prerequisites to this. First, Europe needs to create the conditions to store and extract value from industrial data, so that enterprises can then subsequently use AI. Second, stakeholders in the manufacturing sector will need to understand the value of data and recognize that their role is more than just traditional machine builders. Third, Europe needs to upgrade the skills of its workforce because autonomous, self-learning robots will do more of the repetitive, manual tasks that are part of many jobs. Europe also needs to create the conditions to share data so that manufacturers can monitor and then improve their machines’ efficiency, reduce waste, and improve quality. Since manufacturers will need to store and use a great deal of data, cybersecurity must also be a primary concern during the path towards AI.

Francesca Stevens, director of government affairs and business development at Arconic Europe, agreed and described additional challenges in Europe. Currently, there is a big disconnect between digitalization and manufacturing, and a misunderstanding as to why digital policies are important for the manufacturing sector. AI will enable Europe to stay competitive in the global market, adapt to the demands of the supply chain, and allow European manufacturers to improve their internal processes. Companies can improve quality control, reduce their energy consumption, and remain competitive. Stevens added while the technology and the organization play an important role, people are the key element in the process of digitalization: If an organization fails to get its employees on board in this process, it will fail at implementing change.

Robert Atkinson, president of the Information Technology and Innovation Foundation (ITIF), elaborated on his recent study, “The Manufacturing Revolution,” which explores how AI will transform manufacturing and the future workforce. While many companies plan to start testing AI, a majority of manufacturers state that the biggest barrier to increased use of AI is a lack of data resources needed to enable AI solutions, while the remaining raised uncertainty regarding how to implement these solutions, as well as the lack of workforce skills.

Dana Eleftheriadou, head of advanced technologies and digital transformation team at the European Commission’s DG Grow, argued that rather than fear or skepticism towards new technologies, there is a sense of pragmatism and realism among policymakers, renewed optimism, and the will to improve European strengths in regard to digitalization and AI. Eleftheriadou also concurred with Rea’s and Steven’s emphasis on the importance of industrial data in the pivot towards digitalization. As a global manufacturing leader, Europe can also become the world’s leader in the collection and exploitation of this industrial data. Currently, only 1 percent of non-personal data is being used to create intelligence which companies can exploit and only 10 percent of European SMEs use data analytics. The Commission plans to focus on SMEs and solutions to support their adoption of AI to address this. The Commission hopes to more closely consult with industry and address people’s concerns over the increasing use of AI in manufacturing. Along with an AI white paper and a data strategy in February, the Commission will release an industrial strategy in March, which reflects the interconnectivity of manufacturing sectors and AI. It will include a focus on new strategic value chains such as future mobility, industrial IoT, and smart health, under the umbrella of six Important Projects of Common European Interest (IPCEIs).

Commenting on the Commission’s approach to AI, Rea argued that Europe needs to create innovation faster. Projects which Europeans are trying to start in 2020 have already found their market in the United States, where money and talent are easier to find. While Stevens applauded the new Commission’s focus on technology, she raised the issue of unpreparedness in the manufacturing sector, and the increase in regulations which will impact the ability for both SMEs and multinationals to use data. Policymakers need to ensure that manufacturers are involved in the legislative process. New regulations could support innovation and competition but should not be overly prescriptive. The manufacturing sector is not uniform, and its specificities must be considered.

According to Eleftheriadou, the Commission is developing models for “common European data spaces” to facilitate data sharing between member states and stakeholders. The Commission wants to simplify the process of accessing and sharing data and ensure its value is better distributed among more companies.  The Commission also wants to support those whose jobs will be affected by automation. Therefore, it plans to announce the European Pact for Skills to better work with industry to reskill the workforce at the national, local, and regional levels.

Addressing the concerns of the impact on the labor market, Atkinson argued that AI is not so much about automation, but about better customization, speed, and greater quality. He stressed that European firms have world-class capabilities to become global leaders. Moreover, the Commission’s focus on small enterprises is somewhat misguided, as AI requires scale. Eleftheriadou responded that Europe cannot avoid focusing on SMEs since they make up 99 percent of the European economy. European scale is reflected by collaboration among SMEs and alliances.

Regarding data, Atkinson argued that manufacturers should be allowed to engage in contracts with their customers, free from rules and regulations. While most data sharing is anonymous, sometimes it is important to know the machine operator’s data. Stevens agreed that regulations inhibiting data sharing have already slowed down innovation in Europe.

Europe can aim to be a world leader in manufacturing. To this end, it is increasingly important for Europe to build upon and further solidify its assets. It should do so with the right regulatory instruments to enable data sharing, create a skilled workforce, attract and retain talent, and unlock investment.

Matthew Glavish of the American University, D.C. contributed to this interview.

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