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Electronics manufacturing plays a crucial role in linking the physical and digital worlds. Electronics components and systems help capture, transmit and process personal and industrial data. They, thus, accelerate the adoption of emerging technologies such as autonomous cars, wearables, AR/VR and AI that rely on data. Yet, the transition from traditional markets, such as PCs, to emerging applications is a challenge for many electronics manufacturers, in particular for SMEs. The EU can play a pivotal role in the transition to a data economy in Europe by supporting research and education in electronics, promoting industry-driven standards, investing in its infrastructure and implementing a forward-looking policy framework.
Communication infrastructure allowing high-speed data flow
The increasing number of connected products is expected to generate a significant burden on mobile data traffic. IDC estimates that the data we create and copy is doubling in size every two years, and by 2020 it will reach 44 trillion gigabytes. Also, different sources estimate that 50 to 200 billion devices will be connected to the Internet by 2020. In parallel, real-time interactions increase the need for minimum latencies (i.e., 1O gigabit speed per second, latency below 5 milliseconds) across the world. Given that, the EU should speed up the roll out of 5G communication infrastructure that is needed for seamless data transfer between devices at cross-border level. 5G infrastructure should cover manufacturing companies that are often located far from city centers but that provide a great source for big data. To this end, EU’s 5G Action Plan is a strategic initiative that aims at stimulating public and private investment in digital infrastructure. A key pillar of 5G Action Plan should be the coordination of national priorities for 5G, as industrial data is often transferred across Member States.
Forward-looking policy framework
In 2017, the European Commission launched the “building a European data economy” package. The electronics manufacturing sector welcomes the EU’s efforts to remove unnecessary data localization restrictions hampering free flow of data within the EU. The package also refers extensively to industrial data in the B2B context and foresees new policy initiatives to promote data-driven solutions. In B2B sectors, access to machine-generated data is defined through contracts. As innovation cycles are getting shorter in high-tech sectors, introducing pre-mature regulations on access and use of industrial data would cause lock-in effects for many businesses. Given that, electronics manufacturers do not favor a one-size-fits-all regulatory approach, imposing generic rules on access to and use of machine-generated data that are context-sensitive. The Commission, with the help of stakeholder groups, should raise awareness, in particular among SMEs and start-ups, on how industrial data can be monetized; provide non-binding guidance; and promote industry-led standards on data. The Commission should also accelerate the work on a framework for data exchange with third countries as data economy knows no border and trade is an important pillar of growth for the electronics manufacturing sector.
Funding for research, development and innovation
Research and development is essential to accelerate innovation in electronics manufacturing as wells for the broader data-economy. EU’s framework programmes in that sense plays an instrumental role in providing funding, accelerating cross-border collaboration and supporting risky projects. The collaborative research and innovation (R&I) model can also play important roles in advancing data-driven solutions by bringing in actors of electronics, software and vertical technologies. In addition, future framework programmes should take into account that generating electronics components for IoT is complex and costly, in particular for SMEs. Given that, the EU should significantly increase the overall budget for R&I in the next framework program and extend the SME role in collaborative projects. EU funded R&I actions should support more experimentation, demonstration, piloting, and prototyping activities and cooperation between different actors of data economy.
In parallel, Important Projects for Common European Interest (IPCEI) should remain high on the public policy agenda, as a very powerful tool to support real manufacturing projects, creating added-value jobs. IPCEIs bring together knowledge, resources and economic players throughout Europe to undertake large-scale and highly innovative projects. IPCEIs are good examples of expanding Europe’s industrial production capabilities strengthening European industry’s competitiveness internationally.
Shifting demands in electronics is heavily affecting the skills needs of electronics manufacturers. To support the growth of data-driven products and services, the electronics manufacturing industry will increasingly need a workforce pool with a mixed skill-set. This mixed skill-set should include human resources from various disciplines; manufacturing, software, data analytics and specific verticals, to name a few. To this end, Europe needs new education policies that promotes multi-disciplinary teaching in STEM degrees, raising the workforce needed for a flourishing data economy. The European Commission should also foster an environment in which technology leaders and education providers can partner at cross-border level. Aligned with this, the Commission’s new initiative, blueprint for a sectorial cooperation on skills, is an excellent step.
Data security and trust on new IoT products
Products and services that contain data and that are open to cyberattacks raise serious security-related concerns for both manufacturers and users of IoT devices. According to a McKinsey study, lack of secure hardware and software is indeed seen as an important factor hindering investment in data technologies. To ensure market acceptance and trust, data should be secured at different levels, covering both hardware and software. The EU can achieve a secure data economy by promoting the “security by design” principle and by supporting industry-led standards with the help of stakeholder groups.
Standards and interoperability
Electronics manufacturers rely on standards to prove the functionality and security of their products. In addition, many IoT devices are being placed on the market by various producers that use different platforms need to be interoperable. Lack of commonly agreed applicable IoT standards and interoperability between various IoT devices is a major barrier against building a data economy in Europe. Against this background, the Commission is in a good position to foster a dialogue between standardization stakeholders (industry, research, standardization bodies…), which would unlock networking effects and enable the mass deployment of big data products and services.
SEMI’s role in advancing data economy in Europe
SEMI is a key stakeholder of the policy debate on data economy led by the European Institutions. Recently SEMI participated in a Round Table co-organized by DG Connect and DG Energy. The event, focused on electronics & smart energy, saw the participation of many electronics manufacturing companies and research institutes. SEMI has brought the participants’ attention to the role that electronics plays in Europe’s data centers. As to industry platforms, SEMI is organizing special sessions on Smart Manufacturing during SEMICON Europa. The sessions will address key topics such implementation of predictive process control solutions, requirements for the implementation of cloud-based solutions, use of advanced analytics and automated change management. As to standards & interoperability, SEMI is extending its work on standards that enable a fully automated smart manufacturing environment. For instance, SEMI’s standards “Guide for equipment information system security” cover the domain of semiconductor manufacturing equipment operation, including entities that interact with the equipment and data objects of the equipment operation; embedded information systems; and components inside the equipment. On skills, SEMI Foundation and HTU initiative reaches students and raise awareness on the role of electronics in data-driven industries, aiming at increasing STEM workforce in the sector. SEMI encourages all stakeholders to follow its Smart Manufacturing Central for various opinions on the topic and to investigate the opportunity of getting involved in the Smart Manufacturing Special Interest Group.