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SEV’s proposals for Greece to play a leading role in the 4th Industrial Revolution

The adaptation to the 4th Industrial Revolution remains extremely relevant and is an important factor of competitiveness. In a period of upheaval in the international production chains can create new investment opportunities. The role of digital transformation remains crucial in increasing the industry contribution to 15% of GDP, by improving the efficiency of production lines and supply networks. State-of-the-art technologies are a factor in surviving intense competition in the post-Covid environment, while at the country level it can contribute to a new productive model. In contrast to the external developments that affect competitiveness (such as energy), the pace towards the 4th industrial era depends almost exclusively on the country and its businesses.

The digital transformation of the economy and business in the country is moving faster than in the past but not yet fast enough to close the gap with the EU. gain a compass and move faster to converge with the performance of the rest of the EU. For example, successful e-government interventions that have changed the landscape for citizens must now focus equally on business needs.

The BSE Digital Transformation Observatory presents a framework of proposals for further accelerating the technological adaptation of companies and narrowing the country’s technological gap with the rest of the EU.

Proposals for the faster adaptation of Greece to Industry 4.0

1. Completion & agreement of national strategy. In the EU, 22 countries have already completed the planning and are now implementing relevant initiatives. In Greece, a first outline of the industry development plan was recently announced, which when completed is expected to specify “smart factory” issues. The most important challenge of the national plan remains the inter-ministerial coordination on issues of financing tools, tax incentives, innovation mechanisms, upgrading of skills, reduction of bureaucracy in public administration, etc.

2. Businesses focus on cutting-edge technologies. The majority of companies still do not invest in modern technologies and focus on outdated systems (here). The pandemic has delayed many investments, but the lag in relation to countries such as Denmark, Belgium and Portugal (2nd, 7th, 16th place respectively) was evident from 2020-2021. The change of business philosophy in the utilization of state-of-the-art technologies is now imperative in order to maintain the competitiveness of companies. Performance is expected to improve in part once tech giants’ investments in the country push up local businesses.

3. Adaptation of administrative practices to utilize cutting-edge technologies. In trying to restart the post-Covid era, businesses need to adapt their operating and decision-making models more quickly to the conveniences offered by Industry 4.0 technologies (eg IoT, artificial intelligence, machine learning, augmented reality, etc.). To date, the majority of companies are transforming their operation at a slow pace resulting in extremely low performance in the index of real penetration of cutting-edge technologies. Comparable countries like Denmark, Belgium and Portugal have much higher performance, even within the pandemic.

4. Enhancing the domestic production of state-of-the-art systems. Progress on innovation has been particularly evident in recent years. However, the 20th place in the Innovation Scoreboard shows that our capabilities to develop cutting-edge technologies can be further improved to be comparable to the EU. Portugal (19th place) has a similar performance, but the distance from countries such as Denmark remains significant. or Belgium (3rd and 4th place).

The ability to develop cutting-edge technologies is manifold. Dual-use technologies such as the Internet of Things (IoT), standalone machines, artificial intelligence, surveillance systems, cybersecurity solutions, etc., can create highly qualified and paid jobs for young people, be used directly in industry and strengthen the security / defense of the country.

5. Reversal of the significant digital lag of SMEs. A similar finding is recorded in many EU countries. However, the very small size and low productivity of SMEs in Greece, should work accelerated in terms of the integration of Industry 4.0 technologies to improve competitiveness. The design of the new NSRF is in the right direction, combining digital upgrade with the improvement of competitiveness, channeling resources with criteria both the different needs of SMEs and the technological intensity of each investment.

6. Rearrange the priorities of the Digital Transformation Book (BAP) based on the needs of Industry 4.0. Although BPM is a breakthrough in the country’s technological design, it has not yet implemented critical projects for Industry 4.0. The vast majority of her works focus on the digital transition of the public sector. About 20 of its 450 projects are clearly focused on Industry 4.0, and only a few of them are in progress (eg Digitometer, the National Network of Digital Innovation Nodes, the National Platform for Digital Industry and the cybersecurity toolkit). The speed of implementation of BJP projects involving (and) companies is now a critical factor in BJP’s contribution to economic growth.

Faster allocation of EU funds to projects for Industry 4.0. The design of the Recovery Fund (TAA) was announced a year ago. Includes grants over € 500m. for the overall digital transformation of businesses but also significant resources for upgrading skills. One year later, it is necessary to start the implementation of the relevant actions of the TAA through the specialization of specific eligible costs and integration procedures, so that companies know how / when they will use the relevant incentives.

In addition, it is noted that the very large focus of the TAA subsidy on smaller companies is a national choice, although EU rules allow for the sensible involvement of larger companies. Therefore, a sensible reform of the TAA in the direction of providing investment incentives to medium or large enterprises will contribute to faster allocation of resources, to achieve a greater growth footprint and to greater complementarity with the NSRF (which is traditionally addressed to SMEs). The success of the TAA (as well as the new development law) now depends on the speed with which resources are allocated to investments with greater multiplier benefits.

In summary, Greece can immediately take very clear steps for the transition to Industry 4.0. The proposals presented by BSE at its industrial conference in December 2019 (here) remain relevant and continue to be a comprehensive basis for the country to converge with the EU performance. 12 of these 21 proposals have started, but with the more at an early stage. Just one has been completed (enhanced R&D incentives) while 8 actions remain without progress.

Important challenges remain both the adoption of an integrated strategy to improve the coordination of relevant public policies, and the reversal of the reluctance of many companies to adopt cutting-edge technologies and to replace outdated administrative practices.

Source: Capital

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