For the industry, being digital is more than just an empty label or a trend; it is a necessity for its survival. If this were not the case, industries would not invest a significant portion of their efforts into implementing actions aimed at their digital transformation. In this article, we discuss the level of adaptation of this sector to the available technologies, as well as some interesting measures being taken for this purpose.

Industrialization is one of the clearest signs of the progress of an entire society. This fact has remained unchanged from the Industrial Revolution to the present day. However, much has changed since then, and the concept of innovation in industry has evolved significantly.

Nowadays, there is no greater sign of innovation in a factory than having the status of being a Smart Factory or Intelligent Factory. A facility that leverages the full potential of the most disruptive technologies to achieve the best results in its production, both in efficiency and in quality.

With this in mind, it is crucial for us to have an understanding of where European industries stand, and specifically Spanish industries, in terms of their digital transformation. Additionally, it’s important to know what the most notable measures authorities are taking to promote industrial technological development.

Will you join us on this journey to explore the current state of the European industry and how the most innovative solutions are being integrated into it?

What is the situation of the industry in Europe?

The industrial and construction sector accounts for 28% of the European Union’s Gross Domestic Product (GDP). Additionally, the industry is responsible for 80% of Europe’s exports, representing a market of around 365 trillion euros. From an employment perspective, the industrial sector in Europe employs about 25% of the Union’s workforce.

Excluding construction and focusing solely on manufacturing, European authorities are making efforts to foster the growth of the sector.

To begin with, in 2010, the European Commission launched the Strategy Europe 2020, continuing in 2017 with the Renewed EU Industrial Policy Strategy. The goal of these strategies was for industry to reach 20% of the EU’s GDP by 2020. However, not many countries have met this target as of the key date, with some exceptions such as Germany, Poland, the Czech Republic, and Slovakia.

In light of the difficulty in reaching this target, the High-Level Industrial Roundtable for Industry 2030 concluded with a series of recommendations regarding this matter:

• Improve the positioning of value chains by transforming them into networks
• Make regulations affecting the sector more flexible
• Increase the digital transformation of the sector through the use of disruptive technologies, such as Blockchain.
• Continuous training around these technologies, so that quality jobs are created

Regarding the challenges faced by manufacturing in Europe, the most notable are those of a commercial nature, as a result of international conflicts (mainly between the United States and China) and the recent exit of the United Kingdom from the European Union.

The role of industry in Spain

Focusing on the Spanish case, we refer to the report The industry in Spain: proposals for its development, from the Economic and Social Council. From it, we can extract the following information:

• Industry is the second largest economic activity in the country, after services, as indicated by its contribution to GDP and the number of jobs.
• Manufacturing accounts for 12.6% of GDP.
• The industry accounts for 11.5% of full-time employment.
• Compared to other European Union countries, its contribution to GDP is below the European average (14.5%) and countries like Germany. However, it surpasses other major countries like France or the United Kingdom.
• The Spanish industry specializes in food, beverages, and tobacco; textile, clothing, leather, and footwear; petroleum refining, chemical industry, and metals.
• In comparison, the European industry is more specialized in manufacturing

of computer, electronic, and optical products, machinery and equipment, material, and

equipment and transport vehicles.

If we break down the activity by autonomous communities, the Industrial Barometer published by the General Council of Official Colleges of Industrial Technical Engineers of Spain (COGITI), the ones with the highest indexes are:

1. Catalonia (23.48% of the total in the country).
2. Community of Madrid (11.07%).
3. Valencian Community (10.14%).
4. Basque Country (9.96%).

In the lowest positions, we find:

• Balearic Islands (1.02%).
• La Rioja (1.09%).
• Extremadura (1.31%).
• Cantabria (1.54%).
• Canary Islands (1.66%).

How has COVID-19 impacted the industry?

As we well know, in recent months, an unexpected and highly unwelcome actor has emerged and has fully entered to change the landscape in a significant way. It is none other than the unfortunately well-known COVID-19.

Although it is a recent event, and its final impact is still uncertain, studies have already been conducted to try to measure its level of impact on society, including the industrial sector.

For example, we can refer to the survey by KPMG and CEOE titled The Spanish company in the face of COVID-19, which is frequently updated. From this, we can highlight:

• 27% of industrial sector entrepreneurs acknowledge an impact of the crisis on their activity greater than 80%
• If we consider those whose activity has been halted by more than 50%, this impact rises to 63%.
• In terms of the labor sector:
• 46% stated that they maintained jobs.
• 44% believe that employment will be seriously affected.
• 10% expect positive growth in the workforce.

• 27% of the participating industries plan to maintain their planned investments, while 54% believe they will be reduced.
• Companies need to improve in two key areas:
• Resilience.
• Digitalization to improve processes and prepare for future crises.

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The digital transformation in the European industry

We have just seen the importance that digital transformation is gaining in the industrial digitization industrial digitization in light of the current situation. According to the European Commission, digital transformation will bring benefits to European companies such as:

• Availability of high-quality industrial data. With this data, for example, in the agri-food sector an additional 225 euros could be earned per hectare. In manufacturing, this savings could reach 90 billion euros.
• Easier to do business online thanks to the European Digital Single Market.
• Increase in the digital skills of workers, improving employment levels.

This is why, under the initiative of the community authorities, measures are being taken to boost digital industrial transformation. From the European Union’s side, these digital transformation tasks are closely linked to environmental aspects.

Among these actions, we can highlight the reduction of energy consumption in factories and, consequently, their emissions into the atmosphere. An aspect that can be greatly contributed to by the use of new technologies and related productive efficiency.

We must also mention the promotional actions for the excellence of Artificial Intelligence and the generation of trust in it. These actions aim to encourage the presence of innovation centers, as well as communication between them, and promote the hiring of these services, to name a few.

Data is essential within digitalization; they are the lifeblood that gives life to the entire process. European authorities are aware of this, and that is why they have launched the European Data Strategy. This strategy is crucial for promoting the free flow of data for the greater benefit of citizens and businesses, while not neglecting aspects such as legality and data protection.

The digitized industrial sector in Spain

To be aware of the level of digitalization, we can refer to the report Industry 4.0: Global Digital Operations Study prepared by the prestigious consulting firm PwC. According to this, Spain has a score higher than the Spanish average (43.6 points versus 43.3).

Despite this good rating, the report states that only 5% of Spanish companies enjoy the highest standards of digitalization.

From an economic perspective, PwC states that 20% of a company’s revenue comes from the implementation of new technologies.

Looking ahead, an 11.1% increase in revenue is expected for 2023, along with a 19.4% decrease in expenses.

Finally, we can focus on the main technologies used, which are those aimed at process control and monitoring, as well as those targeting predictive maintenance of machinery.

The Connected Industry 4.0 initiative

Spanish public entities are also taking actions aimed at the digital transformation of the industrial sector. Among them, we find Industria Conectada 4.0, led by the Ministry of Industry, Trade and Tourism, specifically the General Secretariat of Industry and the SME (SGIPYME).

Industria Conectada 4.0 sets the following key objectives:

• Increase industrial added value.
• Promote skilled employment in the sector.
• Foster a model for the industry of tomorrow.
• Promote the competitive differential levers to support Spanish industry and boost its exports.

To achieve these objectives, the initiative has defined the following support programs:

• The Advanced Digital Self-Diagnosis Tool (HADA): with this tool, companies can measure their level of digitalization by classifying themselves into one of the 6 digital maturity levels it defines.
• ACTIVA Industry 4.0: aimed at professional and personalized advice for the implementation of Industry 4.0 projects.
• IC 4.0 Initiative Grants: financial support for the incorporation of knowledge, technologies, and innovations aimed at the digitalization of processes and the creation of technologically advanced products and services.
• “12 Challenges of Industry 4.0” Program: to connect startups with large industries and thus foster open innovation.
• ACTIVA Cybersecurity: with this program, companies will assess their current cybersecurity level and work to optimize it based on specialized criteria.
• Business growth: consulting customized consulting in areas such as innovation, human resources, operations, digitalization, marketing and commercialization, and finance.

Technologies involved in the digital transformation of industry

Industrial digital transformation encompasses a wide variety of technologies that are changing the traditional paradigm of a plant. Some of them, such as Artificial Intelligence, have already been mentioned earlier, although this is just a small sample of all the tools we have at our disposal.

Artificial Intelligence, associated with Machine Learning, Deep Learning processes, as well as Big Data, are essential for the massive and advanced processing of the vast amount of data generated daily by a factory.

In addition, this data must also be collected using advanced instruments, such as sensors that form part of an IIoT (Industrial Internet of Things) architecture, or those responsible for determining the location of any asset on the shop floor (whether human or material), such as beacons.

At Sixphere, we leverage all these technological resources to create a fully digitalized industrial environment with our solutions, where management is based on data-driven decisions.

With Polaris, production management it will translate into efficiency, but also into greater safety and satisfaction for the entire factory team. This is because of tools like our solution for Housekeeping and 5S audits we strongly bet on the quality of processes and the well-being of all workers.

European Commission’s Digital Innovation Hub (DIH), which acknowledges the role we play in advancing digital transformation in industrial environments. Being recognized by such prestigious organizations fuels our commitment to enhancing the industrial sector, ensuring that we continue to provide innovative solutions that make a real difference. Project DIVA for the agri-food industry or Block.IS in the case of Blockchain technology.

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