Industry 4.0 (I4.0) is taking off across Europe. Regions are keen to ensure that their strategies are coherent with this new line of integrated, digital development. They must also ensure that SMEs, the heart and soul of regional economies, are involved and that they benefit from it. This is not only technological R&D. It is about cultural mind-set, preparation and qualifications.
4.0-Ready partners cooperate at interregional level to reach their overall aim: to prepare SMEs for the I4.0 revolution. With SMEs, we refer to entrepreneurs, owners, managers and staff at all levels, who need to become ready to take on the new challenges of I4.0.
European social funding (ESF) can support vocational and professional capacity building. European regional development funding (ERDF) can support technological, organisational and skill development. Improvements to these policies could go far to ensuring that SMEs, and people working for them, are able to embrace and benefit from industrial digitalisation and automation.
4.0-Ready partners and stakeholders cooperate to understand SMEs’ skill and digital maturity needs and what policy makers can do with policy instruments to address these needs. They develop an Action Plan, with proposals on how ESF/ERDF policies can better support SMEs in preparing for I4.0. Partners and selected stakeholders implement and monitor the Action Plan, starting in project Phase 1, leading into Phase 2.
Policy improvements range from funding projects on I4.0 skills and digital maturity, to management approaches that create synergy between policy instruments, to strategies that integrate both I4.0 and the SME skill focus. Partners are Managing Authorities or Implementing Bodies of selected policies: they have the power to make real change.
4.0-Ready regions will become better placed for a successful, durable and profitable application of I4.0. They will support their SMEs to become more competitive, while maintaining and creating more and better jobs.
ROP ESF 2014-2020 is the regional investment programme for growth, employment, education and training. It included Axis A - better and sustainable occupation (including A.4 Adaptation of businesses, entrepreneurs & workers to change) and C - professional training & continuous learning (C.3 Adapting training systems to the labour market).
Both support continuous training (particularly for RTD and innovation), ITS / IFTS training courses, worker retraining and support for SMEs to adapt to economic change. Final beneficiaries are SMEs and their workforce (young and aged workers, professionals, managers and entrepreneurs).
31% of ROP ESF resources were initially scheduled for 2019-20. This is now increased and calls are expected in each of remaining year of the period. This leaves room for significant improvements.
ROP ESF was created before the I4.0 revolution, so did not make reference to skills in this field. In 2017, the Managing Authority (MA) started to adapt ROP measures/calls to the I4.0 national strategy. However, more work is required. ROP ESF needs to test and adapt funding measures to support SMEs in training / employing a workforce that can adapt to necessary technological and organisational actions. Possibilities include training for employed people, technical education/training courses, continuous training and other initiatives, such as intergenerational mentoring. POR ESF should support a combination of measures for a smooth integration of I4.0 into the workforce.
Finland’s ESIF programme is a multi-funding instrument aiming to create over 12,700 new jobs and support 5660 SMEs by 2023. 4.0-Ready will particularly address ERDF Action Line for Producing and using the latest information and knowledge. Funded projects should implement the Smart Specialisation Strategy of Helsinki-Uusimaa (RIS3), where Industrial Digitalisation is a spearhead thematic area. The RIS3 is highly relevant in the context of regional governance reform.
The Policy addresses SME Competiveness by generating new businesses, promoting growth, internationalisation and energy efficiency in SMEs, addressing production and use of the latest knowledge. It does so by developing centres of research, expertise and innovation based on regional strengths, strengthening innovation in enterprises and developing renewable energy and energy-efficient solutions. Beneficiaries are educational institutes and development organisations. SMEs are indirect beneficiaries.
At least 2 calls are expected in the last programme years, but not yet defined. It would be important for at least one call to strengthen readiness for Industry 4.0 in SMEs. As ERDF and ESF funding is limited, it is important to find efficient ways to use funding, to strengthen links between ERF and ESF (with different managing bodies) and to find synergies with other funding instruments. As the ERDF programme cannot give direct support to companies, there is a need to find efficient new ways for SME capacity building.
The ERDF Axis being analysed within 4.0-Ready funds creation and equipment of Competence Centres for Industry 4.0. The ESF OP provides complementary funding for trainers within these Centres. The Policy Instrument has funded 3 Competence Centres working in different sectors on global and additive technologies, automation, robotics and smart maintenance, sustainable development and energy efficiency. The projects were created with SIRRIS research centre and clusters MECATECH and WAN (smart specialisation).
The Policy Instrument has also financed important projects on the digital economy, though these are not directly linked to Industry 4.0.
These large scale projects have absorbed the majority of ERDF and ESF funding in this sector (though some savings may be observed in the final years) and the challenge now is to monitor and improve their implementation.
Improvements concern better integration of projects into a global strategy for the development of Industry 4.0. These projects should also be linked to the Wallonie Digital Strategy, which was approved in 2015 after projects were already set up. The current training axis in Wallonie is largely focused on schools and teaching, while the SME component could be strengthened. Interregional learning and regional stakeholder engagement should help to achieve improvements: creating a greater Industry 4.0 culture, enlarging the circle of trainers active in I4.0, supporting a more coherent and multi-stakeholder skills approach.
ROP WSL 2014-2018 is the regional investment programme for economic and entrepreneurship development, growth, employment, education and training.
This multi-fund ERDF/ESF OP aims to fulfil the Silesia 2020 Development Strategy. It runs alongside the regional RIS3 (planned updates in 2019-20).
The OP provides funding for 10 thematic objectives, with SME Competitiveness allocated 12% of total investment. It aims to improve the viability of SMEs that are most vulnerable to market fluctuations and to boost investment in innovation.
Axis I supports the Modern Economy (ERDF). It funds activities aimed at increasing market value of R&D, increased enterprise R&D, improving the pro-innovation environment of enterprises and improving the competences of SMEs employees. Among the initiatives funded, the OP has funded the Network of Regional Specialised Observatories (SORIS). SORIS will support enterprises (SMEs) in raising qualifications and competences in the area of regional specialisations. Axis 8 supports Regional knowledge-based economy cadres (ESF). Activities improve competences of employees in the SME sector.
The current OP does not distinguish activities to support industry 4.0, which is now essential for the proper development of entrepreneurship. Thus, updates to the OP and the Regional Innovation Strategy, must ensure that I4.0 and means of dealing with industrial modernisation are an integral part of measures for SME competitiveness and conditions on the employment market.
ERDF OP, within Priority Axis 3 Improvement of SME competitiveness, supports SME to create and enhance advanced capabilities for the development of goods and services. This measure funds two schemes, where beneficiaries are Navarra based companies (mostly SMEs):
• Investment projects for SME competiveness that must acquire new tangible or intangible fixed assets.
• Improved goods and services provided by SME, production processes or internal organisation: advanced engineering and consultancy services.
At the time of the elaboration of the OP, Industry 4.0 concept didn’t have the current level of development. Measures to increasing SME competitiveness were foreseen, but there was no reference to Industry 4.0. RIS3 Navarra has since included it as a priority.
The evaluation criteria of OP calls now include a criteria where projects that comprise technological enablers in the field of I4.0 are subsidised with higher level of aid. This is a first step to make SME aware of the need to adopt I4.0 and to get ready for the changes that it implies.
However, public policy should now provide SME more specific and customised services, in different domains. To foster I4.0 4.0-Ready is expected to provide input to this. Measures could include elaboration of roadmaps towards digital transformation, calls targeted at supporting SME investment in I4.0 technology and training. There should be public support to training centres so that they can offer up-to-date training on I4.0 related fields.
The overall objective of the OP is to improve equal access to lifelong learning for all age groups in a formal, non-formal or informal setting, updating knowledge, skills and competences of the workforce and promoting flexible learning pathways.
Priority 3 “Jobs for all” supports access to employment. This will entail improving people’s skills, facilitating the recognition of qualifications and experience; assisting participants in finding a job or setting up micro companies and SMEs. Within this, Axis 3.12 focuses specially on improving employees’ skills related to the country’s key economic sectors, as identified by the national competitiveness and R&D strategies. Eligible applicants are individual enterprises (micro and SMEs).
The Application Guidelines for this specific priority, document to support potential beneficiaries in applying, are now under public consultation.
The ESF objectives were created before the Industry 4.0 revolution, so there is currently no reference to it in the guidelines. This priority can be improved with measures to support the integration of Industry 4.0 into the workforce. The growing need for lifelong learning in means that the OP should promote more flexible types of delivery, personalised training offers and well-established validation systems for non-formal and informal learning. The potential of Information and Communication Technology can be used to stimulate education and training of SME staff and help them adapt to I4.0.
ESF support within Priority Axis 9 is allocated to 6 measures addressed to SMEs. The overall objective of these measures is to ensure support for employees’ qualification and training. They also seek to create conditions for employees to acquire specific competences and to adapt to changes in the economy.
“Competence LT” funds training for the development of sectoral competences for enterprises. “Apprenticeship” funds trainings for employees in the form of apprenticeship; trainings in the workplace. “Invest LT” and “Training for the employees of foreign investors" fund trainings and qualification improvement of employees of foreign investors investing in Lithuania. A number of projects have already been funded for each and each has targets for the number of SME employees to be trained. Calls are foreseen for these measures until mid-2020.
These measures administered by the 4.0-Ready partner are linked with RIS strategies, through improving the competitiveness of SMEs. Changes and improvements for these measures are carried out continuously by monitoring projects in steering committees, which include all stakeholders, adjusting to industry needs and changes.
Industry 4.0 is only in the initial stage. The ESF policy instrument and calls launched until now do not address it directly. This needs to be addressed: SME competitiveness must be connected to I4.0 priorities in programming documents and in calls.