KEYNOTE SPEECH. ALINA UJUPAN Member of Cabinet, Mariya Gabriel, Commissioner for Digital Economy and Society

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2 On 17 October 2017, top policy-makers and stakeholders came together at the European Transport Forum (ETF) in Brussels for a high-level debate how can the data economy unlock the full potential of European transport? This year s edition of the ETF brought together several high-level speakers explaining their ideas on what are the most important challenges and opportunities to address the potential of the data economy for transport in Europe. 2

3 KEYNOTE SPEECH ALINA UJUPAN Member of Cabinet, Mariya Gabriel, Commissioner for Digital Economy and Society According to Ms Ujupan, the European data economy is growing at a fast pace: in 2016 it represented 2% of the European GDP and employed around 6 million professionals. With the right legislation environment and investment she expects its size to double by 2020 and employ around 10.5 million people. She said that the advanced use of data has a positive impact on health and wellbeing, societal challenges, emissions, resource management and driving. In particular the digitisation of transport and especially connected and automated driving is one of the most important trends that will transform industry in Europe. However, challenges have to be faced in areas such as liability, cybersecurity, and data use, access and ownership. Ms Ujupan highlighted several ongoing processes: many Member States have agreed to develop cross-border testing corridors; a recent high-level ministerial 3

4 dialogue adopted an Action Plan; an industry roundtable has been set-up; and both the European Automotive and Telecom Alliance and the 5G Automotive Alliance are making headway. She stated that automated mobility features prominently on the agenda of the European Commission as it is keen to support European industry and make sure it keeps its edge by putting Europe in the frontline of deployment of smart mobility and connected and automated mobility technologies. Interlinked initiatives such as GEAR 2030 and the CITS platform will bring together different elements. Ms Ujupan said that the Commission s role is to provide an enabling framework, not to make technology choices. Turning her attention to cybersecurity, she said that cyberattacks can have potentially huge consequences on road traffic and human lives, and that vehicle manufacturers need to take a proactive role in detecting and responding to cyberattacks. She believes that the Commission s recent proposal on voluntary certification schemes will help in this respect. Other key aspects include the management, storage and communication of data, which is essential to build the trust of the consumers who will ultimately buy these vehicles. A key priority for the European Commission is interoperability and continuity of service across borders. In the area of testing cross-border cooperation, a task force is to be established, including the Commission as well as Member States and stakeholders from different environments. Several Member States have agreed to collaborate to launch four crossborder test beds or corridors: Norway, Finland and Sweden; France, Germany and Luxemburg; the Netherlands and Belgium; and Spain and Portugal. Ms Ujupan said that 50 million euros for 5G testing will be made available this year from the Horizon 2020 ICT program, with more funding available via the Horizon 2020 Transport program. Moreover, with the 5G Action Plan the Commission is committed to promoting the deployment of cellular technology along many transport paths by Her final point was that access to end user data is essential for the development of services for the end user, while economic and business models are essential to build the technology infrastructure to support these services: We therefore need to take the necessary measures to make the European environment attractive for investment and growth in this sector. 4

5 CONTEXT SET-UP VICTORIA A. ESPINEL President and CEO, BSA Ms Espinel conducted a poll to see how the audience reached today s location whether by train, car, taxi, plane, boat, bike or on foot and then said that all these forms of transport are going to be radically transformed over the next 30 years thanks to data and software. She explained how IoT and data analytics are already having a major impact by providing live data and feedback that reduces emissions, cuts costs and improves customer service. She gave examples of how artificial intelligence and machine learning are impacting transport and providing benefits to companies and consumers, and said that Blockchain has significant potential in the shipping industry to improve efficiencies and eliminate fraud. Ms Espinel said that all these new technologies have data in common, and a regulatory framework is necessary that is as international as possible. She focused on three aspects of this. 5

6 First, data needs to be made available and be able to move around the world with as little friction as possible. Transport is probably the most global sector, so it s vital that data can be sourced from around the world as efficiently and as real-time as possible, she stated. If governments move forward with policies that localise data or restrict data, this will negatively impact the ability to innovate. A regulatory framework must allow data to be used in a way that is flexible, including the ability to repurpose data as necessary. This means finding a compromise between society s need to digitise and society s need to protect personal data. Second, an IoT regulatory framework is needed that is fit for purpose. Here Ms Espinel said that to accelerate the deployment of IoT, the European Commission needs to recognise that this is a global technology, and work with Member States and other countries to push for international standards. Third, the data needs to be as secure as possible. Ms Espinel pointed out that the future of transport relies heavily on the 6

7 integrity of data. If the system is susceptible to hacking, it has serious implications for businesses and consumers. She remarked that governments need to acknowledge that this is a global system and we collectively will only be as strong as the weakest link in the cybersecurity chain. Consequently, governments around the world need to work together to come up with a framework for cybersecurity that is global and as interoperable as possible. Ms Espinel said she has been very pleased to see the initiatives coming out of the office of Mariya Gabriel, Commissioner for Digital Economy and Society, and commented positively on her enthusiasm and energy that she displays in her role overseeing this complicated portfolio. 7

8 AUDIENCE POLL RESULTS DO YOU THINK THE EUROPEAN COMMISSION S APPROACH TO BUILDING A EUROPEAN DATA ECONOMY ADEQUATELY ADDRESSES THE ISSUES FACING THE TRANSPORT SECTOR IN THIS AREA? o 14%: Yes, it is on the right track to enable the transport sector to take full advantage of the data economy o 69%: Partly, but it should take more account of the specificities of the transport sector o 17%: No, the EU is not doing enough to maximise the data economy s contribution to unlocking the full potential of European transport WHAT, FOR YOU, IS THE MOST IMPORTANT ISSUE THAT NEED TO BE ADDRESSED TO ENSURE DATA FROM TRANSPORT IS SHARED AND USED INA RESPONSIBLE WAY? (PLEASE PICK ONE) o 27.7%: Getting the legal framework that will underpin such data sharing right o 26.5%: Striking the right balance between realising the potential benefits of sharing data while protecting the interests of market players who invest in generating data? o 45.8%: Ensuring that whatever data is shared, this is done in a way that does not compromise the safety and integrity of the vehicle WHO NEEDS TO DO WHAT TO MAXIMISE THE DATA ECONOMY S CONTRIBUTION TO UNLOCKING THE FULL POTENTIAL OF EUROPEAN TRANSPORT? o 11.6%: Policy-makers at all levels have the most important role to play in driving progress o 19.8%: The private sector has the most important role to play in delivering the technologies needed to drive progress o 68.6%: Both: policy-makers and the private sector must work together if we are to accelerate progress 1

9 PANEL DISCUSSION LED BY MODERATOR JACKI DAVIS o DITA CHARANZOVÁ Vice Chair of IMCO Committee, The European Parliament o JOHN FRANK Vice-President EU Government Affairs, Microsoft o NIKLAS GUSTAFSSON Chief Sustainability Officer, Volvo Group o VICTORIA A. ESPINEL President and CEO, BSA o VINCENT KOBESEN CEO and Member of the Executive Board, PTV AG 9

10 The Moderator asked about the size of the revolution affecting the sector and the key challenges. Mr Frank said that every company is becoming a technology company, and the opportunities through data, computing and communications are providing an excellent platform for innovation. Another aspect is that it is democratised; a large organisation is not needed to get very high computing capacity or access AI algorithms. He considers that what is going to hold us back is human talent; there are not enough people learning the quantitative skills to think about how to apply these technologies. Mr Gustafsson said that with connectivity, self-driving vehicles and electromobility, a paradigm shift is happening, but the change still needs to happen in automotive companies like Volvo which are still running over 90% of their fleet on diesel. He thinks that the next five to ten years will see a huge change in the transport sector, with data availability increasing uptime of trucks etc. Connectivity will combine the three areas in a sweet spot that helps address societal issues like sustainability. 10

11 He believes the transport sector will meet the targets set on emissions, safety and climate change. According to Mr Kobesen, real-time data and predictive traffic systems are revolutionising logistics, enabling trips to be optimised in real-time. He says that politicians are needed in cooperation with industry, to set regulation regarding data collection and even force cooperation between companies and industry sectors. Data is the key for the future of the transport sector, said Ms Charanzová. We need to get it right and avoid different sets of standards and rules in different Member States. She said that Europe is on the right track in this respect, although she is aware that some Member States are adopting different legislation on self-driving cars, which she considers dangerous for the future of the EU framework. She believes that infrastructure is key, and made a plea for a seamless and cross-border 5G network. She is wary of extra legislation for digital issues as it can take so long to implement. We need a significant shift in mindset, both corporately and governmentally, remarked Ms Espinel. The biggest challenge, she stated, is fear; rapid change can cause concern. This could lead to stagnation in policy development or an impulse to pause regulation or slow it down, which could significantly dampen down innovation. The Moderator asked how panellists voted on the first question ( Do you think the European Commission s approach to building a European data economy adequately addresses the issues facing the transport sector in this area?) Ms Espinel voted 3 (No), because she thinks this is a very new area and legislation is a slow process, so is not surprised that governments are struggling with legal systems that were created years ago. She believes that future-proof legislation is the right approach, and sees many governments working hard in this area. Mr Kobesen voted 2 (Partly) but is concerned that momentum is being lost, with some regulations or cross-border issues preventing access to valuable data and the creation of a uniform data set. He also said that many companies busy with data are not cooperating with each other. Mr Gustafsson voted 2 (Partly) as he is aware that both the private sector and policymakers have plenty of things on 11

12 their To Do lists. He is concerned that the right policies are created that do not disturb what is already in progress. An example is the free flow of data which is happening in industry through contractual agreements which he believes are working fine. He is concerned that Member State legislation is coming up that is going to limit this free flow of data. Also interesting is to see how cities are becoming more important in this area. Mr Frank voted 3 (No). He remarked that the General Data Protection Regulation (GDPR) comes into effect in 219 days, and enterprises around the world are committing resources to work out how to comply with this. At the same a new proposal, the eprivacy Regulation, which was essentially designed for telecoms, has been added on top of the GDPR. He believes the eprivacy Regulation starts off from a fundamentally flawed position, and is concerned it will be rushed through and get in the way of the digitisation of European industry. Ms Charanzová would have voted 2 (Partly). She believes the EU is on the right track, but more needs to be done in areas where the EU can add value. If Europe wants to lead in this sector, we have to set up a European integrated approach to transportation and ensure the free flow of data. The Moderator referred to question two of the poll (What, for you, is the most important issue that need to be addressed to ensure data from transport is shared and used in a responsible way?). She asked what legal framework is needed and what are the most important issues? Mr Gustafsson said the correct legal framework is key, especially in regard to the safety and integrity of vehicles. A truck, bus or car is not a smartphone on wheels, he said, and he does not want them to be seen as part of the IoT, at least at the start, because he feels it is risking the safety of drivers and people on streets. The data needs to be stored and processed in the vehicle, and shared offline with third parties to avoid being hacked and its safety compromised. He said that Volvo already takes responsibility for communicating all data to offline servers, while keeping the firewalls to its own data. For Mr Kobesen, the anonymization of data is a big issue, particularly in some European Member States. Ms Espinel remarked that there is no international consensus for the baseline rules for the free flow of data, which she considers to be a big and 12

13 significant gap in our legal framework. She said that we need a ruling that the default rule is that data should be able to move across borders; currently such an understanding, treaty or agreement is not present. The Moderator asked how this framework could be created? In Ms Espinel s view, one strategy is to have different bilateral discussions happening and then knit their agreements together. The disadvantage of this approach is that if significant differences exist, then the knitting process will never happen. Such bilateral discussions are taking place between the US, Europe, Japan, Canada and Mexico. Another direction is via discussions at G7 and G20 level; should real momentum occur here, these could be promising. The Moderator asked what should be regulated, and what should not. Ms Charanzová agrees with Mr Gustafsson that regulation on safety and integrity is needed. She foresees new regulation coming soon on liability, and believes that two networks are likely: for essential data and non-essential data where different regulatory approaches are necessary; the former where regulation is needed at European level and the latter where it is not. She is rather 13

14 pessimistic about whether international regulation can be achieved in a short timeframe, because every continent has a different approach and mindset on data privacy. Mr Kobesen gave two examples. The International Transport Forum modelled the city of Lisbon in the future, when autonomous vehicles would enter it on a massive scale, and the outcome was that 40% more vehicles were needed, adding to congestion. He said that this shows that new kinds of models are needed. Second, the increase in online purchasing means that more white delivery vans are driving into cities, halffull, stopping to make deliveries and adding to congestion of cities. He concluded that regulation here is needed, and logistics companies need to work together. The Moderator asked if the market is working well, or is something needed to accelerate the shift of mindset? Ms Charanzová sees the need to act on essential data; Ms Espinel prefers incentives to share data rather than compulsory methods. These could be removing barriers, such as not penalising companies under liability rules if they were to share data. Forcing companies by government regulation is not the way 14

15 to go, she thinks, and pointed out that governments are long-term collectors of data, which companies have been asking for them to share for a long time, e.g. weather data. In the transportation sector this is starting to flip; governments are now going to companies to ask for their data, to share with citizens. We have to recognise that data has value, said Mr Frank, who gave the example that the most valuable asset of a stock exchange is data on what trades have been made. We have to recognise that data can be shared but it should not necessarily be free because it has value. For Mr Kobesen the logistics sector needs some encouragement to work together, and here the government needs to work to get various parties moving together in the right direction. Mr Gustafsson believes there is huge potential in logistics because 50% of transports are half empty: maybe it will not be the traditional logistics companies doing this but newcomers. A delegate commented that much of the discussion has centred around generic data, and wondered if it was necessary to talk about concrete specific applications of data. Mr Kobesen agrees that a generic data discussion is difficult; in PTV they look at very specific data with privacy data. Similarly, a delegate asked for panellists to define the difference between essential data and publicly available data. Ms Espinel made the distinction between personal data and commercial data. She said a lot of the policy discussions conflate these two, which is not helpful. In her view it s better to start with some high-level principles or outcomes you are trying to achieve, and then work those down through various types of data and evolve them as necessary. Mr Gustafsson gave an example from trucks, which produce a huge amount of data on the engine, exhaust, fuel quality etc., which is extremely important to Volvo to help them develop their next models. Another layer of data is traffic related which should be shared with other vehicles and traffic authorities. A third layer is private data: where is the driver, how many hours he is working, his phone calls etc. He thinks that it would be good to define these levels and come to a common understanding. Also asked from the floor was whether the contractual agreements mentioned by Mr Gustafsson are specifically for data transactions or more traditional suppliercustomer agreements? 15

16 Mr Gustafsson said they refer to specific contracts concerning data. Turning to the skills missing, the Moderator asked how can mindset be changed? In Mr Franks view, entrepreneurial skills are needed to see the new opportunities, which in the transportation sector are huge. He also thinks that more IT people are needed, and that machines can help by finding patterns in data better than humans can. Ms Espinel pointed out that for companies, economic interest will drive the change of mindset. She is also aware that a lot of education needs to happen, especially around emerging technologies and their societal impact. With greater understanding comes a lessening in fear and concern. For Mr Kobesen it is important to change the skillsets from offline thinking to real-time thinking; to become aware that it s a 24/7 economy instead of the traditional 8-5 economy. He added that it s vital to make a company attractive so people will want to work for it. Mr Gustafsson agrees, and believes it is essential for a company to give the clear signal that they are welcoming the future and want to be part of it, not only from a technological point of view but also to address societal challenges. People want a job that enables them to make a difference. What we are missing is the crucial point: It will happen! stated Ms Charanzová. It is therefore vital to prepare the next generation to be ready to deal with it. We have to start with the educational system, she remarked, adding that she would like to see more programming in schools, not just how to use a computer. Ms Espinel gave an impassioned plea to encourage more women to go into STEM and computer science education: We are moving backwards: there are fewer women going into computer science in the US and Europe than there were 20 years ago. CONCLUDING REMARKS The Moderator asked panellists what they would do if they were a European Commissioner for a day, to help the transportation sector take advantage of all the opportunities discussed? Ms Charanzová: I think you can do more than one thing in one day! I would fight to get the free flow of data regulation adopted as soon as possible, and would fight for a seamless 5G network in Europe. I would see how public and private sectors can work more closely to develop more joint 16

17 initiatives, and would like to see more pilot projects going from testing to practice. Ms Espinel: I would negotiate an international consensus on the free flow of data. I would focus on developing greater trust between citizens and governments and governmental institutions, who need to be more responsive to citizens. I would use technology like AI and data analytics to get as much citizen input as possible. Mr Kobesen: I would set up a European data warehouse, modelled on the national data warehouse in the Netherlands, which collects offline data from the private sector; it s a good initiative as it forces the private and public sectors to work together. I would do it at a European level, not just for offline data but also for real-time data from the public and private sectors. Mr Frank: I would put the eprivacy Directive on hold. Then I would encourage the sector to get excited about the possible innovations and how our lives, jobs and society can be improved by them. Mr Gustafsson: I would seek to nurture this huge potential for data not by introducing large pieces of regulation but smaller packages that are relevant for all companies, from the smallest to the largest. And I would make sure that European business is driving forward with the ambition not to lose this competitive race against other parts of the world. 17

18 Initiated by Volvo - #ETF2017 EUROPEANTRANSPORTFORUM.EU