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Digital transformation should be socially and ethically responsible says #EESC

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Appropriate skills, social protection and diversity in the workplace will all be crucial for the future, as will social dialogue about the introduction of new technologies.

The digital transition in the EU should be underpinned by respect for European values and supported by more robust social policies, to ensure that no one is left behind. European society as a whole – workers, companies and the general public alike – should instead benefit from the huge potential offered by new technologies, the European Economic and Social Committee (EESC) said at its July plenary.

"We disagree with the assumption that 'digitalisation will result in winners and losers'", rapporteur for the opinion on EU concepts for transition management in a digitalized world of work, Franca Salis-Madinier, told the plenary. "It should be possible for everybody to benefit. It can be ensured that no one is pushed aside."

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In the opinion, the Committee listed several priorities for the EU which should make sure that the benefits of digitalisation can be reaped.

One of the top priorities is upskilling European workers, i.e. ensuring that they have the appropriate skills for the future, as the vast majority of jobs will be affected by digitalisation. To keep pace with development, the EESC said: "All sectors will need workers not only with high levels of cognitive and creative skills but also with managerial and communication skills and the ability to learn."

There is an urgent need for a policy focusing on training and life-long learning, with the aim of reducing skills shortages and mismatches. Currently, some 22% of workers in the EU may not have the right digital skills to keep up with developments in their jobs.

Particular attention should be paid to workers in low-skilled occupations at high risk of automation, transformation, replacement or even disappearance.

Another priority is to bolster social security systems, which should be of high quality and financially viable so as to guarantee protection for all workers, including those in the flexible and atypical forms of employment that are now on the rise. This is in line with the European Pillar of Social Rights. The EESC also stressed the importance of holding social dialogue on adapting social protection systems to the new forms of work.

However, as the EESC highlighted in its opinion, investment in social policies currently accounts for only 0.3% of total public expenditure in the EU, which should be beefed up.

Diversity in the workplace was also singled out as a top EU objective. For example, most jobs in the IT sector and other well-paid and highly recognised fields are currently predominantly occupied by men. This needs to change if we want to avoid inequalities in the future world of work.

In its opinion, the EESC also reiterated its support for a "human-in command" approach to digitalisation, and said it encouraged the development of socially responsible artificial intelligence that served the common good. It also said that the lack of clarity surrounding how algorithms worked and how they made the choices that were beyond human control posed fundamental questions about the society we wanted to live in.

"We stress the importance of the human-in-command principle – whatever happens, humans should be in charge", said the co-rapporteur for the opinion, Ulrich Samm. "Modernization is in our hands: we decide what the world should look like, what our environment should look like, what technologies we want to use."

According to this principle, machines clearly have the role of serving humans, with more complex, ethical and human-related tasks left under human control. One positive example is the increased use of "collaborative robots" to help workers or people with disabilities.

"This should allay our fears; we should acknowledge that we are in the driver's seat", said Mr Samm.

The EESC opinion was requested by the Austrian Presidency of the EU and will provide key input for an EU White Paper on the future of work. The EESC has already produced several opinions on this topic, at the request of the Estonian and Bulgarian presidencies.

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New rules on open data and reuse of public sector information start to apply

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17 July marked the deadline for member states to transpose the revised Directive on open data and reuse of public sector information into national law. The updated rules will stimulate the development of innovative solutions such as mobility apps, increase transparency by opening the access to publicly funded research data, and support new technologies, including artificial intelligence. A Europe fit for the Digital Age Executive Vice President Margrethe Vestage said: “With our Data Strategy, we are defining a European approach to unlock the benefits of data. The new directive is key to make the vast and valuable pool of resources produced by public bodies available for reuse. Resources that have already been paid by the taxpayer. So the society and the economy can benefit from more transparency in the public sector and innovative products.”

Internal market Commissioner Thierry Breton said: “These rules on open data and reuse of public sector information will enable us to overcome the barriers that prevent the full re-use of public sector data, in particular for SMEs. The total direct economic value of these data is expected to quadruple from €52 billion in 2018 for the EU Member States and the UK to €194 billion in 2030. Increased business opportunities will benefit all EU citizens thanks to new services.”

The public sector produces, collects and disseminates data in many areas, for example geographical, legal, meteorological, political and educational data. The new rules, adopted in June 2019, ensure that more of this public sector information is easily available for re-use, thus generating value for the economy and society. They result from a review of the former Directive on the re-use of public sector information (PSI Directive). The new rules will bring the legislative framework up to date with recent advances in digital technologies and further stimulate digital innovation. More information is available online.  

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EU can be €2 trillion better off by 2030 if cross-border data transfers are secured

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DigitalEurope, the leading trade association representing digitally transforming industries in Europe and which has long list of corporate members including Facebook are calling for an overhaul of the General Data Protection Regulation (GDPR). A new study commissioned by the lobby shows that policy decisions on international data transfers now will have significant effects on growth and jobs across the whole European economy by 2030, impacting Europe’s Digital Decade goals.

Overall, Europe could be €2 trillion better off by the end of the Digital Decade if we reverse current trends and harness the power of international data transfers. This is roughly the size of the entire Italian economy any given year. The majority of the pain in our negative scenario would be self-inflicted (around 60%). The effects of the EU’s own policy on data transfers, under the GDPR and as part of the data strategy, outweigh those of restrictive measures taken by our major trade partners. All sectors and sizes of the economy are impacted across all Member States. Data-reliant sectors make up around half of EU GDP. In terms of exports, manufacturing is likely to be hit the hardest by restrictions on data flows. This is a sector where SMEs make up a quarter of all exports. "Europe stands at a crossroads. It can either set the right framework for the Digital Decade now and facilitate the international data flows that are vital to its economic success, or it can slowly follow its current trend and move towards data protectionism. Our study shows that we could be missing out on around €2 trillion worth of growth by 2030, the same size as the Italian economy. The growth of the digital economy and the success of European companies is dependent on the ability to transfer data. This is especially so when we note that already in 2024, 85 per cent of the world’s GDP growth is expected to come from outside the EU. We urge policymakers to use the GDPR data transfer mechanisms as it was intended, namely to facilitate – not to hinder – international data flows, and to work towards a rule-based agreement on data flows at the WTO." Cecilia Bonefeld-Dahl
Director General of DIGITALEUROPE
Read the full report here Policy recommendations
The EU should: Uphold the viability of GDPR transfer mechanisms, for example: standard contractual clauses, adequacy decisions Safeguard international data transfers in the data strategy Prioritise securing a deal on data flows as part of the WTO eCommerce negotiations
Key findings
In our negative scenario, which reflects our current path, Europe could miss out on: €1.3 trillion extra growth by 2030, the equivalent to the size of the Spanish economy; € 116 billion exports annually, the equivalent to Sweden’s exports outside the EU, or those of the ten smallest countries of the EU combined; and 3 million jobs. In our optimistic scenario, the EU stands to gain: €720 billion extra growth by 2030 or 0.6 per cent GDP per year; €60 billion exports per year, over half coming from manufacturing; and 700,000 jobs, many of which are highly skilled. The difference between these two scenarios is €2 trillion in terms of GDP for the EU economy by the end of the Digital Decade. The sector that stands to lose the most is manufacturing, suffering a loss of €60 billion in exports. Proportionately, media, culture, finance, ICT and most business services, such as consulting, stand to lose the most – about 10 per cent of their exports. However, these same sectors are those that stand to gain the most should we manage to change our current direction. A majority (around 60 per cent) of the EU’s export losses in the negative scenario come from an increase in its own restrictions rather than from third countries’ actions. Data localisation requirements could also hurt sectors that do not participate heavily in international trade, such as healthcare. Up to a quarter of inputs into the provision of healthcare consist of data-reliant products and services. In the major sectors affected, SMEs account for around a third (manufacturing) and two-thirds (services such as finance or culture) of turnover. Exports by data-reliant manufacturing SMEs in the EU are worth around €280 billion. In the negative scenario, exports from EU SMEs would fall by €14 billion, while in the growth scenario they would increase by €8 Data transfers will be worth at least €3 trillion to the EU economy by 2030. This is a conservative estimate because the model’s focus is international trade. Restrictions on internal data flows, e.g. internationally within the same company, mean this figure is likely much higher.
More information on the study
The study looks at two realistic scenarios, closely aligned with current policy debates. The first, ‘negative’ scenario (referred to throughout the study as the ‘challenge scenario’) takes into account current restrictive interpretations of the Schrems II ruling from the Court of Justice of the EU, whereby data transfer mechanisms under the GDPR are made largely unusable. It also takes into account an EU data strategy that places restrictions on the transfers of non-personal data abroad. Further afield, it considers a situation where major trade partners tighten restrictions on the flow of data, including through data localisation. The study identifies sectors in the EU that rely heavily on data, and calculates the impact of restrictions to cross-border transfers on the EU economy up to 2030. These digitising sectors, across a variety of industries and business sizes, including a large proportion of SMEs, make up half of EU GDP.
Read the full report here

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European Commission adopts new tools for safe exchanges of personal data

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The European Commission has adopted two sets of standard contractual clauses, one for use between controllers and processors and one for the transfer of personal data to third countries. They reflect new requirements under the General Data Protection Regulation (GDPR) and take into account the Schrems II judgement of the Court of Justice, ensuring a high level of data protection for citizens. These new tools will offer more legal predictability to European businesses and help, in particular, SMEs to ensure compliance with requirements for safe data transfers, while allowing data to move freely across borders, without legal barriers.

Values and Transparency Vice President Vera Jourová said: “In Europe, we want to remain open and allow data to flow, provided that the protection flows with it. The modernised Standard Contractual Clauses will help to achieve this objective: they offer businesses a useful tool to ensure they comply with data protection laws, both for their activities within the EU and for international transfers. This is a needed solution in the interconnected digital world where transferring data takes a click or two.”

Justice Commissioner Didier Reynders said: “In our modern digital world, it is important that data can be shared with the necessary protection - inside and outside the EU. With these reinforced clauses, we are giving more safety and legal certainty to companies for data transfers. After the Schrems II ruling, it was our duty and priority to come up with user-friendly tools, which companies can fully rely on. This package will significantly help companies to comply with the GDPR.”

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More information is available here.

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