Today, U.S. Secretary of Commerce Penny Pritzker delivered remarks at the Digital Transformation of Industry Conference hosted by the European Commission (EC) during the 2016 Hannover Messe. The conference provided a forum for public and private sector leaders in both the U.S. and Europe to discuss the opportunities and challenges presented by the digitization of industry.

Secretary Pritzker presented the U.S. perspective on key issues related to digitization, and highlighted the critical role that the EU-U.S. Privacy Shield and the Digital Single Market play in spurring innovation, and boosting the transatlantic digital economy.  In November 2015, Secretary Pritzker announced the Department's new Digital Economy Agenda, which is focused on promoting innovation, a free and open Internet, trust online, and Internet access for all Americans with the input and support of the private sector. 

EC Commissioner for Digital Economy and Society Gunter Oettinger also delivered remarks.

Remarks As Prepared For Delivery

Thank you, Commissioner Oettinger, for sharing your thoughts. You have been a true partner, and your support for advancing digital policy between the United States and the European Commission has been critical. I am honored to be here today representing the United States as the official “Partner Country” for Hannover Messe. President Obama’s participation at this fair reflects how highly our country values our transatlantic commercial relationship.

Everyone in this room knows that the U.S. and Europe lead the world in developing new and innovative technologies, and that the volume of data flows between us are the largest in the world. Both are enabling extraordinary economic growth, not only in the U.S. and Europe but around the world. Think about this: for the first time in history, data flows are growing faster than trade in goods. And they are expected to accelerate in the future.

To realize the full economic promise of Industry 4.0 in the United States, in Europe, and around the world, we must adopt public policies that support the free flow of information, ideas, products, and services. Commissioner Oettinger and I believe that the digital economy needs to be free and open while protecting privacy in order to create opportunity for everyone. But not everyone agrees with us.

New rules, such as content controls and data localization requirements, present significant risks to the open Internet model that has been the foundation of our growing digital economy. Governments around the world are increasingly pursuing isolationist laws and policies that seek to restrict the free flow of data and services. In spite of these policies, more data is flowing today than ever before, especially between the United States and Europe. But we should not just assume that this trend will continue unabated. The United States and all of Europe must lead by implementing policies that promote our vision and shared values.

For example, recognizing that $260 billion in digitally delivered trade is at risk, the European Commission and my Department worked closely for over two years to develop a modernized and comprehensive framework that protects privacy and creates certainty for companies on both sides of the Atlantic. Trust is an essential ingredient to our shared digital future. And we have ensured that this new Framework meets EU legal requirements.

Together with the European Commission, we constructed a framework that includes: new privacy protections to be implemented by companies; new commitments and resources from my Department to administer the Shield and oversee compliance; new redress options for EU individuals; and new collaboration with European institutions to ensure the Framework functions as intended. The European Commission is working hard to complete the approval process, but they need your support. In the absence of an agreement, companies on both sides of the Atlantic have faced significant uncertainty. So, now is the time to put in place these new privacy protections.

While the Privacy Shield is essential, alone, it is not sufficient for the United States and Europe to realize the full potential of the “fourth industrial revolution.”  We applaud Europe’s effort to establish a Digital Single Market, another key element needed to capitalize on the economic promise of digitization.  If done right, the Digital Single Market will make European companies more competitive by reducing the red tape they face when trying to expand across the continent. Today, for example, a data startup in Berlin may want to export their services to Paris, Prague, and Pisa. But the company faces disparate rules that make it challenging and expensive to navigate these new markets, both in the digital space as well as the delivery of physical goods ordered through e-commerce platforms.

A well-constructed Digital Single Market with common regulations will make it easier and cheaper for European startups to access the continent’s 500 million customers. As a result, EU consumers will have a broader range of choice at more attractive prices, as well as greater certainty that the products they buy will perform as expected. In addition, a market that is open and welcomes competition will also benefit the many U.S. firms that have invested heavily in Europe and created jobs across the continent. But if done wrong, we put at risk the thriving, multi-billion dollar transatlantic digital economy.

Both the Privacy Shield and the Digital Single Market are reminders that, as industry and society continue to evolve, digital tools and services are enabling and driving much of the transformation of our economy. As policymakers, we must approach this transformation with a shared commitment to make standards work for businesses large and small on both sides of the Atlantic. Collaboration in the development of international standards enables technological innovation by defining and establishing common foundations upon which product differentiation, innovative technology development, and other value added services can be developed. This collaboration is possible when standards are developed in organizations that are transparent in their decision making and open to participation by all interested stakeholders.

In the U.S. and Germany, our approach to developing standards is both private sector led and industry driven. But there is no one size fits all approach for standards development. Fundamentally, what is needed is industry leadership and active government participation. This results in solutions with standards that meet the needs of industry and government. But we cannot approach standards simply on a country by country or regional basis. We need international solutions that are globally relevant. We need international collaborations to create a common language for interoperability and product performance. We need international standards, so that manufacturers of all sizes will not incur the significant additional costs associated with creating different versions of the same product for different markets. International standards are particularly necessary for digital economy technologies given the breathtakingly rapid pace of innovation. They enable new technology to be deployed more rapidly, giving consumers all over the world faster access to new knowledge and services.

On April 18, 1951, the European Coal and Steel Community was born, laying the groundwork for the modern EU. 65 years ago, the goal was to link countries together to prevent conflict and support economic growth. There would not be French steel or German steel – only European steel. Today, our goal is the same, but the scale is much larger. We cannot have a European digital economy or an American digital economy. We need a global digital economy, underpinned by smart policies that keep the Internet free and open while protecting privacy. If we succeed in the United States and Europe, we will prove to the rest of the world that the free flow of information across borders is good not just for our businesses but also for our people and our communities. Thank you.