EU tech policies should wake up Europe’s sleeping giants

Now that the European Parliament elections are over, attention is shifting to the European Union’s agenda over the next five years. There are many tricky dossiers sitting in the EU’s in-tray, but it should include amongst its top priorities clear and effective digital policies over areas like data and artificial intelligence (AI), while underpinning overall competitiveness in the industrial and service sectors.

The EU has built its digital expertise and policies since the early 1980s when it launched ESPRIT, the first EU tech programme to encourage cross-company and cross-border collaboration. Successive European Commissions have implemented a series of digital policies all aimed at building a fully functional digital single market that Commission President Jean-Claude Juncker has said could contribute an annual €415 billion to the EU economy.

The latest policy framework dates from 2015, but as the tech world radically and rapidly transforms our economy and society, these policies require constant revision, renewal and upgrading.

So, as part of its vision for the next five years, the Juncker Commission unveiled in May its Strategic Agenda which identifies digitalisation – where Europe underperforms – as one of the key challenges for the mandate of the next European Commission (2019 – 2024). It argues that new opportunities will emerge, in particular in the areas of health, mobility, industry and science.

The Agenda’s publication, two weeks before the elections, underlined the policy continuity that officials hope to maintain, whoever leads the next Commission. It notes that for all its strengths in nurturing research, no European has broken into the world’s top 15 digital companies.

While officials insist that their job is not to create tech giants, they would nonetheless dearly like to see some European challengers in that list. “Europe has no lack of innovative digital business ideas but few of our innovative European companies scale up and expand in Europe or shape these global markets,” the Agenda says, adding that, “the level of ambition of other major players” presents a risk to Europe’s influence on global technological developments.

It argues that the EU must leverage Europe’s scientific strengths into breakthrough and disruptive innovation. It calls for more investment in key capacities, like AI and data which have the potential to boost the economy at a time of faltering growth. According to some estimates, Europe could add €2.7 trillion to its economic output by 2030 if businesses were to develop and diffuse AI.

The Commission wants to develop and promote “human-centric and ethical approaches” in technologies at both EU and international level. That means developing cutting-edge, ethical and secure artificial intelligence – including building European world-class super computers and cyber strategic capacities. This is to be welcomed: the EU needs to show far more ambition in every aspect of tech. And there is an opportunity to apply a particular European emphasis on its priorities, which means giving consumers more of a say.

Europe may still have to catch up with rivals, but it has many strengths on which to build. Its start-up scene is flourishing:  the number of technology IPOs with a market capitalisation below €1 billion rose by 120% in the past five years. Moreover, Europe is perhaps the world’s largest digital single market in terms of value, and the biggest in terms of the number of researchers. While many markets are still national, that is changing – holding the prospect of synergies across Europe that integrate at scale.

The challenge is not just about promoting entrepreneurship – it is also about policy. Europe needs to lead on both personal and non-personal data. There is an emerging policy discussion on data collection and use, an area that covers access to data and mandating interoperability with competitors. Transparency and cybersecurity have become key concerns for both businesses and consumers.

At the same time, there is global competition to control both technology and data, and thus shape new global value chains. With data increasingly at the heart of many business models, the EU will have to carefully navigate this tricky policy landscape, and companies will need to engage in the debate.

The EU is very well placed to change these data dynamics. On the back of last year’s General Data Protection Regulation (GDPR), the EU emerged as a global leader in governance for data access and trust. The EU is now considering new governance rules that give citizens more control over their data, as it aims to make clear what data are shared and when. This is likely to develop into a debate on how to make platforms more secure and transparent.

As a new generation of EU leaders takes the reins this year, there is an opportunity to help Europe scale up by building its own model for innovation. Europe’s businesses and networks are sleeping giants. The EU should ensure that digitalisation wakes them up.

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