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Thoughts from Helsinki: Europe and the Future of Technology

BLOG - 3 October 2019

On 19 and 20 September, Helsinki hosted the Digital Excellence Forum and ICT Proposers’ Day. Two days of conferences and events to "present and discuss the main policy drivers of the digital transformation of European industry and society". Théophile Lenoir, Policy Officer in charge of digital issues at Institut Montaigne, shares his insights on European investments and the future of technology.

For policy makers working in the field of technology, Europe is the future. Foreign digital services companies are simply too big for national European actors to compete at an international scale on their own. The issue is not only one of market size (although 510 million potential consumers make life easier for businesses), but also one of access to financing and talent: providing access to a large market, top talents and investments are the European Commission’s levers to create alternatives to foreign technology services.
 
Having alternatives matters because, as former Member of European Parliament Marietje Schaake mentioned in an interview for Altinget, in many cases the stakes are too important for us to rely on foreign actors for basic services (such as transporting or processing data). The aim, therefore, is to encourage the development of European technology, not because innovation makes life easier (satisfying our needs in a faster way), but because innovation impacts geopolitics (through economic power and access to information).

What is at stake?

The issue with technology is that it embeds values that convey and accentuate messages that impact our way of life. Overall, we need to develop technology that spreads messages we, as Europeans, like. In Europe, we are worried that technology will convey values that do not respect basic human rights. One example lies in the field of artificial intelligence (AI) and ethics, where defining the uses of AI that are acceptable and the ones that aren’t has been a topic of heated debates: so far, we find that facial recognition for mass surveillance is not acceptable, neither are unfair and discriminatory automated decisions.

Overall, we need to develop technology that spreads messages we, as Europeans, like. In Europe, we are worried that technology will convey values that do not respect basic human rights.

On the global stage, Europe has had a role in shaping technology through legislation (the most famous recently being the RGPD). Legislation is an efficient way to make sure one’s voice is heard, and Institut Montaigne looks forward to discovering the Commission’s legislative agenda for Europe’s digital strategy. However, the main reason why Europe’s legislation has had an effect on global rules is that the European market, with its wealthy citizens, is highly valuable for foreign companies. In the long run however, if value is not created in Europe and enriching European societies, foreign actors may stop caring about the European Union and its citizens. In this future, Europe is the consumer of basic services on which they have little power over (in terms of certification, security, negotiation of tariffs).

The aim is therefore to find other levers than legislation to impact the development of technology. If competitiveness is not everything (hopefully, all in the world is not about figures and market shares), in the case of technology, it has great consequences. Indeed, the spread of technology is about just that: the better product at the cheapest price will spread faster than the lesser, more expensive one. In the end, a technology that spreads (to users or to companies alike) is one that influences. To be influencers and spread messages we like, we have to find ways to make our products competitive, so that we can design ourselves the technologies that will create value and influence the development of technology.

Making Europe competitive: investing in research and deployment

One way to make our products competitive is to lower the cost for private actors to innovate and facilitate their dissemination. What is the European Commission doing to reach that goal? The European Commission’s programmes to foster innovation and the adoption of technology were presented by Mr Khalil Rouhana, Deputy Director-General at the European Commission Directorate-General for Communication Networks, Content and Technology. These focus on research and innovation on the one end, and on the deployment of technology on the other.
 
First, there is a large research and innovation investment programme, Horizon Europe, to succeed the now ending Horizon 2020 programme. In total € 100 billion will be made available over the years 2021 - 2027 to foster the emergence of technological breakthroughs. Second, there is the Digital Europe Programme, which, over the same period 2021-2027, focuses on building digital infrastructures and facilitating the deployment of technologies in Europe (such as 5G or artificial intelligence). This € 9,2 billion investment program will be divided into five areas: € 2.7 billion will go to supercomputers, € 2.5 billion to AI, € 2 billion to cybersecurity, € 0.7 to enhancing digital skills and finally € 1.3 billion for ensuring the wide use of digital technologies across the economy and society. 

Of course, these impressive figures have to be compared with investments from overseas actors. A PricewaterhouseCoopers study shows that, In 2018, Amazon alone invested $ 22,6 billion in research and development; Alphabet, $ 16,2 billion. Nevertheless, the amounts invested by such companies should not undermine the European Commission’s efforts. At this point it is important to stress some of its results. As an example, in the field of supercomputers, the European High-Performance Computing Joint Undertaking’s objective is to develop top-of-the-range exascale computers (computers that can execute one billion billion - 1018 - calculations per second). With this long-term objective in view, three centers in Europe (Barcelona, Bologna and Kajaani) have been selected to host three large supercomputers, with a capacity of 150 to 200 petaFLOPS (1015 operations per second). Coherent with the general strategy of the Digital Europe Programme, the aim from 2021 onwards will be to make this computing power available for independent projects.

More public effort will be necessary

Therefore, the European Commission’s achievements must be lauded, whilst keeping in mind that such efforts, both in terms of financing and network building, must continue and increase in the foreseeable future. Margaret O’Mara’s book, The Code: Silicon Valley and the Remaking of America reminds us of the role of the American government in encouraging innovation and entrepreneurship in the early 1960s. As one example, the 1958 Small Business Investment Act gave the opportunity to all companies registering under the Small Business Investment Company (SBIC) status to access funding: for each dollar invested, the US government would give 3 in long-term loans. Although the programme was shut down shortly after (it was too costly), it shows the mindset that influenced industrial policy in the early days of the contemporary technology industry and set the grounds for the emergence of a vibrant innovation economy. Today, we find similar methods in Europe (with different proportions) with projects such as the QuantERA initiative, a network of 31 organisations from 26 countries supporting international research projects in the field of Quantum Technologies (QT). To finance this project, the European Commission invests 1/3 of the amounts put in by individual participants.

States playing the role of private companies

Intense public spending is necessary in the field of emerging technologies in Europe. Because European companies have missed the information and communication technologies (ICTs) revolution, Europe does not have private actors with a capacity to invest heavily in groundbreaking research such as artificial intelligence or quantum computing. As mentioned earlier, the consequences of these emerging technologies can be profound for the way information is processed and therefore impact a Nation’s safety. In the case of quantum computing, making sure these technologies exist inside the European Union is a matter of national security: quantum computing will be needed to protect information that affects European citizens (in the military, the energy sector, the economy, etc.).

More generally, it is public authorities’ role to prevent European citizens from being in a situation of dependence towards foreign actors (the capacity of Huawei to shut down communication in places using their software and antennas has been mentioned in some countries to justify blocking the equipment provider). Therefore, the European Commission and the member states have a significant role to play in showing the way and encouraging investments.

Therefore, the European Commission and the member states have a significant role to play in showing the way and encouraging investments.

Talking with European innovators and researchers helps contextualise the position of European technology compared to the United States and China. Overall, it is difficult to have an objective appraisal of Europe’s position in the technology field, partly because both Chinese and American companies have armies  of public relations executives shaping public discourse by selling their companies’ breakthroughs. One example is 5G. If the future network is already available in some American cities, the promises of low latency and heightened reliability are not standardized yet. This means that no one has started using 5G to its full potential yet, even though American players have communicated about making 5G accessible. If it is difficult to deny the fact that Europe is running late, maybe it is not as far behind as we think.

 

Copyright : Digital Excellence Forum - ICT Proposers Day 2019

 

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