BusinessEurope Headlines No. 2020-06
“Research and innovation must be central to the Green Deal, in order to make this deep societal transformation a success”, said BusinessEurope’s Deputy Director General Alexandre Affre at the conference “Innovative Europe – The way forward”, organised by i-Com (Institute for Competitiveness) on 18 February. “A lot of technologies are already there and need to be deployed at large scale, but many still need to be invented. Innovation is therefore a must”, Affre added. As reported in the BusinessEurope’s strategy paper on research & innovation, to scale up their investments in Europe, companies need more and smarter public funding, innovation-friendly legislation, talents and collaboration.
Contact: Carolina Vigo
The race for AI supremacy
By Patrick Grant, Digital Economy Adviser
It is no secret that AI has the potential to transform our economies and societies for better if legitimate challenges are overcome. But as a foundational technology, AI will also be an important measure of geo-political power for the incoming decades. This power will then be used to dominate further affairs across the globe that this technology interacts with, from consumer rights to national security.
China has committed itself to build a USD 150 billion AI industry by 2030. The United States used a 2019 executive order to prioritise federal research and development funding in AI. Meanwhile, the EU continued to force ePrivacy through its legislative machine, a law recognised by many that would slow down the development of machine learning in Europe.
But new personalities have been injected into the Commission college. Following their initial stumble, France presented Thierry Breton, a tech businessman who now sits as the EU’s Internal Market Commissioner. While it is unclear exactly how the relationship between Breton and Vestager will play out, it is clear that he is enjoying great influence over the Commission release this week.
The data strategy is clearly an initiative with Breton’s fingerprints on. While it is widely accepted that Europe initially lost the B2C digital revolution to the United States, leading to the rise of the GAFA’s (Google, Amazon, Facebook and Apple), it is believed there is all to play for in B2B industrial sectors. Data and the value that can be derived from it will be the resource of success. France’s President, Emmanuel Macron has been calling for a European data strategy since his visit to China in 2018. There, at an AI conference in Beijing, he explained that the Chinese view their domestic market so importantly as it can be used to energise home-grown companies to compete with the US tech giants. This is now the current direction of policy in Brussels.
But if the amount of data in the world is growing exponentially, industrial applications where Europe already leads are the next battleground and cloud processing is shifting to edge computing, why should Europe pull up the draw bridge? Optimists will preach that this is not about shutting Europe off from the rest of the world but simply creating its own data strategy as China and the USA continue to project their own ideas. This may be the case but no matter how the data strategy is implemented with the benefit of European AI in mind, Europe exists within a rule-based free market economy and there will be limits to mandating access to data that has been fairly collected and processed. Incentives will be required, privacy respected and intellectual property rights protected.
Europe has become a front runner in digital regulation rather than innovation itself. Views on whether this approach is correct varies across the continent. The General Data Protection Regulation (GDPR) is a prime chicken or egg case to test what came or should come first. The GDPR is a novel and detailed law that has certainly influenced other regions but was this at the detriment of home-grown innovation? This question will be answered by Europe when reviewed in May this year.
In fact, Europe’s inability to move faster has long been due to the same issues: a lack of holistic policy making, poor enforcement of existing rules, a fragmented single market, growing cases of cyberespionage, a digital skills gap and uneven distribution of high-quality digital infrastructure. This all leads to a risk adverse attitude in financing that doesn’t accept, unlike the USA, that failure is often the first step towards success. That is why, through yesterday’s release, it has never been more important for Europe to invest in long-term policy making to catch up and truly make Europe fit for a digital age.
Vestager believes the Chinese have the data, the Americans have the money and Europeans have the purpose. Yet when AlphaGo defeated the world “Go” champion in 2016, demonstrating an ancient Asian board game enjoyed for generations could be beat by an American computer programme, Europe had little to no visible hand in the contest. While computers beating humans at board games is no ground-breaking feat surely Europe’s claims for purpose would be best demonstrated by moving from the artificial to reality?
Contact: Patrick Grant
comprehensive strategy that includes more than 130 recommendations that should be implemented simultaneously”, Santos stated. The systemic challenges resulting from China’s state-led capitalism are generating a new sense of urgency among European Industry that something must be done to restore the level playing field. That is why BusinessEurope believes the EU needs to act now in pursuing four key objectives in its relationship with China: (1) secure a level playing field, (2) mitigate the impact of government-induced market distortions, (3) reinforce the EU’s competitiveness for instance by implementing an Industrial Strategy and by (4) ensuring fair competition and cooperation in third markets.
Contact: Maurice Fermont
Contact: Martynas Barysas
Reform Barometer. Some members also noted that the Economic Governance review can be an opportunity to improve the clarity of the Stability and Growth Pact (SGP) and in particular to simplify the fiscal rules and reduce their pro-cyclicality.
Contact: Pieter Baert
Contact: Pedro Oliveira
Contact: Elena Bertolotto
Photo copyright: EPO
Contact: Elena Bertolotto
- 20 February: European Council
- 26 February: European Semester Winter Package
- 27 February: Competitiveness Council