Center for Data Innovation
The EU should direct investments to support digital innovation in the industries and technologies where it can build on core competencies, such as robotics, autonomous systems, high-performance computing, the Internet of Things and in key application areas, for instance health IT, smart grids, smart cities and e-government. In addition, to ensure companies can compete in the global digital economy, EU policymakers should avoid adopting more regulations that make it difficult for firms to gain scale, and that raise the costs and legal difficulty of developing and using technologies like AI.
The EU should not only invest in digital technologies, but also digital skills. The EU should address the digital skill gap by encouraging member states to integrate digital skills into their education curricula. Only 56% of the EU population is equipped with basic digital skills, which will be far from enough to boost EU competitiveness and productivity. But improving digital skills will likely require improving online education. Unfortunately, in several EU countries, the capacity of schools for digital teaching and learning remains limited. Through its newly-adopted Digital Education Action Plan, the EU should invest in the use of digital technologies in education, including remote teaching.
The EU should also prioritise digital free trade and the free flow of data across its borders, as well as globally with its allies. Although the EU has made substantial progress in creating a Digital Single Market, European firms still face challenges in scaling up and developing emerging technologies, and full cross-border access to online content and services for all users is not yet a reality. For example, European citizens cannot securely access and exchange their electronic health records when seeking treatments in multiple EU countries. But an integrated digital single market will not be enough. EU firms will need global reach and scale, which will be difficult if the bloc limits cross-border data flows to its allied trade partners.
Rather than fighting a rear-guard action to erect roadblocks for US technology firms while attempting to protect and subsidise European firms, the EU should recognise who the real adversary is – China.
Finally, the EU should focus on aligning its industrial strategy with key allies to provide a unified front to the economic and national security challenges posed by China, such as intellectual property theft, forced technology transfers, and closed markets. Unfortunately, Europes current industrial strategy focuses on EU sovereignty rather than “allied nation sovereignty,” which contradicts Europes commitment to free trade and global innovation. Rather than fighting a rear-guard action to erect roadblocks for US technology firms while attempting to protect and subsidise European firms, the EU should recognise who the real adversary is – China. As such, EU officials should seek to establish a joint technology alliance with like-minded allied partners and pool resources in the many areas where that is mutually beneficial. To be competitive against China, the EU should coordinate with the United States, Japan, Australia, South Korea and others as it seeks to leverage technologies like AI and the Internet of Things, develop shared datasets and data standards, and improve cybersecurity in autonomous systems.
The Marshall Plan was a major factor in Europes post-war economic success, and this type of ambitious and strategic leadership will be necessary to recalibrate the European economy for the post-pandemic era.