Europe in the 21st century – museum of technology or digital champion putting the human being in the centre?

Last month, when European Commission president-elect Ursula von der Leyen presented her team and the new structure of the next EC, she made an important remark relating to our digital European future in her agenda:

"We have to make our single market fit for the digital age, […] we have to work hard for our technological sovereignty."

Her program lays it out in more detail:

“It may be too late to replicate hyperscalers, but it is not too late to achieve technological sovereignty in some critical technology areas. To lead the way on next generation hyperscalers, we will invest in blockchain, high-performance computing, quantum computing, algorithms and tools to allow data sharing and data usage. We will jointly define standards for this new generation of technologies that will become the global norm.”

Ian Bremmer’s GZERO (part of Eurasia Group) makes it very clear where Europe needs to put more emphasis:

“[…] being a regulatory superpower isn't enough. Europe also needs to ensure that its companies can compete in the digital age.”

I fully agree. Acting on “technological sovereignty”, especially regarding data and algorithms, while embracing global collaboration is key. We are at a cross roads. And we must act now - if we do not want our children to end up living in digital colonies of the technology super powers USA or China. Reduced to the role of uncritical consumers and data providers for digital services produced outside of Europe. 

Europe is losing ground in digital technologies.

Europe is still the world’s largest single market. We are still building the best cars in the world, are global champions in industry automation and logistics. In contrast to other regions of the world, we have high social and environmental standards and functioning liberal democracies (at least in most places).

Nevertheless, the formerly leading economies in Europe have been facing overwhelming competition: Today, the leading digital giants are American and Chinese companies. Apple, Microsoft, Amazon, Alphabet and Facebook are the five largest listed companies worldwide (by market capitalization). The platform companies Alibaba, Tencent and Baidu dominate the Chinese market, with ByteDance growing aggressively. Companies such as Apple, Nokia and Ericsson manufacture or have manufactured in China. In fact, no one can avoid China for electronic components, and the USA for artificial intelligence and chip production.

Looking into the start-up scene does not paint a better picture: just last month the Hurun Global Unicorn List 2019 has been published and has received a lot of attention. From a European point of view, this list is particularly depressing. It is clearly led by China and the USA, which have both produced over 200 companies in this category. There are three European countries in the top 10, the UK, Germany and France, with altogether 24 (!) unicorn companies. 

Dealing with data and algorithms will not only determine our competitiveness, but also the success of political systems at the end of the 21st century.

Data is the raw material of the digital world. In contrast to physical raw materials such as oil, ‘real-time’ data, e.g., from the Internet of Things, is easily "perishable" (they must be up-to-date). In addition, they multiply constantly, because more and more people and things are connected and produce data all the time. However, so far, we have not excelled in making data usable in bulk (‘big data’), in interpreting it, in developing meaningful algorithms on a grand scale, in advancing machine learning and artificial intelligence (AI) across all sectors. But that's exactly where the challenge lies for Europe today. So far, two distinct models have been applied successfully – at least from the point of view of the providers. The liberal-capitalist business model from Silicon Valley and the authoritarian-capitalist model of the People's Republic of China. Both models significantly challenge Europe:

• Economically: Many digital strategies regard the availability of data and the training of specialists for AI research and commercialization as a prerequisite for long-term economic success. Europe has fallen behind in both areas.
• Geopolitical: Data of European users of digital services are mostly stored on servers of American companies, and perhaps Chinese in the future. Data from business users and companies relying on public cloud solutions is also predominantly stored on American servers, or servers that are under the control of US companies. The reason for this is a lack of focus on, a lack of demand for, and consequently a lack of success in building local computing capacities in Europe. The current global trade conflicts show that the availability of powerful chips or access to cloud-based computing power is a strategic necessity. European countries are not competitive in this area compared to the USA and East Asia.
• Societal: The conception of man underlying authoritarian but also liberal platform capitalism does not necessarily go well with our European, liberal understanding of individual rights. ‘Users’ can hardly claim ownership of their data, but usually pass on the rights to their data to the data platforms. The assertion of individual interests against the data platform is a challenge. In addition, algorithms are based on the social context of their creators, today mainly American of Chinese men. This has resulted in prejudices, for example in recruiting software, against women or people of colour. On some platforms, fake news spread six times faster in the internet than correct information.

We are hesitant designers, but submissive users.

On the one hand, especially in Germany, we are hesitant about the design of digital technologies and skeptical towards companies. On the other hand, we are careless in handling our data and using digital services that originate elsewhere. A good example is the TikTok mobile app from China. With TikTok, young people can create their own lip-sync video clips and other creative expression formats popular with teenagers. Meanwhile, the app is more successful than WhatsApp:

By 2018 TikTok already had 500 million mostly young users from 150 countries, with users typically spending around 52 minutes per day on the app. For the first time a Chinese social network has established itself in European children‘s rooms. Biometrically usable images and data on personal preferences are revealed for processing and evaluation - with initial indications of "content moderation" according to Chinese censorship standards.

We need profound cultural change and life-long learning to close the digital skill gap.

Considering developments like this, I believe we urgently need the European Sputnik moment in the digital sphere. A sense of urgency, as we experience it in the climate movement. We need openness towards shaping our own digital and green future instead of just consuming without criticism or allowing others to force us into geopolitical camp thinking USA vs. China.

How do we arrive at a culture of making? How do we get more passion for innovation to solve our problems?

In view of the ageing population and the rapid pace of technological development, we can only achieve this, if we accept and embrace the principle of lifelong learning. And dedicate us to the huge task of closing the (digital) skill gap or, more generally, improve our problem-solving skills. In all age groups.

A European "counter-model": sustainable - digital - with the human being at the centre.

For me, the key to a successful European counter-model is a human-centred development of digital technologies. And an economic model applying the very same principle. This includes future human beings, i.e. the question of how to avert the climate catastrophe and the littering of our planet. Mastering digital technologies can help. It is also imperative if we do not want to fall behind in global competition.

Innovations are usually born in ecosystems of a few large and many small companies. Carried by the people - driven by their passion to shape the future. It is up to politics to define the right framework for action and to correct undesirable developments. Europe grew through openness and change, not through isolation and stagnation. We have created and maintained peace through cooperation, not through national egoism. In today’s crunch-time between the US and China, a Europe tied in national thinking barriers will weaken us even further. It is easier to negotiate at eye level.

I have a few thought-provoking suggestions aiming to increase our competitiveness:

• Implement agile principles also in administration and governance in order to increase the speed of decision-making and implementation.
• Create better later-stage funding ecosystems for successful start-ups.
• Framework conditions to make investments more worthwhile, #1: More political will to consolidate within certain industries. Powerful technology policy to form very large players - Goal: competitive European champions, #2: Tax concessions for research and development
• Enforce your own rules towards anyone who wants to do business in Europe with the same rules for everyone! This includes a clear attitude how to deal with platforms whose business model could threaten our liberal democracy.
• Adjust rules for pre-competitive cooperation. This requires clarification which type of cooperation is still accepted as pre-competitive versus not accepted because it might reduce competition. Current law interprets pre-competition proceedings too narrowly. We need a legal framework that deals with data protection yet grants enough freedom for real-life laboratories.

In addition, education, education, education! Life-long-learning is what our future will depend on!

All of this requires a gigantic amount of enlightenment and positive role models. A broad campaign by all social actors. It's about our future! We need passionate pioneering spirit in the digital world.

Just this week, I had the chance to speak at two digital ecosystem shaping events (Digitalgipfel 2019 / Digital Summit 2019, Digital X 2019) and be part of an inspiring group of shapers. I appreciate the plans of the GAIA-X initiative that we have been working on with key players from government, science and business to establish a new logic for data sovereignty as the cradle of a vital European digital ecosystem. There is a spirit, energy and momentum that we should use to get this project going with as many partners as possible!

For an efficient, competitive, secure and trustworthy data infrastructure for Europe!