A New Transatlantic Era - Finding Common Ground in Shared Policy, Business and Technology Opportunity

I first visited Poland in the spring of 1990. Having been back twice – once over a decade ago, and just last week – the stunning progress is nothing short of improbable if not impossible.

What I remembered most from my first visit was the near euphoria that came with the historic ending of decades of communism – that all was possible and achievable. In my venture life, it is a well-known that everyone loves seed stage companies, whose futures are a blank slate and all in our imaginations. Things become less lovey-dovey a few years in when results, usually, bring us to reality. What Poland has achieved economically defied the most optimistic scenarios, but it has not been an easy ride.

This was a perfect time to be in Warsaw considering the impressive win of the more centrist Civic Coalition, whose scale of victory surprised even the winners, and instantly made them the mantel and model across the West for holding back the rise of extremism far right or left.

How intriguing it was for me to find in this shift less euphoria than hard-nosed, pragmatic concern. As of my visit, the new Prime Minister Tusk and his government were not yet in place, and the outgoing Law and Justice Party (PiS) was putting up a fight - though unlikely to change anything - buying time to stall reform. To a person I met in what is likely the new government and business communities, there was worry about the Presidency still in the hands of the old order, that with local elections in April there was tremendous pressure to show something (anything) that resembles progress. I was repeatedly warned that we in America among others underestimate how much institutional change has happened – in the courts and regulatory agencies of the prior government – that would not make new, sustainable change easy.

I found this soberness repeated across travels to Rome, Berlin, Paris, Warsaw, and London meeting with many leaders in the business, technology, and policy worlds. For many this soberness is synonymous with somberness, but for me it is also encouraging. The uncertainty of our polycrises worlds weighs heavily. At the same time, these are moments of opportunity looking at the world as it is, candidly assessing the lessons of these crises, understanding that technological change offers as much opportunity as risk, and that that which binds the region, America and other parts of the world dwarfs what divides us.

To the degree that one can paint Europe with a broad brush – a risky proposition at the best of times – a few surprises captured my attention in their consistency.

The rise of the right is much more nuanced than many appreciate. In Rome I heard repeatedly that Prime Minister Meloni is as nuanced and sophisticated politician as Italy has seen since Draghi – she knows when to pull the populist levers in politics but also has deliberately built a coalition of support and ministers from a broader conservative base in governance. She has, surprisingly to some, known how to engage with and garner support from Brussels and NATO. She knows when and how to pick her battles. Hers is a playbook well beyond nativistic, populist political pleadings – as effective as they are – pushing more that she can deliver the goods by attacking where the status quo has not. Hers is a playbook of political success that with their own versions may be modeled elsewhere.

The migrant issue has been front and center across Europe, especially in more rural areas and in the eastern part of Germany, but there is an irony. Much to my surprise was my inability to find hard evidence – and I spoke with politicians and researchers alike – that a single job has been lost to an increase in migrant workers. In fact, many countries in Europe have significant employment requirements – especially in tech, service, and health care sectors – almost impossible to meet without more immigration. But the burden on infrastructure and resources is real, and where people come from, and how they integrate, appears to be the greatest challenge. “There is some racism to all this,” one expert told me, “But that is also too simple. Certain communities, certainly from Ukraine but including Muslims, have integrated well and are a part of society (though there is a belief that most Ukrainians will leave as soon as they can), others less so. That is the thing to watch and has been most successfully manipulated politically despite the data.”

Political power often seems as much about keeping coalitions together in the face of weaker opposition than a clear measurable agenda. I was told in Germany that the leading coalition, which has many differences, is held together by a kind of “mutual assured destruction” – that the outcome of breaking with the coalition significantly outweighs the benefits of cohesion. Ironically, opposition in many countries has been relatively weak or disorganized, and yet nearly everyone I met is worried over time about the rise of the far right or far left. They know if in both perception and reality electorates think of government at best out of touch, at worst a rigged insider game, vacuums will be filled by those who articulate a path out of existing challenges. Holding on to power and a status quo in the name of preserving democracy – let alone one’s own political hide -- won’t be enough. One journalist said to me: “It all boils down to the economy, energy and migration. All with a leaning towards anti-incumbent.”

A new uneasiness around China has risen rapidly. Even a few months ago, European leaders would tell me that America should stop trying to force them to choose between China and America. They made it clear that with the significant economic engagement there, independent strategies towards China were a better way to get the best out of it rather than being “America’s lackey.” One European minister said to me in the spring: “NATO is for security, but China is for the markets.” I heard almost none of that now. Economic reliance remains, but any reliance is cause for reassessment. The rise of Huawei and 5G, the rush for critical minerals, and significant Chinese investment in ports have created a pause. One executive in the automotive worlds told me: “We have done business in China for decades very successfully, but when you see a beautiful, $5,000 electric vehicle coming, it tends to focus the attention.” And yet I met other executives who want to make hay while the sun shines in the short term, noting that China’s central planning will hinder its own innovation – sounding for me like many US automakers dismissing Japan in the 1990s. ?One diplomat told me: “Resilience is the key term. We are seeking more intradependence than interdependence. There are shared interests – we should not talk about decoupling. But now is the opportunity to re-align with those who share our values, rule of law, predictability, and reliability.”

“Sovereignty” – always a watch word in Europe – has taken on new meaning from Covid and War. The inability to quickly manufacture masks or vaccines, the massive reliance on Russian energy and spike in energy prices, has been an enormous wakeup call here. Near shoring takes on special meaning for new opportunity, and many countries – especially in the East of Europe – are vying against places as far flung as Vietnam to Mexico to offer reliable, affordable solutions for their own supply chains all the while seeking who their best allies and trading partners will be over time.

Government regulation – at the local, state, national and European level – is among the top weights on economic growth and technological innovation. I met with nearly 100 early-stage tech entrepreneurs, each with stories on the difficulty in registrations, tax law, bureaucratic paperwork, ability to hire and fire and encourage hard work all embedded in their lives. The larger company executives had their own examples but also the scale and resources to navigate it. The young entrepreneurs are more mobile, and willing to leave if they cannot succeed – and represent some of the highest and most desired engineering talent globally. One German tech CEO said to me, “Unicorns are not the only measure of success of a tech ecosystem, but they tell you something and are models for the next generation of builders on how to succeed. There have been less in Europe than Israel, and some of those moved to America when they wanted to scale.” Another said to me, “Even in manufacturing – for which Europe is proud – how many multi-country Airbuses have there been built in the last decade? It’s all weighed down by regulation. We need a coherent, clearly stated agenda of opportunity.”

Government regulation looks at innovation from the lens first of what can go wrong, and not enough from what can go right. There was a fascinating, generational pull I observed in my travels that I often see in Washington, DC often around AI. It still never ceases to amaze me that this is the first unprecedented technological change where executives and government alike are trying to regulate it before we really know what it is. Said one AI investor in Berlin: “So, the EU, yet again, is the first out of the box with vague rules and frameworks that defines the varying levels of risk, but not that we will cure cancer with this technology.”

There is a welcoming and a new essentialism to relations with and leadership from the United States, but a desire for co-authorship. There was significant concern expressed about our commitment over time in Ukraine, especially with the additional war in the Middle East and in potential shifts politically in our own elections. One minister told me bluntly, “The world is a less safe place when you turn inward.” The Inflation Reduction Act still bristled many not so much for its substance – some said to me they wished they had their own policies to make their markets more attractive – but in style. “There was really little discussion in advance of it,” noted one politician, “And it felt like America will do what it likes, taking Europe for granted. We have choices now globally but want the right dynamic with your country. The transatlantic relationship has never been more important – but requires fewer surprises.” Another said to me, “Let us not brush aside how many differences there are also – we cannot push those under the rug. But it allows for us to acknowledge those differences while focusing what we collectively share.” Another noted, “At least the IRA was not a regulatory race to the bottom – piling on regulations and protectionism to relieve every grievance or concern – but a kind of race to the top. It’s about opportunity in a very changed environment – we should be able to find common ground in opportunity.” One diplomat reminded me: “Overall relationships are the best we’ve seen in years. We just can’t take it for granted. Relationships take work.”

The Transatlantic relationship is bigger than the geographic confines of Europe and America. Large players like India and Japan, and new economic opportunities across what is lazily named the “global south,” was front and center in almost every meeting I had on business and the economy. This, too, requires its own co-authorship, its own meeting of rising players on their terms. One minister told me, “One cannot have a China strategy without having a BRICS/rising economy strategy. China is and will play there. We will have to. And they will not want to choose sides, so we must be competitive.”

War in the Middle East was uniformly held as both tragic and the home of the greatest potential black swans. Every country I visited had a different emphasis and approach, France being most engaged both with their history in the region and demographic concerns at home, Germany fully supporting Israel (“Never again is now” resonated in several meetings). All worried about uncertainty and escalation on the ground and politically in their own backyards.

Climate seems as much now about mitigation and adaptation. Several people told me there are so many crises in the here and now, that addressing the serious climate concerns needs a new presentation. People tire of the abstract of the world coming to an end but can understand when change is presented in terms of jobs, infrastructure, and wealth creation. Ironically, at a time where France not only advocates for its leadership in nuclear energy – and believes this is a significant area for startups and innovation – and Poland is examining the France model for themselves, but Germany also just shut off its last reactor.

I was struck by the consistency on where challenges lie, and how each nation is navigating their own version of economic fragility in a multi-crisis world. Out of necessity and incentive, but also by choice, we are collectively glued to short term focused political realities and overly full inboxes that leave little time to plot for the medium and longer term. Creating breathing space to be longer term and strategic has never been more essential.

Competitiveness can be vague catch all term, but I have become convinced is the very framing for bringing the issues above together into something strategic and actionable across a new transatlantic era. It has special importance not only in today’s immediate concerns, but also in the medium and longer term societal, geopolitical, economic, and technological shifts in our midst.

I came back from my travels more convinced than ever that the European and America economic ties - always crucial - have a new essentialism in a world with at least five premises:

First, the very foundations of democracy and rule of law are being actively questioned and

challenged - at home and abroad – both because governance does not consistently deliver the goods and there are significant actors who want to leverage any weakness to divide us.

Second, competitiveness means we won’t always agree but, what we share, and our potential together, significantly outweighs this. It requires ever better and regular communication and a new “co-authorship” of skills and ideas in a new world.

Third, China underscores that the time is now. At one level it offers great opportunity to strengthen the transatlantic strategic vision together and to engage in the “rise of the rest” globally. At the same time, it invites creativity in that we all can benefit from economic opportunities with China more strongly together, while acknowledging and addressing that there are real shared interests (climate, pandemic, broader stability) impossible to resolve independently.

Fourth, AI and advances in genomics, genetics, energy, space and more open an ability to re-imagine what is possible to meet our challenges with greater speed, efficacy, and reach. Policy and regulatory making should start here.

Fifth, never has it been more important to find the common language and ground among policy making, politics, business, and technology. Historically leaders in these fields tend to be siloed in their own communities, interests, and language. The overlap and connection among them all are the only way to make progress and broaden the base of opportunity.

One way of looking at this period of uncertainty is that history has given us, who share so much in values, history, culture, interests, and economic opportunities an enormous tail wind.

We have to decide whether to take it or fly in the face of it.

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