Data challenge accepted
Last year's report identified a number of opportunities for improved collaboration between policymakers and the European tech community. This year's report explores change in these areas, based on the results of the State of European Tech Survey as well as the POLITICO Pro Intelligence's analysis of the activities of the European Parliament (the legislative branch of the European Union). The European Parliament is a useful proxy for actual policy outcomes that may have a nearer-term impact on the European tech ecosystem, as it represents the "end result" of the European policy agenda set by the European Commission.
While China and the United States have been moving forward with determination on the AI front, Europe has the resources at its disposal to keep pace. The continent boasts cutting-edge education and research capabilities; it has more professional developers than the US and is home to 1/3 of high-quality research publications on AI. For Europe, achieving a global leadership on AI will require pulling all necessary levers to unleash innovation-led growth, ease transitions in the skillset of the workforce and foster technology adoption and diffusion. We estimate that if only 9 European “digital front-runners” countries were to adopt AI at scale, the potential economic impact could be as high as €42 billion annually (or 1.4% of GDP).
The EU should go beyond patching existing frameworks and bolstering effective enforcement. The increased use of AI systems, in particular, suggests that the EU’s regulatory vision must expand to include tech’s impact on discrimination and socioeconomic inequities. Rather than retreating or “sheltering in place,” now is the moment for the EU to translate the "new possible" of a post-pandemic world to its digital ambitions.
I am informing myself about a lot of the regulatory pieces, and I know about most of it. But you have to really search for it, it is not like you are getting the information easily. Also, I feel that the start-up economy is not a top priority of the EU. For example, Macron is doing a lot to boost France's start-up economy and also publicly. Not a lot of high-level European politicians are actively lobbying or even publicly caring about startups (except for the ones who can almost be compared to corporates regarding their size).
EU only has a small share of the world data economy and the EU is the only jurisdiction where text and data mining is an act relevant to copyright. In the US and Asia, copyright protects the artistic or literary form, not the information embedded in works. The EU commission should change the DSM directive to allow text and data mining, that is extracting information from works, without the present restrictions. The EU data economy will not flourish under the present DSM directive and this makes commercialisation of research results difficult in Europe. Startups based on EU funded research involving data science have to move to the US or Asia.
There are definitely reasons for optimism, not least as the European tech ecosystem is still evolving and improving in a number of ways. For one, people are moving back from established tech businesses in the USA and bringing great skills and strong experience with them. And, funding opportunities are improving; while there's still far more value being created in the US and China than in Europe, investors from the USA and elsewhere are also looking this way. Even during the first half of 2020 when so much was unknown, we saw some impressive investment news coming from European firms. However, there’s a way to go until Europe has the right environment to keep pace with tech elsewhere in the world, and more needs to be done by regulators and policymakers to protect competitive dynamics and help foster European tech champions. In particular, we would welcome greater harmonisation of laws and regulations between the Member States of the European Union.
Europe can do tech. Although the Old Continent is often viewed as a digital laggard, running far behind the frontier-pushing United States and Asia, the appearance is deceiving. Start-ups are strengthening. Venture capital is flourishing. Gone are the days when Europe’s “tech” sector largely comprised consumer-oriented e-commerce businesses – often blatant knockoffs of successful US companies. Today, Europe is home to pioneering innovation, led by real successes in fintech and digital health. Looking forward, the continent needs to be careful to avoid jeopardising this success through overregulation or protectionism. It should avoid turning a call into Digital Sovereignty into a self-defeating effort to protect European champions, impose data localisation and build a “European” cloud. Its upcoming Digital Services Act should set new standards of responsibility for Big Tech, without hindering European access to new technologies or imposing costs which force ambitious entrepreneurs to flee.