Europe out of the Digital Olympics
Victor Ângelo
The
progress of the digital age, which has accelerated over the last decade, will
be even faster, deeper and more pervasive in the coming years. Major
transformations in information processing and use are coming, with amazing
advances in artificial intelligence, 5G networks, new generations of
microprocessors, 3D printing techniques, and in protecting cyber systems from
hostile attacks. These transformations will have an enormous impact on the
exercise of political power, on the economy and functioning of societies, on
individual attitudes, as well as on international relations.
Digital
mega-investments are taking place today in the United States, China, Taiwan,
South Korea, and Japan. The latter three produce 60% of the semiconductors and
are moving at a rapid pace towards faster, more efficient processors, and much
less gluttonous in terms of energy consumption.
Where
will Europe stand in this new technological framework? Ursula von der Leyen
last week defined the digital domain as a priority. The EU currently produces
about 10 percent of the world's semiconductors. It has lost a lot of ground in
the last 30 years. In 1990, it accounted for 44 percent of global transistor
production. The ambition defined by the
President of the European Commission is to reach 20% in 2030. For this, it will
be necessary to mobilize public and private investments in the region of 160
billion US dollars. It won't be easy. It is a lot of money, but insufficient
when compared with the plans of others. South Korea, for example, is ready to
invest 450 billion dollars. Taiwan Semiconductor Manufacturing Co. (TSMC), the
world's number one chipmaker, will invest $100 billion over the next three
years to expand its capacity. Interestingly, part of this investment will take
place in China, across the strait, and part in the United States. Thus,
strategic interdependencies are created.
Europe
is lagging not only in the field of processors. We are out of the league of
champions when it comes to technology platforms. When you look at the top 10,
you notice that six are American and four are Chinese. The platforms we know,
in this part of the world where we are, such as Facebook, Twitter, Netflix,
Google or even Uber, Airbnb or Booking, all have one or more Chinese
competitors (Tencent, Weibo, WeChat, Baidu, iQuiyi and more).
Our
picture is also not the best when it comes to the so-called unicorns. Many of
the new applications and technologies are developed by newly established
companies that the capital market values above $1 billion and calls unicorns.
These companies are very important creative agents in the areas of artificial
intelligence, financial software, e-commerce, and e-logistics. Digital giants
follow them closely and eventually acquire the most innovative ones. Today, the
inventory of unicorns totals 827 companies. Of these, only 57 are based in the
EU area, with France and Germany at an absolute advantage in the tiny European
share.
Given
this, what does digital sovereignty mean in the EU? The question is even more
pertinent if one takes into account the correlation between defence and
artificial intelligence (AI). A recent report by the National Security
Commission on Artificial Intelligence, a US commission, shows that the major defence
competition with China is primarily about AI. Whoever wins that race will have
a critical advantage over the other side. The EU is out of this championship.
Many
other questions remain, concerning the protection of people's rights, the fight
against information manipulation, or even the meaning of democracy in robotic
times. All of them are important. But
for us Europeans, the fundamental challenge is to clearly define a plan that
allows the EU to leap from the periphery to the centre of the digital issue.
(Automatic translation of the opinion piece I published in the Diário de
Notícias, the old and prestigious Lisbon newspaper. Edition dated 24 September
2021)