DigitalIndustryResearch & Innovation

Ensuring the digital transition between EU territories as well as in its transnational dimension

We started this new mandate already in the midst of a digital revolution. AI, self-driving cars, European cloud spaces- digital was an EU priority as we looked towards 2020 as the onset of Europe’s “Digital Decade”, in other words building a successful digital economy and society, and ultimately being a digital leader. Then you know what happened very soon after: Covid.

As the pandemic hit pause on many areas of our lives, solutions to bring these back to us lied in the digital realm. Schools were closed, so teaching went online. People were in quarantine, so grocery and other shops digitalized. Offices were shut, families and friends were physically separated, so online call platforms became a daily necessity for many people. We saw years of online growth take place in just months.

According to the Digital Economy and Society Index (DESI) 2021, all EU Member States have indeed advanced in the area of digitalisation. The overall picture across the EU is not the same, however, with a large gap still existing between the frontrunners and those with the lowest scores.

So the question is, how can we bridge this gap to ensure the digital transition?

While covid catapulted us forward into this digital decade, it also brought some other less welcome trends. More protectionist, inward-looking voices have grown stronger as a backlash to globalization, also within Europe, and ideas of creating a sovereign and autonomous EU have now become mainstream. This also applies to our digital policies, with the term technological sovereignty and strategic autonomy being heard now constantly as our ultimate goal.

These ideas of a stronger more autonomous Europe, nevertheless, can be part of an overall vision that remains open and resists protectionist temptations. Calls for digital sovereignty should not be calls for a closed European market.

We of course will need to look at our internal EU and national policies to achieve our goals – for instance, improving the digital skills of our citizens, improving connectivity, helping our companies integrate more and more digital technologies, and boosting investment. All of this is extremely important, which I have discussed many time before.

One of the priorities in the EU’s Digital Compass targets for instance is that by 2030, at least 90% of SMEs in the EU should use digital technologies at enterprise level.

In 2020, the number was at only 60% with a huge divide between the top, Denmark and Finland, with around 88%, and the lowest, Bulgaria and Romania, far behind at 33%.

To bridge the divide between richer and poorer Member States, we need to ensure that our companies, especially the SMEs, have the widest choice of relevant providers possible. If we limit their access to just select European providers through protectionist measures masked under the guise of sovereignty, prices will only increase and we will delay efforts to ultimately end this divide.

The only issue that justifies preventing the purchasing of digital infrastructure should be when it comes to real risks to security, for instance in the case of Chinese firms and the EU’s 5G network. Otherwise, we still need our partners around the world and they need us.

The newly proposed European Chips Act is a good example. During the pandemic, there was a shortage of semiconductors, which affected a wide range of sectors, from cars to healthcare devices. Boosting EU chip development and production in Europe is therefore very positive to be ready to face future shortages, along with generating innovation, growth and jobs in Europe.

However, to be fully “sovereign” would require multiple times more than the amount of 43 billion euros put on the table by Commission – money that neither it nor the Member States have to spare.

We should not aim for full self-sufficiency at the expense of better and more diverse supply chains. This is not realistic. The aim should be a strategic reserve for the next crisis and for the rest of the time, to allow the markets to provide cost-effective solutions for the developing Member States to catch up.

We must focus on creating and sustaining close ties with allies (in this case of semiconductors, especially with our ally Taiwan) if we really want to ensure security of supply. We need to keep this balance of improving conditions within the EU and maintaining good trade links abroad.

To conclude, to become a digital leader globally and to achieve our digital goals at home, the key lies ultimately in our own competitiveness, which must be done by creating an environment for innovation to flourish organically. Instead of investing time and resources on economic measures to protect from foreign companies, we should invest energy into tearing down walls (both within and beyond our single market) to allow our companies to truly thrive. We need to complete the single and digital single market, and also remove barriers with our partners, most notably the US.