Eight digital priorities for the French Presidency

On 1 January 2022, France will take over the Presidency of the Council of the European Union with digital sovereignty as a key theme. By focusing on the eight following areas we can boost Europe’s capacity to act in a global digital economy.

1. Lay the foundations for a European industrial data-sharing culture, supporting the creation of European data spaces and avoiding restrictions to international data flows such as forced data localisation.
2. Promote innovation as a guiding principle of the new digital rulebook, for example with new laws like the DSA, the DMA and the AI Act, ensuring a clear scope and requirements and reducing compliance costs as much as possible.
3. Create the conditions for a decade of health innovation based on trust, by championing e-health initiatives and successfully launching the European Health Data Space.
4. Keep up the momentum on the digital decade, by setting a strong governance framework for monitoring Europe’s KPIs and encouraging more investment in multi-country projects.
5. Accelerate the twin green and digital transitions, by using climate-related regulation and investments to fully harness the power of digital technologies for cutting emissions in traditional sectors.
6. Ensure supply of semiconductors for the digital transition, through an EU Chips Act based on industry needs and aligning closely with international partners.
7. Reinforce Europe’s security in the digital age by finalising a new NIS framework on cybersecurity, with a clear harmonised scope and requirements, and strengthening coordination between the EU and NATO on investment in emerging and disruptive technologies.
8. Make tangible progress in the EU-US Trade and Technology Council, setting clear targets and demonstrating the benefits of international digital partnerships to citizens.

In detail

1. Laying the foundations for a European industrial data-sharing culture

Europe has strong data potential, but it remains untapped. In 2020, the data economy represented only 3 per cent of the EU’s gross domestic product (GDP). We believe that Europe can, and must, grow its data economy to 6 per cent of GDP by 2025.

Building on the recent agreement found for the Data Governance Act, the upcoming Data Act (set to be presented by the Commission early 2022) will have a key role in building a robust governance framework, accelerating data sharing and use through the European data spaces. Making public data available for research and innovation, supporting data altruism, safeguarding existing industrial data sharing initiatives and harmonising rules across Europe are all vital measures to turn our data-sharing ambitions into reality.

This is not limited to data generated and collected in Europe; digital knows no borders, and international data flows are necessary for our industries to grow at home and abroad, and for Europe to attract the world’s best businesses and investors. Data initiatives in the French Presidency should avoid measures which place blanket legal requirements to store data in the EU. Our recent study shows that restrictions to cross-border data flows could cost the EU economy up to €2 trillion of potential growth and two million jobs by the end of the Digital Decade.

Gaia-X

Cloud uptake is still lagging in Europe, with only 36% of businesses using advanced cloud services. We believe that this can reach 50% by 2025 if companies receive the necessary support, and by raising awareness and tackling the legal uncertainty that cloud providers and users may experience. This is one of the objectives of the Gaia-X project, which DIGITALEUROPE joined as day-1 and Board member. To boost data sharing and use among companies of all sizes and to increase cloud uptake in Europe, we believe that Gaia-X should  first focus on selected actions and deliverables for 2022, improve internal governance and coordinate with other European cloud initiatives to create synergies. One priority for 2022 should be the support of national hubs to expand existing initiatives and encourage regional and cross border data sharing uptake. It is also crucial to create a sandboxing environment where companies can test concrete data-powered business use cases and data spaces based on collaborative and transparent rules.

2. Promote innovation as a guiding principle of the new digital rulebook

DSA – Digital Services Act 

The Digital Services Act proposal marks an important update to internet regulation in Europe. We welcome that the DSA  maintains the key principles of the  eCommerce Directive, which have helped Europe’s digital economy to flourish. We believe the DSA due diligence requirements such as trusted flaggers, trader traceability, and transparency mechanisms, if developed in a proportionate and workable way, will lead to a safer online environment and boost trust in the internet. However, internet regulation is a delicate balancing act and it is crucial that the French Presidency also maintains strong protections for fundamental rights.  Read more here.

DMA – Digital Markets Act

Platforms have driven significant innovation. At the same time, fast-moving markets can give rise to challenges which require intervention. We welcome the important discussion about improving contestability and fairness and hope that the DMA can provide workable solutions for real challenges. The DMA needs a clearer definition of gatekeepers to provide legal certainty and a stronger regulatory dialogue between platforms, enforcers and users to ensure an effective and proportionate approach. Read more here.

AI Act

We support a risk-based approach protecting fundamental rights while ensuring that businesses can continue to innovate and make Europe become a global AI hub. To ensure legal certainty, the overall scope and requirements should be further refined. Such requirements should be detailed in harmonised standards, building on the New Legislative Framework and its fundamentals, as we hope to see recognised in the European Standardisation Strategy. Support measures should be designed to mitigate expected high compliance costs and paperwork, particularly for SMEs and start-ups. Read more here.

3. Create the conditions for a decade of health innovation based on trust

Trust is the backbone of digital health, and collaboration is the key. This was the theme of our latest paper, A digital health decade: from ambition to action.

Companies and governments should collaborate to define or update their national healthcare data platforms strategies and to select common standards (such as for data quality and interoperability), protocols, and best practices (such as for encryption, de-identification, and transparency). Given the current and projected public health challenges, we cannot afford to start from scratch.

• To enable research and innovation – anything from basic research to training and testing machine learning algorithms – we can achieve a lot by connecting a federated network of controlled data sources. But this will still require harmonisation of data protection rules, and approaches for de-identification methods through guidelines from the European Data Protection Board.
• For the primary use of health data – for healthcare delivery – we encourage greater harmonisation of rules and practices in Member States that should allow for innovative digital health solutions.
• Alignment with the existing and developing legislative framework is a must. The EHDS will not exist in a vacuum, and the GDPR, regulations on medical devices and the coming AI Act should complement one another. We should aim to limit the complexity of requirements for all parties – big or small – to realise better health outcomes.

4. Keep up the momentum on the digital decade

It is very good news that 26% of the EU’s Recovery and Resilience Funds have been dedicated to digital spending. It is now essential that those funds are spent in areas that will support the sustainable digitalisation of our society. Learn more about DIGITALEUROPE’s digital spending priorities in areas like skills, private sector digitalisation, connectivity and infrastructure here.

In the next six months, there should be two areas of focus to maximise this opportunity:

• To realise the promise of the Digital Decade, we will need a strong governance framework led by a Commission equipped with the necessary funding, tools and personnel, to monitor the spending. The Path to the Digital Decade communication is a good start, and the French Presidency will have an important role to play in ensuring that the funds are spent wisely.
• We believe that establishing multi-country projects will be key to boost the potential for scaling in Europe. Without a strong push from the Commission and the French Presidency, it is unlikely that Member States will agree to pool their nationally-allocated funds. We should build on existing collaborations like the Three Seas Initiative and Digital V4, and back them up with funding.

5. Accelerate the green and digital transitions

Digital technologies have the potential to help Europe’s most energy intensive sectors save 20% of global CO2 emissions. To reach the EU’s ambitious climate goals, we need to look at digital and climate action together. We cannot achieve one without the other.

While much progress is being made, in reality we see that these two goals are too often considered in isolation. For example, in the recent “Fit for 55” legislative package, the Taxonomy Regulation and the investment plans at national level, the connection between digital action and climate action is underdeveloped. This is a missed opportunity.

In our recent paper, we recommend eight actions, including setting ambitious KPIs for the uptake of clean technologies, data cooperation, boosting connectivity and developing international standards.

We also outline 22 case studies where digital technologies are already being put into action to improve our climate. For example, a smart city project in the City of Vienna was realised by a combination of innovative digital solutions and data analytics, enabling, amongst other environmental benefits, a reduction of 71% of CO2 emissions in a large residential building. The project plays a key role in the ambition of the City of Vienna to reduce its environmental footprint.

6. Ensure supply of semiconductors for the digital transition

Europe’s share of global semiconductor production has declined from 22% in 1998 to 8% today. The European Chips Act is a notable opportunity to reverse this trend and secure a more resilience European semiconductor ecosystem overall. We call on the Commission and Member States to:

• Bring together in the European Semiconductor Alliance microelectronics companies, their design and manufacturing supply chain, as well as downstream industries, including chip users
• Make public investments based on market demand. The EU should help expand production capacity for chips of any size, as  determined by market dynamics.
• Improve the efficiency of administrative systems, speed up IPCEI selection and execution procedures, and introduce innovation measures like tax credits.

7. Reinforce the Europe’s security in the digital age

Cybersecurity: the NIS2 Directive

As more and more businesses and governments move services online, that increases our vulnerability to cyberattacks. Cybersecurity initiatives at the EU level are therefore more important than ever before.

Following the 2016 NIS Directive, we need to make sure that the revamped Directive is robust and pragmatic, without overlapping on other cybersecurity frameworks. Notably around the circumvention of voluntary uptake of European cybersecurity schemes envisioned under the Cybersecurity Act. The NIS2 should strike the balance between ensuring that those entities in scope are not completely overburden with compliance and reporting obligations against ensuring the level of cybersecurity resilience in Europe remains of high standard.

Cyber Resilience Act

We need horizontal cybersecurity legislation for connected products, as existing product legislation (RED delegated acts) is not suitable to address product cybersecurity. Potential cybersecurity requirements under current product rules should be limited to basic product-related requirements.

EU and NATO collaboration on funding emerging technologies

Once dominated by the public sector a small number of firms, security innovation is increasingly coming from smaller non-traditional players. Both the EU and NATO have significant funds available for the promotion of emerging technologies. It is our view that this funding should be coordinated as much as possible to avoid overlaps and reduce complexity for businesses.

8. Deliver results for citizens through the EU-US Trade and Technology Council

The transatlantic trading relationship is worth a trillion euros per year and creates millions of jobs. As long-standing allies, if we are able to set the standards for new technologies together, they can have a global influence.

After four years of division, the Trade and Technology Council (TTC) is an unprecedented opportunity to provide real solutions to problems faced by citizens, workers, and industry. We called for the launch of the TTC back in January, provided concrete industry input in July, and addressed political leaders at the inaugural TTC Meeting in Pittsburgh. The work now turns to the working groups.

By the end of the French Presidency, we hope that the forum will have made progress across all ten working groups, launching a number of new initiatives that can deliver for citizens as soon as possible. The Council should also set clear targets for six months, twelve months and by 2025, and DIGITALEUROPE will provide expert input at the Masters of Digital conference in February 2022.

The TTC can provide a blueprint and inspiration for further international digital partnerships, where progress can be made in boosting trade and aligning on standards. It is therefore vital that we follow through on the promise shown so far.