5 ways to boost Europe's Economic Security
Today the Commission will announce the next step of its Economic Security Strategy, with actions on export controls, the screening of investments, both into Europe and outside, as well as new measures to support research.
“To become #aDigitalPowerhouse, Europe must have access to and be a creator of the critical technologies that will define the future.”
Right now, the EU has very few standard-setting tech companies left: only 11% of the world top tech companies and only 8% of unicorns.
This is a common problem we must address now.
Back in June last year, the European Commission published its European Economic Security Strategy. It identified four technologies – AI, advanced semiconductors, quantum and biotechnology – that are essential to our security and economic prosperity and therefore need special attention.
The strategy in 3 Ps:
- Promoting the EU’s economic base and competitiveness;
- Protecting against risks; and
- Partnering with the broadest possible range of countries to address shared concerns and interests.
Today it will announce the next step of that strategy.
5 key things to look out for:
1. Don’t forget the promote and partner!
Today’s announcement is heavy on risk management and the protect aspect of the strategy – that is, ensuring that European technology and know-how do not get into the wrong hands. This is important, but it cannot be the central pillar.
We should avoid the temptation to reach for too many protective tools which create huge burdens on companies. Where we use them, they must be aligned with our international partners to avoid a spaghetti bowl of global rules.
We should focus instead on boosting the competitiveness of Europe’s digital industries, and strengthening our digital partnerships with likeminded international countries as much as possible.
2. Lean on our greatest assets, the Single Market and people
As we outlined in our recent manifesto, we should focus on removing barriers for companies looking to scale here in Europe. Too many of our brightest start-ups head abroad because of difficulties growing across borders in the EU.
This could be because of variations in how EU law is put in place in 27 member states, different interpretations of data rules, or complicated business reporting of the same thing multiple times.
We also need an EU-wide approach to critical tech skills. We still lack between 300,000 to 1 million cyber specialists. Yes, education is dealt with on a country level, but more can be done to coordinate and level-up. For example, we should develop a cyber skills campus in 10 European countries, based on the public-private model pioneered in France.
3. Closing the funding gap
US investors injected $170 billion into start-ups in 2023, with a large proportion of that going to AI. Whilst we hope for a similar venture capital market in Europe to flourish, we must use all the public funds at our disposal. But they must be better directed, and easier for our smaller innovators to access.
The EU spends billions every year but it could be more targeted on critical technologies. That’s why we call for a 25% funding target for technology across all EU programmes, including Horizon Europe – just like we did with the COVID recovery funds. We must also revolutionise procurement, using digital tools and cutting paperwork, so that innovative tech companies can access it more easily.
Initiatives like the Strategic Technologies for Europe Platform (STEP) are welcome but €10 billion is a drop in the ocean, and from what we hear it may end up being significantly less than that.
4. We cannot forget the role of regulation
The last four years have seen an unprecedented amount of EU digital regulation governing data, AI, cybersecurity and other areas critical for our economic security.
In many areas the EU is pioneering the laws and hoping others will follow. In the meantime, this means extra burdens for companies in Europe that companies outside won’t have. This is why the next Commission must focus laser-like on simplifying and implementing all the rules in place.
5. Add a new P – Public/Private Partnerships
On critical technologies, it is the industry that holds both the know-how and innovation potential. The Economic Security Strategy should find ways to build in private sector expertise at every step of the process. For example by setting up a Critical Technology Board with experts in the four critical technology areas.
“In sum, to promote European economic security, we need successful European digital companies, scalable markets and strong partnerships with like-minded third countries.”
To read more, please see our new manifesto, Europe 2030: A Digital Powerhouse.
Cecilia Bonefeld-Dahl, Director General DIGITALEUROPE
