Europe needs open markets, not sovereignty

The term of Europe's technological sovereignty is increasingly becoming part of political debates at European Union level. It is also increasingly appearing in new EU legislative proposals. However, there are concerns that efforts to secure technological sovereignty will lead to restrictions in the internal market as well as in free trade. This can also have negative impacts on innovations and future prosperity. It makes more sense to focus on technological autonomy, which will ensure immunity to economic pressure from third countries, as well as the right of choice for consumers and companies, who must be able to choose the best partner, product or service. Experts from the Czech Republic, Sweden, Ireland and Germany agreed on this on the international roundtable organized by the Confederation of Industry of the Czech Republic.

The Confederation of Industry is concerned about the growing pressure from some European politicians that the European Union should focus on achieving technological independence, sovereignty or autonomy. It is worrying that the European Commission has already incorporated these ideas into different strategy papers and legislative proposals. Technological sovereignty will also be addressed by the European Council at its next meeting. But it's not just business representatives who are worried. The European Commission has already received two letters signed by prime ministers from 12 Member States who are warning against the rise of protectionism.

“In order to achieve its goals in the field of the digital agenda, the European Union must not take the path of introducing protectionist measures that will restrict the EU's internal market and international trade. Not only European companies that could lose access to markets outside the EU would pay for it, but also consumers,” says Milena Jabůrková, Vice-President of the Confederation of Industry of the Czech Republic.

Although there are strong voices and calls for technological sovereignty in the EU, this concept still does not have any clear definition. The Confederation of Industry of the Czech Republic therefore organized an international roundtable, where experts from the Czech Republic, Germany, Sweden and Ireland were invited to look at this phenomenon from a business perspective. They focused mainly on the impact on the digital economy, which is one of the main drivers of Europe's future economic growth, innovations and export potential.

The Czech Ministry of Industry and Trade also warns against the growth of protectionism in the name of technological sovereignty. “We must be very careful not to cross the line of protectionism. The data economy is our future. Therefore, we need clear international rules for data flows or e-commerce. The EU should play a leading role in this area globally,” said Martina Tauberová, Deputy Minister of Industry and Trade of the Czech Republic.

During the roundtable discussion, experts agreed that it makes much more sense to talk about technological autonomy. It offers a choice on the basis of which every company or consumer could choose the best partner, product or service, regardless of where they are from. Such diversity then gives space for the development of the best innovations, from which the entire European economy would benefit.

“Any protectionist ideas must take into account that Europe is extremely dependent on exports, which represents 33 to 35 percent of GDP. This means that whatever we do can cost us dearly when third countries take countermeasures against European exporters,” warned Hosuk Lee-Makiyama, Director of the European Center for International Political Economy.

If there were European companies with a dominant position in global digital markets, technological sovereignty would probably not be discussed in the EU. “Our survey among German companies has shown that they feel too dependent on foreign key technologies such as software, virtual reality or quantum computers. Nevertheless, the EU's role should be to create rules and standards and then export them to the world. As was the case with GDPR,“ said Benjamin Ledwon, Head of the Brussels office of the German digital association Bitkom.

International cooperation will be crucial for Europe's economic success. The EU cannot close itself and create its own national champions who will not be able to succeed in international competition. “Limiting the choice of companies and consumers means lower efficiency. Politicians must support the innovation potential of European companies, not lock them up in the past. I want Avast's partner to be the best provider of cloud services, which is constantly innovating, not someone who is weak but meets geopolitical criteria,” said Michal Pěchouček, Chief Technology Officer of Avast.

Europe has jumped forward in the digital transformation due to a pandemic by several years. However, persistent differences in digital development can still be seen not only in different parts of the EU, but also between different sectors. “Our recommendation for policy makers is to support digital development and the development of the internal market. Europe should increase investment in strategic sectors and technologies, whether in terms of infrastructure or people's skills. But it must remain open,” said Erik O'Donovan, Director for Digital Economics at the Irish Industry Association Ibec.

The Confederation of Industry is closely following the whole European debate on technological sovereignty. Both at national and European level, we remind politicians that the EU should focus primarily on strengthening competitiveness, supporting innovations and ensuring the secure and free flow of data at European and international level.

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