Technological sovereignty is a key issue for Europe amid tensions between the United States and China


BRUSSELS, BELGIUM – DECEMBER 16: European Commissioner Thierry Breton.

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LONDON – The European Union is investing billions of euros in what it believes to be fundamental and core technologies as part of an effort to boost its technological sovereignty and reduce its dependence on the United States and China.

The Fraunhofer Institute, a German state-backed research agency, defines technological sovereignty as the ability of a state “to provide the technologies that it considers critical to its well-being, competitiveness and ability to act, and to be able to develop or obtain them from other areas. economic without unilateral structural dependence “.

Europe currently relies heavily on technologies that come from beyond its borders, but the continent’s leaders want to change this.

“Strengthening Europe’s digital sovereignty is a key component of our digital strategy,” a spokesperson for the European Commission, the executive arm of the European Union, told CNBC. “Europe can play a leading role on the world stage when it comes to technology.”

However, at present, Europe has lagged behind when it comes to crucial technological infrastructure, such as semiconductors and ultra-fast telecommunications networks.

Companies like Cisco in the US and Huawei in China have built the pipes that sustain the Internet for the more than 700 million people in Europe. The chips mainly come from manufacturers such as Nvidia, Qualcomm, and Intel in the US, Foxconn in China, Samsung in South Korea, or TSMC in Taiwan, which China considers a breakaway province. Then there are the US and Chinese internet platforms – think Google, Facebook, Instagram, and TikTok, which have hundreds of millions of European users sharing their personal data with businesses on a phenomenal scale.

“Nations have become concerned that technology is allowing foreign powers to dominate them in all sorts of ways,” Abishur Prakash, a geopolitics specialist at the Center for Innovating the Future, which is a consulting firm based in China, told CNBC. Toronto, by email. “Because of this, governments are looking at technology through a new lens.”

Increasing tensions

The ongoing geopolitical tensions between the United States and China have not gone unnoticed by European leaders.

In recent years, the United States has waged a battle against Huawei, one of China’s most prized tech companies, urging other countries around the world to boycott it. The United States has accused the Shenzhen-based company of building back doors in its computers that can be exploited by the Chinese Communist Party for espionage purposes. Huawei has repeatedly denied the allegations.

Under the Trump administration, Washington blacklisted dozens of other Chinese tech companies last year, including drone maker DJI. Meanwhile, Beijing has for years blocked US platforms such as Google, Facebook and Twitter.

“In the face of mounting tensions between the United States and China, Europe will not be a mere spectator, much less a battlefield,” Thierry Breton, the European Union’s commissioner for the domestic market, said in a speech last July. “It is time to take our destiny into our own hands. This also means identifying and investing in the digital technologies that will underpin our sovereignty and our industrial future.”

Tech analyst Benedict Evans, a former partner at venture firm Andreessen Horrowitz, told CNBC that tech sovereignty as it relates to China and the West is interesting and important. “Their supply chain is in a hostile country and both parties care about that,” he said. “The differences between the United States, the United Kingdom and the EU seem to me nothing more than populist handshakes.

Great investment

Since Breton’s speech, Europe has announced plans to invest billions in technologies ranging from semiconductor chips to new telecommunications infrastructure, with the vision that these technologies can help facilitate developments in others, such as artificial intelligence and cars. autonomous.

“Europe’s digital sovereignty is based on three pillars: computing power, control of Europeans over their data and secure connectivity,” said a spokesman for the European Commission. “To this end, Europe’s capacity to design and produce the world’s most powerful processors must be increased, innovative European clouds must be created to ensure data security, and governments, businesses and citizens must have access to networks of high-speed, secure broadband. “

The chips are used to power cars, phones, high-performance computers, defense systems and artificial intelligence, but Europe accounts for less than 10% of global production, although it is an increase of 6% five years ago. The European Commission wants to increase that figure to 20% and is exploring investing between 20,000 and 30,000 million euros (between 24,000 and 36,000 million dollars) to achieve this.

When it comes to connectivity, the European Commission wants 100% of the European population to be able to access download speeds of 1 gigabit per second; Average speeds are currently well below 100 megabits per second. It is beginning to prepare for 6G and is considering using satellites to broadcast the Internet across the continent.

Breton and European Commission Vice President Margrethe Vestager on Tuesday included the targets in a new “Digital Compass 2030” plan that is designed to translate the EU’s digital ambitions for 2030 into “concrete terms.”

They also said they want Europa to build its first quantum computer, a machine that uses quantum phenomena like superposition and entanglement to perform computing tasks, within the next five years.

“As a continent, Europe must ensure that its citizens and businesses have access to a selection of cutting-edge technologies that will make their lives better, safer and even greener, provided that they also have the skills to use them,” Breton said in a statement. .

“In the post-pandemic world, this is how we will together form a resilient and digitally sovereign Europe,” he added. “This is Europe’s Digital Decade.”

Do they take advantage of European innovators?

The European Commission insists that technological sovereignty is not about “isolating” Europe, but rather about the region defending its strategic interests and being firm in its values.

“It’s about protecting our companies against predatory and sometimes politically motivated foreign acquisitions,” Breton said. “And it’s about developing the right technology projects that can lead to European alternatives in key strategic technologies.”

Europe has already lost some of its biggest and most important tech companies to giants in the US and China in the last decade. London’s artificial intelligence lab DeepMind was sold to Google in 2014 for around $ 600 million, while chip designer Arm was sold to Japan’s SoftBank in 2016. SoftBank is now in the process of trying to sell Arm to the American giant. of Nvidia chips for $ 40 billion, a deal that critics say will reduce competition.

Elsewhere in Europe, Apple acquired part of Dialog Semiconductor, a German chip company, in a deal valued at around $ 600 million, while PayPal bought the Swedish payments company iZettle for $ 2.2 billion.

But Prakash of the Center for Innovating the Future said the world will become more divided as nations and nation states fight for technological sovereignty.

“As more governments use technology to reassert control, they will also end up ‘limiting’ their relationship with the rest of the world,” he said, adding that “nations will take action against each other in a way that results in the world become fragmented. “

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