Key issue of technological sovereignty 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 sees as fundamental and essential technologies as part of an effort to strengthen its technological sovereignty and reduce its dependence on states- United and China.

The Fraunhofer Institute, a German state-supported research agency, defines technological sovereignty as the capacity of a State “to supply the technologies which it considers essential for its well-being, its competitiveness and its capacity to act, and to be able to develop them or to obtain them in other economic fields without unilateral structural dependence ”.

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

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

Currently, however, Europe has fallen behind when it comes to critical technological infrastructure such as semiconductors and super-fast telecommunications networks.

Companies like Cisco in the United States and Huawei in China have built the plumbing that underpins the Internet for more than 700 million people in Europe. Most of the chips come from manufacturers, including Nvidia, Qualcomm and Intel in the United States, Foxconn in China, Samsung in South Korea or TSMC in Taiwan, which China considers a separatist province. Then there are the American and Chinese internet platforms – think Google, Facebook, Instagram and TikTok – which have hundreds of millions of European users, who share their personal data with businesses on a phenomenal scale.

“Nations are concerned that technology will allow foreign powers to dominate them in all kinds of ways,” Abishur Prakash, geopolitics specialist at the Center for Innovating the Future, a Toronto-based consultancy, told CNBC by email. . “Because of this, governments are looking at technology from a new perspective. “

Rising tensions

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

In recent years, the United States has fought a battle against Huawei, one of China’s top tech companies, urging other countries around the world to boycott it. The United States has accused the Shenzhen-based company of building backdoors into its equipment that can be exploited by the Chinese Communist Party for espionage. Huawei has repeatedly denied these allegations.

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

“Faced with the growing tensions between the United States and China, Europe will not be a mere spectator, let alone a battlefield,” said Thierry Breton, European Union commissioner responsible for the internal market, in a statement. communicated. last july speech. “It’s time to take our destiny into our own hands. It also means identifying and investing in digital technologies that will underpin our sovereignty and our industrial future.

Technology analyst Benedict Evans, former partner of venture capital firm Andreessen Horrowitz, told CNBC that technological sovereignty over China and the West is interesting and important. “Your supply chain is in a hostile country, and both sides are worried about it,” he said. “The differences between the US, UK and EU seem to me nothing more than populist hand gestures.”

Big investment

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

“Europe’s digital sovereignty is based on three pillars: computing power, Europeans’ control over their data and secure connectivity,” said a spokesperson 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 that ensure data security must be created, and governments, businesses and citizens must be created. have access to secure high-speed broadband networks. . “

Chips are used to power cars, phones, high-performance computers, defense systems and AI, but Europe accounts for less than 10% of global production, although that figure is 6% there is five years old. The European Commission wants to increase this figure to 20% and plans to invest 20 to 30 billion euros (24 to 36 billion dollars) to achieve this.

In terms of 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. He is starting to prepare for 6G and plans to use satellites to broadcast the internet across the continent.

On Tuesday, Breton and European Commission Vice-President Margrethe Vestager included the goals in a new ‘Digital Compass 2030’ plan designed to translate the EU’s digital ambitions for 2030 into ‘concrete terms’.

They also said they wanted Europe to build its first quantum computer – a machine that uses quantum phenomena such as 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 choice of cutting-edge technologies that will make their lives better, safer and even greener, provided they also have the skills to use them, “Breton said in a statement.

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

Are European innovators the prey?

The European Commission insists on the fact that technological sovereignty does not consist in “isolating” Europe but rather in the region defending its strategic interests and affirming its values.

“It’s about protecting our businesses from 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 behemoths in the United States and China over the past decade. London AI lab DeepMind has been sold to Google in 2014 for around $ 600 million, while chip designer Arm was sold to Japanese SoftBank in 2016. SoftBank is now in the process of tries to sell Arm to US chip giant Nvidia for an announced amount of 40 billion dollars, as part of an agreement 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 Pay Pal bought Swedish start-up 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 strive for technological sovereignty.

“As more and more governments use technology to reassert control, they will also end up ‘limiting’ their relations with the rest of the world,” he said, adding that “nations will take each action. against others so that the world becomes fragmented. “

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