Technical sovereignty important issue for Europe amid tensions between US, China

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

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

Europe is currently heavily dependent on technologies that go beyond its borders, but the leaders of the continent want to change that.

“Strengthening Europe’s digital sovereignty is an important part of our digital strategy,” a European Commission spokesman, the executive arm of the European Union, told CNBC. “Europe can play a leading role on the world stage in terms of technology.”

At present, however, Europe has fallen behind when it comes to key technological infrastructures such as semiconductors and super-fast telecommunications networks.

Companies like Cisco in the US and Huawei in China have built the plumbing work that supports the internet for the 700 million inhabitants of Europe. Chips come largely from manufacturers, including 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 companies on a phenomenal scale.

“Nations have become concerned that technology will allow foreign powers to dominate them in all sorts of ways,” Abishur Prakash, a geopolitical specialist at the Center for Innovating the Future, a consulting firm in Toronto, told CNBC in an email. . “As a result, governments are looking at technology through a new lens.”

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

Over the past few years, the US has waged a war against Huawei, one of China’s valued technology companies, which is calling on other countries around the world to boycott it. The US has accused Shenzhen headquarters of building back doors in its equipment that could be used by the Chinese Communist Party for espionage purposes. Huawei has repeatedly denied the allegations.

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

“Given the growing tensions between the United States and China, Europe will not be a spectator, let alone a battleground,” European Commissioner for Internal Market Thierry Breton said last July. years in a speech. “It’s time to take our destiny into our own hands. It also means we need to identify and invest in the digital technologies that will support our sovereignty and our industrial future.”

Technical analyst Benedict Evans, a former partner of venture capital firm Andreessen Horrowitz, told CNBC that technological sovereignty in China and the West is interesting and important. “Your supply chain is in an unfriendly country, and both sides are concerned about it,” he said. “Differences between the US, the UK and the EU seem to me nothing more than populist handwashing.”

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

“Europe’s digital sovereignty rests on three pillars: computing power, control over Europeans over their data and secure connectivity,” a European Commission spokesman said. “To that end, Europe’s capacity to design and manufacture the world’s most powerful processors must be enhanced, innovative European clouds that guarantee data security must be created, and governments, businesses and citizens must have access to high – speed and secure 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 higher than 6% five years ago. The European Commission wants to increase the figure to 20% and is investigating investing 20-30 billion euros ($ 24-36 billion) to make it happen.

In terms of connectivity, the European Commission wants 100% of the European population to have access to the download speed of 1 gigabit per second; the average speeds are currently well below 100 megabits per second. It is starting to prepare for 6G and is looking at using satellites to radiate internet across the continent.

The Vice-President of Breton and the European Commission, Margrethe Vestager, on Tuesday set out the targets in a new “2030 Digital Compass” plan aimed at translating 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 computer tasks – in the next five years.

“Europe, as a continent, must ensure that its citizens and businesses have access to a choice of modern technologies that will make their lives better, safer and even greener – provided they also have the skills to use them,” Breton said. a statement said.

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

The European Commission insists that technical sovereignty is not about the “isolation” of Europe, but rather about the region defending its strategic interests and affirming its values.

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

Europe has already lost some of its largest and most important technological ventures to goblins in the US and China in the past decade. London’s AI lab DeepMind was sold to Google for about $ 600 million in 2014, while disk designer Arm was sold to Japan’s SoftBank in 2016. SoftBank is currently trying to sell Arm to US disk giant Nvidia for a $ 40 billion deal, in a deal that critics say will reduce competition.

Elsewhere in Europe, Apple bought part of Dialog Semiconductor, a German chip company, in a deal worth about $ 600 million, while PayPal bought the Swedish payment 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 technical sovereignty.

“As more governments use technology to regain control, they will eventually ‘limit’ their relationship with the rest of the world,” he said, adding that “nations will act against each other in a way that leads the world to is fragmented. ‘