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Global Cooperation and Open Competition are Essential to Advancing Innovation

Global tech trade association ITI welcomes European Commissioner-designate for Internal Market, Thierry Breton, as Europe’s new leader on digital policy. Amid calls to boost Europe’s “technological sovereignty” in response to concerns about the bloc’s diminishing contribution to global supply chains and its increasing dependence on foreign technologies, we wholeheartedly embrace Commissioner-designate Breton’s statement that this is not about protectionism, but about developing stronger players on key technologies in Europe, and stressing that together, we can help Europe be globally competitive.

Maintaining and increasing the ability to develop key technologies and ensure their availability to the EU in the future is a legitimate concern and an unquestionable aim for any government. Our industry acknowledges the sincere public interest objectives the EU is pursuing, and we want to be an active and constructive partner of the EU in achieving those aims.

The notion of technological sovereignty is closely intertwined with that of “strategic autonomy,” addressed by the European Commission’s own think tank - the European Political Strategy Centre (EPSC) – in its note on strategic autonomy in the digital age (July 2019) noting how digital technologies affect all dimensions of strategic autonomy. We support a direction excluding protectionism and discrimination as tools to achieve technological sovereignty. Doing so would actually harm European interests, and negatively affect larger societal and economic goals, such as the pursuit of innovation, prosperity, peace, and security.

Many have put forth suggestions to achieve “technological sovereignty," such as through public procurement, authorisation mechanisms, testing procedures and transparency requirements on value chains for critical infrastructure, or strategic restrictions to EU research funding. Most of these ideas can be implemented in ways that are compatible with Europe’s longstanding commitments to free trade and open markets, and should not be based on the false premise that excluding or otherwise treating foreign entities differently is the way to strengthen Europe’s technological autonomy. An open EU economy is in fact a major source of productivity gains and private investment, which in turn foster new technologies, research, and innovation. While economic considerations alone may not be driving the demands for “technological sovereignty,” one cannot and should not forget that globalisation also benefits European innovation.

In its 2016-2020 Strategic Plan for Trade, the European Commission recalled the need to look at “all the ways EU companies interact with the rest of the world," stating that, "today’s global and digital system is based on international value chains that see conception, design, and production happen in a series of steps across many countries.” The global nature of many companies is a crucial element of their innovation strategy, their contribution to Europe’s goal of maintaining and increasing the ability to develop key competences and technologies and ensure their availability in the future, their efforts to create jobs and enhance competitiveness in Europe, and their commitment to European values, regardless of where they are headquartered.

Europe’s long-standing commitment to free trade, multilateralism, and open and fair competition are key drivers of innovation and efficiency. Europe can strengthen its ability to shape the digital revolution by embracing globalisation, recognising the significance of its mutual interdependence with like-minded democratic countries like the U.S., Japan, and the rest of NATO, and building on the benefits and successes of global collaboration. Moreover, the EU is well placed to benefit from increased international engagement in a fair and free trade environment given its companies’ high level of competitiveness globally. Since the beginning of the century, EU goods exports have almost tripled, increasing by approximately EUR 1.5 trillion.

In a context of globally integrated markets and value chains, the EU will maintain a leadership role in developing trusted innovation globally by deepening its international engagement and ensuring its ability to shape international norms and set the rules of the road for the global economy. GDPR and the EU Cybersecurity Act are recent instances where Europe has been able to seize this opportunity. This can go hand in hand with the ongoing rethinking of regulation’s impact on domestic innovation, the development of startups, and industry’s competitiveness overall, which will support Europe’s goal of developing new technological capability, its resiliency, and its influence on the development and deployment of new technologies globally.