The key issue of technical sovereignty for Europe amid tensions between the US and China

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

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

Europe is currently relying on technologies that go beyond its borders, but the continent’s leaders want to change that.

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

At present, however, Europe is lagging behind in terms of crucial technological infrastructure, such as semiconductors and super-fast telecommunications networks.

Companies such as Cisco in the US and Huawei in China have built the Internet-based sanitation facilities for Europe’s 700 million people. The 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 separatist province. Then there are the internet platforms in the US and China – think of 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 is allowing foreign powers to dominate them in all sorts of ways,” Abishur Prakash, a geopolitical specialist at the Center for Future Innovation, a Toronto-based consulting firm, told CNBC. “Because of this, 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.

In recent years, the United States has fought a battle against Huawei, one of China’s most popular technology companies, urging other countries around the world to boycott it. The US has accused the Shenzhen-based company of building back equipment that could 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 technology companies last year, including drone maker DJI. Meanwhile, Beijing has blocked US platforms such as Google, Facebook and Twitter for years.

“In the face of growing tensions between the United States and China, Europe will not be a simple person to participate in, let alone a battlefield,” European Union Internal Market Commissioner Thierry Breton 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.”

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

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

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

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 this is up from 6% five years ago. The European Commission wants to increase this figure to 20% and is exploring investing 20-30 billion euros ($ 24-36 billion) to make it happen.

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. He is starting to prepare for 6G and is looking at using satellites to broadcast the internet on the continent.

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

They also said they want Europe to build its first quantum computer – a machine that uses quantum phenomena such as overlap and entanglement to perform computational tasks – over the next five years.

“As a continent, Europe needs to ensure that its citizens and businesses have access to a range of state-of-the-art 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 shape together a resilient and digitally sovereign Europe,” he added. “This is Europe’s digital decade.”

The European Commission insists that the sovereignty of technology does not refer to the “isolation” of Europe, but rather to the region that defends its strategic interests and asserts itself in terms of 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 technology projects that can lead to European alternatives in key strategic technologies.”

Europe has already lost some of the largest and most important technology companies to the giants in the US and China in the last decade. London’s AI lab DeepMind was sold to Google in 2014 for about $ 600 million, while chip designer Arm was sold to Japanese SoftBank in 2016. SoftBank is now trying to sell Arm to US giant Nvidia chips for a $ 40 billion report, in a deal that critics say will reduce competition.

Elsewhere in Europe, Apple bought a stake in Dialog Semiconductor, a German chip business, in a deal valued at about $ 600 million, while PayPal bought iZettle to launch payments in Sweden for 2.2 billions of dollars.

But Prakash, of the Center for Future Innovation, said the world will become more divided as nations and nation-states strive to gain the sovereignty of technology.

“As more governments use technology to reassert control, they will also come to ‘limit’ their relationship with the rest of the world,” he said, adding that “nations will take action against each other in a way that it will result in the world becoming fragmented. “