Cecilia Bonefeld-Dahl / Feb 2022
Gina Raimondo, Cecilia Bonefeld-Dahl and Margrethe Vestager.
On the first anniversary of the Biden administration, a great deal of work has been done to repair the transatlantic relationship, following four years of divergence. In 2021, the launch of the EU-US Transatlantic Trade & Technology Council (TTC) marked the first major milestone of this commitment.
Yet time is running out. In just over two years, both the US government and the European Commission will reach the end of their mandate. The EU and US make up more than 40% of global GDP. What we do together matters.
There is no time to lose. The TTC must avoid the pitfalls of previous bilateral initiatives. Almost ten years later, the failure of the Transatlantic Trade and Investment Partnership (TTIP) is still fresh in our minds. To avoid meeting the same fate, the TTC must show that it can deliver.
The stakes are high
2022 will be a year of continued challenges for both Europe and the US.
Climate change exacerbated most of the natural disasters we experienced in 2021, from floods in Europe to wildfires in the United States.
The semiconductor shortage is still wreaking havoc on industries across Europe and the US and has resulted in tremendous supply chain disruptions.
The digital skills gap is increasingly hindering economic growth in the EU and the US, with only one-third of working-age Americans being able to use basic online tools, and over 55% of EU companies experiencing difficulties in recruiting ICT specialists in 2019. We want the next generations to be creators of technology, not just users.
Such shared challenges call for joint actions. In our recent paper we called for the EU and US to set ambitious joint targets for inclusive and green tech. For example, over 20% of the workforce can be retrained with digital skills, including the training of at least 250,000 cybersecurity specialists across the Atlantic to address the EU’s 291,0001 and the US’ 465,0002 skills gap. Greenhouse gas emissions can be reduced by 35% below their 2005 levels, if the TTC succeeds in aligning regulatory action for industry, with green digital technologies at their heart. Digital technologies can help other industries save 20% of global CO2 emissions by 2030, and the TTC has the potential to accelerate sustainable economic activities enabled by digital across all sectors.
To handle the current and future supply chain disruptions, the EU and the US need to work together. The EU has just unveiled the European Chip Act proposal as a tool to increase its resilience to future crises, but the semiconductor space is global by nature. It is essential to use the EU-US Trade and Technology Council as a forum to promote a geopolitically balanced production and transatlantic innovation partnerships.
Unlocking the potential of innovation
On the data front, the situation is not all roses either.
The US is the EU’s largest data partner. If cross-border data restrictiveness on exports gets any tighter, the EU stands to lose over 2.5 per cent of its total GDP by 2030. However, if we manage to turn the tide – as data transfers will be a key enabler for many of the TTC’s objectives –, over 2 million jobs can be created in Europe by the end of the Digital Decade if we guarantee international data transfers.
Data is also vital to accelerate AI uptake in key sectors such as health. However, the prevailing uncertainty in both the EU and US markets around health data and pharmaceutical research is posing significant obstacles in front of European and American health innovators.
Oncompass Medicine is a Hungarian AI-based medical software company that was crowned the winner of DIGITALEUROPE’s Future Unicorn Award in 2021. Its journey towards expansion and innovation has been often hindered by this uncertainty. In the words of CEO István Peták, “It would be great to have at least a mutual understanding of health data sharing, AI risks and applications, to support entities like ours in a faster rollout of our products.”
Young tech innovators in Europe and the US are struggling with barriers of regulatory fragmentation to scale up and expand overseas, despite belonging to a sector – the digital economy – that grows two and a half times faster than any other.
Ivan Jelušić, co-founder of Croatian scale-up Orqa FPV, notes that his company’s biggest barrier in scaling up are the differences in European and US regulations, including compliance issues and protection of privacy and personal data.
That’s exactly where the TTC can make a difference, by helping harmonise regulations on both sides of the Atlantic. From setting common standards for trustworthy AI to better aligning on cloud and connectivity policies, European and American businesses and citizens alike can benefit from a dynamic transatlantic cooperation.
A tech-driven security policy
Cyber-attacks have become more complex and ever more frequent, and technological supremacy is once again at the heart of international security. This calls for coordination with our allies.
It also means that alliances like NATO need to keep their edge when it comes to emerging and disruptive technologies. Unlike the past, where the internet and GPS were government inventions, innovation in fields like AI and quantum computing is coming from the private sector.
Beyond the TTC, it is crucial that the transatlantic relationship – through bodies like NATO and the EU – remoulds itself for this new era. They must harness the creative powers of the technology industry, as well as modernising their own processes and – crucially work together with those that share common goals.
Digital knows no borders, and as we face bigger and bigger global challenges, there has never been a more pressing time for international cooperation on technology. Yet the window of opportunity for progress is closing.
Let’s not miss it.