Strengthening Europe's digital sovereignty, avoiding protectionism

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Last year's discussions about trustworthy 5G and cloud providers and the current impact of the Corona pandemic make it clear that successful and secure digitization requires mastery of trustworthy IT solutions. This requires a very high degree of digital and technological resilience. This is only possible with: own competencies, independently developed technologies and a holistic ecosystem.

In 2020, the Corona-pandemic has revealed the advantages and disadvantages of a digital world: Europe has experienced an undreamed-of surge in digitalisation. For example, many people started working from home and consulted online media. However, the crisis also revealed Europe's digital backlog: the availability of components for critical infrastructures, data protection-compliant video conferencing systems and IT skills are crucial success factors for successfully mastering longer-term crises.

Germany and the European Union as a whole have lost their own competences in many technologies that are central to the digital transformation – especially in the B2C sector – or have not advanced the development, implementation and dissemination of these technologies sustainably enough. US-American hyperscalers, i.e. high-performance cloud service providers, dominate the market, as do US-American and Chinese social networks. In order to be more resilient in the future, Europe must now clarify how it can be more resilient in terms of digital skills as well as in the development and production of key technologies such as AI and digital platforms. GAIA-X is a first promising pan-European approach to step-up Europe’s digital sovereignty. Turning towards "business as usual" would endanger Europe's long-term future and competitiveness.

Towards digital sovereignty

The concept of "digital sovereignty" has long been discussed in the political arena. Digital sovereignty is defined as the ability of citizens, companies, states and communities of states to act in a digitally self-determined manner. This includes the ability to holistically define and implement one's own strategic goals.

Layer model of digital sovereignty (Source: BDI)

From the above elaborated definitions, if follows that Europe's digital sovereignty does not only include a public/state dimension, but rather consists of an interplay of structural, organisational and individual dimensions. For example, companies must possess the ability to develop products, services and infrastructures independently. Also, they should be able to produce them, if required. They also need the ability to evaluate third-party components and to integrate them securely into their own systems. 

Citizens must also be empowered to act in a more digitally sovereign way. According to the D21 Digital Index 2019-2020, Germans are far from being digital natives: although two-thirds can transfer files from one device to another, the majority of Germans are not familiar with technical terms used in the digital world. The current lack of digital knowledge is (partially) due to the lack of structured teaching of digital skills. There is a need for action here. To ensure that citizens are not left behind in Germany’s digital transformation, a sound knowledge of common IT applications and the secure handling of digital applications and devices are a basic requirement. Strengthening Europe's digital sovereignty will only be possible, if all Europeans are digitally sovereign and digitally competent users.

Strengthening digital sovereignty, embracing globalisation

From the point of view of German industry, the goal of digital sovereignty is both an opportunity and a risk: an opportunity because working towards a more digitally sovereignty Europe entails the potential to increasing the resilience of Europe’s society, economy and politics. It could be risk, because it can also lead to protectionism, misallocations and self-sufficiency. Digital sovereignty must not be understood as a departure from globalised production, innovation and value creation processes. Rather, from the perspective of German industry, it is crucial to define all those technologies, competencies and framework conditions that make it possible to maintain a maximum degree of openness and at the same time be more resilient. In its position paper "Strengthening Europe's digital sovereignty sustainably", the BDI outlines a large number of concrete recommendations.

Digital sovereignty is thus not a luxury, but an absolute prerequisite to ensure that no one in Europe is left behind in the age of digital transformation, or even that Europe as a whole becomes dependent on third countries. Europe must therefore promote future-oriented technologies, strengthen the necessary skills and establish a holistic ecosystem.

Just an example of how these three dimensions mesh like gear wheels: The European Commission must support the development of forward-looking digital business models with an innovation-friendly framework. Building on the industrial strength of German industry, numerous companies - from start-ups to SMEs and international corporations - operate their own platforms. In addition, two-thirds of German companies state that digital platforms ensure the future viability of their business. This example demonstrates that the European Commission and national governments should provide a regulatory framework supporting the ideal position, in which many European companies are at the moment. Europe possesses an outstanding B2B platform-landscape. To ensure that these platforms remain economically competitive, an innovation-friendly regulatory framework and investments in digital skills are urgently required.