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 core 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 state-backed German research agency, defines technological sovereignty as the ability of a state “to provide the technologies it considers essential for its well-being, competitiveness and ability to act, and power develop them or obtain the sources of other economic areas without unilateral structural dependence “.

Today, Europe depends heavily on technologies that come from 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 executive arm of the European Union, told CNBC. “Europe can play a leading role on the world stage in terms of technology.”

Today, however, Europe is lagging behind when it comes to crucial technological infrastructures such as semiconductors and super-fast telecommunications networks.

Companies like Cisco in the United States and Huawei in China have built the plumbing that sustains the Internet for Europe’s more than 700 million people. The chips come largely from manufacturers such as Nvidia, Qualcomm and Intel in the United States, Foxconn in China, Samsung in South Korea or TSMC in Taiwan, which China considers a pro-independence province. Then there are the American and Chinese internet platforms, such as 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 been concerned that technology will allow foreign powers to dominate them in all sorts of ways,” Abishur Prakash, a geopolitics specialist at the Center for Innovating the Future, a consulting firm, told CNBC by email. based in Toronto. “That’s why governments are looking at technology through a new goal.”

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 prized technology companies, and urged other countries around the world to boycott it. The United States has accused the Shenzhen-based company of building back doors to its equipment that the Chinese Communist Party can exploit 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 U.S. 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 mere spectator, let alone a battlefield,” European Union Internal Market Commissioner Thierry Breton said in a speech last month of July. “It’s time to take our destiny into our own hands. It 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 capital 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 parties are concerned,” he said. “The differences between the United States, the United Kingdom and the EU seem to me nothing more than shaking populist hands.”

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

“Europe’s digital sovereignty is based on three pillars: computing power, Europeans’ control over their data, and secure connectivity, ”a European Commission spokesman said. “To do this, we need to increase Europe’s capacity to design and produce the world’s most powerful processors, we need to create innovative European clouds that ensure data security and governments, businesses and citizens have access to secure, high-speed broadband networks. “

Chips are used to power cars, phones, high-performance computers, defense systems and AI, but Europe accounts for less than 10% of world production, up from 6% five years ago. The European Commission wants to increase this figure to 20% and is exploring investing between 20 and 30 billion euros ($ 24-36 million) to achieve this.

In terms of 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 began preparing for 6G and studied the use of satellites to transmit the Internet across the continent.

Breton and European Commission Vice-President Margrethe Vestager on Tuesday included the targets in a new “Digital Compass 2030” plan designed to translate 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 overlay and interlacing to perform computer tasks, over the next five years.

“As a continent, Europe must ensure that its citizens and businesses have access to a selection of state-of-the-art technologies that will make their lives better, safer and even greener, as long as they have the skills to use them. “Breton said in a statement.

“In the post-pandemic world, this is how we will shape a digitally resilient and sovereign Europe,” he added. “This is the digital decade in Europe.”

The European Commission insists that technological sovereignty does not consist in “isolating” Europe, but in defending its strategic interests and asserting 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 its most important and important technology companies to the greats of the United States and China in the last decade. London-based AI lab DeepMind was sold to Google in 2014 for about $ 600 million, while chip designer Arm was sold to Japan’s SoftBank in 2016. SoftBank is now in the process of selling Arm to the northern giant -American Nvidia chips for about $ 40 billion reported. an agreement that critics say will reduce competition.

Elsewhere in Europe, Apple acquired part of Dialog Semiconductor, a German chip business, in a deal valued at about $ 600 million, while PayPal bought iZettle for the start of Swedish payments for $ 2.2 billion. dollars.

But Prakash, of the Center for Innovating the Future, said the world will be divided as nations and nation-states strive for technological sovereignty.

“As more governments use technology to reassert control, they will also end up” limiting “their relationship with the rest of the world,” he said, adding that “nations will take action against each other so that make the world fragmented. “