A discussion on digital innovation, digital sovereignty and future competitiveness

In Europe, we seem to have finally realised that we cannot rely on other continents anymore, whether for security guarantees or technological innovation. For too long, we in Europe (by virtue of past prosperity) have relied on being able to buy the security guarantees or technological innovation we need. 

Recent times have shown that we can no longer rely on our big strong mates to come to our rescue when needed, and that former world-leading industries (e.g. automotive) are now being outcompeted by companies based on other continents.

Most of us working in tech seem to agree that future competitiveness is largely driven by digital tech innovation such as AI or the effective utilisation or development of available digital tools. In this context, it is frustrating to see that, until now, we in Europe have not been leading this development. Instead, we have bought this innovation from other continents, especially the US and its tech giants. 

Comparing the EU's GDP with that of the US, it can be seen that in 2008 our GDPs were basically the same. Today (less than 20 years later), the US GDP is almost 50% larger, while the trade balance in manufactured goods has remained more or less the same. The conclusion is that the change in GDP has been driven primarily by different types of tech. 

A recent French report says that in Europe we buy EUR 264 billion worth of tech annually from US cloud giants. With average price increases of almost 10% annually, that figure is also rising rapidly. The report makes a comparison where this is equivalent to about 2 million jobs. 

The same report suggests that if just 10% of these investments were shifted to Europe instead, it could lead to 331,000 new jobs by 2030. Although much of this money currently ends up in the pockets of shareholders, perhaps the most serious long-term effect is that the money is reinvested in new technological innovation, further cementing the tech giants' lead (already today, the 10 most used AI solutions in Europe are controlled by US or Chinese companies). 

When our dependence on these services is so great that access to the technology can be used for political pressure, we are in a very difficult situation.

Fortunately, the risks of this development seem to have finally reached our top politicians in Europe. The Commission is working on important incentives and regulations to boost digital investment in Europe and create digitally sovereign solutions that cannot be influenced by foreign powers. In Germany and Denmark, politicians have shown courage and are taking the lead with clear statements and guidelines to promote and support this development. 

In France and the EU, there are clear and strong initiatives in the AI field. European cloud providers are scaling up and will be ready to meet increased demand (also through the influence of, for example, the Eurostack initiative). Similarly, the European Open Source companies are gathering in various alliances and collaborations (e.g. OpenDesk, Apell and EOS Consortium) to meet increased demand for open software and local services to close part of the innovation gap. 

Europe has realised that clear initiatives and collaborations (such as Open Source software or communities) are the way forward to strengthen our continent in this area. It is also important to emphasise in this context that no new money is needed. If we in Europe could reallocate just a fraction of the money we currently spend on US cloud services, it would lead to a better balance, more jobs and a vibrant digital tech sector (see report above for examples).

Is my reasoning too simple and are there really alternatives that are as good as US cloud services on the market today? Yes - maybe my reasoning is simple, but certainly there are solutions that can compete with US cloud services/applications already today and if we do not start challenging the monopoly they have created by redirecting our resources, we will never get out of the dependence we have created. 

As a result, we in Europe are making ourselves targets for political pressure and spiralling costs that are simultaneously eroding our competitiveness. We don't need to buy all our digital solutions from European suppliers, but we do need to create a better balance and break dependencies. 

Over the summer, think about how you and your organisation can create greater strategic flexibility, invest in alternative solutions, reduce dependency on US cloud services and help build a strong European competitive continent, for our and future generations.

• Establish an exit strategy from US cloud services. What are the alternatives and how can you reduce your organisation's dependence on these services? 
• Investigate alternative solutions to existing platforms such as databases, middleware, integration platforms, etc. There are opportunities to both reduce dependency and lower costs. 
• Get involved in the debate. Make sure you are informed and make informed choices. 
• Establish partnerships with other organisations. This may be especially true for public organisations with similar needs. Push the envelope and collaborate to develop alternative solutions together. 
• If you are a politician - dare to take the debate, take a clear stand and initiate actions to steer existing investments in the right direction for a better balance regarding digital innovation.