Technology

Since the first transatlantic cable was laid in 1856, technology has served to unite Europe and the U.S. Recently, however, different approaches to technology and its regulation have strained the transatlantic relationship, as European regulators impose stricter controls on tech giants than the American “hands-off” approach.  Expecting Europe and the U.S. to agree to common transatlantic standards is unrealistic. Key differences between European and U.S. tech approaches make it challenging to coalesce on legally binding frameworks. An alternative may be to establish several shared baseline principles between Europe and the U.S. and then allow each side to build upon these with their own initiatives, thereby allowing for shared goals but different means localized to each country’s context.

By looking at the bigger picture, it becomes easier to find commonality and reinforce the transatlantic union. Artificial intelligence (AI) regulation was cited as an example of regulatory conflict. Seeking a harmonized approach to AI largely draws from European legislation that appears to be designed to curtail leading U.S. tech companies. Striving for compatibility over harmonization would ease this friction and allow both sides to forge their own prominent tech regulations.  

Transatlantic Leadership

Europe and the U.S. should be at the forefront of technological design and innovation to help promote a democratic society. Europe and America’s investments into emerging technologies should aim to propagate and foster transatlantic values, according to the NextGen members. The U.S. needs to shift some of its focus from private to public tech investment, like Europe does. The EU’s development of digital ID is a good example of how Europe is embracing technology to improve governance and public services. Furthermore, Europe and the U.S. should focus on an international approach to technology regulation and innovation. Developing countries and emerging markets will play a major role in the tech world. It’s critical that Europe and the U.S. acknowledge this within their regulatory approaches by accommodating international compatibility. To compete with China, more investment into education and talent programs fostering the development, deployment, and regulation of new technologies is required. Both Europe and the U.S. could benefit from knowledge exchange by introducing greater opportunities for scholarship exchanges between graduate-level STEM students and policymakers. This would widen the number of resources flowing into the development and regulation of new technologies. 

Challenges and Opportunities of AI

The opportunities and challenges of AI quickly became the focus of the conversation. One participant reflected on the potential cost to democracy of losing the AI race against China. They argued that tight AI regulations would limit Europe’s and the U.S.’ ability to compete with China and its one billion users by hampering innovation and competition. The consequence of losing AI market share to China may outweigh the cost of weaker regulatory standards. The participant questioned the value of Europe’s tight AI regulations and the extent to which the U.S. should follow them. However, to counter this argument, another mentioned that some parties blame the coup in Myanmar and the U.S. Capitol riots on deficient tech regulation. A full consideration of the wider costs and benefits of regulation is required by both sides. 

Concrete metrics should be developed to define the AI race and assess each country’s progress. By demarcating the race, countries can channel greater investment into that area to develop a competitive advantage.

The meaning of winning the AI race is ambiguous and covers a broad remit. It could denote successful research driving AI innovation, the integration of AI into the economy, or the adoption of AI within the military. Participants suggested that concrete metrics should be developed to define the race and assess each country’s progress. By demarcating the race, countries can channel greater investment into that area to develop a competitive advantage. Regulation was positioned as a tool for winning the AI race and a means of flexing global power. The far-reaching impact of regulation on tech market development can be seen through the EU’s General Data Protection Regulation (GDPR). Following the development of GDPR, India, Japan, and California generated their own comparable data standards. For China to gain access to these markets, its companies had to conform to standards set by the EU. Thus, regulations hold real power to influence company market share and drive global conformity. Tight transatlantic AI regulations could similarly boost the standing of European and US companies and constrain potential Chinese markets. 

Despite Europe’s strong stance on the economic and societal consequences of AI, it lacks coherence on the use of AI within the military. The neglect of such a key part of the conversation is a major oversight. Moving forward, Europe must decide how its military can adopt and benefit from AI and calculate how it will alter future conflicts. The challenge of predicting new technologies makes it difficult to futureproof regulation and tends to generate a regulatory lag. Although today’s focus of tech regulation is AI, soon, ground-breaking advances in quantum computing will dominate and destabilize established regulations. Europe and the U.S. must try to develop sustainable regulatory models that set clear guiding principles for tech development and can adapt to innovation.

Recommendations for strengthening transatlantic technology cooperation:

  • Invest in education and talent.

  • Lead in the development of new technologies.

  • Strive for compatibility over harmonization.

  • Pursue an internationalist approach over a transatlantic one.

  • Define concrete metrics for emerging technologies and relative capabilities.

NextGen Insight:

Grounding the EU-US Leadership in Technology through Value-based Cooperation

by Cezara Panait

Technological advancement has become a power changer within our societies and economies when it comes to setting the agenda on key policy issues worldwide. The outbreak of the COVID-19 pandemic amplified the role of technology. This incentivized governments and industries to (re)design solutions that will maximize the potential of technology for the well-being of citizens and also for the swift recovery of the global economy. Technological leadership is thus an essential factor, which is able to shift the balance of influence between the world trend-setters when it comes to governing the digital space.

Among the leading actors worldwide in the field of technology, the contributions of the European Union (EU) and the United States of America (US) in driving innovation and research brought by emerging technologies is well known. The influence of other global powers such as China cannot be overlooked when it comes to assessing the overall aim of various actors to achieve digital sovereignty. However, the perspectives of the EU and US are quite divergent from the approach taken by China. The future of our rights and freedoms in the digital realm, as well as the evolution of global markets, will greatly depend on the priorities of the players setting the global digital agenda. Hence, the aim of this paper is to ascertain the fundamental goal of EU-US leadership in technology – which is to focus on value-based cooperation – and to put forward some action-oriented recommendations that could contribute to fulfilling this objective.

Current state of play

The EU has taken a great stand in affirming its aim for achieving digital sovereignty. This enables the Union to boost its capabilities in terms of promoting its strategic autonomy, but also through significantly updating its regulatory framework[1] on areas such as Artificial Intelligence (AI), online platform regulation, data sharing or digital markets. The priorities set forward through the EU’s Digital Decade[2] plan have also a great emphasis on data governance, developing digital infrastructures and fostering technological uptake. The recently proposed pieces of legislation at the EU level consistently highlight the strict regulatory framework that the EU is promoting, with a particular interest on safeguarding rights and freedoms in the digital environment. As the EU is a trend-setter for normative action, incentivizing other states to put forward legislative initiatives through the so-called “Brussels-effect”[3], the future of technological development will be significantly influenced by the EU’s position on such matters.

As for US priorities in designing technology policies, innovation, competitiveness, and economic growth are among the top commitments[4] of the Biden Administration. Technological leadership is placed at the core of the US agenda, where innovation, education and training, robust infrastructures and international cooperation represent fundamental pillars. The US is investing a great number of resources into technological innovation, resulting in a momentarily substantial lead, while China rapidly approaches and the EU lags behind both of them[5]. In terms of research and development (R&D) in the field of technology, recent data based on the Science and Technology Indicators[6] of the Organisation for Economic Co-operation and Development (OECD) shows that both the US and China are holding front positions on global expenditure, thus leading to a highly competitive technology landscape.

The EU-US leadership in technology needs to promote a common vision on fostering innovation through research, development, and deployment of new technologies worldwide. Policy actions in these areas will influence the future of economic growth and sustainability.

Promoting a value-based approach to technology. Do we still share the same values?

There are fractured visions among the states inside the EU and the US, and domestic complexities which make it difficult to promote a single, unitary approach that would accurately describe the position of EU or US regarding technology policies. However, there are already initiatives (such as the establishment of the Trade and Technology Council) that incentivize both EU and US to realign based on democratic values to promote their common goals on technological advancement. Although former President of the US, Donald Trump, turned away from multilateralism through his actions and deviated from the course of strengthening the transatlantic alliance, President Joe Biden made further steps in advancing key policy issues to rely on a closer cooperation on technology matters between the US and the EU.  

Through foreign policy tools and high-tech policy, the EU and US should focus on mutual gain and shared objectives, rather than competition to achieve technological sovereignty on their own. There are still many fronts to be agreed upon, as seen with the divergent views of the EU and US on pivotal stances such as strategic autonomy or weapons technology. Beyond such conflicting standpoints, upholding the shared values of democracy, protection of fundamental rights, and ensuring that individual states are held accountable for respecting these values remains crucial. With democratic backsliding happening on both sides of the Atlantic, this values-based approach to technology could further advance the EU-US technological leadership.[7]

Opportunities for creating a common digital space between EU and US

One of the most important platforms for collaboration and for aligning mutual priorities on technology, trade, and economic issues between EU and US, is the newly established Trade and Technology Council (TTC)[8]. The Council’s objectives are enhancing technological and industrial leadership through boosting innovation, increasing investments in emerging technologies, critical infrastructure, and fostering competitiveness and prosperity.[9] Moreover, a cornerstone of the TTC function is advancing cooperation in the trade and technology area through shared democratic values, including respect for human rights, with the aim of achieving compatible standards and regulations.

Governing technology worldwide is now able to influence the balance of power, and this is a primary cause for why the EU and US should be leading figures promoting the positive side of technological advancement. Both the EU and US should strive to emphasize how emerging technologies can work for humanity, besides their potential misuses or disruptive effects. Through their strong cooperation, the EU and US could contribute to developing solid partnerships between key stakeholders, such as state actors, industry players and independent organizations. Any potential capabilities of technological progress should aim for compatibility and interoperability of products and services. Lastly, flexibility should remain the bedrock of stimulating innovation.

Recommendations for fostering the value-based cooperation between EU and US

EU and US should seek to become global standard setters in technology

In this complex geopolitical environment, the EU and US should set forward a common agenda that is deeply rooted in safeguarding democratic values and fundamental rights. The approach to technological development should be respecting the mutually agreed upon principles, such as those promoted through TTC. Such cooperation could prevent authoritarian visions from taking the lead in governing the digital space at the global level. 

  • Support coordination through multilateral platforms and partnerships with other nations 

    Beyond the EU-US relationship and their lead in technology regulation and further development and deployment, a stronger partnership should be established based on multilateral principles (including sustainable and effective cooperation, solidarity, and open dialogue). A more inclusive coordination could benefit the fundamental goal of achieving technological leadership through strengthening democracies and consolidating sustainability and economic opportunity. Over the decades, during the most pressing global challenges and threats, democratic values have been crucial in reinforcing the need for resilient alliances that uphold common purposes. In view of this crucial reinforcer, the North Atlantic Treaty Organization (NATO) remains one of the most prominent and influential alliances that works toward securing these values shared by both the EU and US. Moreover, NATO at the same time has a crucial role in facilitating further coordination between the EU and US to surpass threats and challenges, but also in aligning strategies and strengthening the industrial and security foundations of the transatlantic relationship.

  • Bridge the gaps between fractured visions among different states from EU and US

    When describing the value-based approach to technology, this broad understanding could only refer to the overall perspectives of the EU and of the US. However, notable divergent visions on fundamental values and the standpoints on technology policies are present within individual states from EU and US. Proposals in this area include reducing the discrepancies between states, which could be accomplished through the next recommendations, such as technology transfers between states, sharing best practices on technology development or increasing funds in technological R&D. More homogenous positions of states that agree with the overall mission of EU and US leadership in technology would make the shared objectives easier to achieve.

  • Encourage the exchange of technology and strive for tech compatibility

    Cooperating on technology transfers could achieve a level-playing field among states when it comes to technological power and innovation, or in the least it could help diminish the disparities between the most and least economically developed states. Moreover, when designing tech products or services, aiming for compatibility rather than harmonization could likewise support the reach of a common ground with potential for future evolutions in the tech field.

  • Increase investments in technological R&D

    Trade, investments, and economic cooperation are essential in leading the development of new technologies. Currently, the R&D funding focuses on the capacity of states to innovate and to prosper. While the US remains in a leading position worldwide, the EU should align with the US and consolidate efforts to increase the expenditure in R&D. Both the EU and US should diversify their resources in cutting edge technology areas such as AI, cyber security, quantum computing etc.

  • Access to the global supply chain should remain crucial

    Besides the policy discussions on technology development, one essential aspect of technological progress cannot be neglected: access to global supply chains. Currently, semiconductors are at the core of the world technological race. The global technological and industrial leadership depends on the most advanced chips, where the EU, US, and China are willing to set up chips ecosystems, including production mechanisms, to ensure the security of supply.[10] Close cooperation and a shared vision of the EU and US regarding the global supply chain will consequently impact the future of technological governance.

  • Create educational resources and attract new talents

    A final priority should focus on finding new talents and sharing best practices among people from both EU and US. They should be encouraged to learn from each other, to engage in fruitful exchanges regarding the future of digital space, and they should benefit from funds and opportunities to pursue research that could lead to the advancement of the EU-US value-based cooperation.

    There is great potential to be explored by the EU and US in reinforcing their strong relationship and consolidating the transatlantic community. The sense of shared goals and values will play a vital role for the future of technological advancement worldwide.