EIT Digital chief: With no serious competitor to Facebook, the situation is not good

CEO of Facebook Mark Zuckerberg (C) arrives to testify before the House Energy and Commerce Committee hearing on 'Facebook: Transparency and Use of Consumer Data' on Capitol Hill in Washington, DC, USA, 11 April 2018. [EPA-EFE/MICHAEL REYNOLDS]

This article is part of our special report Pushing Europe’s tech frontiers.

Europe needs to develop competitors to tech giants like Facebook instead of introducing more regulation of the tech industry, EIT Digital CEO Willem Jonker told EURACTIV in an interview. 

He said the next EU budget should focus on helping home-grown European companies use the continent’s research in areas like artificial intelligence to compete on a global scale.

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Looking at the Juncker Commission and the European Parliament term winding down next year, how does that in political terms affect EIT Digital? What are your priorities now?

If you look at the Commission’s innovation research programme and Horizon Europe you see that for EIT Digital the situation looks very good. First of all, for EIT, there’s a growing budget, there’s much more emphasis on innovation. And we see outside Horizon Europe an additional 9 billion for digital, in particular around artificial intelligence and cybersecurity.

All in all, I think compared to previously, digital is much more exposed in the plans of the Commission, so that’s very good news. Although I still think that the impact of digital is not always very well understood. We’re making enormous progress, in the popular press digital topics are quite prominent.

Nowadays privacy, Facebook-Cambridge Analytica, and cybersecurity are of course much bigger topics. And digital finance and digital currencies, bitcoin and the underlying technologies like blockchain, have a lot of mystery around them. Driverless cars, AI, you see that the digital topic is really all over the place.

Nevertheless, if you look at investments in Europe and compare it to the US, we still have a bit to go. We’re working on the digital single market, and that should go much, much faster. If you see the time it took to have roaming charges off the table, I think by that time everybody was using Wifi and WhatsApp. No one was using normal calls anymore anyway.

Do you see EIT’s focus on specific technologies shifting now or in the coming years?

The big topics are the digitisation of our industry, cybersecurity is always a hot topic. Digital finance is an emerging area. Digital currencies have a lot of promise but on the other hand, nobody wants to use them only overnight so you have digital currency fluctuation. You see those areas becoming very prominent. The other area is the maker industry and Europe will have to reinforce that.

You see protectionism going on, you see society being torn between the workers that see threats in technology and the part of society that only sees opportunities in a lot of technologies. Such a divide leads to an unstable government. The Brexit discussion is a sign of that, the American presidency is a sign of that. We see instability rising and our governments will have to find an answer to that.

Social cohesion is really important for economic wealth, they reinforce each other. Those are the topics that are ahead of us and for us as EIT Digital, we contribute to the digitisation of industry big time. Robots are not a threat but an opportunity. That has to do with education, with awareness creation, that also has to do with building the factual picture rather than just spreading fear.

We are acting in those areas. I see cybersecurity expanding, I see digitisation of the industry expanding. Our education system is under pressure. In the Netherlands, universities don’t have the capacity to have enough AI students. Our education system needs to be more flexible, more open and also itself use digital technologies to be able to quickly scale courses in case there is a growing demand.

Public outrage has increased in recent years over how certain technologies affect privacy or how automation could potentially replace human jobs. Should politicians address this anger directed at technology companies?

Technology can be used in a constructive way but it can also be used in a destructive way. The feeling I have is that the current discussion misses the ethics element in the development, and it misses the technical discussion when it comes to the argument you see being made in public. Because it’s a lot about opinion, it’s a lot about prediction, it’s a lot about speculation and it’s little about facts.

That being said, every technological revolution or transformation has met resistance. As such, that is not new, resistance has to be taken seriously because in the end technology has to land in the society and society has to accept and embrace technology. Otherwise technology will be a divider, but it can also be a uniter. I see those fears, I see those arguments, I think some of them are right.

The dominance of single parties in certain markets is by definition not good, whether it’s a technical domain or any other domain. As long as there is no serious competitor to Facebook, the situation is not good. But that’s a general principle that would be the same if it had to do with a municipal oil company or a single hospital or what have you. It doesn’t have much to do with technology. It has to do in this case with the fact that the digital world develops very fast.

Legislation has difficulties to catch up, understanding it is also difficult because: can you translate physical world rules to the digital world? We’re still struggling with that. That’s why we’re now in a situation where things are turbulent because they go very fast, people are sometimes taken by surprise and don’t understand the consequences.

There shouldn’t be a dominance of single players. That’s something that has to be addressed maybe by breaking up companies. The focus is too much on technology regulation and trying to stop companies from technological development. I don’t think that’s the way to do this.

Is it EIT Digital’s role to help support competition in Europe and develop competitors to these American tech giants like Facebook?

If you look at our budget, it would be a little bit too optimistic to think that we can immediately compete with them. What we can do is plant the seeds that can grow to a more serious presence of European companies in the digital world. That’s what’s currently lacking.

The way we do that is we attract talent to Europe, we are seeking this talent not only with technical skills but also with entrepreneurship skills. We help them to flourish in an ecosystem where we stimulate them to be entrepreneurial within existing companies or to create their own companies where we help them to scale.

There are certain periods in their lives where they need some help. And one of the periods is the scaling phase. Starting a company in Europe is not that difficult, you can raise your first investment money from angels, friends, family. However, when you need 5 or €50 million, there’s a kind of gap.

If you’re only on the radar of the big investors, you can get upwards of 50 million upwards because you more or less have proven yourself as an interesting investment. But with a bit of hand-holding some can be led to bridge that gap.

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Europe is lagging behind in technology investment compared to the US and China. Does Europe need a more comprehensive program like China’s ‘China 2025’ to really help the tech industry?

You have programs at the European level from the European Commission and if you look at the numbers for the total European budget compared to the national budget of different countries, then you see that that is where the action is. What you can do at the European level is facilitate and mostly work on policy that is implemented on national level afterwards, like the digital single market. But most of the work needs to come from individual countries.

A good alignment between countries, like Germany and France, are working on when it comes to the technological agenda, that helps. I don’t think that Europe has the political structure to have these kinds of China 2025 programmes because our governance, the way we work, the autonomy of national governments is completely different than in China.

Europe should do two things: speed up the digital single market because the 500 million people are really economically powerful instruments on this market. And on the other hand, technology development is something that is much more local, it happens in certain regions and sometimes in certain cities around specific industry clusters with a specific focus.

That’s what the national agenda should focus on. We need a hybrid approach where the policy alignment is really a focus of Brussels and the smart specialisation is much more on a national and regional level with very specific industry investments where you want to excel.

In the Commission’s MFF proposal, funding will go towards a few focus areas like AI and cybersecurity. Will that set the tech policy agenda Europe needs?

Definitely, the area is well chosen. Within AI, there is still a variety of topics you can address. That’s great. On the other hand, 9 billion for that package seems like a lot of money but if you’re going to distribute it over 7 years over 27 member states then it’s probably what Google is spending on the same topic in one month. You have to be aware of what you can do on the European level.

On the national level you have to reinforce that. I’d say much more on specific applications. In Europe, our knowledge in universities is there. What is lacking is translating all this great AI knowledge in our research centres and universities into AI-based products from European origin that can compete in the global market. The challenge is not so much in having more AI research in Europe.

Commissioner Gabriel is especially focused on digital skills. How can an EU programme promote education and digital skills when there is still a lot of brain drain of tech entrepreneurs who start in Europe and then leave?

I don’t think there is a huge brain drain. If I look in London, Paris, Berlin, Helsinki, Stockholm, Amsterdam, I see a lot of talented people. Some good technology from the Nordics ended up in the US, like Skype and Spotify. But I think we can keep others in Europe.

It’s fashionable to be an entrepreneur nowadays. If you want to sustain that and build on that you have to create interesting jobs and the right economic environment. Europe has the advantage that it’s a nice continent to live on, people are in general very happy here, there’s good infrastructure, there’s good medical care, there’s a good social security system.

But we have to create the jobs and the economic growth to keep those talents here. We should be a little bit more proud of this. Silicon Valley is great. I’m in Silicon Valley several times a year, we have a hub there. There are a lot of upsides but there are also a lot of downsides. The apartment prices are crazy, the infrastructure is overloaded. It’s a monoculture, it’s not very diverse, this whole valley area. There are a lot of winners. But there are 100 times more losers in the system. We know about the winners.

If you’ve ever been in a Google office in an outdoor workspace you’re one of the 10,000 wannabe CEOs programming all day, is that really the best life? It’s a balance also in Silicon Valley and I think we can offer a more balanced life in Europe.

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