Building a European data strategy

If the EU is serious about becoming fit for the digital age, it must first build an environment that allows European companies to take advantage of the data economy, argues Miapetra Kumpula-Natri.
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By Miapetra Kumpula-Natri

Miapetra Kumpula-Natri (FI, S&D) is rapporteur on Parliament’s report on the European Strategy for Data

13 Apr 2021

Making Europe fit for the digital age is an ambitious goal. Sadly, the inconvenient truth is that the EU lags behind in some sectors - such as AI - where China and the US are investing more in R&D. Therefore if Europe truly wants to be fit for the digital age, it needs to act now.

Three pillars are key to getting this right: first, we need to increase the flow of data in Europe, by building trust that allows SMEs and the public sector to share data. Second, we need capacity and knowledge, with improved overall digital literacy as well as high-level software engineering and digital professionals. Third, we need modern, high-speed and large-capacity infrastructure.

“The Commission has estimated that, by 2025, the net worth of the EU’s data economy will be €829bn. This means that the data economy will grow from two to six percent of EU GDP in just seven years”

So far, we have taken the right steps. On 25 March, the European Parliament voted on its own initiative report on the European Strategy for Data, for which I was proud to be rapporteur. The report responds to the Commission’s Data Strategy published last year, a central piece of the EU’s digital vision. We are not talking peanuts here; the Commission has estimated that, by 2025, the net worth of the EU’s data economy will be €829bn.

This means that the data economy will grow from two to six percent of EU GDP in just seven years - and this is only the start: the amount of data currently doubles every 18 months.

Therefore, the question we should be asking ourselves is: who will benefit from this trend? Our companies must be able to use the single market of data as a launchpad for the global market. Therefore, the aim should be to create an environment where players from various sectors can grow, and innovation can develop, away from the influence of global tech giants.

The EU plans to make room for actors of all sizes, to allow them to participate in data ecosystems built on European values and a competitive market economy. Infrastructure plays a major role in building European capacity to grow in the data economy.

In the European Strategy for Data report, Parliament recalls how the success of the Union’s data and AI strategies depends on the wider ICT ecosystem and on accelerating technological developments, such as 5G, 6G, quantum and cloud computing.

The cloud era is in its infancy. We will have so much data that there will be no point in transferring all data from the edge to data centres for analysis. Soon, the applications will increasingly work on the edge (e.g. in smart devices) and will be less data hungry.

Therefore, there is a constant need for innovation, and we need to make sure this can and will happen in the EU. Parliament is not afraid to call on the Commission and on Member States to promote competitive markets while strengthening European businesses and supporting development of European cloud offerings.

The European Cloud Federation, an Alliance for Industrial Data and Cloud and funding initiatives, as well as the GAIA-X project, are all welcomed by MEPs. The current market situation for cloud offerings is dominated by non- European hyper-scalers. Parliament is not calling for a ban on those; were we to do so, the EU would fall even further behind its goal.

However, I believe that should the current situation remain static, we shouldn’t be satisfied or passive. We need to boost our own capacities via open and fair markets, because the situation may be quite different in 10 years. As we highlight in our report, we need to remain vigilant to any potential abuses of market power by dominant actors, operating in oligopolistic markets, that could inhibit competition or consumer choice.

Cloud infrastructures should be also based on the principles of trust, openness, security, interoperability and portability, allowing consumers to more easily avoid technology lockins. Parliament eagerly awaits the European cloud rulebook establishing principles for competitive cloud service provision in the EU. This rulebook should provide a solid framework, enhancing clarity and facilitating compliance for cloud services.

In addition, it should, inter alia, oblige service providers to reveal where they process and store data, while ensuring users retain sovereignty. While the choice of operator lies with businesses and consumers, Parliament stresses that all cloud operators, when established or acting in the EU, must follow EU rules, norms and standards and their compliance should be monitored. As with data sharing, interoperability is also vital.

“If we want the EU to succeed in the coming decades, we need to cherish our own strengths and capabilities and increase our know-how, particularly in new technologies”

MEPs argue that this rule book should also allow users to seamlessly migrate their data, via interoperable interfaces, to other service providers. Technology lock-ins, particularly in public procurement, should be prevented.

The current COVID-19 crisis has further underlined the importance of digitalisation, digital infrastructure, tools, and skills. If we want the European Union to succeed in the coming decades, we need to cherish our own strengths and capabilities and increase our know-how, particularly in new technologies.

For rapidly developing technologies, market changes occur rapidly too; current cloud players may appear too big to challenge, but just remember who was talking about edge computing or cloud services 15 years ago? Nobody knows whether the next hyper-scalers will come from Europe, but this will not happen without hard work.

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