Digital technology is clearly a fundamental sector of the twenty-first century economy. It also demands deep behavioral adaptation by individuals and the society as a whole, a new legislative framework and conceptual tools. There is broad consensus in Europe by now about the need to ensure greater autonomy with the freedom to set effective rules in this pivotal sector, establishing what is known as “digital sovereignty”. Necessarily this calls for the development of an industrial capacity to create innovative products, a complex task from a strictly technological and investment-related standpoint as well as from that of human capital.
If we consider online services, the underlying principle of the new European rules is that activities that are illegal offline must be illegal on line as well – which essentially means bringing the web fully into the realm of the rule of law. Particular attention should go to the dissemination of content over the social network and the relationship between the consumer and the distributor (instead of the actual manufacturer) for companies that utilize e-commerce. The problem of jurisdiction remains however, resulting in limitations on regulatory efficacy, since any form of market limitation represents a potential cost to manufacturers and/or consumers and therefore a distortion. Some participants expressed greater faith in self-regulation than in legislation that revives the principle of digital sovereignty.
Investments and trade in the digital sector will, in any case, be crucial to post-pandemic recovery, especially in Europe and the United States, but it is clear that the regulatory framework needs to be revised on the basis of new standards: the challenge is to do so in as coordinated a manner as possible without jeopardizing the open and shared nature of digital networks. According to some participants, the “strategic interdependence” of the two shores of the Atlantic is more important than the goal of digital sovereignty, especially by safeguarding competition and open markets. On the other hand, concern is growing over the dominant position that some of the largest platforms have earned in a steadily expanding market on which a vast number of almost indispensable services now depend. Essential, in any case, is broad-based discussion of the goals common to the private sector, governments and international agencies, as well as consumers. It is not always going to be possible to satisfy needs through legislation, but it is important to avoid ideological polarization on issues as complex as these.
The concept of digital autonomy can be understood in a broader sense as the capacity to comprehend and utilize digital instruments to fuel innovation and growth without necessarily seeking sovereignty in the narrow sense of the term, i.e. as absolute control of entire value chains – something that is probably unrealistic even for the United States. Nevertheless, Europe struggles with the concrete problem of delays, at least in terms of some specific sub-sectors, human capital (e.g. specialized engineers), Artificial Intelligence and the rapid adoption of new instruments for use by industry and the public administration. The answer is not to raise the drawbridge, but instead to facilitate the emergence of “European champions” capable of actively participating in the value chain rather than being mere consumers. Scale economies are essential, and Europe could better exploit the size of its market; a step in the right direction is the considerable 20% of Next Generation EU funding to be allotted to digital development. Moreover, in some important cases such as 5G, some very promising partnerships are forming between American and European firms that could enable technological advances and, at the same time, reduce dependence on Chinese manufacturers.
The “data economy” is poised to be a major development driver, but many warn of the need for more reliable data management (and marketing) rules in order to ensure privacy, competition and efficient and dynamic markets. It is not necessarily true that the concept of “sovereignty” is suited to the digital sector; nevertheless, Europe must make political and strategic choices aimed at accelerating the cultivation of digital expertise. The objective would be to trigger excellence and active participation rather than government control per se – even if it is European.