Technology, protectionism and a debate in Europe

Protectionism in the world of technology is a raging topic. Should countries strive for technological "independence"? Should reliance on foreign technology providers be viewed as economic dependence and a threat to sovereignty? Is autonomy truly served by being the originators of technology rather than beng mere users? Should countries develop national players in technology to compete with foreign technology bigwigs?

The above questions plague many national governments. What should an appropriate national industrial, technology policy espouse - openness or protectionism or a mix? How should that translate into international trade agreements and national negotiating positions?

An informative policy paper on technology sovereignty in the context of Europe's debates on data protection, privacy, sovereignty can be found here on the ECIPE website.

On rising global powers like India and China:

There are three important takeaways for Europe as policy-makers consider their options. First, neither Europe nor the US will be able to rely on their own market size as the main source of maintaining autonomy, sovereignty and influence in the global economy. Other countries, e.g. Japan, are confronted with the same reality. Rising powers like China and India may gain tremendously in market clout and increase political pressure on others to conform to their laws, rules and norms, but none of them will come close to the same dominance in global rulemaking that the US and Europe had in the period that followed the Second World War. Global economic power will be rather more distributed.

 On having independent, national payment gateways to challenge the Visa and Mastercards of the world (I was reminded of the WTO dispute on payment systems):

Launched in November 2019, around 20 European banks from eight Eurozone countries are now supporting a new European payment system to challenge leading non-European payment services providers such as Visa, MasterCard, AliPay, Apple, Google and WeChat Pay. Banks headquartered in Germany and France make up a large share of this “European Payment Initiative” (EPI) project membership. A decision on whether or not to pursue the EPI is expected at the earliest in mid-2020.

On how foreign technology is not bad after all: 

However, the Covid-19 crisis has shown that reliance on foreign technologies is not a threat to European autonomy. First, during the confinement period technologies and tech companies made Europeans – and their governments – stronger. Technology kept Europe open for business despite the lock-down by enabling Europeans to work from home, access to computing power via cloud solutions, receive essential home deliveries, home schooling, online banking, etc. Europe’s citizens became more sovereign with respect to accessing information and authorities used data to track and contain the spread of the virus. 

On the inevitable aspect of retaliation of trade wars: 

Protectionist approaches like taxes on digital services or AI licensing obligations would generate negative market responses from other parts of the world. European firms – beyond those that provide technology and digital services – would be at risk of losing market access abroad simply because foreign governments would retaliate. European firms that sell goods and services abroad are at risk of being confronted with market-access restrictions because they have used inputs that are derived from a market that has been regulated to shut foreign firms out. 

 A great read to understand Europe's data dilemma! But it has lessons for national governments the world over. Atleast a debate should start.