The Good, the Bad and the Ugly: von der Leyen’s Digital Strategy

The Italian movie director Sergio Leone invented the genre Spaghetti Western, bringing Hollywood actors such as Clint Eastwood to Italy to shoot Wild West-movies about sheriffs and cowboys, re-creating an America that never existed*. The phenomenon comes to mind when I look at the EU Commission’s digital strategy – it looks like it wants to re-create a Silicon Valley that never existed. (I cannot resist; the “Spaghetti-Silicon Valley”!)

For certain, there are many things to like in the strategy, presented by President von der Leyen’s in an opinion piece published in member state media last week. But there are also some fundamental problems with the approach. Let’s take a page from Leone and look at the Good, the Bad and the Ugly (il buono, il brutto, il cattivo):

THE GOOD – IL BUONO

The President makes several points about European values and Netopia can only agree that Europe holds the keys to some of the most important issues online: privacy, fair competition, diversity, freedom of expression, worker’s rights, just to mention a few (not saying this matches UvdL’s list exactly!). Netopia also likes the approach of active institutions and not ruling out legislation. The internet naïvist idea that the online world is best left without government only means it will be ruled by the strongest rather than some radically re-invented democracy. The merits of “tech sovereignty” – the capability for Europe to make its own choices – can be debated in a global world (Netopia would prefer European global leadership) but as an ambition for a digital strategy it can be useful. The word diversity is also welcome, the internet once promised diversity but now looks more monolithic for every passing day. Maybe the EU can bring the idea of diversity back? 

President von der Leyen’s opinion also recognizes the importance of data. Not all data is created equal and much of the 85% that remains unused according to the op-ed may actually be useless. It is true, however that data is power. It used to be that whoever has the biggest computer runs the world, but computing is not the bottleneck anymore so whoever has the most (and best!) data is the winner. The president suggests safe data pools under European regulation in order to store and share data in a trusted environment. Netopia files this under “interesting ideas”.

THE BAD – IL BRUTTO

The president’s opinion talks about giving European “start-uppers” the same opportunities as those in Silicon Valley. A tall order, if taken literally: the multitude of talent, the proximity of platform HQs, the academic and business research, the data, the atmosphere, the competition and gold rush-mentality – those are things that can’t really be replicated somewhere else. Unique success factors to Northern California. China’s Big Tech use a quite different set of success factors: enormous home market, protection from competition, integration with government policy including huge contracts and so on. California and China share one edge: access to cheap public money. In China, it is generous loans from the state-controlled banks. On Sand Hill Road, the venture capital firms used federal pension funds (four public dollars to each private) for loan guarantees to bankroll their bets. It’s good that the EU Commission wants to fund research on AI and 5G and so on, but it’s nothing like what the competition does. Rather than providing same opportunities, Europe’s vision could be to provide quite different but better opportunities. The op-ed already mentions diversity, add creativity and culture and we’re on to something. It is no coincidence that Europe’s best digital companies are content creators.

Let me point to one more pitfall, again about data. Making data available to all is a great line, but that will not suffice. Information needs to be edited, refined, packaged, marketed and delivered to the user in the best possible way in order to be used. Passive data is not very helpful, it is the application and the commercialization of data that brings value. Those processes require much more than access, for example protection of the investment that goes into making the data useful (yes, I’m talking about copyright).

THE UGLY – IL CATTIVO

Digital technology has been around for four decades or more. Still policy-makers talk about the “digital transformation” as something that is coming. President von der Leyen is no exception. Here is an idea: what if the words “digitalization” and “digital transformation” were deleted from the glossary? What if we were to stop thinking and talking about it as some unified phenomenon? What if we banned categories such as “tech-optimist”, “tech-sceptic” and “tech-pessimist”. (I know, I know, this blog is certainly part of that problem!) Would we then look at policy options were digital technology is one of many strategies, not a goal unto itself but a means to other ends? Let’s say we want productivity increase, for a more competitive manufacturing industry for example. Many options come to mind: educating workers, automation of processes, integrating value chains, better sourcing of components and raw materials and so on (obviously this writer knows nothing about manufacturing, this is a thought-experiment!). Some of those options would involve digital technology. Others would be about standards, public institutions, trade agreements and a million other things. Talking about digital transformation begs the question. Perhaps it would be better to not talk in those terms at all?

Will the global battle for tech sovereignty look like a Mexican stand-off in the cemetery, tuned to an Ennio Morricone-soundtrack? Europe needs to bring its best gunslinging game.

*) There is a beautiful exhibition on Leone at Rome’s Ara Pacis-museum until May 5th http://www.arapacis.it/en/node/1005903