Claudia Nemat

Europe's digital sector needs a Sputnik moment

An article by Claudia Nemat, Member of the Deutsche Telekom AG Board of Management, Technology and Innovation.

Germany is a world leader in industrial automation and sensor technology. We invented the "industry 4.0" brand and spread the word globally. We still build the best cars in the world. And we have a remarkable number of hidden global champions in our SME sector.

 Claudia Nemat, Member of the Deutsche Telekom AG Board of Management, Technology and Innovation

Claudia Nemat, Board Member Deutsche Telekom AG, responsible for Technology and Innovation

Yet we are not leading the world when it comes to making big data usable and interpretable, or developing useful algorithms on a major scale, or driving machine learning and AI across all sectors. And therein lies the challenge:

Our ability to handle data and algorithms won't only affect our competitiveness – it will decide on the success of political systems at the end of the 21st century.

Data is the raw material of the digital world. Unlike physical raw materials such as oil, real time data from the Internet of Things is particularly perishable (it has to be up to date). Not only that, but data "breeds" continually. This is because the number of people and things connected to the network is growing constantly.

So far, two distinct models have been successful: the liberal-capitalist business model from Silicon Valley, and the authoritarian-capitalist model of the People's Republic of China. Both models pose major challenges for Europe. The data of European users of digital services is largely stored on the servers of U.S. companies and now even Chinese companies. Data from companies that use public cloud solutions is also kept predominantly either on servers in the United States or on servers under the control of U.S. companies.  "Users" have barely any rights in terms of data ownership – in most cases, they transfer the rights to their data to the data platforms. Asserting individual interests against the data platforms is a challenge.

A European "counter model": sustainable – digital – people-centric.

Europe's digital sector needs a Sputnik moment. A sense of urgency equal to that seen in the current climate movement. One that could be combined with – or run alongside – the strong-willed determination to rescue our ecological future. There needs to be an openness about wanting to structure our own future, rather than simply consuming without protest or allowing politicians to force us into a partisan U.S. vs. China mentality.

The way I see it, a people-centric understanding of technology and an economic model that works on the same principles are the keys to a successful European counter model. A model that includes future generations. This means asking ourselves: How will we avert the impending climate crisis and stop filling up our planet with garbage? This is where a mastery of digital technologies can help. And it is urgently necessary if we are to keep pace with global competition.

Innovations invariably come from a handful of large companies and a host of small ones – but are virtually always the brainchild of people driven by a passionate dedication to shaping the future. It is therefore key that the policymakers put the right action framework in place and make course corrections when developments take an undesirable turn. Europe has a strong history of openness and transformation, not isolation and stagnation. Peace was achieved by working together, not by fanning the flames of national self-interest. In the battle of the superpowers – the United States and China – national pettiness will only weaken us further. Negotiations are better done on an equal footing.

Some food for thought on ways to help improve our competitiveness:

  • Introduce agile principles into the administrative sector, too, to speed up decision-making and implementation.
  • Make more later-stage financing available to successful startups
  • Create an investment-friendly framework #1: Greater political willingness to consolidate within certain industries. Powerful technology policies to promote the formation of very large players – goal: competitive European champions.
  • Create an investment-friendly framework #2: Tax breaks for research and development.
  • Enforce European rules on everyone who wants to do business in Europe – the same rules for all! This includes the issue of how we plan to deal with platforms that could pose a threat to our free and democratic order in the future.
  • Adapt the rules on pre-competitive cooperation. We need to be clear about what kind of pre-competitive cooperation is acceptable and what is undesirable due to its restrictive effects on competition. As it currently stands, the interpretation of the area of pre-competition law is too restrictive. The legislator should create a legal framework that protects data on the one hand but offers sufficient freedom for real-world labs on the other.

And, of course: Education, education, education! Lifelong learning!

All of this calls for a huge degree of enlightenment and positive role models. A broad-based campaign among all social players. "It's our future!" We need a passionate pioneering spirit in the digital world.

Claudia Nemat

Claudia Nemat

Member of the Deutsche Telekom Executive Board, Technology & Innovation