Reversing course or resigning to a
slow agony are the alternatives faced by Europe amid an
existential challenge that requires a new industrial strategy in
order to be won, according to a report on the future of EU
competitiveness presented by former Italian premier and European
central banker Mario Draghi this week.
The first pillar outlined by Draghi's blueprint on
competitiveness is innovation.
In order to stop the decline and be productive again, a
meaningful acceleration is necessary, the report suggests,
eyeing in particular the digital revolution sparked by
artificial intelligence as a "window" of opportunities for
Europe.
It is imperative to gain lost ground compared to the United
States due to the EU's inability to capitalize on the previous
digital revolution guided by the Internet, notes the report.
"We made an experiment - explained the former governor of the
European Central Bank (ECB) -we removed the US high tech sector
and compared again the economy of the United States and of the
EU.
"We saw that, in that case, they could be compared and,
actually, EU productivity would be slightly better", he
observed.
However, conditions for a new beginning are not the most
promising.
On the eve of the new digital revolution, the report photographs
an EU that has fallen behind in innovative technologies that
will lead future growth - starting with artificial intelligence.
Since 2017, 73% of foundation models, observed the report, have
been developed in the United States.
When the main AI start-ups are considered worldwide, 61% of
global funding goes to US companies, 17% to Chinese companies
and only 6% to businesses in the EU.
The few European champions in the development of generative AI
models, like Germany's Aleph Alpha and France's Mistral, need
great investments to compete with US businesses, a need that
drives European companies to seek funding abroad.
Overall, this weak position of the EU could impact the economy
in the future, with different industrial sectors risking to lose
market shares because they are unable to exploit the competitive
advantage generated by AI.
And if the barriers to the development of emerging technologies
identified in the report are different, Draghi saves the most
pointed criticism to European legislation on privacy and AI -
the GDPR privacy law and AI Act.
"With this legislation that we have given ourselves, we are
self-destructing, we are killing our companies", he warned,
stressing how the complexity of laws and the risk of overlapping
could halt innovation in the sector.
The report, for example, notes that the EU today has some 100
laws on technologies and over 270 authorities of regulation
active in digital networks in all member States.
Draghi's recipe for the EU to become a leader in AI includes a
wide range of proposals.
A key role, according to the report, will be played by the
vertical integration of AI in European industry.
"In order to prosper in an increasingly heated global
technological race - the report said - the EU needs to exploit
the development and implementation of 'vertical AI', or cases of
innovative use of AI technologies in key industrial sectors"
like automotive, robotics, the pharmaceutical industry, to
mention a few.
Such sectors are expected to be completely changed by AI.
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