Adaptation was the key word during 2022: not so much adapting to technologies, but of adopting them to adapt to the needs of a volatile world.
The invasion of Ukraine triggered the activation of the EU’s Cyber Rapid Response Teams (CRRTs), a previously unused mechanism for solidarity between member states. The conflict also reframed technology as a geopolitical vector: the Ukrainian government decided to ‘export’ data centres to trusted third countries in order to protect its personal, industrial and sensitive data in a ‘digital haven’. Likewise, the high expectations placed on crypto-assets were partly dashed by the collapse of FTX, which led to a ‘crypto winter’ in the international markets. Furthermore, semiconductors hit the headlines due to the international rivalry between China, the US and the EU. The issue had been around for years and is not new, although it is current, given its effect on export-control regimes, foreign direct investment and the growing role of sanctions in a greater number of technology verticals.
The year 2023 began, like the previous year, with prominent headlines, although a measured and rigorous analysis of the subject suggests that there are more likely to be three major trends, as indicated below. This is particularly important in the year that Spain will hold the Presidency of the EU Council.
An even greater role for industrial policy
Since the President of the European Commission, Ursula von der Leyen, pointed out in 2020 that the year marked the beginning of the European Digital Decade, three major mechanisms began to develop: European Industrial Alliances, Important Projects of Common European Interest (IPCEIs) and Joint Undertakings (JUs). Industrial-technological development accounts for a large part of the initiatives in each of these three action areas and is expected to develop in more technology areas.
However, there has been a change in the transition from 2022 to 2023. If in 2022 each of the technologies that were considered strategic could cause a significant impact on their own –for instance, artificial intelligence for data processing–, in 2023 it is likely that the differential value will be in how the combination of various technologies (‘combinational trends’) will be able to create new possibilities. Such is the case of cloud and edge computing powering the networks that connect electric cars.
Even though some of these combined technologies have not yet reached the market, 2023 will be the year when public institutions start to consider measures regarding the use of these technologies. This is the case of the announcement by the President of the European Commission during her 2022 State of the Union Address on an initiative to explore the challenges of virtual reality: ie, the final frontier of the metaverse, which is not a technology per se but a platform for technologies that can bring together either few or many applications, such as virtual, augmented and immersive realities, cloud, computing, artificial intelligence, the Internet of Things, and others.
Another case was the announcement of the European Commission’s 2023 Work Programme on a first proposal for a regulatory framework for the hyperloop, which seeks to embrace this high-speed, low-carbon transport solution. It is to be accompanied by the common European mobility data space, already under development, to digitise the transport sector.
The year 2023 is also expected to see solid agreements in the EU on securing supply chains in critical materials, minerals and rare earths from third countries on which the EU is dependent.
Such is the case not only with China, but also with countries like Brazil, Chile and Mexico, which are necessary for essential raw materials used for technologies in the digital and green transitions. This explains why 2023 will be a year of new agreements, specifically through the EU-LATAM Digital Alliance, which is expected to be the framework for channelling technological cooperation with the region and consolidating relations of trust. An example of the latter is the December 2022 update of the trade agreement with Chile, which has guaranteed non-discriminatory access to the export of raw materials such as lithium.
State aid as an element of global technological rivalry
Green technologies are a further trend for 2023. They are nothing new, as they have been under development for a long time, but they are highly topical for a number of European and global governance reasons.
The US announced its Inflation Reduction Act (IRA) on 12 August 2022, allocating almost US$400 billion in public spending and tax credits over 10 years to reduce CO2 emissions by 40% by 2030. The move was coupled with subsidies to strategic areas such as semiconductor factories with the US CHIPS+ Act, while sanctions on the export of cutting-edge technology products to China gave rise to disagreements.
The sum of state aid from the US did not come alone. China proposed a ‘Big Fund’ for semiconductors, while –already in February 2022– the EU had announced a European chips act proposal to explore state aid for the creation of semiconductor manufacturing facilities on European territory, although proposal is focused to a lesser extent on the design, research and development phase –an approach that needs to be improved–.
Thus, 2023 looks set to be a year in which state aid will be equally valued and criticised by all sides. In any case, each of these three regions will continue to implement subsidies. In fact, the debate has already led to differences at the EU-US Trade and Technology Council (TTC), where Commissioner Bréton, disagreeing with the way the IRA was being addressed at the preparatory talks, did not attend the December 2022 meeting itself. State aid was not addressed at the TTC and the meeting focused only on issues on which there was agreement.
Within the EU, differences between member states on how to grant state aid are expected to deepen, with some being more cautious about lending (such as the Netherlands), some demanding more rigid state-aid rules (Italy) and others seeking to offer more state aid (Germany and France).
The year of the democratisation of technology
Over the past few years the focus has been on the EU’s regulatory and industrial policy pillars from the security, political and economic perspectives. However, a third pillar is that of values.
There have been developments such as the Declaration of Digital Rights and Principles, the first Eurobarometer on the public perception of digital rights and campaigns against Internet blocking as a form of repression. The next step is to operationalise these principles in ‘grounded’ training proposals for civil society organisations and citizens and at other public levels, such as the regional and local.
In 2023 Spain will hold the Presidency of the Council of the EU at a time when three major legislative dossiers are to be approved, if not negotiated in their final phase: a European digital identity framework, the proposal for Cybersolidarity between the entities of the Member States and the data act proposal. All have an impact on the protection of rights.
In summary, 2023 is set to be a year packed with news. Beyond the multiplicity of media headlines, the key will be to focus on these three trends as major drivers of a global technological governance that is yet to be built.