#167 [EN] Renate Nikolay [audio-only] - EU’s digital strategy, regulation, innovation, the Brussels Effect

Data: Wed, 26 Jun 2024  ·  Duração: 00:41:17

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José Maria Pimentel 00:00:00.00THE INTRODUCTION IN ENGLISH STARTS AROUND MINUTE TWO AND A HALF 00:00:30.00CONVIDADA, Neste Caso, O ESTRANGEIRO Como sabe, quem ouve o podcast já há muito tempo, é uma coisa que eu gosto de fazer de vez em quando, quando o tema justifica ter convidados estrangeiros, ainda recentemente, aliás, com o Tom Chatfield, no episódio 162, embora no outro dia tenha ido ver os números de download, que é uma coisa que eu não faço assim com tanta regularidade, e confirmei a impressão que já tinha de que perco cerca de 30% de downloads neste tipo de episódios, o que é uma pancada grande, mas ainda assim, pelo menos para mim e para 70% de vocês, justifica que eu continuo a fazer um vídeo. 00:00:59.98E agora, ao episódio em si. 00:00:59.98O tema de hoje é a revolução digital que estamos a viver e, em particular, a estratégia da União Europeia para lidar com ela, que tem tentado, basicamente, quadrar o círculo, tentando, por um lado, regular os riscos destas tecnologias e, ao mesmo tempo, gerar mais inovação na área do digital na Europa. 00:01:29.96Mas, depois da União Europeia para esta área, concretamente, eu tinha, até há pouco tempo, uma ideia apenas vaga. 00:01:29.96E não era sequer uma ideia especialmente positiva, porque era muito influenciada pelas críticas, que vocês, de certeza, também já ouviram por aí, que normalmente não fogem muito da piada de que, enquanto os Estados Unidos inovam e criam grandes empresas, a especialidade da Europa é, basicamente, regular. 00:01:59.96O que é um grupo, que é um grupo que, seja lá, de consultores nesta área, até influencers. 00:02:07.96Portanto, é um aspecto muito largo e que vem dos diferentes países da União. 00:02:11.58Nas viagens que, nos últimos tempos, tenho feito às Bruxelas e em discussões com quem lá trabalha, fui percebendo que, na verdade, existe, na União Europeia, uma visão para o mundo digital que, não estando imune a críticas, é multifacetada e a olhar para o futuro. 00:02:25.68E, por isso, decidi que estava na altura trazer este tema ao podcast. 00:02:29.20A convidada é Renata Nicolai, que é a diretora adjunta, precisamente, na DigiConnect, e é alguém que, como vão perceber, defende a visão da União Europeia para esta área de uma maneira muito coerente. 00:02:39.92E agora, para não limitar a audiência do episódio, vamos mudar para inglês. 00:02:44.02We are living through a digital revolution. 00:02:47.28Apps like Instagram, Twitter and TikTok have become the new town squares where we catch up, we share news and we champion the causes close to our hearts. 00:02:55.68Also, the so-called platform economy is getting bigger and bigger, with companies like Amazon, Airbnb and Uber controlling an increasing share of the world's economy. 00:03:05.12And with the pandemic, platforms like Zoom or Slack suddenly replaced, for many of us, our office spaces. 00:03:11.48And then there's artificial intelligence with increasingly powerful generative AI models coming out every month since ChatGPT was launched back at the end of 2022. 00:03:21.24As with any revolution, the digital world creates both opportunities and challenges. 00:03:26.94On the one hand, it has the potential to generate economic growth and improve our lives in many ways. 00:03:33.00But on the other, it creates a real danger of cyber attacks, it spreads disinformation and creates a real risk of us losing our privacy. 00:03:41.90And it doesn't stop there. 00:03:43.18The digital world is also becoming a geopolitical chess game. 00:03:46.90Take the chip crisis during the pandemic, for example. 00:03:50.00Suddenly, everyone is stuck at home, craving new gadgets and boom! 00:03:54.12There's not enough chips, also known as semiconductors, to go around. 00:03:58.10Because Europe imports a big part of the components it uses. 00:04:01.90For a period, this messed up everything from cars to medical gadgets, where suddenly there were no devices for everyone. 00:04:08.20All of this makes it necessary for governments to take action. 00:04:12.66But it's not easy. 00:04:13.98In the European Union, in particular, there is a difficult circle that policymakers need to square. 00:04:19.24In a union comprised of democratic countries, where human rights and the rule of law are respected, we need to make sure citizens' rights are also defended in the online world. 00:04:28.72But at the same time, we also need to ensure that Europe has economic security, such as guaranteeing the supply of chips, and that its economy becomes more competitive in the digital arena. 00:04:40.26And while Europe is top of the mark in education and science, the fact is that we have been getting behind in the digital race, with few big innovations and few big tech giants coming from the content. 00:04:51.26So, something needs to be done here as well. 00:04:53.78Over the last few years, the EU has been putting out a huge number of policies, encompassing regulation focused on protecting our rights online, and measures aimed at creating digital capabilities and boosting innovation in the continent. 00:05:07.98Indeed, one thing EU policymakers cannot be criticized for, for better or worse, is inaction. 00:05:14.54The EU is by far the world's most proactive policymaker in this area. 00:05:19.14And the fact is that other countries are already copying many of these measures in another instance of what has become known in recent years as the Brussels effect. 00:05:28.62In this episode, we will delve into the EU's digital strategy to understand what it is and the main initiatives that are being implemented or will be so in the coming years. 00:05:39.30My guest is Renata Nicolai, who works at the European Commission as Deputy Director at DigiConnect, which is the Directorate General for Communications, Networks, Content and Technology. 00:05:51.22We covered a lot of ground in our 30-minute conversation. 00:05:54.78I started by asking Renata to give an overview of the EU digital strategy. 00:05:59.64She highlights how EU policies towards AI are a case in point in this strategy, because they have taken different measures in the last couple of years, both to ensure that AI doesn't harm our safety and privacy, but also to make European firms more competitive in this area. 00:06:15.28For instance, the US created a network of supercomputers that are available for European AI startups to scale up their technologies. 00:06:24.14But many people in the sector also criticize EU regulation, such as the AI Act, claiming it will stifle innovation and lead international investors away from the continent. 00:06:34.60In the regulation realm, we also talked about the piece of regulation that's probably most familiar to most of you, the DSA, the Digital Services Act. 00:06:45.32The DSA sets strict rules for online platforms such as Instagram, X or YouTube, ranging from illegal content to advertising and protection of minors. 00:06:54.70And we also discussed another important initiative, which, conversely, is probably not that known, but should be. 00:07:01.98The Digital Decade Policy Programme. 00:07:04.14This is a set of very ambitious goals set by the UN member states to be achieved by 2030 in order to push Europe to the top of the digital league. 00:07:13.46They include, for instance, having 100% of key government services online, offering to citizens everywhere high-speed mobile coverage, at least 5G, and doubling the number of European unicorn startups. 00:07:28.22What makes this initiative, in my view, very much worth keeping an eye on, is that these are concrete targets that the Commission and national governments have committed to achieve, which means that we, citizens, can track them and see whether or not they are achieved by 2030. 00:07:44.72Another target in the digital decade is to double, from 10 to 20%, the share of the world's semiconductors produced in the continent. 00:07:53.04I also asked Renata about this, since this is, as I mentioned before, a key element in ensuring Europe's strategic autonomy. 00:08:01.58And now, so much for the introduction, I leave you with Renata Nicolai. 00:08:08.42Renata, welcome on the show. 00:08:16.50Thanks for having me. 00:08:17.38Very nice to have you here. 00:08:18.84So let's start with some context. 00:08:20.72The digital revolution, as it were, has been going on for, I don't know, it depends on how you count it, but at least in full force, I'd say, in the last 15 years, and with different impacts on the economy, on society, on people's lives. 00:08:33.74And that creates a lot of opportunities, but also challenges that have been interpreted differently by different people and by different, in different geographies. 00:08:42.88So the interpretation in the US is not the same as in Europe and in the EU in particular. 00:08:47.22So what would you say is the view of the EU on the opportunities and challenges brought by digital?
Renate Nikolay 00:08:53.82Well, I think in the EU, we have a rather long kind of approach on creating the digital single market. 00:09:02.10I mean, this is not a theme that has been invented only in the last couple of years. 00:09:07.38I mean, this has been with us for more than a decade as an idea to really also use the biggest kind of, you know, advantage that we have in the European Union, which is our single market for kind of, you know, digital advancements. 00:09:21.38However, I think it is fair to say that maybe in a first phase, we looked more at it from a regulatory point of view. 00:09:30.10So when you look back, I mean, this was the days, the early days of the data protection rules. 00:09:35.12You know, that was a conscious choice of Europe to kind of start with that. 00:09:39.68Others did not. 00:09:39.68Others kind of went into kind of, you know, creating the social media companies in Silicon Valley. 00:09:48.02This would probably not have been possible in Europe because of a mix of things, you know, venture capitalism, not at the same level. 00:09:55.64The skills from the kind of, you know, engineering point of view, not at the same level. 00:10:00.54But nevertheless, it was an important contribution from Europe because what we did with the GDPR had an influence on the world because we inspired the world with our principles on data protection. 00:10:10.62I think what we have been doing in the last couple of years is a slightly different approach to this. 00:10:15.78Really capturing, as you said very well, the challenges and opportunities at the same time. 00:10:21.98So as Europe, we stand for values and we also kind of, you know, tend to discuss the things up front. 00:10:29.78So we have seen that kind of digital transitions can have super opportunities, but also present challenges. 00:10:36.52Let's take the challenge of platform economy. 00:10:39.46Great advantage. 00:10:40.54I think we all learned a great deal in the COVID times to kind of use them. 00:10:44.14They kept us alive. 00:10:45.10They kept us connected. 00:10:46.24But we also saw that they can, of course, create harm for society. 00:10:50.10Illegal content, disinformation, you know, safety of minors and so on. 00:10:55.30So, you know, we felt we needed to kind of guardrail a little bit. 00:10:58.86Or let's take the other example of AI. 00:11:01.44Yes, we want AI applications in Europe. 00:11:03.96We see it as a huge possibility, but we stand for certain AI. 00:11:08.60We stand for a human-centric ethical AI, which means that there are some very, very limited, but there are some guardrails where we say no. 00:11:16.28For instance, social scoring, that's not for us, that we don't want in Europe. 00:11:20.72So, but nevertheless, you know, this kind of regulatory, let's say, risk-based approach, so smart regulation, not over-regulating, rather principles-based, you know, leaving space for future innovation is, however, accompanied with a real innovation agenda. 00:11:36.94And I think that's the kind of opportunities part. 00:11:39.18AI is the best example. 00:11:40.36We have the AI Act, but it's kind of combined with an AI innovation package because the race for AI is out there. 00:11:47.18And Europe needs to be a full participant in this race and has very good ingredients to do so. 00:11:52.46You know, if you think about all the industrial sectors where if we now use the opportunities, use the data we have, use the supercomputing power we have, you know, use the guardrails that we have to really kind of, you know, move to the next digital innovation step on AI, then we can play a role, a first league in the future. 00:12:11.72So, I think that's been the game changer, that people have realized that the future competitiveness will inevitably be depending also on our ability to have digital solutions embedded in it, whether that's smart agriculture, smart energy solutions, smart, you know, mobility solutions, telemedicine, you name it. 00:12:30.20So, we need to play a part in that. 00:12:32.42That's why it's not only a regulatory approach, it's also an approach to really use it as an opportunity. 00:12:37.66And AI is probably the best example because it's so much talked about at the moment. 00:12:41.30It has challenges, but offers huge opportunities.
José Maria Pimentel 00:12:43.88Yeah. 00:12:44.32And in AI, the EU has clearly policies towards both goals. 00:12:49.44So, at the same time. 00:12:50.84Absolutely.
Renate Nikolay 00:12:51.60Absolutely. 00:12:52.12It's probably the best example. 00:12:53.84I think it's embedded in a lot of what we do. 00:12:55.86When you take, for instance, the data, I spoke about a data protection approach in the past. 00:13:01.38But in this mandate, we have rolled out a data strategy. 00:13:04.58We have kind of enacted things like the Data Act. 00:13:06.92We are working on data spaces. 00:13:08.52This is a total game changer. 00:13:09.92This is going, again, you know, not forgetting about data protection. 00:13:13.68This is an important foundation. 00:13:15.44But this doesn't mean that you cannot use data. 00:13:17.60So, it's kind of putting the focus a little bit away from data protection only to the huge potential of also industrial data, in particular, of connected goods, because they will be the ingredient, the data is the ingredient for the future AI applications for whatever we want to do on digital transition. 00:13:33.08We need to base it on data. 00:13:34.24So, again, an example of an enabling policy rather than a guard railing that is only, you know, creating compliance costs.
José Maria Pimentel 00:13:42.22Yeah. 00:13:42.54I find it interesting that, well, it's very ambitious that you're trying to kind of square the circle in a sense because you're trying to make, to ensure the online world is safe, is fair on the one hand, mainly through regulation. 00:13:55.06But then, on the other hand, also trying to make sure Europe catches the digital wave, as it were. 00:14:00.28So, boosting capabilities, boosting innovation here. 00:14:03.88That's a big challenge. 00:14:04.90But what I find interesting and I find different from what happens elsewhere, elsewhere in the sense that in other areas, is that it's the same people drafting policies towards both goals. 00:14:15.62Because usually those two roles are split, right? 00:14:18.14You have the kind of the regulation people and the innovation people. 00:14:21.08And you are, you have the same, well, it's probably not the same team, but the same directors in this case, taking care of the two goals that are different in a sense. 00:14:30.52But they're also very much connected because you cannot go too far in one without ensuring the other.
Renate Nikolay 00:14:36.72It's really this new concept. 00:14:38.64And I never believed in this kind of, you know, narrative that it's either innovation or regulation. 00:14:45.30That's nonsense. 00:14:46.32They can kind of coexist. 00:14:48.26You can reconcile the one with the other, you know. 00:14:51.20Europe stands for certain things, you know. 00:14:53.50When we see that there is a platform economy that kind of leads to deep divisions in kind of society, that leads to radicalization online, that kind of leads to the spread of illegal hate speech, we need to act, you know. 00:15:06.86We cannot have one set of rules for the offline reality, but not respect the same rules for the online reality. 00:15:13.78So that's a non-brainer, what we did on platform economy, to simply kind of follow the concept of what is illegal offline has to be illegal online, but it had to be said. 00:15:22.84And always, of course, in full kind of balancing with the freedom of speech. 00:15:26.86But at the same time, of course, we want to be not only consuming the digital solutions coming from elsewhere. 00:15:33.14We want to be an actor in this. 00:15:34.80We want to kind of design the future digital solutions, you know, in medicine, in kind of automated driving, because we have huge potential, especially on the industrial side, to play that role. 00:15:46.14Supercomputers is a good example. 00:15:47.68It is a kind of technological project that we worked on together in the EU, but it's kind of an ingredient for a lot of the things that we want to do in the digital transition, because if we don't have the computing power, you kind of, you know, leave our startups that might have interesting AI application ideas in the hands of the big American hyperscalers, because they need to go there. 00:16:09.32They need to be kind of swallowed by them, because that's the only way to test their models. 00:16:13.00So that's what we need to facilitate. 00:16:15.06We also need to facilitate an infrastructure in Europe that they can stay here, can grow here, can adapt here and can develop their innovations here.
José Maria Pimentel 00:16:24.20Let's go a bit deeper on the, well, first on the regulation front. 00:16:27.74So let's take, for instance, the DSA, which you mentioned before. 00:16:30.94The DSA is focused a lot on removing illegal content, making sure these companies are transparent on what they're doing, on what the algorithm is selecting for us in terms of advertisement. 00:16:41.58For instance, how do you say this relates to broader goals that you mentioned of fighting disinformation that's polarizing society and polarizing politics through, you know, fake news and whatnot? 00:16:52.92How do you say, or what would you say is the role of the DSA on that?
Renate Nikolay 00:16:57.84I think the DSA is a part of our whole society approach on addressing disinformation. 00:17:03.18Disinformation is a phenomenon that you cannot slip something on and off. 00:17:06.72It's not like that. 00:17:07.60It's much more complex because you need to address it really in a kind of holistic approach. 00:17:13.28And I think what we've been seeing over the last years, because there have been disinformation, conspiracy theories, campaigns, during COVID, ever since the Russian aggression in Ukraine, and you name it, on the Green Deal, you know, there are these narratives out there. 00:17:27.40And we've all learned to kind of pay more attention to that. 00:17:30.92So, you know, there is a much more kind of, you know, stronger basis to analyze the kind of the disinformation waves. 00:17:37.62There's a much bigger awareness in the society on disinformation. 00:17:41.20Where we come in with the DSA is indeed, the DSA is a transparency tool, is a tool to kind of deal with systemic risks. 00:17:48.92And amongst systemic risks is also the kind of the potential spread of disinformation. 00:17:53.30So, where we can come in is actually to hold the platforms accountable in a content agnostic way. 00:17:59.00We are not about content. 00:18:00.00We are about kind of, you know, looking at the platform structure, their recommender systems, their algorithms, and what they do when they kind of see disinformation kind of waves, which are being flagged to them by kind of fact checkers, for instance, or by media or by individuals, and how to deal with that. 00:18:16.20How they kind of tame the spread of it, how they kind of the kind of the reality and the speed of it. 00:18:21.30That's the kind of, you know, structural thing we can do. 00:18:23.78So, at the moment, for instance, where we are heading for elections in Europe, it really shows that this whole society approach is what is needed here. 00:18:32.08Because, you know, the platform, they play their role. 00:18:34.12They have really kind of, you know, stepped up their game in terms of abiding with the DSA rules, having incidence protocols, when something like the shooting in Slovakia with regard to the prime minister happened, to really have immediately an incident protocol so that the work kind of, you know, plan can follow. 00:18:50.28But also being much more aware of the fact checking community that comes in and makes them aware. 00:18:55.66So, what we are seeing is that disinformation still exists, of course, you know, we're getting daily reports from the fact checkers, and they are still there, this narrative. 00:19:04.24But what seems to go quite well at the moment, and but of course, we have to keep on our toes, is that because of the system that we have created, with the higher accountability, with more transparency, with platform responsibility, we actually tame the reach. 00:19:17.22So, we keep it quite under control. 00:19:19.22Because, you know, by flagging it, by kind of, you know, debunking it, by kind of demonetizing it, you manage that this is not kind of creating the kind of the spread and the virality and the echo chambers that people are only kind of driven by that. 00:19:32.60And that we need to do. 00:19:33.88Because, you know, disinformation has become a topic that is on the agenda of every European council by now, you know. 00:19:39.68This is prime minister topic. 00:19:41.80You know, this is not just some freaks or some people in DigiConnect who think about that. 00:19:46.58This has become a key issue for our society, for our democracy. 00:19:51.90And we need to be aware of that. 00:19:53.54We need to do it in full respect of freedom of speech. 00:19:55.82But we need to be aware of the systems behind, the actors behind, so that we are not naive, but actually address this in a very systemic way.
José Maria Pimentel 00:20:03.70It's interesting what you said, so because you have an interesting point of comparison in that you have the European elections that are going on right now and the ones that we had last time around. 00:20:13.56So do you feel already that there is a difference, a material difference?
Renate Nikolay 00:20:17.84Oh, big time. 00:20:18.82I've been involved in that in a different role already five years ago, because I was then working as head of cabinet more on the data protection side with the then justice commissioner Vera Yorova. 00:20:29.48And there was the Fain Pitch Analytica scandal, if you remember that, from Facebook, a big kind of data violation scandal. 00:20:36.48And of course, it created a whole debate about this. 00:20:39.12And that was also one of the ingredients that brought about a code of practice against disinformation, which was a self-regulatory approach with the platforms for the first time to bring the different constituencies together. 00:20:49.70Civil society fact checkers asked the platforms to kind of deal with that in a systemic way. 00:20:54.50But it was, of course, not hard law. 00:20:56.00It was a self-regulatory approach. 00:20:58.26So all that was created just before the European Parliament elections. 00:21:01.42Also, the work with the member states and their election authorities was all very early days. 00:21:07.36There weren't kind of systemic workflows, kind of. 00:21:10.28There weren't kind of, you know, incident protocols. 00:21:12.94There weren't kind of, you know, threat assessments. 00:21:16.14We are in a much better shape. 00:21:17.92Doesn't mean that we should be complacent. 00:21:19.96We still have to really remain on our toes, especially now in the countdown moment, you know, in the last days before and also after the elections, because then there's other vulnerabilities with the candidates coming out of it. 00:21:31.18But nevertheless, what I am very proud of, and I know that the world is also quite watching what Europe is doing here, because there are many elections in the world and they look at, you know, how we play with these rules, is that we really have by now an ecosystem that is really well united and well kind of, you know, has really kind of worked and it's cooperating much better compared to five years ago. 00:21:52.60It hasn't been fully tested yet. 00:21:54.40But, you know, when you look at also the input from the cyber world, because we're working also with the people who really observe the potential cyber threats, there's a much better cooperation with the other institutions. 00:22:04.08I have not seen five years ago the same cooperation with the European Parliament, the Commission, the Council as we see it now. 00:22:10.36The member states are much more aware. 00:22:12.04So, you know, I don't know whether you know, but we have done a couple of weeks ago a tabletop exercise with a lot of these players to really go through scenarios. 00:22:19.96You do that a lot in cybersecurity. 00:22:21.70We have never done that on election integrity. 00:22:24.16This was a very, very useful exercise to really play through. 00:22:27.42And these were all scenarios that we have observed, you know, and they were at different scales. 00:22:31.48And it was really a good exercise to kind of just think through it. 00:22:34.56It's still a little bit artificial in a tabletop, but nevertheless, it kind of shapes your mind. 00:22:39.56It makes you more alert. 00:22:40.60And I definitely believe it has an effect. 00:22:43.28And I think that's one of the reasons why we see at the moment, this information is there, but we are taming it. 00:22:48.12So let's hope it will stay that way.
José Maria Pimentel 00:22:51.36Yeah, interesting. 00:22:52.66Let's turn back to AI we were discussing before, which, as you said, is an interesting area because you have been enacting policies in both ends, both in the regulation side and in the kind of innovation boosting side. 00:23:04.30You mentioned the supercomputers and it has been one of the most interesting fronts to follow in my role as digital ambassador because, well, to be fair, I didn't know the EU was doing so much in this area. 00:23:18.40What I find, but correct me if I'm wrong, is that you felt that you needed to step in in order to provide these capabilities, in this case, the supercomputers, to make sure that European startups are able to grow because otherwise they wouldn't have access to it in the way that American startups do, right? 00:23:35.82Because there they have these big, large companies that themselves have supercomputers and they can, well, either through partnerships or through acquiring smaller companies, they can use those capabilities. 00:23:45.24And here, if it weren't for the EU stepping in, that would be a void there in which startups wouldn't be able to grow, right?
Renate Nikolay 00:23:52.52You're absolutely right. 00:23:53.46I think no Germany, no Denmark, no Portugal, no Czechia alone would have been able to kind of create the scale of the supercomputers we're talking about here. 00:24:04.28Really top-notch, world-class supercomputing power that you need to kind of deal with the amount of data that will be the ingredient for any kind of digital kind of advancement in the future. 00:24:17.82And I think it was a very intelligent kind of, you know, process that started years ago to look at that in a kind of a joint-up way. 00:24:26.80So it's not one country. 00:24:28.12It's really kind of a collection. 00:24:29.32It's kind of looking at geography. 00:24:31.18There's one in Finland. 00:24:32.14There's one in Barcelona, you know, and so on. 00:24:34.58So really to kind of cover a little bit also the geography and to really invest heavily in this. 00:24:40.74And I think we can say with pride as Europeans that through that, you know, it's heavy investment. 00:24:46.64It's co-investment. 00:24:47.68It comes a lot of money from the European Union, but also from the member states. 00:24:50.74But it has paid off because, indeed, we now have these kind of, you know, potential structures that can be used. 00:24:56.48With the AI act, it became necessary to facilitate even more than was the case so far that these kind of, in this dynamic process, especially on generative AI, if you think about it, you really need to give the possibilities to the startups right away and easy access to the supercomputing power. 00:25:15.32And that's why we made even an adjustment to the setup of these, you know, supercomputers that now there's really an easy access. 00:25:22.36So the door is wide open for AI startups to kind of come and, you know, run their applications on these supercomputers so that then hopefully they can kind of develop this further in the EU. 00:25:32.54And I think the idea of the AI innovation package, when you think about this, this idea of the AI factories is really that you create ecosystems around certain centers, you know, excellent centers in Europe. 00:25:43.60And that's the other thing. 00:25:45.06Future European competitiveness needs to think about, you know, the geography of the single market as such. 00:25:50.70And then you have certain ecosystems where, let's take Barcelona. 00:25:53.98I was there. 00:25:54.74I looked at Martin Ostrom and it's fascinating when you see it, it's a very vibrant kind of economic kind of, you know, context there. 00:26:01.44You have university setups, so you have the skills also that you need to, you know, because we also have a skills shortage issue in Europe that we need to address better. 00:26:09.52But, you know, in these ecosystems, you have them at the places where you have an academic kind of context where you, you know, provide also the skills input. 00:26:18.34You have an innovative kind of context with startups. 00:26:21.48So it's a wonderful kind of ecosystem that can then kind of develop and from there grow and really kind of serve, of course, the European competitiveness as a whole. 00:26:29.62And I think that's very smart to have this at different places in the EU, maybe also with specificities, you know, you know, the AI factories could be in medicine, they could be in agriculture. 00:26:39.66We have to go for the areas where we have a strong industrial base and then move it from there. 00:26:44.82But, you know, it was smart to invest in the supercomputers. 00:26:48.02And now we have to be smart to think of the next technological kind of issues. 00:26:51.98And that's where quantum computing comes in.
José Maria Pimentel 00:26:55.36Yeah. 00:26:55.72And it's unconventional also in a sense that, at least in comparison with the US, where it would be unlikely to see the states or the public funds stepping in to fund these supercomputers, which there it would be probably less likely to happen, right?
Renate Nikolay 00:27:11.00Yeah, you're right about that, because they're, of course, whole kind of startup scene has, you know, they have a really different tradition on venture capitalism. 00:27:19.32You know, the Silicon Valley was possible because they had huge amounts of money in venture capitalist structures, hugely open for risk taking. 00:27:27.94And they kind of invested in 10 ideas and one made it. 00:27:30.56And the rest was kind of, you know, that's part of the game. 00:27:33.26But on the other hand, I mean, look at the US, they have done the IRA. 00:27:36.12I mean, this is huge subsidies, you know, so I wouldn't say that, you know, I wouldn't say that in the US, everything is market driven only. 00:27:46.84And we are the ones coming with, you know, I think we are different. 00:27:50.32But, you know, we are all, you know, addressing the same challenges. 00:27:54.16We are in a slightly kind of changing geopolitical context. 00:27:57.98We are, you know, in a systemic rivalry. 00:28:00.84So we all have to kind of look for the best way to support our, you know, economic security, our kind of strategic autonomy and our future competitiveness. 00:28:11.10And this is what this is about. 00:28:12.36And Europe is stronger when we join forces and when we kind of, you know, identify areas where we can have our strength and pull our way together. 00:28:21.28And that's, I think, what worked really well in the supercomputers.
José Maria Pimentel 00:28:25.48Well, this is probably the question you get the most, I guess, which is that the criticism on the AI Act, well, much of it actually comes from the US or from American companies. 00:28:34.10And I find that it's largely unfair, but it's also understandable. 00:28:38.20And what I wanted to ask you is this. 00:28:39.40So I was recently reading, I don't know if you caught it, but there's a recent paper by Anne Bradford who famously coined the term Brussels effect. 00:28:46.48Brussels effect. 00:28:47.28Yeah, yeah. 00:28:47.86Maybe we'll talk about that. 00:28:49.46And she has an interesting recent paper tackling this issue. 00:28:52.66And her point, which I very much agree with, is that it's not because of regulation that Europe is behind the US on the digital front. 00:29:00.88It's because obviously of other aspects that have to do, well, for instance, with access to capital that you mentioned. 00:29:06.20So this I find to be true, but it's still possible that with these fragilities, regulation will affect the EU more than it would affect actually the US. 00:29:15.62So if you have already a fragile ecosystem, for instance, regulation on AI, that has to be prescriptive and might, and that this is kind of the argument against it, that might stifle innovation in the sense that companies, well, there's a lot of that they need to comply with and there are some things that they cannot do. 00:29:31.94So in the end, we don't know what the AI of the future will look like. 00:29:35.48So in Europe, maybe they won't be able to experiment with some things that in the US they can. 00:29:40.50And so it will kind of put European firms further behind on these firms. 00:29:45.22This is probably an argument to get a lot.
Renate Nikolay 00:29:47.40I don't buy that argument. 00:29:49.08I want you to kind of, you know, open more for the idea that the AI Act is really a piece of smart regulation. 00:29:55.72You know, this is not about prohibiting things. 00:29:58.18If you look at what the AI Act does, then it has very, very few things. 00:30:02.60It's really just the social scoring mainly where we say, this is not for Europe. 00:30:06.64We don't want that.
José Maria Pimentel 00:30:07.44This is not a society we want. 00:30:08.38Going there, yeah.
Renate Nikolay 00:30:09.28Exactly. 00:30:10.22Very, very limited. 00:30:11.74Then it has this approach on high risk. 00:30:13.94Very limited again, you know, very limited sectors. 00:30:16.60And high risk does not mean we don't want AI there. 00:30:20.04I mean, let's take one example. 00:30:21.72In the judiciary, you know, of course, we don't want to fully replace judges. 00:30:25.72You know, you need to have a fair trial, right? 00:30:27.82But on the other hand, to have the kind of, in the judiciary, a high risk nuance in it, or also in the labor market, has to do with, you know, we want to avoid that we deepen bias, that we deepen discrimination in our society. 00:30:41.86So it doesn't mean it's forbidden. 00:30:43.54It's more is, you know, we want you to have to ensure that you have a certain ex-ante vision on this. 00:30:49.16You know, you take into account certain safeguards before you kind of develop it. 00:30:53.22And that's a fair kind of thing. 00:30:54.54We had a similar discussion on privacy years ago. 00:30:58.10The idea of privacy by design was seen as, oh, this is going to stifle innovation. 00:31:02.60But actually, it can also be in a competitive advantage if you have thought it through, you know, because, you know, one concept could be you let it kind of develop and then you have to crash and then you bring it to court and you litigate American way. 00:31:15.74Or you say, hi, here, this is high risk. 00:31:18.26So let's think it through from the beginning. 00:31:20.02But it doesn't mean that we close the door, you know, and that will be the majority of the AI applications because the majority will not be in high risk areas. 00:31:28.04The majority will be open the gates. 00:31:30.96The AI Act is not limiting it at all. 00:31:33.44Rather, the opposite. 00:31:34.72The AI Act is kind of, you know, supporting industry initiatives to kind of, you know, come together, sandboxing the AI kind of innovation package next to it. 00:31:44.22So I think it's actually a promise of the European Union that we want to support AI applications made in the EU. 00:31:50.76So I would really kind of argue against that the AI Act is an example of how Europe leads again on limiting. 00:31:58.40I think we have to have that narrative also, that political narrative. 00:32:01.32And I think when you look at the letter report or when you kind of hopefully it will be reflected also on the Draghi report, they also show when you look at the statements of leaders, you know, just the recent kind of statement of the German French kind of, you know, leaders. 00:32:14.00So everybody knows that the digital critical technologies are key for the future competitiveness in the EU. 00:32:21.44This was a key debate also in the final stretches of making the AI Act a reality. 00:32:26.70So it's built in generative AI, another kind of thing. 00:32:30.22It's very dynamic. 00:32:31.12It's very fast. 00:32:32.32Again, we are not saying it cannot be done, but we want to kind of, you know, have certain kind of standards. 00:32:37.60And on this, actually, I see on the AI Act much more convergence internationally than I would have thought would happen if you had asked me a year ago. 00:32:47.30When you look at the Hiroshima process launched by the Japanese or now all these AI Emmits, every week you have somewhere at the AI Summit. 00:32:54.28I mean, it's quite interesting, you know. 00:32:56.02You know, there is really an appetite for partners in the world to come closer together on the key principles for, you know, a human-centric AI. 00:33:06.36And here, I think the AI Act is actually the inspiration. 00:33:09.90So I would really... 00:33:10.70It's the Brussels effect.
José Maria Pimentel 00:33:11.88There it is. 00:33:12.10Yeah.
Renate Nikolay 00:33:12.78Actually, it is already a Brussels effect. 00:33:15.02But I think, you know, you have a point. 00:33:17.20We have to make clear that we do not forget this innovation side. 00:33:20.58And we have to push this really, really, you know, thoroughly so that this is not forgotten and it's accompanied by concrete action so that we are not only talking about AI factories, but we actually make it work.
José Maria Pimentel 00:33:31.12Yeah. 00:33:31.30And there, one of my... 00:33:33.00Well, maybe my favorite initiative, which I find is insufficiently known, is the Digital Decade Program. 00:33:39.48Because there, you have very concrete targets, which are not very far away. 00:33:44.50So it's 2030. 00:33:45.54So it's actually not very far away. 00:33:47.36And there are targets on which there is a commitment by the EU to meet them. 00:33:51.64So if they are not bad, well, you guys will have to justify why they weren't met. 00:33:55.82Well, I find the range of targets quite encompassing. 00:33:58.86And I find it very brave to commit on... 00:34:01.60It's not something... 00:34:02.60I was even having this conversation with a friend the other day. 00:34:04.74It's not something governments and public entities usually do to commit with targets. 00:34:09.30So I find that brave.
Renate Nikolay 00:34:10.84You're right. 00:34:11.30It's rare that the three institutions come together, you know, with that kind of Decade perspective. 00:34:16.46And, you know, I'm chairing the Digital Decade Board. 00:34:19.12So I can tell you also from my experience in dealing with the member states representatives who have all their coordination role in having a whole government approach, because it's not one ministry leading here on this. 00:34:30.08I mean, these are targets. 00:34:31.22They go in the area of skills. 00:34:32.48They go in the area of public administration, digitalization, business, digitalization, connectivity. 00:34:38.12I mean, this is broad. 00:34:39.02You really need a whole government approach if you really want to mind a push. 00:34:42.24I see that they are all kind of coming with national strategies. 00:34:45.98You will soon have the next Digital Decade report. 00:34:48.48It's not going to be rosy. 00:34:50.56We are a bit off target, so to say. 00:34:54.00So we have to roll up our sleeves. 00:34:55.52That's a big side of setting targets. 00:34:56.58I mean, honestly, the positive thing is that we are on the road. 00:35:00.36I mean, that's definitely much more the case compared to a year ago. 00:35:04.34And it's a good ingredient also for the transition we are in, the political transition from one commission to the next, that we keep that. 00:35:10.74Also for the next kind of, you know, political setup with the institutions, a newly elected parliament, a new commission, that we keep that kind of compass for us, the digital decade, because they are all very relevant. 00:35:22.80Without kind of, you know, a public administration that goes digital, we will not have the super roaming moment of the, for instance, digital wallets that we could get, you know. 00:35:32.74Without digitalization of business, we will not kind of, you know, move everybody into the cloud and, you know, what we really need or into AI, what we need for the innovation. 00:35:41.50Without digital skills, we will be limited in kind of, you know, for instance, operating the supercomputers that we want to build. 00:35:48.24And nothing can be done if you don't have the high quality digital connectivity. 00:35:53.10And this is the construction side that we need to address in the next mandate, because that is not it there.
José Maria Pimentel 00:35:59.50Yeah, and one of the, I would say, the biggest challenges in the digital decade is the goal of doubling the market share in semiconductors that are built in Europe. 00:36:09.88And this is something you mentioned before, because it's very much related with the idea of ensuring economic security of Europe. 00:36:17.90I guess many people don't remember, but during the pandemic, there was a moment in which suddenly there was a shortage of chips, of semiconductors. 00:36:25.64And this is what I think led you to then enact this policy to make sure that if something like that happens or a shortage in the world market, we will not be in the hands of other countries. 00:36:35.64We will have at least some capacity to build them here in Europe. 00:36:39.86But I find it a big challenge. 00:36:41.12To be honest, I don't know how that's going, that goal.
Renate Nikolay 00:36:43.84I think this is part of a bigger kind of realization that really was triggered, as you said, very well from the COVID crisis and then also the war times, you know, the dependencies that we were so happily and in a very naive way accepting. 00:36:57.56And I would call it the happy days of globalization or the naivety that everything is all going to be fine. 00:37:03.68Well, it's not. 00:37:05.06Geopolitics have changed and we have lived through a supply chain shortages that were hurting us. 00:37:10.72And that's why, you know, there's a different realization that economic security is key. 00:37:15.44We want to remain open to the world because we are very big exporters and we need to keep markets open. 00:37:20.90But nevertheless, there needs to be a certain autonomy that needs to be from a strategic point of view, whether it's on raw materials, whether it's kind of an energy, whether it's kind of in chips, absolutely needed. 00:37:31.84And I think that's why a concept such as the CHIPS Act, which kind of, you know, means we work better together on that. 00:37:37.96We invest also in very kind of, you know, chips production in Europe. 00:37:41.54And you've seen the trend. 00:37:42.82I mean, there is more and more investment coming back. 00:37:44.96It's, of course, happening elsewhere as well. 00:37:46.60It's the same that happens in the US. 00:37:48.46But I think we have to be part of that race. 00:37:50.80And I think that's the same on raw materials, you know, the same on kind of looking at different ways, you know, to deal with energy. 00:37:57.96I mean, look at how much we got out of the energy dependency from Russia. 00:38:01.74So these have been very, very important lessons learned for the European Union in the last couple of years to really kind of stand up more for our, be more assertive on what we need in the EU to really kind of survive whatever kind of drastic crisis situation might arise.
José Maria Pimentel 00:38:18.48Well, Renata, I'll let you go. 00:38:20.70For that, let me just ask a quick question on the future, because I think it makes sense to end on that. 00:38:24.74So as listeners already understood, there was a lot of policy drafting in the last years. 00:38:31.76And now those policies are there, at least most of them, I guess, are out there. 00:38:35.58So will your role change? 00:38:37.88So will the job of your institutions and DigiConnect in particular towards digital change in the next years, in the next minute?
Renate Nikolay 00:38:44.64Inevitably, we will have a stronger focus on effective implementation. 00:38:48.68I think, you know, it's great to have a Brussels effect that we discussed, but we cannot only kind of, you know, have an image as the tech regulator that comes up with good rules. 00:38:58.20We have to show that these rules are effectively enforced and have an impact. 00:39:03.14And I think when you look at the last couple of months where we had, you know, the first kind of months of enforcement of the Digital Services Act and the Digital Markets Act, that's exactly what we are doing. 00:39:12.52We really kind of, you know, pick it up with the platforms, we open investigation, we change their behavior, we kind of address shortcomings, we deal with their risk assessments. 00:39:22.38And I think the same will have to come from the AI Act. 00:39:25.44And, you know, to really make sure this is a very good cooperation at the European level with the national level that we really effectively enforce that. 00:39:33.26And an additional point, I think effective enforcement of some of the rules, which are more enabling rules. 00:39:38.84We spoke about the Data Act that has a huge potential for business. 00:39:42.98But here, you know, business needs to be helped that they actually use that potential, that they actually kind of open space for interesting contractual models so that users can share the data.
José Maria Pimentel 00:39:53.76So, again, you know, they need to be nudged in a sense.
Renate Nikolay 00:39:56.00For me, it's a key game changer that we look at kind of these more future-oriented, principle-based rules in a much more proactive way when the story is not over when it's published in the official journal. 00:40:08.66That's just when another chapter is opening, a chapter of effective enforcement, joint cooperation with industry and the stakeholders to really make it work. 00:40:17.56And we should always be guided by the objective. 00:40:19.86It needs to have an impact. 00:40:21.24It's good to have laws, but they need to have an impact. 00:40:23.66And I think that will be one of the key messages. 00:40:25.92It doesn't mean that we can't do, you know, fill the gaps or recast and, you know, look at some of the rules which might not be fit for purpose, work on connectivity. 00:40:35.32We have done a white paper, so there will be new areas of work. 00:40:38.42But I think effective implementation in a proactive kind of, you know, way, that's for me a key game changer for the next commission.
José Maria Pimentel 00:40:45.82Yeah, good. 00:40:46.96Renata, thank you very much.
Renate Nikolay 00:40:48.62Thanks for having me. 00:40:49.48Thank you so much. 00:40:50.56Bye.
José Maria Pimentel 00:40:50.88Este episódio foi editado por Hugo Oliveira. 00:40:54.44Contribua para a continuidade e crescimento deste projeto no site 45coraospodcast.com. 00:40:59.56Selecione a opção Apoiar para ver como contribuir, diretamente ou através do Patreon, bem como os benefícios associados a cada modalidade. 00:41:14.88Legenda por Sônia Ruberti