Europe’s unique role in the global ICT industrial sector
Published on August 23, 2019
Anastasiya Kazakova, Public Affairs Manger
Jochen Michels, Head of Public Affairs, Europe
The European Union Agency for Cybersecurity (ENISA) recently sought public opinion on its consultation paper dedicated to the EU’s ICT Industrial Policy. In it, ENISA puts forward seven principles aimed at strengthening the European ICT sector as well as stimulating its competitiveness on the global market.
The paper places a strong focus on the issue of Europe’s digital sovereignty, recommending that the EU deliver more ‘champions’ in the ICT sector through research, development and innovation. It also advocates a ‘flexible interpretation of competition law’ to ensure the EU’s competitiveness in the global ICT market.
In this blogpost, we’d like to share our thoughts, and prove that Europe is already a highly attractive market with a strong unique role that shapes the development of the whole industry on a global scale.
Risks of losing fair trade and competition against Europe’s competitiveness
We at Kaspersky fully agree that digital development should work for and not against the EU to ensure the cybersecurity and safety of European citizens. The new reality requires that the government ‘act as a stimulus and not an inhibitor to this progress’, and that is why we believe in the success of a more risk-based entrepreneurial culture where venture capital is easily accessible to European ICT businesses and start-ups.
However, shifts in the competition policy and public procurement policies for creating a protected environment for local players may hurt fair competition and weaken growth. Competition is central to the operation of the EU Digital Single Market: it fosters innovation, productivity and growth. A reduction in competition would deprive EU citizens of cutting-edge technology as well as mute motivation and any incentives for domestic and other businesses to be responsive to consumer needs. Therefore, it would impede innovation in the long run.
Risks to the integrity of the EU digital supply chain – where priority, politically, is given to European industrial manufacturers – cannot be assured by domestic manufacturing and design alone, as they might be vulnerable and not properly secured (including due to lower market incentives as well). The mitigation of supply chain risks could be resolved by other means (such as higher integrity and security standards and testing for greater system resilience) and should not be determined by the location where products are produced.
That’s why the economic and social effects of greater economic integration should rather be addressed by smart regulation based on a transparent institutional landscape. And it’s important to promote a fair competition and trade culture not only in the EU, but worldwide, and here the EU is one of the strongest players and ‘free trade defenders’ in the international arena.
The European Parliament report ‘Towards a digital trade strategy’, adopted in November 2017, highlights that ‘access to a free, open and secure internet is a prerequisite for rules-based trade and development in the digital economy’, and ‘the EU should anchor its digital trade strategy in the principles of reciprocity, fair competition, smart regulation and transparency’.
Thus, the EU’s role as a de facto global tech regulator should be further enhanced, especially through a push for strengthening of WTO rules on subsidies, which could help in achieving fair competition globally, and do so without enabling anticompetitive behavior that could put some of the EU’s strongest global assets (meaning competition rules) in jeopardy.
Revised principles for keeping Europe’s unique role
The EU needs a powerful digital ecosystem with all players on the market included, regardless of the location of a company’s headquarters. For that, we believe that it requires a balanced approach to (i) regulation of the ICT supply chain, (ii) elimination of administrative barriers for ICT manufacturers, and (iii) the creation of an attractive framework for investment.
For the ICT market, the integrated supply chain networks with flexible, agile actors and digital business models will replace traditional supply chains, and the EU needs to support such flexibility and agility in industry and research as much as possible.
In addition, clear standards and certification rules would foster the manufacturing of trustworthy cybersecurity products for EU citizens. That’s why the future European cybersecurity certification framework would have to apply valid statistical methods and an evidence-based paradigm to define the best business practices for trusted cybersecurity products. And it’s also important to send a clear message to industry to follow the principles of digital trust and digital ethics as well as ensure ‘security-by-design’ and ‘privacy-by-design’ principles.
Based on that, the cornerstones of European competitiveness in the ICT industrial sector are and shall remain:
- its openness to technology leaders from around the world;
- transparent and evidence-based competition rules and procurement policies;
- its strong normative power – the EU is emerging as one of the most influential actors and norm-setters when it comes to higher accountability, transparency, digital trust and digital ethics, and especially when we speak about data collection and cross-border data transfers as drivers of modern economies. Here, the EU provides robust personal data protection regulation and acts as guarantor of the free flow of data across countries, industries and sectors of the market. And we believe it should pursue it in trade negotiations on making the protection of personal data and cross-border data transfers, under legal safeguards, non-negotiable in trade agreements. It would ensure for the European ICT industry market access for digital goods and services in third countries as well as clear trade rules and necessary protection.
Europe should definitely make the further development of the ICT industrial market one of its priorities as it’s the foundation for both security and growth in the context of a hyper-connected world and increasing cyberthreats. The EU indeed needs a long-term strategy to build and maintain a cyber-skilled Europe. Here we at Kaspersky are happy to contribute to it through our ongoing research contribution as part of the Horizon 2020 projects, and continue supporting the EU in building a strong ICT market where transparency, cybersecurity and fair competition are at the forefront.