Eurooppa-foorumi 30.8.2023 - Competitiviness of European Technology Companies: Vision for 2030

all right good afternoon and uh warm welcome to this uh afternoon session uh of Turk Europe Forum competitiveness of European technology companies uh written for 2030. my name is Lucy McKinnon I work in technology industries of Finland and I'm the moderator of this panel so let's kick it away then we have had during this uh European commission something that uh quite many call Great regulatory tsunami uh well back in time we already already had the gdpr but now we have digital markets act data act platform work directive and AI act in the workings just to name a few so the at least the digital sphere is quite heavily regulated and uh yet we are asking the question does this help the European companies thus all this regulation give the Competitive Edge that European companies need in order to create prosperity and well-being for all of us and here we are to discuss this uh right in the lead in to the next European uh elections in 2024 and let us start with the Great panelists so we have uh Miss Hannah wilkonen here MEP hello welcome and here your second term in uh in European Parliament uh and has helped many uh three ministerial positions also here in Finland uh and you have been in the key committee uh on that is the itra committee how has it felt from your point of view in the parliament so many proposals some of them even has to be prepared so few impact assessments and uh what is your take on this uh can we turn this regulation into the Competitive Edge for companies um if I'm if I'm thinking as a decision maker different sectors in politics I think that digital sector is maybe the most challenging to make legislation for us as a decision makers because technology is developing very very fast and our decision making process is very slowly so we should have always very technology neutral approach and long-term approach we should give a legal certainty for our investors and for the companies but in the same time we should set also rules and Level Playing Field for all the companies so this is this is very difficult topic I think because in in the same time we should boost Investments and Innovations in Europe but also we have to have legal framework for those Investments and like you were already mentioning many many or maybe just a few of the legislations we have been working during the last years I think we have to all the time be very careful that we are not over regulating to Market and especially when I'm looking smes and small businesses because they don't have the same resources and and big companies very good that you took up the smes 90 of our members are are namely smes so thank you and let's continue with uh our friends from swai the German electoral and digital Industries we have the senior member of management here this I pronounce it roughly correctly yes and uh so zwai has uh more than a thousand members working in Global Market trying to Electrify and digitalize the industry to put it short so Sarah the German industry has been the PowerHouse of European Union for many years but now we see some uh bumps on the road and uh especially the middle stand are required as being quite traditional how do you see how do we how can we renew and reinvent the European industry you know in order that to remain competitive I think the strength of the European industry and also of course the German industry has been that we have been Reinventing us for centuries right and this is necessary we always need change and we always need new Innovations and that's what we need to continue to do and that is uh what the companies are very good uh at doing and when we look at the electro industry we see that many of the fields that we're working in now are digitalizing so when we look at a time frame of 15 years about five to ten years ago the vast majority of our business in the Electro and digital industry was analog right when we look at it nowadays about 50 percent are now digital of the products and services that we provide and when we look into the future five to ten years we did a survey then we think that the majority will will be digital products and services and it's really important to keep Pace with that um to keep on innovating to make use of all the options that we have in the companies but then of course we also need a political framework that allows the companies to invest in that and that means be less bureaucratic allow companies to speed up when they are coming up with newer Innovations not putting hurdles into what they're doing protecting their Trade Secrets and rights and those kinds of things so I think it has to work together we need the Innovation power of the companies and especially the digitalization that we will need also in order to reach our climate goals in order to put the efficiency of the sectors together and then of course the political framework to allow the companies to live up to their potential so more Investments less bureaucracy to put it short yes okay thank you so much and let's stay in uh in Germany so we have the head of uh unit for industry 4.0 Mr and from the Federal Ministry of economic affairs and uh how would you comment this do you agree wholly what the uh Senator said I would even go one step further I think the future economy will be fully data driven and this means that we need a cultural change how we use data because what you talked we are very aligned by the way and um the one thing is just to produce some products which are digitalized yeah but this is still property terrorists this is very single but if you see future Innovation you need the Innovation ground to use data together and exactly to understand how this can be done and what we have today is that we have a lot of silos and system perfect ideas great use cases but they never scale Say Never scale in Industry I speak more for industry because it's very expensive if you ever negotiate each single use case with many companies you cannot scale it only becomes very expensive and this is what we should overcome and that's what I try to work for to implement data-driven environments or systems versus Innovation capacity can really evolve and we could see and you both mentioned it's smes it's not easy just to do it we need a completely new understanding we need to work said something like Co-op petition you have to create jointly a system sustain it which is open which makes a fair Level Playing Field and on that you compete you can compete with your services because your software if you want to say so yeah for example I think it was recently announced by the Bosch company they are now taking a territory one side is a hardware on the other title it's a software yeah okay you need interoperable systems and this interoperable systems no there's not a single company which would be able to create to the loan maybe so much for the beginning but it's a joint effort to build on I would say there is one strength in Europe that we know on a physical on the normal way how to cooperate and jointly invent and bring It Forward we have to bring it to the Digital Data driven area then I'm very positive if not people know so it was great we had uh just lunch before this event and uh uh you mentioned many times uh open and uh European and interoperable but not single time regulations so that was something quite heartwarming to hear from our public official and you named also Silo and we all know that silos in digital are very bad except one so well compared to saline from Silo AI a uh Nordic leading AI company and uh and you just made uh quite Hanson announcement on creating a European large language model for AI so we'll compare and uh Silo has grown in this course of the years so it was founded on 2017 and now already having 300 AR Specialists of which half are phds by the way so how do you find it from the regulatory point of view so we all know that the uh Europe is about to regulate quite heavily actually the uh development and usage of artificial intelligence how do you see the future of Europe and European AI companies in in this regard yes so thank you UC for the for the kind introduction I would I would yeah I I mean I have a very practical perspective to this and and this is what we're doing on a day-to-day basis and and where we are living on a day-to-day basis so so of course of course we can comment that but maybe sort of uh taking a few steps back um and and I would sort of fully agree with the fact that I don't think we can regulate specific Technologies because technology is moving so rapidly um and I think that's one of the major challenges that we have really been seeing during during the past few years with the EU AI act that it's a moving Target um and and I think also the sort of previous draft versions of it that we have seen have have have changed with technology if we look nine months back or or 12 months back we did not talk about how we regulate generative AI we did not talk about how we regulate Foundation models and now we're talking about sort of what is the impact of copyright for instance in terms of generative Ai and what is the impact of these huge models Foundation models built on widely available publicly scraped data um so I I've been a proponent of of sort of moving towards a use case specific perspective and I think that's what we have now sort of seen during the past few years and also the euai ACT discussions uh because it's you cannot really regulate AI because you can't really even Define in AI right so it's a different thing in different use cases and and I I do think that eventually sort of we will be able to come up with the framework and guidelines and that will help us but my major concern has been that it's it's been taking quite long and throughout these past years it has created uncertainty in the market and what we can see is that European companies are sort of moving less rapidly in investments in large-scale initiatives compared to for instance our North American clients given that they have sort of a clear framework and guideline that they know how to follow I do think eventually that it can actually turn into a Competitive Edge that you've also referred to because once we have it in place it actually sort of gives us a playground where we know how to play and this is what we have been trying to do now with this initiative that you mentioned the the world's largest open large language model that we're building is by Design following the current draft of the euai act and we believe that eventually it's going to sort of put that initiative in a good position to follow regulation elsewhere as well when that eventually comes up yes so you're combining quite many great things so the European regulation and then I understood that there is also the world's third or fastest computer up there in kayani that is used to drive this so the Lumi which is also a joint open uh EU initiative so very great example indeed all right thank you Peter and uh but I'm I'm a bit afraid that we're going to have to build and the suspenders in in regulations so we are going to have the AI act but uh uh I fear that there will be also use case specific but let's hope that we can kind of uh have a lineated approach there so that these are in line with each other but then the last but not least panelists so Mr AKO herewala the CEO of Technology industry of Finland uh by every sector the most superlative industry Association in Finland quite clearly we have 1800 members and and creating most of finland's exports technology industry is a Finland strategy is quite a well uh uh lineated towards a digital and green transformation and it seems to suit quite well actually our Industries so however we see that we already mentioned smes there are some that are quite or quite a handful that are still on early stages on their digitalization and then we have this pioneering large companies does this development uh give you any concerns well I'm yes I know uh the development is so so fast at the moment and and I think we have uh we we have we already have a Competitive Edge in in Finland in some areas I think we heard a very uh great example uh uh by Peter um so um when when moving forward I mean you mentioned the green green uh transformation uh we believe that that's that will be data and digitalization and and driven because you know systems will get smarter and and we need smarter use of resources energy and and everything uh to to uh for sustainability purposes but that would be great business for companies that are providing those solutions for for for for this uh global global uh issue that we have in our hands so um boosting the development of uh and capabilities of Finnish and European companies to to be able to uh contribute to that development this is is the key now why uh why why am I not worried uh I think we we we we made a very wise decision uh uh and uh when it comes to uh research development Innovation we we have a parliamentary consensus about uh investing uh much more than before for for for Innovation and as long as that uh you know Innovation is uh sufficiently uh company driven that will uh be directed on on solving this this uh Global issues where where I believe I we we we have a good uh Market the head of us and and good opportunity uh so so that's that's clear why why why maybe I should be a bit concerned uh though I mean when we when we look deeper in in into our company uh um Spectrum the big companies are already aware of this but but the smes are sort of lucking behind so we we need to find find a way to give them a sort of a wake-up call here as well um when it comes to innovation every public fund every Euro will leverage two private Euros with that so so uh majority of of those investments will be private Anyway by these technology companies and uh well I believe that we will see that those companies that are you know most active in investing in new innovation will be the winners of the future across Europe thank you so investment Investments and Investments so shortly put so let us move to the uh round two but now we also activate a bit the audience on online uh with a question uh what is the most important requisite for European companies competitiveness from here to 2030 and we see the results in in after this round so second round what should the commission do uh so not only uh has the regulation gone uh forward in digital sphere also on green transformation so there are we already have in place the new Echo design regulation we have the corporate sustainability uh directive and uh and the green deal package just to name a few and uh with these there comes a lot of reporting lots of compliance and this might prove to be a challenge especially for smes where data capabilities and skills are low and and now if we jump into Brussels and uh and start drafting the agenda for the next commission so what should be the priorities if we think that we are at least from something that the digital is pretty much already regulated green side is also pretty much regulated what if they're left to regulate or should there be a dramatic change in the line of thinking and uh actions of the next commission and uh let's uh start now with Sarah for I think um so I think you've made that quite clear we don't have a lack of Regulation right um there really is a full scale of Regulation and I think some of it is very necessary right we need to find guidelines for the digital age and we especially need to put forward the digital economy right and in order to put forward a digital economy we need to find common ground for sharing data and working on that I think is very important and something that has been very much on the mind of the commission I think we always warn that you shouldn't take that too far right we need to look at the scope of things right when we use when we look at the Cyber resilience act when we look at the AI act we need to look at the scope of things right not everything has to be highly regulated there are fields that are less threatened by security questions and then of course we need different guidelines for that we need to protect Trade Secrets things like that so in some to some degree we need that regulation and to some degree we have to be very careful that we're not stopping our own ambition and making us not competitive enough and of course we see that in some of the fields when we look at the sustainability reportings when we look at the aim to get a supply chain trackings and all these things this is um starting to take up a lot of men and women power in the companies also right we need all these people to to track things and we I'm I'm afraid that sometimes we are starting to lack capacities for Innovation which we really need because we put so much of our capacities into pure bureaucratic movements and that's when things start to get problematic and that's what we what we can't have I think and so I think what we really need for the next legislation also is we need a comp a commission for competitiveness right we need to stay competitive in Europe we look at the world things are moving things are changing and I think when we look at industry especially Germany and Finland and Europe as a whole has remained a strong player on the global field and we want to remain that we want to have something to offer to the world to exchange things with us and we can only do that I think if we really manage to get what we do very well in our factories into the digital age right factories are becoming from OT to it digitalized in every sense of the way and we have the capacity to become very good at that in Europe because we have Decades of knowledge of like really working well within the industry and I think this is a great opportunity for us to bring that into that new decade and we really need to move forward with that and be a little bit less bureaucratic to some degree and a bit a little bit more looking at the opportunities that are out there okay well thank you Sarah and what about henlaf so we have two major if you think back the history of Europe and data where the regulation and Innovation have met I think that the telecoms is something that where Europe really has established and changed the world and perhaps now the Emison trading system as well because it's something that's quite unique and it seems to work because of the market mechanism what is your take on this what is what would be the next big thing for the next Commission the priority of the next commission should be competitive even our Industries in in Europe and what our company is what they need to be successful and what they need for Innovations and Investments of course it's uh Innovation friendly regulatory framework Level Playing Field Fair competition with third countries but also Insight in our single market and then also those businesses which are willing to grow they need of course access to finance so we have to take care of our Capital markets that it's working and then third and I think more and more important point is access to talented people and I think that is something what is very challenging for Europe because we have aging population in Europe and that means that we need people from outside of Europe to to work in in Europe with their ideas but we have to also all the member states they should invest much more to education and skills and we have to invest in research and development in in all the levels in all the member states so I think that is maybe the most challenging part for Europe in the future to make sure that we have access to talented people and we have experts in Europe where you will you were quite successful in kind of listing out the most contentious issues for the in the European sphere but yeah I think that we we all agree with you with you there uh and then uh what is your take on the on this uh you already named in Investments Investments and Investments yes an innovation Innovation Innovation but when it comes to the uh the operating environment I think we heard from henna the keywords already Level Playing Field is is absolutely necessary we need to find a balance between sharing data as much as possible without uh hurting intellectual property rights and and you know stuff like that which is necessary for for businesses and and with that if we are smart we can we can we can uh uh build something unique and be sort of a a step ahead of the the others so uh when it comes to regulation I I think it's uh it's key that I mean obviously we need regulation but uh let's keep that to a you know uh practical minimum so to say yeah you know a framework that that we need but but then then you know uh referring to to uh Peter's example of of you know how how fast AI for example now is developing there's no no way regulation can you know be developed as as fast as that so let's let's make sure that the environment is sort of uh with minimum regulation uh made made fair and and uh and and you know open for everybody and then we can we can openly compete in that environment all right uh so uh and Ernest you are very uh Keen proponent of this uh Level Playing Field in data ecosystems so is there anything else to do for the commission but just to create these are interoperable and open uh I'm trying to avoid using platform but let's say spheres for data sharing and usage okay uh maybe one thing for if I I very often have the feeling that digitalization is not really completely pushed by politicians all over Europe because somehow it's a horizontal issue and I would wish that there is more awareness how big the amount of investment in companies is to have really systems which are really cutting-edge technology this is an investment I just heard from a big company just to change the system it was an oem yeah it's one system only it's 2 billion euros just like this yeah we still have in mind always this physical investment in steel factories and so on and so on we should really see that digitalization is nothing for free and it's not simple it's really a wish here and if we manage that it's this horizontal technology is well understood and we can help a little bit with regard to the lack of talented people because we will have a leg for next years or next indicates I think we can't avoid it so we have to be faster on the other hand AI is coming very fast I heard some very critical points that if AI is this large language models are really working so it might cost a lot of people employment it means an incredible change in companies companies fear of it we don't know it I think nobody can predict what's really coming out so for me it's one opportunity that we think the digitalization is really fully fledged done because it's a key for smes that they can deliver the hangar of the EU commission and governments for information it's a digital product pass in the value chain control and so on which is well understood yeah or if you really want to have circular economy which is fine all companies are aligned that supported but there's no system to do it because if you don't carry the information from the very first part of a product to the end of its life and one the recycler he does not know what's in a battery today yeah if he has information it would be much simpler and they would be created a market if there are hundreds of batteries out and you have this data driven systems you have a market you can can he can give he can quote because he knows what is in a battery or in a car I heard it that was last year as I'm recyclers said okay we simply be from so many old cars recycle to cars to be recycled we don't have information but materials are in there so I think we are an Information Society and in all levels and we should see how this system works and secondly because you asked what platform platforms as we talk about are very proprietary so we have so platforms which come between customer and Company yeah and they take away business which is in a certain sense a level fine but it may uh lead to an erosion of the Innovation capacity of the companies in between you know that's what the OEM sphere are we in the end only a producer of the physical car but we don't know about the software it comes from outside so to understand the systems how to handle it and this is coming back to before we need to create a platform economy if you want to say so that there are also metadata and this controlled data by single companies is not the regular way to do it it will always be there and so we have to create digital cyber entity we need a cloud Edge Continuum this is one of the ipcis we are doing right now we need manufacturing accents there are so many activities and last thing because time is running out I guess we have to think globally and not European or German or German French are only Phoenician that's a key if you understand the global system we can play with it and compete much better develop and invest in data and remain Global yes uh so uh good points and and last word goes to Peter now that you are you have been growing tremendously and and what should the next commission do to facilitate the uh even further growth and digitalization of our societies very good question I think a lot of sort of important topics have been mentioned already and and especially I think Hannah touched upon many of the very relevant ones I'm not sure whether I'm the one to tell what the commission should do but but I can I can sort of touch upon especially from a technology Viewpoint where I believe sort of is going to be crucial um what has been mentioned and if you take sort of a horizontal perspective to things what has been mentioned is digitalization and and that's of course important but but what I sort of believe we need is more than digitalization we need companies that are actually seeing themselves as software product companies it's not just about sort of you know updating your your uh Erp system but but it's really about sort of building product product at the core of your business and and doing that as software and and that is a very different thing and and I think you know if we are to benefit we're I'm speaking sort of here uh in in the role of of uh of an AI company if we are to benefit from AI we need to build software first and then we can benefit from AI um and and you know I think we've mentioned and touched upon the the sort of some of the challenges in the the you know the the role of smes for instance and the sort of heavy bias towards Industrials and so forth and that's tremendous opportunity and if if we are not sort of acting in terms of actually helping those companies see themselves as a software companies and then they will not reap the benefits of of AI so I think sort of that's something that will you know be very relevant to every industry even those more traditional ones and then specific topics I think eventually we are fragmented that we are very fragmented in terms of efforts around AI for instance and now around large language models we've seen every single country set up some initiative around that or set up their own large language model and so forth and this is not really how you compete in this kind of a market these are tremendous efforts and we cannot sort of you know we cannot have one effort per country and that that is still I think in many cases the perspective we have so I think we need to be sort of much more concentrated in these efforts concentrated in terms of geography as well and eventually I think that's going to touch upon one of the key topics that Hannah for instance mentioned Around Talent talented people are attracted to ambitious projects we need to have ambitious projects to be able to I would actually say keep the talented people because we have a lot of talent here um be it Finland or other countries in Europe but but I do think that we are losing the most talented to the most ambitious projects out there yes that very very good that you took up the uh role of people because we had the discussion at the office that what is the the best thing in Europe we had and and and then we came to the conclusion actually European people European people forming the internal market and as long as we have kind of a functioning internal Market we should be doing rather well and and perhaps uh let's go to the last round and uh it's about investment so they have been named quite many many times here and and I think that the digital transformation Nation green transformation all and the energy transformation all these needs a great deal of Investments uh so what uh what would be if you would name three key things uh that would drive the Investments to Reinventing of European industry so let's do the round starting from henna to here yes no I I think I already said quite many times this Innovation friendly regulatory framework because it's really my one of my favorite topics always and I try to work like that that I could create that kind of uh Level Playing Field for all the companies and I could encourage companies to invest and innovate in in Europe but I think it's very important because of course I'm a decision maker and regulator also so regulation and funding is also these are the tools what we can use in in the European level and and both are needed of course Innovation friendly regulation long-term approach also legal certainty for the Innovations and ideas for example in AI this is I think very important topic when when the companies are making research and development to search and Technology they have to have legal certainty also for that that it will be legal to use that in the future and then yeah I think also uh it's important that we are also supporting some some areas with Public Funding like we are doing now in Europe and I think the priorities are right the cleaning the clean transition and also the digital transition so I think these are good areas but of course we have to look that to where we are putting the Public Public Funding and of course the private Investments they are much more important than there we need well functioning Capital markets indeed indeed and uh I think we all hope that we could direct more resources into Innovations and less to cohesion but that's another political yeah that's what we are trying to do and then if I should mention uh something like that area of course it's that also the companies they have to be sure that in the future they will have also Workforce force in in Europe so that we we have to invest to Education and Research development yes and that's been the European strength about Ernst if you put it shortly what would be the three key things to yeah as governments we should find and pick r d projects which are supposed to develop not only use cases but have in mind how you can scale them up and which not only proof is a small demonstrator that it might work yeah in an academic sense but to really create a how to say a bigger and bigger group of like-minded companies and others to develop this thing to bring it to the market and to show that sharing of data can be done in a trustful and Sovereign manner this is a key and then you will see that many other problems can be slowly handled much easier we have to give the tools to all companies to deliver the data easily just pressing a key and not filling out big axle sheets indeed we don't like Excellency so Sarah what is your take if is there anything left to add yeah I think it's a tricky question but like if I take it from my industry's perspective right I would say we need electrification digitalization and automation those are three key points where we can really move forward and for electrification for instance you need to look at which key Technologies do I need right on the sheet like here where people are writing from the audience we see European chip manufacturing for instance that is something that is key like that's one of the key resources that we need we can't have electrical cars we can't have renewable energies heating pumps and so many other things without microchips right so we need in Europe to be able to provide these things and to be competitive also so electrification is key in order to read reach our climate goals digitalization is key for almost everything in order to remain competitive have new Industries in order to reach climate goals all so in order to bring the sectors together and of course also to deal with all these questions of like reporting and sustainability as was talking about things like the digital product passports that can make things easier that are very complicated at the moment so digitalization clear and automation because we need to be more efficient in order to be competitive we need to look at how can we can we deal with a lack of people probably in some Fields right so automation has many opportunities to become more energy efficient to deal better with new challenges so I would say electrification digitalization automation thank you that's very clear how about you Peter so you have a history of uh invent investing in human capabilities mostly I think the the more than most of the uh in the traditional industry what is and you have yourself worked in uh in uh with Innovations and and academic research so what is your take on on from your experience on on investments and investing in the future yeah I I think I I think one one key element is to really sort of identify where we where we should if we are thinking about sort of Investments that pay off in terms of technology that creates a Competitive Edge if that is the intent then I think we need to be better at actually identifying which are such because we we are you know I I think there is both sort of public support and possibilities to get funding in various ways um on the both public and private side but in in many cases we are sort of sprinkling a little bit of capital into many initiatives and especially now we've referred to digitalization and AI I I don't necessarily think everyone is ready to actually invest into sort of AI r d efforts there's sort of plenty of other things that need to be in place before you can actually do that um and and hence I think you know we we should be much better at ensuring that we're allocating Capital into such engagements that sort of build the correct step on your maturity level where you might be still building your sort of digital or software platform or product and then only after that comes for instance Ai and then eventually I think we should also go for Moon shots I mean if we are to be competitive um many of the sort of initiatives that will make your competitive will be Moon shots and there should be a sort of possibility to have access to such Capital public or private um and and I think that's going to be very very crucial um eventually for Europe so a fine balance between realism and moonshots very good very good what about Jacob how would you like to close it off three points would be Focus Talent and a United EU so Focus uh and if I take briefly a finished looking into this now that there's a common understanding that we need to invest in in research development and Innovation so there's money available there's not money available for anything else so you will be surprised to see all these initiatives suggested uh all kinds of Investments labeled as as research development and Innovation because that's the only reason for getting money public money so let's uh you know take that away and and you know Focus The Innovation uh investments in what really counts and where our Competitive Edge is and you know may make make choices there Talent we are running out of uh skilled labor skilled Talent not only in Finland but across Europe so let's let's go uh you know let's let's make this a lucrative country and continent for for for talent to to stay here and uh and and for others to come and uh and then I mean we need each other uh if if uh now with this uncertain times uh countries take very different approaches when it comes to for example state aid subsidies we see you know that sort of questions raising which uh has an impact on on how much we actually trust each other in in across Europe particularly for small countries like Finland it's important that we have we are playing along the same rules and thereby you know uh everybody feeling to be part of the same EU time thank you so we are running out of people we are running out of time as well and now actually the results from the uh our online audience they raise the super Computing as number one brexit and number two is talented people but if I would like to conclude uh this panel so I would like to say that uh your message is that we need to believe in Europe we need to maintain the single market and we need to believe and Foster the great people we have and be courageous enough to innovate and invest in courageous Innovations uh I would like to give a proposed a round of applause for our wonderful panelists thanks and we are carrying on this discussion uh on Innovations and data-driven uh corporate driven Innovations in foreign in 15 minutes you are all warmly welcome there there will be some bubbles after the discussion so uh take the chance and uh challenge the possible weather and be there with us in 15 minutes thank you

2023-09-30 00:32

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