Europe postures with standards leadership still on the line

European standards organization ETSI has released a report demanding the continent take a leadership role for standards and regulation in the global digital economy.

While some might question whether the sluggish Brussels bureaucrats can get up to speed quick enough, there is hope; regulators around the world all share the same track-record when it comes to the painfully slow progress of creating regulatory and legal frameworks.

The report, commissioned at the request of ETSI, was authored over the first-half of 2019 and demands Europe take the lead on creating the standards necessary for a healthy and progressive digital economy.

“Our competitors are very serious about taking the lead in digital transformation,” said Carl Bildt, Co-Chair European Council on Foreign Relations.

“It is important that EU lawmakers put standardization at the centre of EU digital and industrial strategy. Otherwise Europe will become a rule taker, forever playing catch-up in the innovation, production and delivery of new digital products and services.”

Although many would want to see a collaborative, geographically-neutral, approach to standardising the digital economy, this is unlikely to happen. As Bildt highlights above, someone will take a leadership position, standards will gain acceptance, before other regions will have to adopt the rules.

The question which remains is whether Europe, the US or China will have the greatest influence on global standards. In fact, ETSI questions whether Europe is keeping pace with leaders today or whether its influence is waning already. Unfortunately, with the platform economy gaining more traction each day, this is one area which should not be considered a strength of the bloc.

46% of platforms with a revenue above $1 billion are based in the US and 35% in Asia, while Europe only accounts for 18%. These platforms often drive their own ecosystems and have largely been self-regulating to date. This is going to change in the future, though to give European organizations a chance at capturing growth, the European Commission might have to lead the charge to create open-standards. The contrary approach might only offer the established players greater momentum and influence.

This is perhaps the risk which is emerging currently. The idea of globalisation and open-standards are not new, though there is evidence certain markets are heading towards a more isolationist mindset and regime.

Although it is easy to point the finger at aggressive political leaders elsewhere, the report demands Europe look intrinsically also. The European Commission has to take a strong leadership position across the bloc, as with 28 members states there is risk of fragmentation. It only has to be slight variances to start, but this could snowball into greater complications. The digital tax conundrum is an example of what can go wrong over an extended period of time.

This report might be more of a generalist statement to encourage a proactive mindset from European bureaucrats, though there are plenty of examples of governments, public sector administrations and private industry trying to control the tone.

Looking at the ever more influential world of artificial intelligence, the number of feasibility, standards and ethics boards is quite staggering. All of these initiatives will want to create rules and frameworks to govern the operation and progression of AI, though only one can be adopted as the global standard. Regional variances are of course feasible, but this should not be deemed healthy.

In the UK, the Government created its AI Council. The European Commission has released various white papers exploring how AI should be governed. The White House’s National Science and Technology Council Committee on Technology is also exploring the world of AI. Facebook has even created its own independent advisory panel to aid the creation of standards and regulation.

Should Europe want to control the global standards process, it will come up against some stiff competition. The power and influence of the US should not be underestimated, it is home to some of the worlds’ most recognisable and profitable brands after all, while China has a track-record of flooding working groups at standards organizations. This will have a noticeable impact on the final outcome.

That said, the success of GDPR will offer hope.

Europe’s General Data Protection Regulation might have caused headaches all around the world, but it has set the tone on the approach to privacy, management of data and the influence of the consumer. Since its introduction, several other countries, India and Japan being two examples, have been inspired by GDPR to introduce similar regulation, while there have been calls in the US to do the same also.

This piece of regulation was critical to ensure the European principles of privacy are maintained moving forward. This is a win, but there are still battles to be had when it comes to AI, security, encryption, cross-border data flow and access to data.

Standardisation might not be the most exciting topic to discuss in the TMT world, though taking a leadership position can offer advantages to the companies who call that region home. A thorough and innovative regulatory regime can open-up new markets, ensure competition is healthy throughout the ecosystem and drive national economies at scale.

The regulatory landscape is set to undergo somewhat of a shift over the coming months and years, though which region will take the lead is still hanging in the balance.