Europe is, once again, being left behind.
The latest frontier in technology development is Artificial Intelligence. Two current trends should worry Europeans.
The first is that the field is totally dominated by US and Chinese companies. Thee is barely any discernible European presence.
The second is the rapid consolidation that is creating oligopolistic industrial behemoths. In 2017, merger and acquisition activity in the field soared to nearly 120 deals worth some $24 billion compared to some thirty deals worth $6 billion in 2015.
Individual European countries are far too small to make an impact in this field. Promising companies end up being acquired by US giants. While the EU is incapable of putting together anything that brings together the skills and capabilities scattered across the continent – it does not have the set-up to do that.
For decades, Europe has eschewed the idea of supporting “national champions”. In fact the EU has undermined the ability of national governments to promote such champions under its state aid and state support rules. France used to be the centre for the national champions mentality, using its network of leaders of private enterprise interlinked with senior civil servants to engineer the shape of industrial activity. ‘
All this has been swept away since the 1980s consensus of the superiority of open free markets. Airbus remains the only legacy of pan-European industrial policy.
Can Europe afford to ignore industrial policy any longer? Would the EU”s efforts be better deployed focusing on working out how it is going to become competitive in newly emerging technology, rather than spending another decade examining its own navel and fighting among itself about whether, as President Macron would like, there should be a common Eurozone budget and finance minister?
The European Single Market has achieved many things. But one thing it has not been able to stimulate is the emergence and growth of pan-European successes in the industries of the future. It is time that something was done about that.
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