The possibility of digital sovereignty exists, but it requires a transformation of the EU
Dependence on American technology
There is a movement underway to make Europe independent of American technology. For it to succeed, it will require a fundamental change to the EU’s regulatory bureaucracy.
Could you live without your iPhone? What if we also removed Instagram, Netflix, Messenger, and WhatsApp? And likewise asked you to do without Dropbox, Google Drive, and ChatGPT?
In the same way, one might ask whether the average European company could manage without Microsoft Office, Microsoft Dynamics, Outlook, Zoom, Slack, and various American cloud services.
In Europe, dependence on American technology is significant. But as the United States has begun to distance itself from Europe and increasingly behave unpredictably around the world, more and more people are asking: Is it possible for Europe to become independent of the American tech giants, so that our companies do not risk being watched over the shoulder by a potential adversary? Unfortunately, I have bad news after having had the EU up close for 25 years.
No market is as opaque as the EU
During this period, I have run three different companies, all with a global outlook. My current company advises large and medium-sized businesses on how to adapt to new markets. This can involve anything from understanding contracts and payment practices to handling documentation. And my clear experience, unfortunately, is that no market is as difficult to navigate as the EU.
It is about bureaucracy. About rules, regulations, and control processes that tend to stifle creativity and innovation. And it is also about the fact that the EU, by its very nature, is a composite entity consisting of 27 independent countries. This means that the EU almost always ends up creating a mosaic of national solutions, standards, and control mechanisms rather than moving in a single unified direction.
This is highly problematic if, as is now the case, the goal is to create digital European sovereignty instead of relying more or less unilaterally on an ally that we are no longer sure is a friend or a foe
10 different ways to introduce electronic invoicing
Let’s take a few examples: Almost all EU countries are currently in the process of introducing e-invoicing, where invoicing between both businesses and public authorities becomes more automated and, not least, more secure. This makes good sense in a world where it is relatively easy to intercept emails, alter an invoice’s bank account number, and resend it.
The problem, however, is that EU countries are implementing 10 different sets of rules for e-invoicing, which in practice makes it nearly impossible to keep track of the laws, regulations, directives, and control processes in this area.
Another example is the EU’s large-scale GDPR legislation, which is handled very differently across the various EU countries. This makes an already highly complex body of law extremely difficult to interpret.
The EU’s bureaucracy has also hindered development in the field of AI, which in Europe has been met with restrictive regulation rather than an effort to take the lead and make it easier for European tech companies to contribute to the technology.
A real opportunity or an impossible dream?
Paradoxically, Europe actually has strong capabilities in IT and technology—and the capital to develop them further. In addition, there are already several good alternatives to many of the American tech solutions. The problem is not capability. It is the framework.
So we are back to bureaucracy. My colleagues and I experience every single day how companies struggle with complex regulation, fragmented markets, and increasing documentation requirements. Some of them give up on operating in the EU altogether because it is too cumbersome. Others hire specialists who can manage multiple regulatory frameworks at the same time.
In addition to strong IT capabilities, it is my clear impression that the EU also possesses substantial overarching knowledge about both technology and security. However, the EU is more focused on regulating and thereby creating barriers than on unleashing creativity and directing it toward a unified goal.
If we are to succeed in creating European technological sovereignty, it will require a fundamentally different structure within the EU. A structure that supports entrepreneurship rather than bureaucracy. On paper, it is a possibility if we can manage to turn the EU ship 180 degrees. In practice, however, it is likely an impossible dream.
The problem is that the EU, as we know it, is almost designed to stifle creativity and innovation.
All of this is perfectly reasonable. However, the fact remains that over the past 20 years, we have experienced so much regulation and legislation that Europe has gradually become filled with American-owned data centers and IT solutions.
And I see no indication whatsoever that the EU has learned from its past mistakes. This is how the EU tends to trip itself up with bureaucracy, control, and lengthy decision-making processes that hinder the innovative and creative companies Europe has in abundance.
