Among the eye-catching headlines, 2023 should be marked by three major trends in yet-to-be-established global technology governance.
Adaptation is the key word in 2022: not so much adapting to technology as adopting it to meet the needs of a turbulent world.
The intrusion into Ukraine triggered the activation of the EU Cyber Rapid Response Team (CRRT), a previously unused mechanism for solidarity among member states. The conflict also redefined technology as a geopolitical vehicle: the Ukrainian government decided to “export” data centers to trusted third countries in order to protect its personal, industrial and sensitive data in a “digital safe haven”. Likewise, high expectations for crypto assets were partially dashed by the collapse of FTX, which led to a “crypto winter” in international markets. Additionally, semiconductors grabbed headlines due to international competition among China, the U.S., and the European Union. Given its impact on export control regimes, foreign direct investment, and the growing role of sanctions in more technology verticals, the issue has been around for years and is not new, although it is current.
As in the previous year, 2023 kicks off with eye-catching headlines, although careful and rigorous analysis of the subject suggests that three major trends are more likely, as outlined below. This is especially important in the year that Spain will hold the EU Council presidency.
Industrial policy plays a bigger role
Since European Commission President Ursula von der Leyen declared the start of the European Digital Decade in 2020, three major mechanisms have developed: European Industry Alliances, Important Projects of Common European Interests (IPCEIs) and Joint Ventures (JU). Industrial technology development has a large share of initiatives in all three action areas and is expected to be developed in more technology areas.
However, the transition from 2022 to 2023 has changed. If in 2022 each technology considered strategic has the potential to have a significant impact on itself—for example, artificial intelligence for data processing—then in 2023 it is likely that different values will lie in the How combinations (“combination trends”) will create new possibilities. This is the case with cloud and edge computing that power the networks that connect electric vehicles.
Although some of these combined technologies are not yet on the market, 2023 will be the year that public agencies begin to consider measures to use them. In his 2022 State of the Union Address, the President of the European Commission announced an initiative to explore the challenges of virtual reality: the final frontier of the Metaverse, not a technology per se but a technology platform that could bring together a few or many applications, such as Virtual Reality, Augmented Reality and Immersive Reality, Cloud Computing, Computing, Artificial Intelligence, Internet of Things and more.
Another example is the announcement of the European Commission’s 2023 work plan, the first proposal for a regulatory framework for Hyperloop, which aims to adopt this high-speed, low-carbon transport solution. Digitalization of the transport sector with a common European mobile data space already in development.
The EU is also expected to reach reliable agreements by 2023 on securing supply chains for critical materials, minerals and rare earths from third countries on which the EU depends.
This is true not only of China, but also of countries such as Brazil, Chile and Mexico, which are the basic raw materials necessary for digital and green transformation technologies. This explains why 2023 will be the year of new agreements, notably through the EU-Latin America Digital Alliance, which promises to be a framework for technical cooperation and a solidified relationship of trust with the region. An example of the latter is the December 2022 renewal of the trade agreement with Chile, which guarantees non-discriminatory access to exports of raw materials such as lithium.
State aid is an integral part of global technology competition
Green technology is a further trend for 2023. They are nothing new, as they have been developed for a long time, but they are of great interest for some reasons of European and global governance.
The United States announced the Reducing Inflation Act (IRA) on 12 August 2022, allocating nearly $400 billion in public spending and tax credits over 10 years to reduce CO2 emissions by 40% by 2030 . The move also includes subsidies for strategic areas, such as semiconductor factories and the US CHIPS+ Act, while sanctions on exports of cutting-edge technology products to China have sparked disagreements.
Total state aid from the United States is not alone. China has proposed a semiconductor “big fund”, while the EU has already announced a European chip act proposal in February 2022 to explore state aid to establish semiconductor manufacturing facilities on European soil, although the proposal focuses less on design, R&D Phase – a method that needs to be improved.
Thus, 2023 looks set to be the year that state aid will receive equal attention and criticism from all sides. Regardless, the subsidies will continue in all three regions. In fact, the debate has already led to a split in the EU-US Trade and Technology Committee (TTC), with Commissioner Breton not at the December 2022 meeting disagreeing with how the IRA should be handled in the preparatory talks. The TTC did not discuss state aid issues and the meeting focused only on issues of agreement.
Within the EU, disagreements between member states over how state aid should be provided are expected to deepen, with some countries being more cautious about lending (such as the Netherlands), some demanding stricter state aid rules (Italy), and others seeking to provide More state aid (Germany and France).
democratization of technology
Over the past few years, attention has been focused on the EU’s regulatory and industrial policy pillars from a security, political and economic perspective. However, the third pillar is values.
Some progress has been made, such as the Declaration on Digital Rights and Principles, the first Eurobarometer of public perceptions of digital rights, and campaigns against internet blocking as a form of repression. The next step is to implement these principles in ‘foundational’ training recommendations for civil society organizations and citizens, as well as other public levels (e.g. regional and local).
Spain will hold the presidency of the Council of the European Union in 2023, at which time three main legislative documents will be approved (if not negotiated in the final stages): European digital identity framework, proposal for cyber solidarity between member state entities, and proposal for a data bill . have an impact on rights.
All in all, 2023 will be a year full of news. Beyond the diversity of media headlines, the key will be to focus on these three trends as the main drivers of yet-to-be-established global technology governance.
Image: A background with a pattern of hexagons. Modern technology and network concept. Photo: Photocreo.