European Digital Sovereignty – the EU in the global competition

The development of new telecommunication grids and, in particular, 5G is increasingly becoming the battlefield for technological supremacy around the globe, and Europe is not immune to these challenges. By 2030, the economic benefits of this progress will reach, according to estimates, $ 960 billion at the global level. In terms of undertakings included in the top 30 for patents held, China plays the leading role, followed by the US. The European Union has only two companies included in the list – Nokia and Ericsson from Finland and Sweden, respectively.

The EU lags behind in terms of 5G network deployment. In 2021, only 4% of the total mobile network was made up of 5G technologies, compared to 13% in North America and 29% in China. The network is expected to expand by 2025, but not sufficiently to close the gap with the other superpowers. Both China and the United States maintain dominance in AI, a rapidly expanding sector in recent years. Even in this case, the number of patents registered in the Union is significantly lower than in the other two countries, accounting for 18% in China of total patents and 22% in the US. Despite the exponential growth of China may be a concern for its geopolitical implications, the US maintains a strong lead in terms of university ranking (Europe is only represented by Oxford and Cambridge, and some Swiss ones) and most of the talent is based in the US (59%). These are some of the findings from the paper titled ‘DON’T STOP “IT” NOW. Policies to shift Italy’s digital transformation from the EU compass to the RRP’ presented in Rome on 25 October.

As well as the technological advances, one factor weighing heavily on European digital sovereignty is the excessive reliance on non-EU suppliers, especially from the United States and East Asia, as seen in strategic sectors such as cloud computing and semiconductors. For the former, the market distribution of the major global cloud computing providers demonstrates how the Old Continent lacks even a global exponent. Only eight companies control roughly 80% of the global market for cloud computing services, six from the US and two from China.

A similar situation can be found where the EU’s position in terms of semiconductor supply is concerned. In 2021, global turnover was $ 555.9 billion, and it is expected to reach $ 613.5 billion by the end of the current year. Silicon is a common semiconductor material used in electronic components. According to the Mineral Commodity Summaries report for 2022, China is the world’s largest producer of silicon semi-finished products, producing approximately 6 million tons per year, with Russia coming in second.

5G consumer interest

I-Com and ByTek conducted a study on the changes in consumer interest in 5G in 5 nations (Italy, US, France, Germany and Spain) between August 2019 and August 2022 by observing the terms people used when searching on Google across the country. Over 3 million 5G searches per month, on average, were made in these 5 nations during this time period, with about 276,000 of those searches made in 5G only in Italy.

Regarding European nations, the trend of research in absolute values primarily reveals three elements: first, the interest at the national level appears to be influenced by particular events and by how the populace reacts to them (such as the Covid crisis); second, attention is drawn to specific campaigns, such as those that take place around the holiday season; and third, a potential picture of the level of 5G subscriptions (or at least interest) in the major European states.

Usage of digital services by enterprises and residents of the EU

The restriction measures imposed by Covid-19 served as the catalyst for the digital acceleration of 2020, which led to a continual development in digital literacy among European residents in 2021, a constant shift by businesses to the digital channel as an alternative form of commercial instrument, and an ongoing transformation of public administrations. Despite the fact that these trends have impacted every region of the world, it has not happened uniformly, occurring with varying degrees of maturity and sensitivity, both in terms of the development of the infrastructure and technologies that enable digital services (the supply side) and in terms of how people, businesses and the public sector use these services.

The proportion of Europeans who do not use the Internet is steadily decreasing. The most virtue-filled nations in 2021 were those in Northern Europe, where values were quite low (between 1% and 2%), whereas the situation in Southern Europe is more problematic (especially in Bulgaria, Greece and Portugal). Italy, despite improvements, continues to have more non-users than the rest of Europe. The research on daily internet usage results in a clear conclusion with Northern European nations continuing to hold the top spots, although Italy has shifted from 76% to 79%, closing the gap with the European average (80%) by around one percentage point.

In this context, 26.9% of Europeans have basic digital skills, 10% with ultra-basic digital skills, and 13.7& have basic digital content creation abilities. On the other hand, the southern nations, such as Italy, continue to report lower values than the average of the northern countries.

Digital policy in the EU

European institutions have dedicated themselves for years to redesigning the regulatory framework with the aim of understanding and governing the change currently underway, ensuring an ecosystem where fundamental rights are effectively protected, and associating new roles with new responsibilities in order to create a harmonised system. This is in response to the enormous changes that the digital transformation has brought about in terms of habits, opportunities and business models.

From 2021 to 2022, the Commission initiated various legislative proceedings with the release of proposals in 2020 (Data Governance Act, Digital Services Package and NIS2). As well, it has made suggestions to continue the process of reinventing the digital regulatory ecosystem in the logic of regulating the ongoing transformation in the EU in a coordinated manner, preventing and addressing important concerns without clipping the wings of innovation.


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