Global technology trends: what to watch in 2023

2022 got closed as a year of adaptation: not so much of adapting to technology, but of adopting it to adapt to the needs of a troubled world.

Ukraine’s invasion triggered the activation of the Cyber Rapid Response Teams (CRRTs), a previously unused mechanism for European solidarity among member states. The conflict also reframed technology as a geopolitical vector: the government decided to ‘export’ data centres from Ukraine to trusted third countries in order to protect the country’s personal, industrial and sensitive data in a “digital safe haven”. Likewise, the high expectations placed on crypto-assets were partially dashed with the collapse of FTX, which has led to a “crypto winter” in international markets. Also, advanced semiconductors are in the headlines because of the international rivalry between China, the US and the EU. This issue has been around for years and is nothing new – although it is actual, given its effect on export control regimes, foreign direct investment and the growing role of sanctions in a greater number of technology verticals.

2023 opens, once again, with big headlines, although a calm and rigorous analysis of the subject suggests that there are more likely to be three major trends, as indicated below. This is particularly important in a year when Spain will hold the Presidency of the European Union Council.

An even greater role for industrial policy

Since the President of the European Commission, Ursula Von der Leyen, pointed out in 2020 that this period was to be the European Digital Decade, three major mechanisms started to grow: European Industrial Alliances, IPCEIs (Important Projects of Common European Interest) and Joint Undertakings (JUs). Industrial-technological development accounts for a large part of the initiatives in each of these three action areas and are expected to grow in more technology areas.

However, there has been a change in the 2022-2023 transition. If in 2022 each of the technologies that were considered strategic might have a big impact on their own – for example, artificial intelligence for data processing -, 2023 points to the fact that the differential value will lie in how the combination of various technologies (“combinational trends”) will be able to create new possibilities when used together. This is the case of cloud and edge computing powering the networks that connect electric cars.

Even if some of these combined technologies have not been launched into the market, 2023 will be the year when public institutions start to consider measures on the use of these technologies. This is the case of the announcement by the President of the European Commission during her 2022 State of the Union Address on an initiative to explore the challenges of virtual reality: i.e. the final frontier of metaverses – which is not a technology per se, but a platform of technologies that can bring together from few to many applications, such as virtual, augmented, immersive realities, cloud, computing, artificial intelligence, Internet of Things and further more.

So was the announcement of the European Commission’s 2023 Work Programme on a first proposal for a regulatory framework for the hyperloop, which seeks to embrace this high-speed, low-carbon transport solution. This will be accompanied by the common European mobility data space that is already being developed to digitise the transport sector.

2023 is also expected to be a year of strong agreements in the EU on securing supply chains in critical materials, minerals and rare earths from third countries where the EU is dependent on. Not only China, but also countries such as Brazil, Chile and Mexico are relied upon for essential raw materials leveraged for technologies in the digital and green transitions. This explains why 2023 will be a year of new agreements, specifically through the EU-LATAM Digital Alliance, which is expected to be the framework for channelling technological cooperation with the region and consolidating relations of trust. An example of the latter is the December 2022 update of the trade agreement with Chile, which has guaranteed non-discriminatory access to the export of raw materials such as lithium.

State aid as an element of global technological rivalry

Green technologies are another of the 2023 trends. It is not new, as it has been developing for a long time, but it is actual for a number of European and global governance reasons.

The United States announced the IRA (Inflation Reduction Act) on 12 August 2022, allocating almost $400 billion in public spending and tax credits over 10 years to reduce CO2 emissions by 40% by 2030. This was coupled with subsidies to strategic areas such as semiconductor factories with the U.S. CHIPS+ Act, as well as sanctions on the export of cutting-edge technology products to China sparked differences.

This sum of state aid from the US did not come alone. China proposed the “Big Fund” for semiconductors, while the European Union already in February 2022 announced the European chips act proposal for the possible exploration of state aid for the creation of semiconductor manufacturing facilities on European territory, although it focuses to a lesser extent on the design, research and development phase – an approach that needs to be improved.

Thus, 2023 looks set to be a year in which state aid will be equally valued as criticized by all sides. In any case, each of these three regions will continue to implement subsidies. In fact, this debate already led to differences at the EU-US Trade and Technology Council (TTC), where Commissioner Bréton, disagreeing with the way the IRA was being addressed at the meeting preparation, and he did not attend the December 2022 meeting. State aid was not addressed in the TTC, and the meeting focused on those issues where there was agreement.

Within the EU, differences between member states on how to grant such state aid are expected to widen, with countries more cautious on lending (such as the Netherlands), countries demanding more rigidity in state aid rules (Italy) or countries looking to launch more state aid, such as Germany and France.

The year of the democratisation of technology

Recent years have focused on the regulatory and industrial policy pillars in the EU, from a security, political and economic perspective. However, a third pillar is that of values.

There have been developments with the Declaration of Digital Rights and Principles, the first Eurobarometer on public perception of digital rights and campaigns against internet blocking as a form of repression. Now, the next step is to operationalise these principles in grounded training proposals for civil society organisations, citizens and other public levels, such as the regional and local levels.

In 2023, Spain will hold the Presidency of the Council of the EU at a time when three major legislative dossiers will have to be approved, if not negotiated in their final phase: a European digital identity framework, the proposal for Cybersolidarity between the entities of the Member States, and the data act proposal. All of these have an impact on rights protection.

In conclusion, 2023 looks set to be a year with a large number of news. Beyond the multiplicity of headlines, the key will be to focus on these three trends as major drivers of a global technological governance that has yet to be built.

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