Perspectives

This article was originally published to TechUK. Find that article here. 

With the elections to the European Parliament fast approaching in June 2024, and a temporary slow-down of EU regulatory work with the current EU legislative mandate coming to its end, organizations across Europe are looking to better understand what to expect in terms of upcoming political priorities and how these would affect their political and business environment.  

‘Tech’tonic shifts setting the frame for EU tech regulation  
The EU has faced several external shocks over the past years, including the supply chain issues after the COVID pandemic, the war of Russia against Ukraine and the successive energy and cost of living crisis, the Israel-Hamas war, as well as a more volatile global world order. This, together with Europe falling behind in the global race for tech dominance except for perhaps regulation, is expected to inform the next EU legislative mandate. 

• A geopolitical union and a politicized approach to tech
  The EU is on track to become more geopolitical, a trend that we have seen in the current mandate as well. Tech and trade policy will also become increasingly geopolitical and European economic security considerations will be more influential on EU action than in the past. This is demonstrated by the clear shift of cybersecurity policy from a technical regulatory competency towards a geo/politically motivated regulatory approach, where cybersecurity forms a key part of national security and defense, in view of the evolution of hybrid warfare in the EU’s neighborhood. Additionally, the EU Parliamentary elections in June 2024 will bring a shift to the right and populist parties, which means more polarization, resulting in more difficulty in achieving political compromise. EU action will also be heavily influenced by external events, including the upcoming U.S. elections. 

• European economic security and competitiveness
  We can expect a more assertive EU on the global stage, to secure EU economic interests, enhance supply chain resilience, improve strategic independence in critical technologies, as well as, to strengthen Europe’s competitiveness. On the one hand, this means focusing on de-risking trade relations with third countries and protecting the EU Single Market from external shocks, through export control measures and Foreign Direct Investment screening. On the other hand, the EU also aims to foster international strategic partnerships with like-minded countries. For example, the EU-U.S. Trade and Technology Council (TTC) has created a channel for transatlantic cooperation, resulting in more coordinated tech policy action, including global trade relevance vis-à-vis third countries. However, the future of the TTC will depend on the upcoming U.S. elections. 

• Implementing, standardizing, and consolidating existing tech regulation
  Over the past years, the EU has adopted a significant amount of regulation to advance the twin green and digital transition, including framework legislation, especially in the area of cybersecurity, data, AI, semiconductors, digital competition and online safety, among others. In the next term, the EU and its Member States will face the giant task of implementing and enforcing existing rules, including the development of implementation guidelines, harmonized standards (e.g. for cybersecurity and AI), as well as sectoral regulation when applicable (e.g. to create data pools, or for eco-design product requirements). The EU will also have to review the efficacy of its recently adopted tech policies and consolidate these where needed. For example, by ensuring that minimum support timelines for expected product lifetimes align between cybersecurity vulnerability patching and circularity requirements, to avoid legal uncertainty for economic operators.  

• Future regulatory focus on connectivity and critical technologies
  In the next mandate, the EU is expected to focus on connectivity infrastructure and critical technologies, including semiconductors, AI, quantum, and biotechnologies, among others. For connectivity, the level of ambition is dependent on the changes to EU political leadership. While the expansion and security of connectivity infrastructure in Europe will remain undoubtedly an EU priority, questions around network fees and the so-called “fair share” debate are unlikely to keep momentum without a continued mandate of EU Internal Market Commissioner Thierry Breton. Regarding critical technologies, AI will be a key focus area. The EU prides itself on setting global standards for AI governance through the EU AI Act and intends to facilitate a global AI Pact to coordinate industry pledges on ethical AI development. The EU has also been investing in quantum technology research and the EU Commission has recently published a communication on biotech.  

• Uncertain level of ambition on climate action and green transition
  While tech remains a clear strategic objective for the EU, the level of ambition attached to climate and sustainability goals is uncertain. There are significant differences between the green objectives of various EU political parties, and with the expected shift to the political right, there are concerns that green policies might not progress at the same level of speed and scale in the next EU mandate. However, this should not affect the implementation of the extensive legislative body on sustainability adopted in the current mandate. For example, economic operators, as well as, competent authorities will have their hands full with the new corporate sustainability reporting requirements, digital product passports, as well as, ecodesign and circularity rules that will become applicable in the coming years.  

How to navigate these geopolitical and policy shifts?
Businesses should invest in mapping out their geopolitical risk environments and stay mindful of the importance of non-market trends, such as social and political shifts, which can have an increasingly significant impact on business operations. Understanding and monitoring these trends can help inform important strategic decisions and pivot tactics to ensure a continued license to operate.  

Reach out to us to have a chat about the future of Europe, and your political priorities and to learn more about how Trilligent can help you achieve your goals.