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We must cut Europe’s Gordian knots

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Jim Snabe is the chairman of Siemens AG and co-chairman of the upcoming Evian Meeting of France’s and Germany’s top businesspeople. 

There’s a tale from ancient antiquity so insightful we still use it today: the tale of the Gordian Knot — a knot so tightly interwoven it’s impossible to see how it can be untied.  

In the legend, Alexander the Great famously resolved the challenge by slicing through the knot with his sword. The lesson being that intractable problems can sometimes best be solved by challenging their perceived boundaries — and acting decisively. 

In many ways, as it currently works its way to strategic autonomy and seeks to establish itself as a leading global player in the transformation toward a more sustainable future, Europe itself is confronted with several Gordian knots, knots for which our current times of crisis can prove a catalyst. 

When it comes to Europe’s strategic autonomy, economic strength forms the basis for robustness in all areas. And Europe — by which I mean European Union institutions, regional and national governments, as well as its companies and citizens — has come up with a range of long-term economic strategies in fields that truly matter, such as sustainability, technology and social inclusivity. The European Green Deal, for one, is the world’s most comprehensive program for a decarbonized economy.  

But the bloc has often been slow in implementing its great strategies. As of today, we’re trailing behind China and the United States in several critical areas, from digital platforms and the start-up economy to data sharing and artificial intelligence. And now, we’re faced with the geopolitical turmoil caused by Russia’s invasion of Ukraine, which weighs on Europe’s economy much more than on other global players.  

The type of action needed from Europe now is not without example. During the COVID-19 pandemic, Europe showed it can switch gears — from an incremental and deliberate approach to one defined by great agility and a drastic speed of execution. The push for the development and mass rollout of a vaccine is the perfect example of great collaboration between EU institutions, governments and industry. Here, Europe, as a team, cut through a Gordian knot.   

We should be encouraged and inspired by that collective achievement and use the current geopolitical crisis as a spark for the same kind of speedy execution in other, critical areas.  

Renewable energy systems 

If Europe had focused on the expansion of renewables a decade ago, strategic autonomy in energy matters would, to a great extent, already be a reality. My home country of Denmark shows that it is possible.  

To be sure, energy policy is a complicated mesh of EU-level, national and regional responsibilities. However, at a moment when Europe’s destiny is on the line, we must accelerate the shift to renewables. 

The EU decision this summer to reach 40 percent of renewables in the overall energy mix by 2030 is the right plan. The bloc has also set the target of reducing energy consumption in 2030 by at least 32.5 percent. But all actors — at the EU, national and regional levels — must now execute this in unison and with great speed. And that means carrying out a joint accelerated plan across all countries to optimize the entire European energy system as one open market. 

Chips for industrial use 

Industrial chips are the heavy-duty electronics that form the backbone of modern mobility, manufacturing, healthcare, energy grids and similar hardware. If they’re in short supply, companies can’t deliver sophisticated products like cars, trains, medical devices or other machinery, which has ripple effects across the economy.  

Europe already has strategies in place for securing the long-term supply of highly miniaturized chips for consumer applications. But we should also be complementing these strategies with ambitious goals for the decisive short-term expansion of industrial chip production in Europe, something that should include shortening the timeline for getting facilities running down to 18-24 months.  

5G  

The fifth generation of mobile networks allows industrial devices of all kinds — from wind turbines and production robots to power substations — to send, receive and analyze data at tremendous speed and in real time. It’s a physical precondition for reaching the next level of digital industry and the digital economy. However, Europe’s 5G networks are currently insular, patchy and, in many places, non-existent.  

The greatest impediment to competitive 5G coverage is the lack of sizeable investment. In Europe today, there are about 150 different telecommunications operators, and most of them lack market share and scale — and consequently, the financial means — to fund the infrastructure development needed for the networks of the future.  

To achieve 5G coverage like in China or the U.S., we will need to consolidate our telecommunications sector, which, in turn, will require rethinking European competition law. If we are late to 5G, we will be late to digitize our industry and our society, and will lose our competitive edge. 

Data sharing and artificial intelligence 

Last but not least, data is at the heart of innovation. Running low-carbon, low-energy city neighborhoods, for example, requires data on the weather, on consumption patterns at different times of the day and year, on the available supply of renewable energy, and so on. what enabled our battle against COVID-19.

However, different data assets are often in the hands of many different institutions, companies and operators, and only by bringing the puzzle pieces together can we see the bigger picture and gain deeper insights. That’s why we must give data sharing a big boost. 

However, coercion by law isn’t the right approach to promoting creativity and innovation. Instead, the EU and national governments should spearhead and support “coalitions of the willing” in key sectors of the economy — following the examples of the European Health Data Space or Catena-X in the automotive industry — and this could be done by incentivizing such coalitions with public investments, providing governance and legal security, and eliminating administrative hurdles. 

Turning crisis into opportunity 

We live in extraordinary times, with dramatic and heightened geopolitical risks but also significant technological opportunities. In many ways, Europe has defined the right strategy for the future — a strategy that will enable the bloc to lead the transition toward a more sustainable future. However, Europe is lagging behind, and to move ahead, focus and execution are critical.  

At global companies like Siemens, we have realized that in times of rapid innovation, speed wins out over size. Accordingly, we’ve transformed a large conglomerate into three focused, agile companies — each able to lead the transformation within their respective areas — and we’re teaming up with small start-ups to innovate and build scale through an open digital platform. 

Our current structure resembles the structure of Europe — a collection of unique countries collaborating to define the future. Traditionally, this structure has led to complex policymaking and slow implementation. We need to overcome this by leveraging trust and activating the networks between our countries, critical infrastructures.  

Like Alexander the Great, we need to cut through our Gordian knots by acting decisively to turn crisis into opportunity, and finally accelerate Europe’s path to a sustainable future.

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