The pace of digital transformation is a double-edged sword. It has on the one hand far outpaced the ability of governments and international institutions to prepare, adapt and plan ahead for the new challenges and questions it raises.
At the same time, as the world faced health, economic, environmental and social crises in 2020, the ability of the digital sector to adapt and respond proved essential to ensuring society’s resilience and ability to bounce back.
This transformation has raised questions about ethics; how to regulate and protect the rights of people whilst not damaging innovation and growth; about the future of work – the future of skills that will be required to adapt to a digital society. It is also changing consumption habits which are shifting business models, supply chains and distribution infrastructure.
Whilst technological change can be a force for good, it also has the potential to reinforce and widen inequalities and reduce the social ability of those who are most disadvantaged in our societies.
At a macro level, the revolution precipitated by digital has an impact on current and future models of economics and the traditional relationships between supply and demand, as capital flows, services, goods and wider industries transition towards a digital environment.
Digitalisation has the potential to be Europe’s competitive edge, if it succeeds in linking its research, development and innovation capacity with pathways to the market place. It will also need to bring the private sector and civil society closer to the process of developing regulations and standard setting. The EU has described itself as “geopolitical” – digital can be a central driver in terms of its framing.
Harnessing and capitalising on the mountain of data from the public sector could be a game-changer for Europe. Finding a way to enable members states to aggregate, share and exchange this data would create a competitive advantage for them and Europe to bolster a range of social and economic policy areas. It will also improve its bargaining power with the private sector and in its trade agreements.
Artificial intelligence brings new promises and challenges for all citizens. How it is used, managed and developed will be key in terms of transparency, standards and people’s rights. Algorithms have the potential to shape and determine our future social and economic outcomes across societies; that is why we propose to work across policy areas taking a whole society, whole economy approach – to enable policy thinking and developments to be fit for a digital 21st century.
As Europe and the world look to “Build Back Better”, governments, institutions, the private sector and civil society will need to harness the power of digital, while also confronting the challenges that accompany an accelerating digitalisation of industry and society.
Friends of Europe helps think through the implications of these changes and policy options, including through its Connected Europe initiative which aims to hone in on digital’s role in building a Europe that is successful, green and resilient.