Who will really benefit from the EU's big data plan?

Europe wants to force companies to pool their industrial data. It's unclear what the end game is
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“The battle for industrial data starts now,” Thierry Breton, the EU Commissioner for the Internal Market told Reuters less than a week ago. Breton, the French ex-CEO of IT multinational Atos and telecoms giant Orange, is under no illusion: the Silicon Valley giants have won hands down the race to colonise the internet with platforms fuelled and augmented by their users’ personal data. China has also built on that model, harnessing its national tech firms to power through a state-run version of surveillance capitalism with little or no regard for citizens’ privacy.

The EU’s claim to relevance amounts to having styled itself as the world’s tech referee. It has been forcing companies to comply with stringent data protection regulations (GDPR), merrily fining big tech for antitrust violations, and periodically scolding various honchos – read: Mark Zuckerberg – for not doing enough about privacy, disinformation, and terrorism. Problem is: being a thorn in the side cannot be a long-term strategy. As Guntram Wolff, an economist from Brussels think-tank Bruegel pithily put it: “referees don’t win.”

Hence the Commission’s unveiling, on Wednesday, of Shaping Europe’s digital future. A programmatic document which will need time and a lot of haggling to be actually implemented, it touches on a vast range of topics – from privacy, to antitrust, to AI and "technology sovereignty". One line in a leaked early draft promised that it would help European companies “become the next generation of big tech.” The line is gone in the final version – “big” anything always sounds ominous – but the spirit still permeates the strategy, and its two accessory white papers, on AI and on data. The EU wants to build its own technology giants. Which brings us back to industrial data.

Given the US’s and China’s unbridgeable advantage in transforming users’ data into money and datasets to train AI algorithms, and given Europe’s fondness for strong privacy regulations, the EU has decided to enter a different race. Rather than focusing on personal data, the EU wants to help its companies and startup access data gathered from connected objects.

“Today 80 per cent of the processing and analysis of data takes place in data centres and centralised computing facilities, and 20 per cent in smart connected objects, such as cars, home appliances or manufacturing robots, and in computing facilities close to the user (‘edge computing’). By 2025 these proportions are likely to be inverted,” the data strategy document reads. “It is an essential resource for start-ups and small and medium-sized enterprises (SMEs) in developing products and services. The availability of data is essential for training artificial intelligence systems.”

In order to drive this forward, the European Commission plans to create nine European “data spaces”: essentially a mechanism to pool, access and share industrial data across companies in strategic sectors – notably manufacturing, mobility, energy, agriculture, and health. Companies like manufacturers or car-makers will be encouraged to make some of their data accessible to the whole European ecosystem, with the incentive of being able to access other organisations’ data in return, alongside “analytical results from the data pool, services such as predictive maintenance services, or licence fees.”

The document also suggests that the EU could take "legislative action" to make data-sharing compulsory in case of market failures in a given sector – an idea that in all likelihood will trigger some backlash, especially if the obligation extended to US technology giants. “Unleashing data is valuable, but we are walking a fine line here,” says Benedikt Blomeyer, the director for EU policy of small-business advocacy group Allied For Startups. “Entrepreneurs who have spent money to gather their data might very well be reluctant to share it with others.”

The Commission thinks that Europe has an edge when it comes to industrial data. For all its tribulations, Europe is still home to six of the world’s first 19 countries for manufacturing output, and to some of the globe’s largest carmakers – which might prove valuable assets for carrying out the scheme. More importantly, the Commission is punting on the uniqueness of its approach compared to its rivals': the US’s tech strategy is mostly driven by the private sector, and – short of a revolutionary change of tack after the presidential election in November – the prospect of a government-led data-sharing covenant between the Silicon Valley giants seems remote; China is at the opposite end of the spectrum, but that’s not necessarily a place where you want to land. Europe hopes to plough its own different furrow, “balancing the flow and wide use of data, while preserving high privacy, security, safety and ethical standards.”

One question of course is whether this can work at all – whether the Commission can work out and implement a way to lay down the infrastructure, enforce the standards, perfect the interoperability and quality of machine-readable industrial data across its 27 member states, and bring all the big players to the table for the sake of sharpening the continent’s AI edge, and possibly fostering the rise of a new breed of tech champions. It is worth underlining that this is only a blueprint for what will be a five-year-long process of implementation.

Another question is: what kind of tech companies – what flavour of big tech – will this plan deliver? “Much of this is about creating the enabling environment from which new firms can emerge,” says Jack Hardinges, a policy advisor at London’s Open Data Institute. “The type of firm that the commission are hoping to incubate and propel through this work hasn't really come through.”

Hardinges says that the Commission’s data space plan seems mostly focused on traditional industries rather than, say, social media. But there is a good case for going down that route. “An argument for doing so is that there's latent value in data held by firms that might not think of themselves as data organisations or technology firms,” he says. “There is a good case for setting up this infrastructure and these investments, to foster those firms with latent value, but perhaps not the capacity to unlock it.”

This article was originally published by WIRED UK