Helena Legarda: The EU should invest in dual-use technologies

, by Hannah Illing

All the versions of this article: [Deutsch] [English]

Helena Legarda: The EU should invest in dual-use technologies
Photo: CC0

Is China a rival of the European Union, or are they political partners? One area where China is definitely competing with the EU is Artificial Intelligence (AI). The new European Parliament will thus quickly have to decide on a strategy on the development of AI and other technologies.

In this interview, we talk to Helena Legarda from the Mercator Institute for China Studies (MERICS). Ms. Legarda is an expert on China: She has a Bachelor’s degree in China Studies from Oxford University and a Master’s degree in Public Policy from the Harvard Kennedy School of Government; she moreover worked for the delegation of the European Union in China. She says that Europe should act quickly to shape its own AI future, in order to take advantage of the benefits of AI application while controlling the risks.

Hannah Illing / The New Federalist: In a recent report on China’s technology dominance written by you and your co-author Meia Nouwens, you state that China is surpassing Europe in the development of AI technologies. Should European citizens be worried about this development, and why?

Helena Legarda: China aims to be a global leader in AI by 2030, and is moving quite quickly in pursuit of this goal. In 2017, for example, Chinese companies accounted for 48% of the world’s total AI start-up funding, and China’s AI industry attracted 60% of global funding for AI between 2013 and 2018. Besides, the easy access to vast amounts of data means that Chinese R&D centers and companies have a goldmine of resources to continue to develop their technologies. As a result, China’s AI capabilities are rapidly catching up to – or even surpassing – Europe’s.

Europe definitely has an incentive to keep up with these developments, because of the major implications that AI will have for the future of our economies and societies. The applications of AI can be extremely beneficial, but they also raise concerns, so Europe should act quickly to shape its own AI future, in order to take advantage of the benefits of AI application while controlling the risks.

For example, AI is widely recognised as a driver of future growth, competitiveness and job creation for the EU, but it is also true that about half of the activities currently carried out by workers in Europe could be automated in the future, which would have major implications for European labor markets. The Chinese government is also eager to set the norms around the use of this technology, including concerning the ethical and social issues related to AI development. Some of these issues include data privacy, transparency and liability, all topics that are of concern to most European citizens and policymakers and where China has approaches that often directly clash with Europe’s. It is also important to keep in mind that AI is a dual-use technology, and it could therefore also have an impact on the future of warfare and on how China’s military capabilities compare to those of European member states or the United States.

Can we observe similar trends in other technologies?

Thanks to its whole-of-government approach to innovation, as well as Europe’s lack of strong, coordinated strategies to promote and protect its own industry and innovation, China has progressed very rapidly in a range of other advanced dual-use technologies, and is either catching up to, or surpassing European capabilities in several of them.

In terms of unmanned systems, for example, China has managed to develop a very strong UAV industry that has occupied the lower end of the international market, while the US still occupies the higher end and Europe buys American. Furthermore, China’s Beidou satellite navigation system will very soon surpass the EU’s Galileo system in terms of coverage and functionality, and Chinese advancements in quantum computing seem to be quite remarkable.

There are several examples for mergers and acquisitions between Chinese and European companies, one being the takeover of the German robotics company “Kuka”. Are Chinese firms actively seeking to access European technologies?

Europe has become one of China’s main targets in its push to acquire advanced technologies, key components and know-how to support its own development of dual-use technologies. Beijing uses several methods to get access to European technologies, including investments into European companies, research collaboration agreements, cyber espionage, and the acquisition of European talent, among others. While some of Beijing’s methods, in particular espionage, are illegal, many of the rest are perfectly legal. In these cases, it is Europe’s lack of coordinated policies to protect European industry and indigenous research that is enabling China to use Europe as its next “technology piggybank”.

What could be good strategies to protect the European industry?

Ultimately, China has a clear advantage in the process to achieve technological dominance. The one-party system allows Beijing to adopt a whole-of-government approach to closing the technological gap with the West in areas like AI, and this is a model that Europe simply cannot, and probably should not, replicate.

This, however, is not a zero-sum game. China’s progress should not prevent the European Union and its member states from investing in the development of their own dual-use technologies, AI included. To promote innovation in these areas, the EU and its member states should leverage their own competitive advantages, which include, among other things, a highly educated talent pool, an innovative private sector, a competitive edge when it comes to engineering and the production of high-tech components, as well as already available funding and a number of pre-existing initiatives to promote innovation.

The EU is also already taking action to protect European industry and innovation. The recently approved investment screening mechanism is a good example of this new approach. Other measures that could be considered include strengthening export control regulations, improving cyber defences, especially for smaller companies and research institutes, and developing a more nuanced approach to research collaboration with Chinese partners.

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