This week, the European Commission published its strategy and white paper for Artificial Intelligence. It is a significant step for the new Commission, who promised to deliver this within its first 100 days.

The European Union was behind the curve in setting the direction of travel for the development of the consumer internet and the use of user data, which was shaped by the US and now owned by dominant giants like Facebook, Amazon and Google.

The EU’s GDPR regime, which went live in 2018, used the size and prosperity of the European market to finally move the dial on privacy, data and web standards. Subsequently, Facebook’s growth has stalled, while Google is ending the use of cookies to track individual browsing data. But it came too late to help a European tech titan to emerge – a sore spot and a strategic weakness for the world’s largest single market.

The rise of ambitious, well-funded Chinese tech businesses like Tencent and Huawei have only worsened the EU’s tech envy and strategic headache.

The EU’s new AI Strategy aims to capture the early mover advantage and shape how AI technology progresses. It strikes an optimistic tone about AI’s potential – in tackling climate change, improving healthcare and transforming mobility – while proposing rules and principles that make the datasets that AI development relies on as open and non-intrusive as possible. The strategy aims to build public trust and oversight for AI, but crucially for the EU, it also supports “full single markets, where companies of all sizes can compete on equal terms”, as the influential Vice-Commissioner Margrethe Vestager put it.

By laying down those rules, the EU hopes to encourage the tech sector to practice European principles and values for AI development, and attract and support the next generation of tech giants to base themselves in Europe.

The UK has now left the European Union. Once the Transition Period ends at the start of 2021, the UK Government has pledged to establish a new regulatory and taxation regime to make Britain a global leader in technology innovation, including AI. Alongside this, Boris Johnson has pledged a huge uplift in research and innovation spending. Put together, Johnson hopes to lure tech giants to Britain and foster British leadership in the sector.

Through the work of the Centre for Data Ethics and Innovation, a world’s first policy unit for AI and machine learning, and research bodies like the Ada Lovelace Institute, the UK has given itself a head start.

However, the EU’s new AI Strategy makes clear how difficult it will be for the UK to operate in the gaps between three economic superpowers – the EU, the US and China. The UK may want to offer divergence from the EU to empower innovators, but will tech businesses ignore the rules and principles of the enormous European market next door when taking products to market?

This challenge brings home how important it will be for the UK’s innovative tech businesses to tell the Government what they need, and for Government to listen. As the EU gets serious about making tech progress, responsive and creative policymaking from Government and pro-active industry engagement will be needed to generate room for meaningful difference in technology standards and development for the UK in the years to come.

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