Charting a European Path to Competitiveness

So good afternoon everybody. We're gonna, we're gonna start. I'm very great to, to see you all even if we don't have yet full room but people I suppose are coming from their lunches and we have also quite a large number of people watching online and I'm delighted to welcome you to this launch event. On our latest report charting a European path to competitiveness. Since the release of Mario Draghi's seminar report on Europe's economic situation, competitiveness has been at or at least near the top of the EU policy agenda. And there's widespread recognition that Draghi got Europe's diagnosis right. But we are now more than one year on and progress on implementing the agenda set up by Draghi has been more slow than expected when new priorities have emerged. The new US administration, for instance, has made Europe more aware of the need to protect its values. And in turn this is driving demand for more European digital sovereignty. We saw at last week's Franco German summit in Berlin countries which with previously divergent views coming gradually together. And we've also seen massive investments in AI in the US and China which have forced deep fears in Europe about missing out, even if that means amending the AI act before it really comes fully into force. And as a think tank, my friends, as a think tank, sir has always focused on better regulation. So we welcome Draghi's emphasis on better lawmaking. But these more recent challenges have raised new questions and seen some very old ones reemerge about whether Europe's regulatory approach is the right one and whether it is hindering competitiveness. Should we continue to promote non discriminatory regulation and a level playing field at a time when the US and China are closing their markets, can we really do question without a balanced procurement policy that would transform public budgets into engines of technological autonomy? How do we balance the need for more diffusion and use of technology today while positioning Europe to gain greater strength in digital supply chains tomorrow and to make our regulatory environment more innovation friendly. Is it just a question of simplification and streamlining? I'm ready to say that the digital omnibus fixes irritants in the digital rule book. It reduces friction, it trims administrative burdens, and some of its technical adjustments are certainly worthwhile. But it does not solve the structural problem that truly hinders Europe's digital future. Europe does not lose global tech races because its regulations are too complex, intrusive on small tech. It loses because it it does not innovate enough, scale or coordinate enough, and ultimately build enough. So given that many of Draghi's recommendations are not new. Why has the EU been unable to deliver the necessary reforms? And what changes to the regulatory design processes and institutions could help overcome such inertia? The SERRE academics have been working on these questions this year and as you can expect from our think tank, they've come up with rather nuanced and careful conclusions. Conclusions which recognize that the EU has difficult trade offs to make. And just to mention some examples, they point to a need for Europe not to throw the baby out with the bathwater. The design of European regulation can and should in some cases be improved, but Europe's approach to regulating is fundamentally sound. If anything, while the US policy environment is febrile and unpredictable, Europe needs to double down on ensuring that its law making is evidence based, predictable and proportionate. And by the way, that applies as much to regulatory simplification or deregulation as it does to making new rules. Nor can we or should we aim to simply replicate the US economic model. We have different values but also different challenges, such as the limits of integrated non integrated capital markets, which mean that we likely to have different strengths in different parts of the technology supply chains. Many of the ways Europe can improve its competitiveness come from within Europe and do not require us to look at the US for inspiration. The Nordics, for instance, have an invaluable track record in innovation. The Commission has an important role helping member states learn from each other in hard to boost growth. So overall, our report's conclusions point to a very clear path forward for Europe's future. One that will create an enabling environment to nurture Europe's potential in emerging technologies. And here lie the best way of increasing our global competitiveness while at the same time rebalancing what are currently unilateral dependencies in our tech supply chains. That's what I wanted to say to introduce this, but I will stop now because we are very delighted and honored to welcome once again a SER Renate Nicolai to provide a keynote to launch the report. As you know, Ms. Nicolai is Deputy Director General at DG Connect and in her role she's the coal face of questions about how to reconcile digital sovereignty, tech diffusions and economic growth. Please give her a big round of applause.

Thank you for the warm words. Thanks for having me. At such an important moment where SER once more makes an important contribution to an important European debate. I want to bring in a Commission perspective to talk about competitiveness as a framing in three areas. I want to talk about simplification, how I see it, innovation and Regulation, how I see it and the international context of it. I would start by saying that we are delivering on drug big time, and that this Commission is bold in its actions to define the European future, towards competitiveness, but of course, also in a European way, not copying any systems that are not ours, but staying authentic and truthful to who we are and what we stand for. But it is also clear, let me start with simplification, and I have myself worked a lot and led the work in DG Connect on our digital omnibus and our digital package that we present presented last week. And I must say I'm quite proud of what we have put on the table because already before the geopolitical context has emerged as we see it today. We had Draghi's report, we heard about regulatory burden, and we heard that also in the debate and in the campaign to the kind of transition from one Commission to the other and in the campaign for the European Parliament elections. And I think it's only right for this Commission to not only say, we hear you, but actually to also do it. This is a new way, this is a new DNA of this Commission to actually really take a critical look at our regulatory landscape that we are in general proud of, but to see have we always gotten it right or have we, in the haste of doing things sometimes, or in the silo of doing things sometimes, maybe overlooked some burdens that we have created. And I think this is exactly what is behind this digital package that we have delivered last week, because it's about, of course, making the rule book more coherent, offering options for business where we are offering easy options, digital options that are lower in cost, that are cutting red tape and thus bring us forward and make Europe an interesting place to invest in and to do business in. Let me just outline, you know, the key measures that are in this digital package. First of all, I'm very proud of the Data Union strategy, because that's exactly what we need. We need a kind of a vision for Europe to become a place where we can access data, share data, because that's the fuel for our digital transition. That's the fuel that the AI continent needs. And here, of course, to kind of give very concrete ideas be, be it what we can do nationally, but also how we can protect us better internationally against data leakage were very bold moves and are worth kind of, you know, considering and following up to, in particular in making data the kind of the necessary kind of ingredient for our AI revolution that we want to embrace in the European Union. The second aspect that I want to Highlight is the business wallet. This is really a vision of kind of having in the future and a digital kind of system, a unique system in Europe. Wherever you are as a business, whether you're big or small, you have a unique digital identifier, a unique way of authenticating you and a unique way of communicating and bringing in compliance yourself with national and European rules. It is a logical next step to the digital identity that we are building and that will be rolled out at the end of next year, year. But it's a big promise for business that they will have a much easier way in the future. And then of course the digital omnibus being very bold because we are addressing data, we are addressing cyber and we are addressing the AI act and it will kind of lead to huge cost savings in the billions, you know, 5 billion until the end of the mandate. That is not nothing. It will be good news for kind of in particular the SMEs, the mid caps, because we are taking them out of the rules. Because that's anyway the new way of going on the AI act. It's not stopping the clock, it's kind of rather kind of, you know, taking a reality check and making sure we roll it out in light of the support structures that are needed and that are thought through in the AI act to make it work with predictability and reliability for the business. So for the high risk kind of annex, it is important that we have the support system of standards or specifications or guidelines in place. And that's what we are kind of facilitating here. Data, very big kind of adjustments. First of all, in the non personal data field, we are making one law out of four. This is a huge reduction of burden and it's also a logical approach because in the future Europe will have one law for non personal data, that's the Data act and one law for personal data, that's the gdpr. What an easy kind of structure we built here instead of the kind of spaghetti bowl that we have at the moment. And when you look at the issues that we tackle in the gdpr, they are a lot talked about that this is not a hard surgery of the gdpr. This is just adjusting, clarifying, picking up what has already been said by the European Data Protection Board, by the European Court of Justice, with the vision of making it easier to have this innovation approach in the GDPR to make it easier to have a common knowledge about what is pseudomonized data, when is it not pseudonymous data anymore or when can I kind of use kind of data for the training of AI and When can't I? We are not lowering any level of protection. We're not taking the individual out of the control. We're simply clarifying and we are saying what we have already said, for instance, on certain mice data in the court case where we came in with an amicus curia brief to defend our interpretation that we have now put in law and that has been referred also by the European Court of Justice in the ruling on it. Also, when it comes to the cookies, I mean, we all know about cookies fatigue. So this is a very good news for business and for citizens alike that we put order in there, but we don't kind of take the control away. Nobody can access the data in my gadget. We without me consenting, we're very clear about that. But we also put the rules on the cookies in where they should have been from the beginning in the GDPR instead of in the E Privacy Directive. So a lot of clarification and order into something that was not coherent before cyber. Nobody questions the cyber rules. We need to protect ourselves better. Also, business is clear, but business has been very clear in complaining about the. The avalanche of kind of cyber rules that led to an avalanche of reporting requirements to different authorities. So what are we doing here? We're saying we want a single entry point, so one way of reporting and then it will kind of automatically go. That of course has to be built, it has to be secure, it has to be privacy respectful. But it's the right way to go. Business model, single point of entry and a clear data structure. I think these are good news. So this is the kind of digital omnibus and it's only the beginning because we have at the same time launched a digital fitness check because our executive vice president really means it. She wants to fitness check her entire regulatory aqua. And that I think can also kind of look, the public consultation has just been launched. We can look at the governance structures as they are today and we can come back to that and say, well, could we maybe also there have more coherence, you know, overall in the future. So it's just the beginning and I think it's a very healthy exercise for the Commission not only to do this in a digital area, but other in other policy areas as well. Because it's a very important kind of facilitation and simplification for the business to do to be successful in the European Union. But of course we have to be better on innovation. And I think that's the key message of this commission ever since the competitiveness compass. I think in Many different areas, there have been very concrete kind of initiatives and visions to really kind of bring about a change in how Europe is seen. Europe as a place where you can do innovation, Europe as a place where you can invest because it brings stability and it has a vision. And one of the key visions that we have in the digital fields is of course the vision of an AI continent. And if you see the AI continent action plan and the apply AI strategy, this is exactly what to do. We want to kind of bring in particular AI into our industrial sectors. We have to start with building on our computing power, bringing the startups and the AI factories to the computing power so that they can train the models built with apply AI ecosystems for certain strategic industrial sectors and then hopefully make some key progress and maybe have deep seek moments on one or two or three or four industrial sectors in the future. We have strength in industrial sectors. We need to bring them to the next level of the AI revolution. I think also the interest that you are seeing, for instance, when we look at the call for interest on gigafactories, where you have so many who want to come in, telcos and others who want to invest in this, just showcase that this kind of change of tonality, this vision that Europe is a place to kind of innovate and to invest in, is bearing fruit. Of course it has to be accompanied by, with scale up strategies, with making the capital market union a reality. But all these ingredients are being worked on, including the union of skills, because of course we can not only have the gigafactories, we also need to have the skills to actually deal with these matters. But I think there's really a concept around it and this doesn't mean that we should not regulate anymore, but we should regulate with this vision of tech sovereignty and digital sovereignty in mind. And this is what's going to happen in the near future. A revision of the Cybersecurity act is exactly that, to bring us in a better shape, even to deal with the kind of the vulnerabilities that we have in critical sectors and move that forward. The Digital Networks act is exactly about that. It's about simplifying the rules, but also bringing about the context, the single market vision for a sector that is so crucial, and not only in the terrestrial part, but also the non terrestrial part. When you think about satellites, that is so crucial for the competitiveness of Europe in the future, or when you take the Cloud and AI Development Act, a cloud infrastructure, a vision for energy efficient data centers in Europe, a vision even of sovereign cloud solutions, In Europe, that's really what we need in order to build these kind of parts of the stack that are all important to really kind of bring about this digital revolution that we want. And the CHIPS act too will of course also build on the kind of, kind of the supply chain kind of deficiencies that we saw in the past and that we want to remedy in the future. So I feel there's really a program of hope. There's a program of very targeted initiatives, not n' importequoi. It's a very targeted agenda that is very led by competitiveness, simplification and bringing about the reduction of our tech dependencies, building on our strength here, in particular the industrial strengths. Let me finish with a word on the international. Also because American ministers were in town and also because we just had Foreign Affairs Council conclusions on our digital strategy that we have also put in place to kind of react also on the international side on digital in a more strategic way. And it is quite different because we are coming with a tech business offer. We are actually saying to our partners, we want to do business with you. Of course, this is not a one size fits all. When we are discussing with Nigeria, that's different from discussing with Brazil or with Korea. But we have an interesting kind of offer to make to work together on supply chains, to work together on important emerging technologies, whether that's semiconductors, whether that's quantum, whether that's concrete cooperation on AI. It might also include convergence on regulatory approaches. But it's important to be led by an assertive EU that has a lot to offer and that wants to kind of work in alliance with partners, but in a modern way driven by our interests and matching the interests of others so that it's a win win situation. So I feel we are delivering on Turagi. I feel we have a vision. I feel it's a different way of working in the commission and I think we are starting to deliver. Thank you very much.

Thank you very. Thank you.

Thank you.

My mic doesn't work anyway. Thank you very much. Renate, this was a passionate speech. Always a pleasure to be contradicted by you. And we have two minutes for a question.

Two questions.

For two questions. Fantastic. And I have to run, so we would like great questions. Zach Meyers, I think you were part of the organization.

Go ahead, Renata.

Thanks so much for joining us. It was, as Bruno said, a really impassioned explanation of what the Commission's doing. I have a question for you about the digital omnibus and the GDPR changes because I think when it comes to cookies and also the opt out mechanism for training your data for AI models. These are going to rely on standardization and on having companies agree on processes to allow consumers to get the right to opt out and for that to be actionable. And we've seen in the past that these types of processes, if companies are not all on board with the same incentives, can take a long time to become actionable. So kind of how do you see that process happening to make sure that consumers rights are protected?

I don't see that everything that we are doing is depending on standards. Some of it. I mean the key on the standards issue was the kind of the clarification that we brought into the AI act where normally you would have on the 2nd of August next year a certain kind of kicking in. But how can you be predictable? How can you give legal certainty to a business if your standards are not ready? So that's what we had to kind of, you know, where we had to give a structure, where we are giving a certain kind of visions where we want to land and we're not giving too much time and there's a clear kind of possibility to come in earlier. But we need to work on these standards and or specifications or guidance. So it's either standardization structures or we have to kick in I think for the rest, for the GDPR kind of adjustments. And they are really clarifications. They are not kind of redundant reductions of the protection of the level of the data protection in the eu. I would never do that. I negotiate. I was part of the negotiation team on the gdpr. But it's really important to see that. Let's take pseudonymous data. You know, the court has clearly said that if you know, the data is passed on and the third party does not have the key to re identify, then we are not anymore in the context of personal data. And that's such an important clarification when it comes to kind of the use of data for the training of AI or the other clarification that we brought in, which has been debated by the European Data Protection Board. So it's again it's building on it is that of course you can have the legal ground of legitimate interest as the basis for training of data for AI models. That clarification is very important to have. But that doesn't mean it's without safeguards. Because then of course the whole balancing act comes in. And here of course also we can rely and we refer to it in recitals very clearly on jurisprudence of the court. For instance, in the Meta Judgment that has made very clear what are the thresholds. So it's not for free. It's not a kind of, you know, as if we are throwing the kids with the bathwater, you know, in terms of, you know, our safeguards on gdpr. It's just clarifications. When we negotiated the gdpr, it was supposed to be innovation friendly, it was supposed to be future proof. What we are doing now, and it's the right moment it will have the 10th birthday next year, is to really adjust and to kind of clarify with the experience that we have gained both from the enforcers, but also from jurisprudence, and bring that in a clarified way into the law.

Okay, thank you very much. The last one?

Yeah.

Okay, one. One for the road, Alexandre?

No, thank you very much. And indeed, I like very much this enthusiasm. I mean, in Berlin, like the summit that Bruno referred, there was the same enthusiasm that I don't always see in Brussels. You know, many people seem.

That's why you have me.

No, that's why it's really good and it's nice to see you. But how do you see this summit, you know, at the coming. Will you follow up on it? Do you sense a big agreement between France and Germany and that's a direction you will follow, or do you see still a lot of disagreement? And so the commission is in between. So what's the Commission follow up of that summit?

Well, I think there is a lot of concrete follow up. First of all, I think there's really a willingness around the kind of the member states in the Council, because this is not coming out of nowhere, the digital summit in Berlin. I mean, it has very much been building on the last European Council conclusions that were very strong on sovereignty, on digital sovereignty. So it is mainstream. It's a mainstream theme, of course. Does this mean that when, you know, we will have the revision of the public procurement next year, which will be very important, that, you know, we will go extreme, or will we work on a kind of, you know, simple system of criteria that kind of will build on sovereign kind of aspects, as others around the world have done? Aren't we only catching up with what others of the world have been doing for a while? Isn't it the level playing field that we need if we want to compete, if we want to kind of advance on our competitiveness? So this is inevitable that we have to do that. The devil then is in the detail. What are the criteria? What are the sovereign criteria that we built into the kind of, you know, Cloud and AI Development act, or in the government procurement. But I strongly believe the fact that we are already talking about that is giving a lot of hope for the great companies that we also have in the European Union in all the sectors that we are talking about, whether it's AI Innovator, whether it's cloud providers, whether it's connectivity providers. And they need that kind of beacon of hope. They need that vision that Europe actually wants to kind of make it, that we want to make Europe a better place for the them to actually flourish and to scale up in Europe.

Thank you very much.

Sorry, I have to leave.

Thank you very, very much. Ver. Great speech. Now I'll call, I'll call to the, to the stage. Zach Meyers and Antonio Manganelli, who are the first two come, come also. And one of the first two authors who are going to introduce their report on digital sovereignty and competitiveness. Zak, the floor is yours.

Thank you so much, Bruno. And I think Renata has already left, but I just wanted to say a thank you to her. It's not many Commission staff, I think, are going to come to an event where we're calling for the breakup of the Commission. So I think it was brave and bold and we're very grateful. I'd now like to present the findings of the first of the three papers that we're launching today at sare. And this is examining the complicated relationship between competitiveness and digital sovereignty. Following on from that last question for Renata. And I think, you know, policymakers are really struggling to get consensus about what both of these concepts mean, much less tackle the tensions between them. So if I start with competitiveness at the most profound, at a profound level, our problem comes down to one thing, which is that Europe's proportion of the global economy is steadily in decline. And that translates to Europeans living standards falling against the global average and just as importantly, our global heft in world affairs declining. And so the answer to this is twofold. First, we have to improve productivity. Europe has an aging workforce and we have limited appetite for more immigration. So the most plausible way to increase productivity is, is to better use and to diffuse technology throughout the economy and to use it to make sure that our companies become more efficient and more innovative. The risk, I think, for Europe is that technologies like cloud and like AI provide significant growth opportunities for other parts of the world and that Europe again misses out like it did in the 90s with the productivity boom in software. Secondly, we have to build a stronger pipeline in technological innovation ourselves. The European Central bank attributes two thirds of the of the eu, US productivity gap, for example, to the high tech sectors. So this is an area where Europe really has to be focused. If I move to tech sovereignty, the first problem here is trying to understand this complicated debate about what exactly tech sovereignty means. We all agree that Europe is lagging behind, but there are different views on exactly where we need to protect ourselves and from what. So there's questions around the risks of foreign governments accessing European data, about the risks that foreign governments could threaten to withdraw services in order to compel Europe to act in a certain way, about concerns that Europe could be reliant on technologies like AI models that could be trained in ways that are inconsistent with EU values. And also there's concerns about just generally Europe's poor track record in many parts of the tech stack today, which means that our company is not getting the level of value capture that some innovative global platforms are able to enjoy. And so when we think about this tech sovereignty problem, there's two ways to address it. One is to eliminate dependencies. And this is in my view, a very, very difficult approach because some of these problems are really intractable in a globalized world. Supply chains cross borders and there's a high degree of regional specialization, which is something that Europe has benefited greatly from. And similarly, many jurisdictions are doing things like imposing extraterritorial sanctions or seeking access to data held offshore. And again, the EU is amongst these jurisdictions. So we are not merely the victims of these particular problems. Dependencies are inherent to the world that we live in and conflicts of laws and of values are everywhere. So taking a hard line approach to eliminating these risks requires autarky and amounts to closing our back on the world. But at the same time we can't do nothing, of course, and, and in a world that is increasingly governed by power rather than by rules, there is another way of understanding Europe's digital sovereignty problem. And that's that firstly, Europe's relationship with its major trading partners, especially in ict, is too one sided. So the problem isn't dependencies, it's dependencies that are excessively unilateral rather than mutual. And secondly, where Europe does have powerful choke points in tech supply chains, and as we do have, for example, in the supply of chip making equipment and in specialized software, we are unwilling to use these politically to neutralize coercion from other countries. I want to primarily focus on the first problem, though. Evidence of the one sidedness of ICT trade is everywhere and it is getting worse. The EU's global share of the ICT market fell from 21.8% in 2013 to 11.3% in 2020. 22, nearly a halving. And only 6% of AI startup funding is going to European firms. The US and China are leading in sectors like chip design, cloud computing and quantum. If we had a stronger role in these sectors, we'd have much stronger ability to dissuade other countries from weaponizing our dependencies on them. And so when we think about these two ways of solving the digital sovereignty problem, then we can start to think a little more carefully about the technologies and the relationship between sovereignty and competitiveness. In the long run, these concepts just aren't intentioned. If we can get more of a lead in the next generation of technology, then we can have stronger growth and we can have stronger geopolitical theft. In the short run though, we have a dilemma, which is that if our path to becoming more competitive is through technology, then the fastest way to do that is to ensure quick adoption of technologies that already exist. And largely that's going to be global technologies that are based outside Europe. For now, that's particularly true for AI because it's a general purpose technology and it can, it's a powerful tool to hasten the pace of innovation itself. And so we will need it if we want Europe to emerge as a key player, even a leader, in the next waves of innovation, like in Quantum computing or 6G or industrial AI, and to dominate sectors so that other parts of the world can depend on us. But of course, as I said, today, Europe is trailing in most parts of the tech stack, which means we have to use these existing technologies in order to be able to leapfrog. Now we can't be naive. And one of these risks is that we have to think about how to use non European services in ways that recognize that in the short term there are political and economic risks of relying on them. And of course, the other reason we have to act is that perception matters. If we want European businesses and the public sector to digitize, then we have to show that we're taking sovereignty seriously and that using these products is safe. What we need though, is policy that acknowledges trade offs. This means that policymaking should use an evidence based approach to identifying risks to digital sovereignty, quantifying them. We need to identify the feasibility and the costs of potential solutions to digital sovereignty. And we need to consider growth oriented and innovation friendly solutions and prioritize those. So my study looks at a couple of different ways in which we can manage these trade offs, ranging from the famous Eurostack option, which is that you build European Options at every single point in the end to end tech stack to more targeted options where we want to maintain the presence of European options only in high risk areas, targeted cases such as managing sensitive national security data, trying to build the minimum viable products in those areas, rather than trying to go for a maximalist approach and then thinking about a more offensive approach that focuses on promoting areas where Europe can lead the next wave of technologies. I'm not going to run through all those today. You can read the paper. But my overall conclusions are that we are going to need a combination of these defensive and offensive strategies. But we can't lose sight of the long game. And that means putting most of our effort and our resources into finding comparative advantages for Europe, positioning ourselves to win tomorrow's tech battles, not trying to fight yesterday's ones by copying other countries successes. Quick word about regulation here, which I haven't talked about so much yet. And as I said, Europe cannot eliminate its dependencies overnight. And so we're going to need some shorter term solutions and regulation will have a role to play here. This is why Europe, as an enthusiastic adopter of technologies like AI, can use its market leverage to mitigate sovereignty risks, ensuring that firms are providing assurances and options that reduce Europeans exposure to weaponization risks and ensure that there are workable fallback options if those risks ever did materialize. The EU is working on initiatives that could achieve this, like the Cloud and AI Development act, which will be published next year. And even without imposing hard law, the EU can do things like increasing transparency and rewarding companies that take steps to give customers in Europe assurances that their data and their services are safe. So just to end, I want to summarize some concrete recommendations on what Europe can do. Firstly, get specific about what sovereignty means. We can't solve problems unless we properly define them. And at the moment there are a lot of different concepts and fears that are floating around under this sovereignty umbrella. Secondly, cost benefit analysis. We need to understand what the options to solve the sovereignty problems are and and how they impact growth and innovation. Thirdly, respect the role that fair market based competition can play to drive good security outcomes. We don't need to interfere in markets that are working well and where customers can assess and react to risks. And fourthly, don't lose sight of the end goal. Patching up areas where we feel vulnerable isn't a strategy. There isn't anything ambitious about replicating services that already exist. We need a focus that's bigger and that's bolder. We need Europe to be ready to launch the next technological revolution. And that means most of our efforts and our funding should go into putting Europe at the technology frontier. And with that let me hand over to my colleague Antonio Manginelli. He's going to talk us through the second paper in the series. Thank you.

Okay, so thank you very much. And I'm here to present the second survey paper for this competitiveness forum. And it's about competitiveness and digital transformation. And the base of this report has been recognized by the drug report. That's Europe. Competitiveness problem today is fundamentally one of innovation and productivity. In a world of economic fragmentation, price based strategies are really easily quickly eroded by tariffs, trade friction and supply chain shocks. So is not really something that could be effective. What really could sustain growth and resilience is innovation led competitiveness driven by frontier R and D, effective commercialization, wide diffusion of technologies, and in particular today's main general purpose technology. So cloud, advanced connectivity and AI. And that's what on the report we focus and the paper we try to answer three simple but difficult and interrelated question. The first one is why does the EU still lag behind other major economies on innovation productivity? The second one is to what extent does this reflect our difficulty in creating and scaling European tech firms to a global level? And the third question is how well are we doing in the diffusion and productive usage of digital technology across our industry and economies, especially advanced connectivity, cloud and AI. On innovation, the starting point is that Europe, we know very well, spends less on R and D than us, much more. And the gap is essentially on private R and D while on public R and D expenditure is more or less the same. But there is big difference that in Europe is fragmented at national level and dispersed into a much higher number of smaller project while the US much more concentrated. But the real issues, and also sometimes not focusing on that, is that not only how much we spend it is the problem, but it's also where and how we spend our business. R and D is concentrated in the mid tech sector such as automotive and chemicals, while high tech sectors are relatively very underrepresented. And these represent what we call a structural effect. But also on the top of that, even when you firms do invest in R and D, they tend to obtain weaker productivity gains from R and D across all industries, which is very important compared to the US counterpart. And also on the other side, we underperform in ICT and patents despite a very strong scientific base that it can join. So all in all the contribution to R and D to innovation based competitiveness is weaker which is. Which represent what I call an intrinsic effect which is much more complex to address and which make also the increase in R and D spending probably necessary, but maybe not sufficient. The second and third message of the papers concern the structure of our digital economy. And this is also something that in the drug report is very highlighted very well. So the productivity gap with the US is heavily concentrated in the sector where ICT is produced and where ICT is intensively used. As for the first one, Europe has created far few digital firms that reach global scale. And our capital markets and scale up finance remain shallower as a result of that. At the end, the capex investment from non EU ICT firms are way higher than European ones and a correlated factor. We now depend on non EU providers for the large majority of digital products, services and infrastructure. But the important thing is that these two things are correlated. They go together. And then another thing that also as Zach was mentioning and implying, and another thing is that the link between the fact that when you have the dependency means that there is a need and we are talking about the need that we are in a way trying to enhance because it's going towards more digitalization. So all these things go together and the balance is quite delicate. And the paper does not look at the US model as something to be possibly replicated in the short medium term. Instead argue for a more polycentric digital architecture with a stronger role for the public, but also for EU telecoms and ICD manufacturer. And on the other side for a strategic autonomy agenda that is generating mainly risk based and proportionate. On some supply side we have made good progress for very high capacity network and 5G coverage. But adoption lags behind, far behind. And 5G stand alone is still limited. Cloud and AI uptake is uneven, particularly among SMEs and across member states and about instead the demand. The third point, even when we're in I see the infrastructure and services are there. Europe often struggles to turn digitalization into productivity, which is a conceptually similar problem to what we highlight upper in the value chain of innovation, in the chain on innovation. And that's more fundamentally because European firms invest much less in the intangible. So skills, software, organizational change, data assets that make technology pay off to a larger extent and quicker. And also the other side, the other point is that our business demography is dominated by micro firms. So that struggle to absorb this technology in the short term. And what does all this means for policy? The report suggests several direction. I try to summarize here a few. The first one is rebalancing Public R and D towards I'm high impact mission oriented innovation in high tech sector coordinating better and more strongly national and EU programs so we reach a critical mass and better returns. Second, preserving a balanced IP framework especially in sectors like cellular and IoT where EU firms are global leaders so we do not undermine upstream innovation incentives. The third, recasting the digital decade targets away from from a pure coverage logic adoption and focusing on the adoption, productivity and sector specific outcome ideally with also dynamic benchmarking against the US and the fourth point is creating EU level instruments to finance intangibles so skills, software organizational transformation that what I highlighted before is really important to transform digitalization into program and this is particularly for SMEs which of course are populating the European ecosystem very much. And finally designing the strategic autonomy measures that are really genuinely risk based focusing on support, on building credible EU alternatives rather than broadly restricting access to non EU technology and suppliers. So this is my main point.

Thank you. And now is the time for the panel. I will call to moderate it Alexander Strehl, Academic director and he's going to introduce the panel.

Okay. So good afternoon. Good afternoon everyone. So we will indeed have one panel now on the basis of those two important issue paper and then we will do. I will present the third issue paper and then a second shorter panel. So now if I can ask to discuss the first thing Ben Schroeder from booking. Ben, you sit where you want. I don't know where they have to sit. Is there. Okay, sit here. And then we have Olga. Sorry, Dave. Okel. Sorry Dave, you can sit next to Ben. And then we have Olga from OpenAI and then Thomas, thank you very much from Microsoft. So basically you know, and thank you very much all of you to be here. So I will start as always with SER and I would like to know each of you and if you can have two, three minutes to kick off what are one thing you like in those reports? Both or one of them and one thing you think could have been improved or where you don't completely share let's say the analysis because as we know, I mean those issue are complicated issue where not everyone agree and I think that's where SER is maybe useful. So maybe we will start with you Ben. One thing you like and one thing you disagree or you like less.

Okay, sure. So I think the thing I like most about the reports is the analytical clarity. I always found that the DRAGHI and the letter reports were very good but they were a bit high level. And I think the these three reports really go into the details and they do make the decomposition between focusing on diffusion of technology versus production of technology. And I think that's very important for the policy recommendations that we derive from the reports. And for me, the key takeaway is that diffusion of technology is actually extremely important. And I think that's something that hasn't really come out of other reports. I mean, most of the gap between Europe and the US is in the services sector, which is more than 70% of our economy. We love to talk about industrial and manufacturing, but we are a service economy and that's where we're lagging the most. And that's also where it's very, very hard to make progress because we have this structure that screws very much towards very small businesses compared to us. And I mean, we notice as booking.com because the vast majority of our partners are very small businesses and it's very hard just to get the attention for productivity enhancing technology. So I think that's, that's really good to see that reflected in the report, that that's something that we need to focus on and it's also something that's not very easy to solve. The thing I maybe like not so much is that while there's a lot of analytical clarity at the end, we still end up with a bit of a laundry list of things that we can do. And I think strategy is about deciding where to play and how to differentiate and also how to sequence it. And I think that's where we can. I think that's where the reports could be a little bit clearer and say we need to do one thing or two things primarily and then once we have achieved them, we can move on to other action items. So I think that's still something to be worked out.

Okay, so that's very good. I warned my colleague that I will come back to you at the end on those priority lists. But Ben, can I push you a little bit on those two things on diffusion? I mean, it's clear that it's important and Zach has mentioned that and Antonio too. But there seems to be now more and more discussion in Brussels, in Brussels, in Berlin and everywhere that diffusion is not enough. I mean, we should also develop our own technology for different reasons because those technologies are carrying our own value. They are linked to defense. So I mean, maybe this diffusion paradigm is a bit too naive and we have to also develop. What do you think about that? That's the first thing. And the second question is if you have to prioritize what you have read in the report, what will be your first two action?

Okay, sure. So I don't deny that there are certain edge cases where we have certain security interests that need to be taken into account. But I think for the vast majority of the technology we're talking about, diffusion is more important to get ahead in terms of productivity improvement. So I think that's definitely where I would focus also. I mean, and this is in the report, most of the benefits that are reaped from technology are reaped by the people who adopt the technology, not the people who produce the technology. So I think we're a little bit over focused on, on producing technology when at this point in time I think it's much more important to, to focus on diffusion. And I also think there's a bit of a, like a flywheel that we can get going there. If you have more people adopting technology, like it's going to increase demand for technology and once you see that incre increase in demand in technology, that's going to help our firms to scale. And once they scale and you know, they, they also win global markets, then that's also going to have a geopolitical dimension because then we're going to move more, more towards a situation of codependency where we have some technology and some systems that are used throughout the world and that are important for other regions and likewise we'll be using other technology and then it's much harder to hold leverage against Europe and on the priority list. So yeah, if I had to prioritize, and this goes a little bit into Antonio's report, I think you have to look at what's holding back technology adoption and innovation today. And there's the business survey. The number one thing is actually the lack of skilled labor. So that would definitely be something, would be very high on my agenda. In particular with the microstructure of our economy. We're trying to do that@booking.com right now, helping our partners, which are small businesses, to upskill their employees. And it's a, a very challenging task. I think that's definitely where I see a lot of opportunity for the EU also to play a role because in the end it's going to be the same content needed everywhere because the skills don't differ. But right now you have very different solutions all across the member states and even on the regional level. And I think that's really where you could step up and for example, create a European wide upskilling platform like Israel has done. They have a national education platform. So I think that would be my Number one thing. And the second one, if you look at the business service and you leave aside for now energy, which I think is a very separate issue to solve, then the second one is regulation. So I do think we need to look at regulation. And it's not so much that regulation is misguided, but I think it's just the complexity of regulation, in particular for small businesses in some instances. It's also the fact that it's just outdated. Just to give you one very practical example, if you check into a hotel, they have to collect your personal data and then they have to submit it to local authorities or they have to provide it up on request. Now, we have 27 different systems for doing that. That makes it very hard to create a technical solution for that. Second, in some places you still have a requirement to have paper forms.

So.

But that's not necessarily, you know, making changes to the AI act or gdpr. I think there's a lot of sectoral regulation that's really holding us back from adopting better technology. So one thing I would definitely recommend is paying more emphasis on all these sectoral challenges and maybe doing an inventory and how they also interact with EU regulation because there's a lot of, a lot of interaction effects as well.

Thank you very much. That's a very good, very good list. We will transmit to the Commission, hopefully. Let's go now to Dave from the Comrex or the Irish telecom regulator.

So something I liked and then something.

For a bit more level playing field. Same question for everyone.

Level playing field is a contentious expression in my neck of the woods. Okay. Something that I liked was the really big picture approach to the fact that there are a number of issues that hold back European productivity and innovation. And they don't just sit in one bucket, they sit in a number of buckets. And some of those are macroeconomic and structural and don't sit at the institutional level. Given that that issue has been identified, what that means is that the suite of recommendations that are set out in the reports have that similar broad brush. So I really like the fact that compared, for example, to some of the. What you would have heard in the telecom sector that I'm closest to the ill is one thing. It's for example, excessive regulation or not enough consolidation. There are other things going on. So there's a bigger picture that it's appropriate to identify if you're going to have the solutions that generate those that need for innovation in Europe. So that was something that I really liked. Something that I think not so much something I disagreed with, but something that there's another work stream. Given that you've so clearly demonstrated the presence of that innovation gap, how can regulators best assist in narrowing that innovation gap? And that can be either getting out of the way when things are looking after themselves nicely. And you don't need, you know, you don't need a regulation in the way you don't need paper based forms to stay in a hotel. But also, how can regulation actively assist in creating the circumstances in which investment flows occur, in which innovation occurs? How can a regulator move from being sort of the implementer of a set of rules to generate a certain static outcome to kind of, of being a steward of a more kind of digital transformation? So that's, you know, that that generates important questions for regulatory agencies to figure out, given that these problems have been identified at large scale and there is regulators that are on that pitch, but there are only one player on that pitch. What can they do to not be in the way when that's the appropriate course of action? And what can they do to move from just applying rules and checking numbers to creating the circumstances for that innovation gap to be narrowed and for that investment to occur?

Okay, so that's fantastic. And can I push you on this? Because I think that that's very well summarizing what could be the role of the regulator in the future, you know, and one part of it, as you say, is to be an enabler of this digital transformation. So at Comreg, how do you address those challenges and how do you go through those challenges?

Luckily, we published our strategy statement a few months ago. So I was in the trenches figuring that out. So the way that we do that is firstly we look at what do we have and what are we good at and what's coming down the line. Okay. We move from being a regulator of telecommunications and postal services to we're now taking, and this is true of very many regulators across Europe taking on responsibility on the Data act, on the Accessibility act, on the AI Act. There's a ton of stuff going down the line. And also a lot of that stuff, a lot of those responsibilities are being split out between sectoral regulators and member states. So those are the types of challenges that we need to, that we need to take on. But something that I think we're reasonably good at is our kind of bread and butter is probably S and P economic regulation of markets where there is S and P. We and other regulators in Europe have shown we are not stubbornly on the pitch for that. If we think that market circumstances Warrant it. We will deregulate. We will deregulate markets. And that goes to something that Zach had mentioned in his talk, that whatever approach is to be taken, it has to be an evidence based approach. We are already strongly evidence based. Also because we are creatures of statute, we have obligations that are the obligations placed upon us by our political masters. So there is a certain amount of discretion, but only a certain amount. So how we're going about it, we have those strengths, we have new things to come down the line. One of the things we are doing at Comrade is we're resourcing ourselves with new skills. For example, new too is something else that's coming down the line. The Critical Entities Resilience Directive is coming down the line. We need the people in the organisation who are able to engage with the stakeholders that are new to us to be able to interact effectively. So we've a ton of new stakeholders. For some of them, we don't yet know who they are because the regulation has been perfectly caution dried. But we need to start engaging with all those people early to understand what they want and expect of us for them to understand what we will be doing. We are not doing our job by just being awkward and adding more work that does not help anyone. We are doing our job if we are interacting with those entities in a way that provides certainty in a way that's essential, simple as possible, and that delivers better outcomes for stakeholders, ultimately end users.

Okay, thank you for this pragmatic view. We will be. We will have one of your colleague from the Greek regulator later and so we will see if he agree or disagree with that. So now let's go to you, Olga from OpenAI. One thing you like, one thing you didn't like. Maybe you asked ChatGPT to do the exercise. I don't know.

Of course I did.

Of course I did what it says.

I think first I wanted to congratulate the authors because I think these are really, really good papers and I must say I actually really enjoyed a lot of recommendations and this kind of recommendation heavy format. I think we don't do that enough. I think we're really great at I think collectively identifying the problems, but we don't spend enough time in looking into actual problems, pragmatic solution. So I really appreciate that. I also appreciate the consideration of trade offs. This also always comes in. So overall very interesting. Something that caught my attention is something I think that also Ben pointed out is this productive adoption gap and how we can bridge that. Why is that the case that we see that adoption on pair vis a vis other jurisdictions. However, the productivity is not there. And I think if there was an opportunity to double click on that in the future, perhaps. I think you do identify these intangibles that you mentioned, Antonio, but what we can do collectively, both, of course, on the policy side, but also from the sector side, how we can remedy that. And one last thing which came to my mind is the importance of data. How do we measure that? Just maybe anecdotally, we organized a policy hackathon two months ago with even some serious participation. And a statistic that constantly came up around AI is this 13.5% of European enterprises adopting AI. But this is a figure from early 2024, which is completely outdated, does not give us like real, real time insight in what is happening, which is why I think, you know, also thinking about how we can provide insights and what, what is happening would be super helpful.

But I can reassure you that when I see my, my student, you know, they 100% seems to have adopted AI and in particular ChatGPT. So I mean, I am hopeful for the next generation at least. Yes. And so one thing you in your priority list, I mean, or in the priority list. And the same question to Ben. What would you think? What should be the first or the first two things that the commission or the member states should do, according to you? If you were von der Leyen or the Prime Minister of your country, what would you do?

I think what you outlined, proposing that mix of solutions is probably what I would do in my personal capacity. I think thinking about OpenAI and how we can support it is kind of. We really want to show up in a humble way to member states and that's really what we're trying to do under this program that we call OpenAI for countries and really listen and understand what sovereignty means for Europe and what does it mean for particular member states. So we actually had such a listening tour two weeks ago with our chief Strategy officer to really find out how we can show up what would be helpful. And it is different across different geographies. What I'm really proud of is that in the span of the past few months we were able to, you know, partner with SAP for OpenAI for Germany, where we are planning on delivering frontier AI solutions to the German public sector. We also partner with governments in Greece and Estonia around education and, and making sure that there's tailored solutions there for students and teachers. In Ireland, we, we partner for SMEs and, and startups. So I think tailored approaches and not necessarily one size fits all is the path that we're taking.

But that's interesting because I mean, again, maybe I'm obsessed by the sovereignty debate, but I think to me it's one of the most interesting thing in Brussels happening now. So that's why I'm obsessed with this. And as you say, I mean it should lead to some partnership. And I will come also to you, Thomas, after on the partnership you have announced that Microsoft has announced, but two short questions on that. One is are those partnership different from country to country and why? And second, what for you is the best type of partnership with at the same time? Because of course there are trade off, there are trade off between development and diffusion. And so what is the type of partnership that you think try to minimize that trade off as much as we can. So is there different difference across country and is there a kind of optimal partnership? No, I mean, I'm sorry to push you on the spot on this, but if you have some idea otherwise, and Thomas, I will ask the same question. So you will have a bit of time to think, a bit of more time to think about it.

So. Absolutely. I think there are differences and in our conversations these do come up. I think what is really important for us is so to have that local link. So we never kind of go at it alone and we always also partner with the local ecosystem. I think that is also a factor of our scale. We are still a relatively small company. We have proudly an increasing footprint in Europe and this is a very important region for us. But nevertheless, we just kind of need that. And this is why we are kind of driven by, by these local needs in the first instance. You know, I really think, and I think the papers also refer to that, you know, that strength and diversity of Europe. And yeah, I think our approach is really to stay attuned to that.

Okay, thank you. So the same thing, one thing you like, one thing you don't like. And then let's go on this partnership after.

Sure.

Good afternoon, everyone. First of all, I think when it comes to the studies, an excellent piece of work, not only because it provides this pragmatic overview of what kind of real problems we are dealing with here, but I think consistently we're talking about the same issues from slightly different angles. I can concur. Same here. Very much obsessed with sovereignty discussions, especially these days. And here we're facing sort of a dual issue. Right. So on one end we have a competitiveness dilemma where Europe is having this languish, sluggish growth, lack of scale capabilities, skilling issues that were Mentioned as well. While on the other end is striving for having this more autonomous, more sovereign approach, building its own solutions. And when you think about it in the short term, these two are kind of colliding, right? Because you kind of want to scale and bridge that innovation gap now and diffuse AI and deploy all that ICE team for structure that is leveraged for all these beautiful solutions that those were on the platforms provided. Yet you kind of do so with non, with only European solutions because non European solutions are so vast and right there at your finger fingertips right now in the long run I think the two goals somewhat start aligning. Yet I think the biggest risk here is that if you focus only on the short term and the collision between the two, you actually end up having the biggest risk. Risk of falling behind an innovation, which in turn then actually is a sizable and very significant risk in terms of sovereignty and autonomy. Because if you fall behind, then you kind of become even more dependent on others. Right. So that dilemma I think is also somewhat captured in this work, which is great. So I think in looking at the situation there has to be pragmatic ways how to think about it from a sensible point of view as like, you know, what if you will be in the shoes of Prime Minister or you know, the head of the country, I think we need to be very honest with ourselves here in Europe. What is really critical, what is really demanding sovereign solutions for those some call highly critical use cases. And what then should be left for competitiveness approach. So to bridge that innovation gap into spearhead so not to fall behind. And I think in that sense it's also showing how in certain places around Europe and Microsoft is not exception that we are trying to find these cooperative collaborative approaches where international players step in, they provide their know how, they provide their solutions for the local players to leverage and build that added value on top. So our partnerships, and there are many across Europe is exactly for that purpose. And you know, when looking at Microsoft, I think it's not a secret. We're a platform company that is very much dependent on our partners that are leveraging these solutions. So their success is our success and vice versa. And I think it's just important to realize that everything in this digital economy is interlinked. It's very difficult to operate in silos, if you will, just because it's a fast moving world. AI is a general purpose technology that has been already spread out and I think previous speakers captured it well. It is time to leverage it without getting into, you know, that dead end view that Nothing can be leveraged as long as it's not fully sovereign or autonomous. So I think that's the delicate balance we are looking at. And what the commission said at the beginning of the keynote, I think it's important to recognize that, yes, in its own right, Europe has to think about these solutions. But then again, we need to find that delicate balance. So Europe would not be put on, you know, the back foot and would not lag behind even more and risk getting even more dependent on what the others are providing. So those will be my initial thoughts.

Okay, thank you. So what I would do is I will ask a reaction from the panelists if. And then if there is some question from the floor, I will take them and then we will move with the second presentation panel, and then I will ask my colleague to come here, the two ones. So you could also, at the end, react on everything you have heard. Yes, but, Ben, you wanted to say something?

Yeah, I just wanted to comment on the sovereignty point, because to me, it's really not clear that beyond a few edge cases, there are really no technical, contractual, and governance solutions to address most of the concerns that have been voiced in this debate. And it's also not clear to me why these concerns seem to be particularly relevant when it comes to digital technology, but not other technologies. So, I mean, just going a few Years back, in 2017, Airbus spun off its defense electronics business, which is a crucial piece of maintenance military technology, and it was sold to an American company. And, you know, it's thriving. It consolidated a lot of the European defense sector, and we seem to have no issues with that. I mean, there were certain governance principles put in place. The German government, where the company said, quoted. The German government can appoint two independent directors. If the company is ever sold, it has to be sold to another, either European company, or it has to, or it has to IPO on a European stock exchange. So, I mean, there are a lot of solutions for all of these concerns. It's not clear to me beyond the few edge cases, that we cannot do the same thing in the digital sector. And I think the debate is really going in the wrong direction when our main concern needs to be about productivity.

Right. So you don't think that this issue of. Apart from those specific cases, this issue of development is so important. But then why do you think this debate is so. So it's just a protectionist approach or how do you explain in this explosion of this debate?

I mean, so my personal opinion is that I think it's twofold. One, I think there's a bit of a protectionist element in there, but the other one is pointing to innovation. And new technology is just a lot more attractive. It's very shiny. There's, oh, there's these new things and we want to develop this and this new great technology while improving productivity across all these small firms in the economy is really hard work. And you're not going to get a lot of applause.

Okay. Okay, thanks. That's quite another view, but it's great. Question from the floor remark. Yes, Mark Mc from Article 19. Hi, thank you very much, Alex. Mark Dempsey from Article 19. We're a freedom of expression, civil society organization. Quite a basic question for all the.

Panelists, but I'd be curious to know.

How do you define innovation? Easy question. Okay, Ben.

I mean, for me, it's anything that improves productivity. I mean, in the end, this goes from something very complicated, technical to changes in company workflows. I mean, a lot of the improvements actually come from just applying modern management techniques. It's not really software or any other sort of technology. It's just, I mean, just think about it. In the end, you want to either get the same output with less effort, less resources, or you want to achieve more with the same resources. Right? So whatever way you can make that happen, that, that's innovation for me.

Okay, productivity.

Am I being asked about innovation or something?

Innovation, yeah. So, sorry, and, and, and, and if you want to react also what you have heard so far, you are very welcome to do so.

So just on innovation, pretty much what Ben said, from a regulator's perspective, doing better things with an equivalent level of inputs, better can be scaled, measured in a number of different ways. Scale, speed, efficiency, but also using inputs in a different way to generate something. The job as the regulator is to create the conditions for that or not get in the way of that. Just one thing that I want to pick up on. Ben had mentioned some stuff is sort of new and sexy and bright and shiny and other stuff isn't. I introduce you to telecommunications networks. They are, you know, fiber networks. They're there, they're being rolled out. There's a question over, are these becoming, you know, commoditized? They're not the bleeding edge. They're. Nothing else happens without them. Nothing else happens without, you know, 5G standalone. That's being, being, beginning to be rolled out at different rates. So just two cheers for the boring stuff, for the connectivity for the networks. If that stuff isn't being delivered, not much else is being delivered on top of it.

Okay, what's the innovation for you.

It's funny, I mean, being part of this company, you always feel like, and it's a very privilege to be on this bleeding edge of innovation. But from my perspective, I would bring it back to this metrics and measuring it because I think this is really important and I think if we do not know what we measure against, we cannot really measure the progress that we're making towards being more innovative, more productive. An idea in the paper around maybe updating the digital decade target is all something that, you know, perhaps we should consider because I think it will help us to, you know, define what it is and define it a little bit more about like, you know, what is needed in terms of solutions. So that's okay.

Thank you, Thomas. And then I will ask your definition mark on innovation.

I would probably wrap it in one sentence because to me, innovation is empowering every single person and every organization on the planet to achieve more. You might ask where that comes from. That's actually our own mission. That's what we do for the last 50 years. And I think we need to talk not only about how to define innovation, but actually what conditions have help it thrive. And the point I haven't mentioned in my introductory remarks is that since we're here in Brussels bubble, we need to also admit that if you look at the stats, and we love Numbers in the EU, we have four times more regulatory initiatives than we have in the US since 2019. Four times more. I think we need to ask ourselves a question, question how to leverage all these instruments that have been churning out out of Brussels machinery that would help incentivize innovation, that would help scale, that would help innovate, rather than the other way around. And I think there's a lot of questions that need to be answered on that front, given the sheer amount of those attempts to achieve that.

Right. And we will come back to it. Yes, you're a definition mark of innovation. And then we will move to the other panel. I think speaking from a civil society.

Perspective, I'm going to obviously have a.

Similar line to the regulator in terms of creating and enabling the market conditions.

That open the market to allow small firms to compete with larger firms on.

A level playing field. I mean, what does that mean?

It's less about productivity, it's more about.

Ensuring that small companies and small and SMEs can keep innovating till they have the scale they need to compete. And that means, if you're looking at it from a competition perspective, making sure.

That the potential for killer acquisitions doesn't.

Isn'T there, or at least there's proper scrutiny. So pre notification, for example.

I mean, I think there's a lot.

One could say on the topic.

And I think it's still very, very much an amorphous subject, which is used.

Rightly or wrongly in my view, wrongly when it comes to regulatory burden.

That's just saying innovate, innovate.

But it's still lacking exactly what that means. And I think within this whole context.

Of simplification, it's something which needs much.

More exploration because I think it's very.

Easy as a large company such as Microsoft, for example, to say there's a huge regulatory burden. But there's very little evidence suggesting that.

That has actually stopped innovation. There's much more evidence to suggest that innovation has been stopped because of the.

Lack of a proper competition environment. Thanks, but on that, but I will come back to that in a minute. But I think this debate on innovation and regulation is a complex one. It's obvious that innovation per se is not against innovation, otherwise the Silicon Valley will not be in California. But the question is of course how you design your regulation. And I think that's where Europe should think harder on it. But so basically I think it's nice because we have two kind of definition of innovation. One is productivity and the one is open society. And basically I think one of the challenge of Europe, if we want to be on our value, is to try to combine both productivity and open society. Okay, is there any other question? Yes, the last one.

Thank you very much.

My name is Alexis Bly from Greco.

The German Broadband Association. My question would be how would you basically believe that it would be best to measure innovation when it comes to increasing competitiveness?

By which standards, by which criteria should we measure that?

Would that be investment, for instance, in frontier technologies? Or what would be sort of like.

The objective criteria that you would see.

To basically say, okay, we're like moving.

Into a direction of like increasing our.

Competitiveness and being more innovative.

And then maybe just from a self.

Interest based telco perspective, what role, and.

I think it has been mentioned by.

Mr. O' Connell from the Irish regulator, what is the role that you believe.

That telco companies can play in this role maybe as well, beyond simply providing.

The, let's say digital backbone technology that.

Allows innovation to thrive. But what as well do you believe that telco operators can.

Provide in terms.

Of being an active enabler as well.

In innovation in that regard?

Thank you.

Thank you. And that would be the last thing. So I will do a last round also. If you want to have a closing remark, whatever, take this opportunity to do it.

I mean, there are a lot of different metrics that try to approximate innovation. I haven't really seen one that's like totally convincing to me. Whether it's private equity, venture capital, whatever it is that goes into new ventures. I mean, in the end I have to be stubborn on this. I think for me it's more an xpos perspective. It's like what improves total factor productivity, right? That's, that's how we, that's how we measure innovation. In the end, it's what's left over if you account for all the other things like human labor, capital expenditures and so on, so forth. That's why I also have a very hard time saying governments can do a good job in steering innovation in a certain direction because it's just very hard to do, very hard to know ex ante how markets and demand is going to develop. I have no opinion on, on telecommunication network, so I'm going to pass on that one.

Thanks for the question. Just on the first thing kind of things worth measuring. I'm just going to take that question as the opportunity to note that we've called for evidence which came out I think yesterday on digital decade targets. Currently they all look just as kind of rollout metrics. We want to scale that, move that towards take up metrics. And I think take up metrics is something that is a foundational way of looking at whether innovation is kicking in. It's not the only thing, but it is a better measure and a reasonably simple measure of the capacity of European society and business to move in an innovation focused direction than just flat rollout. On your second question on what telecommunications companies can do to kind of move into that innovation space, they are already doing that. To be fair to them, I think the challenge is, and it's set out in the report as well, take for example 5G standalone. Take for example network slicing. Take for example network virtualization. Take for example edge nodes. These are all kind of frontier technologies. Some of the challenge seems to be that they are technologies in search of usage cases and in search of demand that maybe isn't maybe materializing. And I think the SER papers clearly articulate that the technology, the innovation, the expertise may be there, but there are some structural issues in Europe that maybe mean that the enthusiasm for take up isn't really there. So maybe for telecommunications firms it's kind of the technology is there, the expertise is there, it's finding the usage cases that will drive from the demand Side.

Maybe just very quickly, I think partially I was trying to nudge Zach and Antonia to work a little bit on these metrics that you mentioned. And how do we best measure that? I think from our perspective, we have an office of a chief economist who is actually increasingly doing really thorough research of how people are using our tools because we see a lot of conflicting information about AI uptake and how it leads to productivity, whether AI investments are actually paying off. And we conducted both the research more among individuals as well as how it's being used in the workplace and actually even among the individuals. The work related queries that we of course had at aggregate privacy preserving ways. I think it is really kind of showing an interesting thing about how many of us actually use these tools also in our personal capacity, which kind of complicates a little bit the picture and the measurement. So maybe I'll leave it at that.

Thank you.

And last word, maybe just three points on this. I think first of all, it's important to measure how quick uptake is in the society, in the enterprise world of new technologies, just because that is one of the prime indicators how quickly these innovations become up and take off. Secondly is also the evergreen topic of how we can enable these startups with their innovative ideas to pass through that so called valley of death that they need to go through before they scale appropriately so they could grow.

Right.

And that's also leading to my third point. You know, all these concerns about the sheer amount of regulation. I think it's clear that, you know, big companies, global companies, inevitably they will adapt. But we're talking about concerns here coming from smaller players and we have many customers and partners around Europe alone where they're raising these concerns. And what we keep on hearing is that it's important to have a more streamlined approach, more harmonized approach that would enable that possibility to scale, scale and hence go through that so called valley of death that innovation sometimes struggles to get to a point where they can scale. So I think these would be some of the primary considerations. But all in all, I think it's taking it pragmatically, it's possible to reconcile all of them. As long as we look at it from that more holistic perspective, long term perspective, what needs to be, needs to be done to help this continent grow.

Okay, thank you for this positive and constructive note. And we should focus on demand side, not only on supply side and on the long term. Thank you very much. So now I will ask my colleague to join on the panel. Okay, so now I will present the Third paper of the series. Don't worry, that's the last. It's not the series of 11 paper and that I wrote with Zach and with the very useful contribution also Richard at Fizzy, who help us a lot in designing those paper. So, you know, this paper is mostly on regulation and institution. And it starts from a frustration that Zach, Richard and me had. Is that why we don't manage to deliver on drug. You know, okay, the deputy director General says that they are delivering a lot. And I mean, it's true, we are progressing, but probably not fast enough. And that's not me saying that, but it's Draghi himself. So I think we have to be mindful of the fact that it takes time and maybe too much time. But what is, I would say even more worry is that if you compare the report of Draghi with the report of Jacques Delors in 93, you know, it's more or less the same, even more or less the same title, you know, he was referring to competitiveness, growth and job growth and job. Maybe no job has been removed. So maybe we don't care anymore, I don't know. But you know, a lot of recommendations that the Lord did are the same. And yet here we are here 30 years ago, 40 years ago, after, and we are still asking ourselves what to do. So basically we think that we, we need to think harder at the ability and the incentive of the governance framework in Europe and in the member states to deliver those recommendations. And the paper has some recommendation on two aspect on regulation first. And so here I can be fast because I can free ride in a way on the previous debate and on institution on regulation we have really 4.1 is that innovation and it's good that we had this innovation discussion on objective and metrics should be more present as an objective of the law. Now sometimes it's there, sometimes it's not, sometimes it's implicit, sometimes it's explicit, but we think that it should be explicit and also that we have to have metrics so we can measure whether indeed we achieve those objectives or not. So that's the first, the second recommendation regarding regulation, it's more regarding regulatory design and you know, to have a kind of good regulation and a good regulation is a regulation which allowed a single market because, you know, let's be clear, I mean, we will not have a single market without regulation, okay, but with good regulation and single market is useful because it's allowed the firm to scale up for that. So we need clearer rule and probably better enforcement of the single Market rule. But also another thing that we should do and maybe do not enough in Europe is not only to scale up for firm but to scale up regulatory success. Because we know when we speak about Europe and it was mentioned before, some member states are extremely good at delivering on innovation and on competitiveness. And maybe what we are not good at that is to scaling up those success. Now on digital sovereignty, I will not come back on it, but I think the point as Zach was mentioning is that we have to do a clear cost and benefit in the short term, but also in the long term as we have discussed and maybe too often we only reason in the short term, but we also have to have a long term approach. Like for instance the Chinese managed to have. No, I don't see that we need to replicate their industrial policy. But one thing what I admire with China is that they are able to think very, very long term. And that's one of the explanation of their success. I would say the third element next to innovation and regulatory design is regulatory making how you make law. And here really, I mean we have those better regulation guidelines since I think nearly 20 years. But we think the problem is that they are not sufficiently or sufficiently well implemented. You know, we focus on numbers and again I mean it was interesting to hear renate to speak about 5 billion saving in the omnibus. But let's be clear, I mean those numbers are nearly impossible to do and I think we all be in those kind of discussion or myself I have helped some consultants to do those calculation sincerely it's you know, like divinatory things. So you need a number, ideally a big number and then everyone seems to be happy. But we think that instead of focusing on numbers we should focus on causality link. Causality link to try to think harder. What's the link between a rule, a behavior and a welfare, Consumer welfare. That's to us not enough. We focus on number and we don't focus on causality in the ex ante assessment and then exposed evaluation. We should look who come back and see whether those causality links have been implemented or not. And that's again not what we do in the evaluation. So really I think we have to completely rethink the way we do ex ante and exposed evaluation. And one thing which could help in doing that better is to have more independent authority within the Commission and outside the commission doing that work. So the regulatory scrutiny board within the commission is an important body, but the problem is that they are clearly understaffed and so they cannot deliver on everything they are Asked to do. And at the end of the day it's a political decision. So if the regulatory scrutiny board is unhappy, but the college wants this, it will happen. Big test case as we know is the Digital Network Act. And then another thing is for exposed. We think that the European La Courdecont. The European account. What's the Court de Conte in English? Sorry, the Court of Auditor. Sorry, because I have the acronym here. But the Court of Auditor could also play a better role. Why? Because the Court of Auditor is independent, real independent. And it's interesting to compare what the court of editor is saying on the CHIPS act and what the commission is saying under CHIPS act. And who is right? I mean, you can guess, but you can have your own view. But one thing is clear is that one is independent and the other is not. So I would say that if I ask my student to mark their homework and if I have to mark it myself very often, it's different. And I would think that my mark is probably more fair than there. And the last thing is on regulatory implementation. And there really. I mean this is something. An idea that we have pushed at serious since a long time now is to. And in fact ser. Is that an ecosystem of actors, you know, where you have the big firm, the small firm, the regulatory authorities, the agencies to try to. And the consumer association, civil society and to try to come with recommendation, which we think are sufficiently. I mean not fair, but are implementable because are owned by the actors, you know. And you know, in such a complex environment, you know, I don't think you deal with complex environment with more complexity in the rule. You deal. Ideally the rule should be simpler, but with an ecosystem of actors. And that's why I mean the tech. The big tech have been so good at. And you are mentioning Microsoft, which is a win win. I mean win win most of the time, sometimes it's mostly win for the big tech, but. But where everyone is involved in the system. Okay? So innovation, better regulatory design, better regulatory making and better regulatory implementation. That's for the first part on regulation. Now on institution, which is probably of course a little bit more delicate because we know that every time you discuss institution, it's becoming more complicated. And let's be clear, the goal of our report is not to say we should end up in institutional battle and not the rest, because that would be the disaster. And we know how institution is complex, but still we think that we need to think about there and there. I think we have three main proposals. One is a better coordination. And I Think everyone agree. And Renate also said that in the context of the digital fitness check, I think they will look at substance, but they also will look at institution. If you look at the call for evidence and it's clear that we need better coordination, better coordination at the national level between the digital regulator. I think here, as often in regulation, the UK is in the lead with the Digital Regulatory Cooperation forum, the rcf, which has been set up now since four years ago, I think, which is a way for all the UK regulator to discuss pragmatically. And this has been no replicate in most of the country. You have your own in Ireland, you have your own network in Belgium, it seems to be more complicated. I have discussed with some colleagues, but, you know, everything is complicated in Belgium. But I hope that we will get it at some point. And then at the European level, we probably need what we call in the paper a European system of digital regulator, which is very much inspired by what you have in financial regulation. You know, where it's a system which is more than a network and where you have at the top an independent European authority which is taking the European decision and supported by strong national authority. Now the next issue, next to coordination is the next Commission. And that's probably where our proposals are a little bit more controversial. And I was discussing with Renate just before and clearly she don't agree with our proposal, surprisingly, because what we propose to some extent is to break up the Commission. Instead of breaking up the big tech, maybe we should start by breaking up the Commission. And let me explain our idea. The idea is that the Commission has acquired more and more role over the years and there is more and more. And that's good. I mean, that's the reflect and that's what Renate told me. It's good, yes, it's good because it's. I mean, for the people who believe in Europe, because then it means that we are integrating better. But a problem we see is that there is more and more conflict of interest within those roles and that's the problem. So it's not a problem that the Commission has more role, it's the problem that there is more conflict of interest. And let me explain. There are at least three types of role which probably are in conflict. The first is a kind of geopolitical government which is proposing law and which is orchestrating an industrial policy, hopefully. Well, so that's one role, which is the classical role, I would say, of a government. And, and that's fine. I mean, that's what the Commission is ultimately supposed to be. But then you have another role, which is the evaluator of the EU law and EU program. And that's what I was mentioning before about the evaluation. If you have to mark your own work, of course you will say everything is great, as Renate was saying. So I think here we have a problem in terms of how you who is doing the evaluation. And we think that the evaluation should be more independent than the commission. And then the third role is a role of regulator, regulator against the member states for the digital market rule. And the Commission should go against the member states where they do not respect the internal market and regulator of the digital a key. The EU digital a key against the big tech. And you know, what is interesting is that there is an obvious conflict of interest by being, on the one hand the geopolitical government of Europe who needs to propose law and therefore needs to have the buying of the member states. And on the other hand being the regulator of those member states, because I mean, of course you don't want to antagonize them when you want to have their buying in the council or another conflict between being a geopolitical government, having to deal with Mr. Trump and his friend and his business friend mostly and to be the regulator against the big tech. So, you know, there we think that at least we have to have more separation of function now. I mean, Renate was telling me, and when they discussed that with people who have had the chance to work in trade also, like Bruno and the people who have worked in antitrust, they told me yes, but it was there since ever. It is true, but the time of the 80s, the 90s were completely different because first, the commission has much less regulatory role and second, the world was much less turbulent in terms of geopolitics. So I don't think that what was good in the 80s and the 90s is necessarily good today. So that's one thing. The second thing is. Yes, yes, I finished. The second thing is to have at the Commission more strategic function. We think that is missing and internal expertise. I mean, the Commission has outsourced too much expertise. And it's not the fault of the commission. And let's be clear is the vote of the Council and the Parliament who decide the budget of the Commission. But here we have a problem. And then the last point is on the third point, next to institutional coordination and the next commission is to have more efficient EU court. I mean, they are relatively efficient, but maybe we should beef them up first, the Court of justice have to answer more and more preliminary ruling Question because there are more and more European law. And so maybe we think that next to the court, the Supreme Court, which is in Luxembourg, we may have some district court a bit like you have in the US some federal district court in some part of Europe. And then as I have said, to reinforce the role of the court of auditors in terms of evaluation. So we really think that we would need that. So basically what we are calling for is second report by Draghi on governance and institution to deliver what he wants to deliver. And you know, if we don't do that, you know, the risk is that we will have maybe in five years or in 10 years a Melanie report, you know, because it seems that the next the Prime Minister of Italy, then when they finish they do a report for the commission. So the Melanie report saying the same thing than the Draghi report, which says the same thing that the Monti report, which itself saying the same thing that the Dalho report. So I mean if we don't think harder on those institution issue, we think that we will never deliver on Dragi. Thank you very much.

Thank you very much, Alexandra, for that tour de force of paper three. And I think that we are all very keen not to have to see Maloney report. And so we very much hope that our recommendations are picked up. We talked a little bit about conflicts of interest and I'm going to ask this panel to offer some kind of recommendations or things that they liked and things they didn't like about our report. And of course as an author, I'm not an unbiased, I don't have an unbiased opinion there. But first let me welcome Dimitrios Veritas from eett, the Hellenic Postal and Telecommunications Commission. For this third panel, Carolina Lorenzen from Media for Europe and Oskar Petrovic from Qualcomm. Thank you all of you for joining us for this discussion. And I'm afraid that because of time we're going to have to be relatively quick and so we may only have one round of comments depending on how we go for time. But maybe I can start with Dimitrios, since you're here in the room and it'd be great to hear something that you like and something I would be.

Very sort of in my comments. First of all, I'd like to congratulation for these reports, these papers in this very tricky issue and very complicated issue. This is my first comment. We're trying to address several questions. It was excellent reports opening the discussion in many issues in details and also there's a lot of recommendations. So My first comment is that, that I fully support that you recognize regulation as a critical tool. And also there is the sense that the common market, the sick market, is going to be the playground for innovation. So it's very clear, it's very a good way to go further. It's a tricky issue because let me say there is no very clear what is the actual innovation, how we can deal with innovation. So I need more work on this and to see issues related to this. So when it comes to regulator, and from the regulator point of view, I think it's a clear recognition for everyone. We need to strengthen institutional collaboration, coordination and independence in the European Union. Also in a national level, there are a lot of barriers in national, in the national level, for instance, we all agree that there is a link between different sectors, we need to work together. But when it comes to the regulations there are some kind of silos. So when trying to build some silos to deal with more complex issue. So this is a challenge also for the policymakers and for the regulators, also for think tanks to work on this, how we can implement this complex regulation and how we can go further in Europe. So from the regulator point of view, I fully support the ideas of the evolution of the telecom regulators towards the digital regulator. So there is some challenges for us as well, how we can incorporate these modern tools, big data and AI in our work, how we can build our capacity, our expertise. Of course the Commission needs this tool, but we also need to deal with these issues and the build capacity and the use of new technology when it comes to, let's say, some further issues to be addressed. I think we agree that regulation is complex, but it's also a costly issue. It's very difficult for smaller SMEs from microfilms to deal with all these digital regulation issues. So it's also a barrier. That's why I think a lot of interest is going to go in other countries as well. So the capacity building needs to be further discussed for the regulators and how we can exploit the technology. And of course I fully support the idea of EX and the exposure spot evaluation. So in this case the regulators can also help in the European level and also national level to have better regulation and better policy development. So this is a common. Thank you.

Thank you so much Dimitrios. Let's now move online to Carolina from Media for Europe. Hopefully you there and can hear us. Carolina, look, I know you talked a lot about this question around a level playing field in Europe and the way that European firms can compete with international ones and whether the frameworks around technological neutrality, for example, are working for European firms. And obviously this links in with this discussion that we've already had about digital sovereignty. So, you know, really open to any thoughts that you have on the positive or negative aspects of the paper. But on that question in particular, it'd be really great to get your perspective.

Thank you Zach. And thanks Alexander, to the whole ser academic team. There's lots of food for thought, but from the start I shall say that I do not quite share the re engineering of the the Commission's powers. I think there are checks and balances in Europe that work really well among all the different institutions and also the institution that the kind of the suggestions you gave to reform even the cost of justice seem a bit out of place. But that said, we think that proper regulation which grants on the one side the fundamental rights enshrined in the treaty and on the other side, fair competition and contestability are the conditions of sine qua non to achieve innovation in Europe. So I don't quite share the view that innovation is the only criteria to assess the impact of regulation on European competitiveness. There are other criteria which are of course relevant with the legal basis and the objectives of the legislation, be consumer protection, privacy or upholding pluralism as a full regulated service. We've been regulated, I think broadcasters are the media which are most regulated in Europe and we've been regulated since 1989. We don't quite share the stand in the paper that takes a positive stand on disruption, innovation via disruption. We've seen that the move fast and breakthink mantra has caused many casualties and especially in the most vulnerable, With the most vulnerable citizens. And so this approach left the social cost to be paid by society. For example, we see now that the financial scams which are nothing but paid for ads that proliferate on digital platforms, the cost of indemnities is not on the platforms but rather on the banks. And there's a question of really responsibility since we're all competing for attention, we're all competing for viewers time. So indeed, in terms of simplification and better regulation, something which is not in the paper, that should be a view to the definitions of e.g. video sharing platforms and social media which are regulated in different ways in the paper I think you make the wrong assumption that VOD are, that broadcasters are against vod. But we have VOD and VOD under the sector specific regulation, the ABMSD are regulated just like broadcasters. The problem is social media and video sharing platforms which, well, video Sharing platforms are. Now, I don't want to get into the details, but it's basically a question of defining who is responsible for what. Another interesting idea in the paper. There's also the definition of European companies and I believe that you identify criteria linked to the country of establishment, namely where operations and staff are. But there is another most important criteria which is key when we think about funding innovation, which is fiscal, where companies has its fiscal residency. So it's really hard to compete not only under very different regulatory regime, but competition to compete with behemoths that pay no taxes whatsoever in Europe. And one last thing, on the digital omnibus, I heard Renate and Aucha could be positive and thinking that simplification is to benefit SMEs. But what we see actually that for example the simplification of consensus as pro browser level is actually strengthening just a few gatekeepers and even wavering consent for the purpose of audience measurement and consent to use personal data is again strengthening the power of self measurement for platforms that under the DMA should not be measuring themselves but should allow third party independent audience measurement. So there are lots of, I mean simplification should not be a means to strengthen the power of existing, I should say very large online platforms or gatekeepers, but a way to provide really level playing field and better consumer, equitable consumer protection to all. I'll stop here, but on a positive note, I should say there are interesting suggestions on for example the consultation process, but in my view, for example, now going towards the revision of our landmark regulation on avmsd, we have three consultations prior to the commission presenting its own impact assessment. So having an extra step as suggesting in the paper for the regulatory board scrutiny. So before the impact assessment is handed to the, to the, for scrutiny of the regulatory board, having another consultations will bring that to four consultations. I think we have too many consultations and there is no, in my view, in over 30 years of doing this job with the Commission, I don't think there's a lack of transparency. There's a possibility for all stakeholders in society to have a say. And I think this process might be cumbersome, but it's democratic and it's the only one that we have unless if we want to uphold our fundamental values and continue to live and to uphold our democratic institutions. Well, that's all in a nutshell.

Thank you, thank you so much, Carolina for that. You know this constructive thoughts. I think there's a number of issues that you drew out that I think that we would like at sare to look at more deeply in the future too, which are, you know, how to distinguish between good versus bad innovation, because of course not all innovation is productivity enhancing and consistent with European values. A second point that you raised was around disruption. And you know, of course there are going to be losers from disruption. And a real question that we have, particularly if we want our economic model to look different than America's, is how do we compensate the losers in a way that keeps them engaged in the political process, but doesn't lose kind of the benefits of allowing resources to move to the most productive sectors of the economy. And I think the third one that you raised was the impact of regulation or deregulation on levels of competition. And I think, you know, that's a really important question the Commission should be grappling with now. But finally I want to move to Erska from Qualcomm and hopefully she's with us. Are you there, Erska? Yeah. It'd be great to hear your thoughts on the paper, both the good and the bad. Over to you. Yeah.

So thank you. Well, first of all, I would like to to commence there for the papers presented today. I think they really provide a very strong foundation for thinking about the next steps on how to make Europe more competitive. I think one point that has resonated across all this paper and in the Draghi report is that innovation is critical for European global competitiveness. I think this is something that is increasingly recognized among all the experts. Europe has fallen behind and things need to change to preserve the quality of life that Europe has right now. The question is, of course, how do we increase this innovation? And what One point that I have seen across the paper that I really agree is that Europe is not a low cost region. Competing on price is not a good long term strategy for Europe, especially in a world where cost advantages can disappear overnight with tariffs. So Europe's strength must really come from being more technologically advanced than its global competitors. I also agree with the paper that not all innovation is equal. I think there is a big difference between incremental improvements and disruptive breakthrough that drive growth and progress. I think this year Nobel laureates in economics emphasized exactly that this point. They show how throughout history it was really disruptive innovation, the one that fuel economic growth improves the quality of life. So I think focusing on increment on disruptive breakthrough is where Europe will be able to stay ahead. I also agree with the notion that we need more Europe, no less. But I do think that there is a need to refocus a little bit on the right thing. I think we need to start from the premise of, okay, what is going to drive innovation? The cutting edge innovation that will be critical for growth. And we have to recognize that that type of innovation requires massive investment in risky R and D. And as the Nobel laureates have emphasized, companies will only make these massive investments in R and D if they can obtain a fair return on this investment. And so the foundation for this confidence to make this investment is one, a protection of property rights and then access to an effective judicial system that upholds the rule of law. No one invests in building an advanced manufacturing facility in Europe. If someone can take that property or if there is a violator or a trespasser, you don't have access to a court system that allows you to protect that and that holds from real property and for intellectual property. So this is, I think, the foundation that has to be recognized whenever we talk about regulation. But then the second thing to be able to monetize this high investment in R and D is the market size. And here I think the single market is really critical. Europe is the largest market in the world, larger than the US So it really offers an enormous potential. But as we know, barriers to single market are still there. And this is where I think the paper is right. We need to double down on Europe. And harmonization is one tool. But I would say that it's just one and not the only one. And here is where I think the third point that I want to make is that Europe does need significant regulatory simplification, both at the member state level and at the EU level. As someone that lives in the US and comes to Europe, I'm really shocked many times by the amount of red tape. And I'm not talking about, you know, the big regulations, really the small, you know, requirements that people need to get the small certificates and this slow businesses down. So we really need a fundamental rethinking of which regulations are truly necessary and which are outdated code, counterproductive. It doesn't mean that all regulation is bad. Some is really critical and important and beneficial. But there is a need to review the system. And I think the European Commission could lead this effort. And frankly, I think this would be a win for competitiveness, but also for the public trust in the European Commission that, as the paper highlights, the European Commission is really looking to boost its public trust. And as we have heard from the keynote, the Commission has started work on that.

So.

So hopefully we are on the right path.

Thank you so much. Thank you so much, Jessica. And that leaves just Alexandra, we're already in overtime, so if you want to give okay, then I will wrap up and say let's give a round of applause to all of our panelists. That brings us to the end of the event. So thank you for all with us a few minutes over time. I'd really like to thank firstly the fellow academics who've worked so hard on these papers over the last couple of months. Thank you. And a huge thanks to the SARA Events team who have put a huge amount of work into making today happen. It's a huge administrative and logistic effort not only today, but throughout the process of this competitiveness forum which has led to the release of these three papers. I'd like to encourage you all to subscribe to our email newsletter, which you can subscribe to on our website, www.cerr.eu and feel free to follow us on LinkedIn or Bluesky. Just to let you know, we've got a couple of public events that are coming up in the next few months, including the Digital platform summit on the 21st 5th of February, where we're going to have Margret Vistaja as a keynote speaker and which will be wrapping up some of our recent work on digital competition and consumer protection. So thank you so much for joining us and taking part in the discussion today and we'll see you next time.

Thank you very much.

Sam.