China has paid dearly for its geopolitical rise. The Corona crisis is the latest example of the risks involved with massive investment in the Silk Road. The megaproject, which is also known as the Belt and Road Initiative (BRI), was launched in 2013 to underpin the rapid expansion of China’s economy by outbound investment beyond its own national borders. It encompasses infrastructure investments, development policies, investment and trade relations, and financial cooperation with the BRI partner countries. Moreover, it represents a crucial policy to foster China’s geopolitical rise, i.e., by internationalising China’s financial system and its currency, enabling a strong export-driven economy.
The recent pandemic has caused substantial economic downturn and led to an outflow of capital in many BRI countries. The outbreak adds a new hurdle to the trade and infrastructure programme by prompting delays and disruptions, e.g., through labour shortages caused by quarantine measures. This amplifies risks attached to financing investment projects in less politically and economically stable developing countries. However, not only are many countries caught in a Chinese debt-trap, but China itself needs a strategy for managing non-performing loans amid the crisis. Loan defaults on the Silk Road could jeopardise the Chinese mega-project.China Globalisation Industry Macroeconomics
The Chinese Nightmare: Debt Risks Along the Silk Road
19 Nov 2020
Regulating autonomous vehicles is not only a question of finding solutions in connection with the technical aspects of the legal framework. Rather, it involves making preliminary policy-based decisions that take all stakeholders into consideration. This article makes the case that efforts must focus on how to incentivise the use of autonomous vehicles without putting the burden on the shoulders of those who will ultimately make use of them. In that respect, the existing regulation (implemented on the basis of the Product Liability Directive and the Motor Insurance Directive) is insufficient, as there is a considerable mismatch between the current framework and the challenges posed by autonomous vehicles. There is a need to act urgently on the regulatory level.
Read the full article of the June 2020 issue of the European View, the Martens Centre policy journal.Anastas Punev Industry Innovation Technology
Autonomous Vehicles: The Need for a Separate European Legal Framework
18 Sep 2020
Perhaps, when the history of European integration in the early 21st century is written, 5G will be viewed as the beginning of Europe’s geopolitical renaissance. Although, that currently seems very unlikely. Because it’s hard to escape the overwhelming feeling in Brussels that a greying, slowing Europe is now stuck in a technological blindspot behind the two global superpowers of the United States and China.
5G sums up the EU’s ability to constantly punch below its weight on a geopolitical level. It also symbolises how Brussels has totally failed to leverage its significant (and often underestimated) economic strength to project its wider political priorities.
Honesty is clearly needed in Brussels because advocating for greater subsidiarity within the EU while simultaneously calling for a more geopolitical Europe is resulting in a clear dilemma. You simply can’t be a global power if there are 27 (or more) potential veto’s sitting around the table. What is required is not a universal abandonment of the EU’s competition or industrial legislation, but rather a more agile, more nuanced understanding that in select, geopolitically important areas, Europe must work together if it is to protect its interests on the global stage.Economy European Union Industry Innovation
A Geopolitical, 5G Europe? Brussels needs to go big, or go home
13 Mar 2020
The term ‘financial technology’ (FinTech) refers to technology-enabled innovation in the financial sector. FinTech could result in new business models, products and services. It has been rapidly developing around the world, offering innovative products and services that are quickly gaining traction with consumers and investors. Different countries and regions around the world are finding themselves caught up in this fast-paced ecosystem, where their competitiveness depends on a variety of factors, including the interaction of different market players, access to funding and talent, and regulatory measures. This paper examines the latest developments in specific financial technologies, major financial services and product providers. It also looks at the conditions which are shaping financial centres’ competitive significance in FinTech on a global scale.
European Union Industry Innovation Technology
Recent trends suggest that the US and China are emerging as key hubs for unlocking the disruptive potential of financial innovation in terms of the scale of their FinTech businesses and investments compared to Europe. For the comparatively smaller and younger European FinTech companies it would be challenging to compete with them without favourable government initiatives and support. The EU has already undertaken certain measures and initiatives in order to nurture its FinTech firms, but at the moment it lacks a targeted, EU-wide approach to FinTech. The policy landscape remains rather fragmented with different national approaches to legislation and regulation. The paper examines the current EU policies, initiatives and frameworks for the purpose of providing forward-looking policy recommendations for a more competitive and innovative single European market in the financial sector.
Fine-Tuning Europe: How to Win the Global FinTech Race?
18 Feb 2020
During the last decade of perma-crisis in Europe, we started to believe in our own impending demise. Suddenly there was money for nothing, China was chomping at our heels and our demographics were catastrophic. All that was left was a long, slow inevitable decline into global insignificance. Fast forward to 2019 and a similar vista appears, this time with the added bonus of catastrophic climate change. Now Europe teeters on the brink of another economic downturn.
These challenges, while serious and real, can be addressed by a long-term policy reorientation. But to adequately respond to the issue of climate change and to effectively project European interests on a global stage Europe must combat the one issue which is its biggest impediment. Europe needs to remember that thinking big isn’t a crime. Europe needs to understand that investing for the long term is a vital part of economic planning.
Take the environment. The airline industry is one of the largest sources of global Co2 emissions. Yet, notwithstanding the relative proximity of many of Europe’s main urban centres, high-speed rail in Europe remains “an ineffective patchwork of lines without a realistic long-term plan”. EU funding of 23.7 billion euro in co-funding for high-speed lines since 2000 is minuscule when compared to support levels for other transport modes. At a European level, the overall picture remains one of isolated national systems and incomplete domestic programmes.
Yet, the environmental benefits of high-speed rail are obvious. The development of high-speed networks in France, and more recently in Italy and Spain, have significantly reduced domestic air travel and resulted in reliable transport links between many major cities. Cross-border services – most notably the Eurostar connecting London to Paris/Brussels and Thalys linking Paris to Amsterdam (via Brussels) have become important transport arteries.
So why then the implied reluctance – at both a national and European level – to place high-speed rail at the centre of the EU response to fighting climate change? One reason is the economics of high-speed rail. Such developments are, by their very nature, expensive to construct, the time taken for such lines to become operational can be substantial (often a decade or more) and during this time they are constantly being subjected to negative media and economic analyses.
China built a comprehensive high-speed rail network in little more than a decade.
Consider both the proposed Lyon-Turin and London-Birmingham (HS2) rail links. The considerable opprobrium heaped on these projects relates mostly to cost. Unrealistic initial budgets (often required to gain political support for commencement) are used by opponents as an economic basis for seeking to halt the project. But cost-benefit analyses are, by their very nature, only based on a set of quantitative assumptions regarding issues such as construction costs and passenger numbers.
The traditional economic analysis ignores wider societal and environmental benefits. In addition, both of these projects also seek to achieve important strategic economic objectives in terms of improving cross border mobility (Lyon-Turin) and tacking increasing regional inequalities (London-Birmingham).
Often expensive (and they are very expensive) high-speed rail projects find it difficult to attract consistent political support. Welded to an election cycle governments find it difficult to coherently develop plans for high-speed rail lines that may take decades to become fully operational. This equates, in many politicians eyes, to decades of considerable government spending without any discernible impact on their re-election prospects.
China built a comprehensive high-speed rail network in little more than a decade. In Europe, proposals for new, or even for upgraded lines, can languish for decades in planning hell.
To counter this reality, the EU should be the perfect mechanism for ensuring consistent financial support for these long term investment projects. The EU should significantly increase co-funding for an earmarked list of strategic priority projects. For example, the approximate 500km distance between Berlin and Munich still takes a minimum of 4 hours to complete by rail.
Likewise, the 400km trip between Brussels and Frankfurt requires a journey time in excess of 3 hours. These train journey times are not sufficient to alter many passengers travel habits regarding short-hop airline flights. Up to 8-10 flights still leave Brussels for Frankfurt (and vice versa) on a daily basis.
Given the current climate crisis, and Europe’s wish to lead the response, this situation is clearly unsustainable. Tackling climate change is a very expensive business. Europe needs to hop aboard this high-speed train before it leaves the station.Eoin Drea Economy Energy EU Member States Industry Sustainability
To tackle climate change Europe needs to embrace high-speed rail
02 Sep 2019
Social media are becoming the dominant source of information for significant parts of our societies. There are numerous positive aspects of these media, such as their ability to mobilise for a political cause and how they enable greater and quicker flows of ideas across societies.
This paper focuses on those aspects of social media that negatively affect the public debate, such as the spreading of fake news and the creation of ‘echo chambers’ of like-minded users who become isolated from alternative opinions. The paper proposes that social media platforms should be considered media companies and that they should be regulated by modified versions of existing press laws, adapted to suit the new technology.
The creation of a ‘notice and correct’ procedure, as it is tentatively called, would provide an effective tool to stop lies from spreading, allowing affected parties, public or private, to protect their rights. By making the social media platforms jointly responsible for the content they publish, governments would create the right incentives for companies to adapt their business models and modify the construction of their algorithms and policies.
The paper outlines how such a procedure could function without constricting the freedom of speech. Finally, the paper stresses the improvement of e-literacy as an additional, viable and long-term solution to the problem of fake news.Ethics Industry Internet Technology Values
Weeding out Fake News: An Approach to Social Media Regulation
11 Jul 2017
“Pleased to make your acquaintance,” European Commission Vice President Jyrki Katainen meets 3D-printed life-sized robot InMoov at Makerstown.
Held on 24 May 2016 at the Square Meeting Centre, Makerstown was the first event of its kind in Brussels. It brought to the European capital 50 young and innovative Makers — a new generation of entrepreneurs and DIY experts empowered by Web 3.0 tools, technology and crowdfunding. From 3D printing to robotics, wearable technology to new ICT and food to fashion, the Makers selected from all over Europe might just be tomorrow’s Robert Bosch, Enzo Ferrari or Arthur Guinness.
Part fair, part conference, Makerstown was organised by the Wilfried Martens Centre for European Studies, the official think tank of the European People’s Party, and by Think Young, the first think tank to lobby for young people.
Speakers included Jyrki Katainen, vice president of the European Commission responsible for Jobs, Growth, Investment and Competitiveness; and Carlos Moedas, European Commissioner responsible for Research, Science and Innovation, as well as members of the European Parliament and business leaders. Industry 4.0, public and private finance for entrepreneurs, women’s entrepreneurship, start-ups and scale-ups were the order of the day.
1. Ideas are assets. Makers are leading the way
Twenty years ago, our biggest challenge was digitalising information. Now we are entering a new era in which the digital world is affecting and transforming the physical world in unpredictable ways. It is the age of the fourth industrial revolution and of the peer-to-peer economy. In this age, innovative Makers at the cutting-edge of the technological frontier are our best hope to revive our ailing economies.
Start-ups in Europe represent only 5 percent of firms, but they already account for a disproportionately high percentage of job creation. This is destined to rise due to the increasing interpenetration between digital and physical world. We must be ready to exploit this opportunity.
2. The three Fs of funding: Friends, family and fools
For innovative start-ups launched by visionary Makers, financing is often the main initial hurdle. In the early stages, often only friends, family and fools will be bold enough to believe in a new idea. In some contexts, public money can partly remedy this shortcoming, and innovative financial instruments have been developed by the European Commission and the European Investment Bank in the last few years.
Such versatile instruments are often not well known by makers and it is important to raise their awareness on this topic. However, public money should be used with great caution, as it can backfire and discourage the investment of private money.
Europe’s real problem today does not seem to be the availability of finance – markets are actually flooded with liquidity – but the lack of an adequate ecosystem. In the U.S., public money is much more limited than in Europe, and yet Silicon Valley is in California, not in Germany or France.
3. We can make it: Female entrepreneurship
Women are an under tapped source of economic growth and innovation. While more than half the European population is female, women represent only a third of the self-employed and 30 percent of start-uppers in the EU. This happens in spite of excellent educational achievements. The EU has traditionally been at the forefront of initiatives promoting gender equality and equal opportunities.
It could potentially do more in the field of education, which is essential in fostering a new mindset that would encourage women to live up to their potential. This needs not come at the expense of maternity and family life: intelligent policies can help women reach a balance between family and career engagements.
4. Creative bravery: Celebrating failure, changing the world
According to Organisation for Economic Co-operation and Development (OECD) figures, 60-70 percent of productivity growth stems from innovation. Taking initiative is therefore essential. Recent years have seen a few success stories of innovation in Europe, for example the Estonian policy of abolishing tax for new companies, arguably one reason why Skype was born in Estonia.
However, some countries are doing better than others and policymakers should be open to bolder initiatives. In the U.S. more universities are introducing commercialisation offices to help students develop their ideas and bring them to the market. The initiative can be valuable for Europe, too.
Other important policy initiatives include increasing personal security on the Internet, strengthening the presence of technology and science in schools and decreasing transportation costs. Why not even allow reformist zeal to carry us away? The introduction of a ‘failure day’ could celebrate entrepreneurial failure and help eliminate the stigma it carries.
5. Ecosystems are essential
Only the right ecosystem can allow entrepreneurial spirit to create start-ups. The first element of a successful ecosystem is a big continental market. Europe has in place all the institutional instruments to create such a market, but national tensions mean services, digital and energy remain closed to competitive pressure.
The second essential element is an environment with few regulations, little bureaucracy and a very high level of flexibility. The EU has not always been up to the task. The EU and its member states should minimise regulation and allow as much innovation as possible. The third element is a mindset open to failure as a stepping stone towards success, and not paralysed by it as a shame to avoid. Although it’s unlikely that a single European Silicon Valley will emerge, we can be optimistic that Europe’s innovative future is bright.
After a day of demos and discussions, everyone who attended the event could agree on at least two things: Europe’s manufacturing tradition IS getting an update, and Makerstown was THE place to experience it first-hand! Breaking free from the confines of a regular EU-bubble conference, it was anything but a talking shop. Instead, it was streets ahead, celebrating European innovation in a dynamic, engaging, and inspiring way. Missed the action this year? No worries, Makerstown 2.0 will be back in town in spring 2017.Business Economy Industry Innovation Technology
Europe, get ready for the Makers Revolution!
25 May 2016
Technology is, undoubtedly, disrupting the world as we know it at a faster pace than we’ve ever seen before. It is reinventing society in ways we could have hardly imagined just a few years ago.
Technologies such as cloud computing, mobile apps, ecommerce or wireless communication have helped democratize information and give access to knowledge at a larger scale than ever before. We now live in a ‘network society’ always connected, always changing and always redefining itself.
This digital revolution has taken by storm all aspects of our daily lives and the way we work is one of the areas where disruption will be the strongest. It is not only the ‘how we work’ that we need to rethink, but also the ‘when’ and ‘where from’.
Coping with such disruption is already proving to be very challenging across industries, for both employers and employees in the public and private sectors. But it is up to us to face the challenges and make sure that the workplace environment is keeping up with the technology surrounding it, instead of trying to ignore for as long as possible (which, on the long term, would have disastrous consequences).
First of all, I strongly believe that for the world of work to keep the pace with the technological revolution, our paradigm around what work is and how it should happen need to change. For the past 150 years, throughout the industrial revolution and until today, very little has changed in the way we design organisations and jobs.
Just like in Henry Ford’s time, today’s workplaces are following the factorymodel organisational design shaped around structured hierarchy, heavy bureaucracy, overwhelmed by control and rules, adverse to change. As much sense as this model might have made in the industrial era, today it is making less and less sense to apply these same principles to our working environments.
Given the opportunities that technology is providing, it is now the time for us to start rethinking the meaning of work so that we can start redesigning the workplace. Organisations need to become flexible and adaptive in order to survive and because of technology, we now have the opportunity to make it happen.
Less hierarchy, more autonomy, simplifying bureaucracy as much as possible and involving employees more in the decisional process should become the norm of the organisation leading the way forward in any kind of industry or sector.
New models of organisation design such as holocracy, wirerachy, freedom centered or distributed (remote) have challenged the status quo of the world of work. And though none of these models have proven to be perfect, they all have one thing in common: maximising the impact that technology has within the workplace, taking full advantage of how it can help an organisation thrive (and improve the flow of information, communication, learning and development of employees, productivity etc).
In addition, technology is also redefining the physical environment of the workplace. Remote work is becoming more and more the chosen solution, as for an organisation this means lower fixed costs, significantly decreasing commuting times and also being able to tap into a global talent pool without being limited by the physical space to look for the most talented employees living in the proximity of the workplace.
And even for companies for whom remote work is not the solution, the office space is being redefined. It is making its transition from the cubicle to becoming a hub for collaboration where employees can spend time connecting with each other rather than the place where they need to be between 9am and 5pm.
But for all of this, the shift of paradigm needs to happen also as organisations need to drop the idea that efficiency and performance is directly tied with the rules of the physical offices fixed working hours and long commutes. Instead, remote working working organisations and coworking offices rely heavily on collaborative technology and digital tools to help employees thrive in their work.
Secondly, another aspect of the world of work keeping up with technology is the fact that digital workplaces will need digital employees. In other words, emphasis needs also to be put on developing digital literacy both within current generation in the workplace as well as younger generations who will enter the workplace in the upcoming years.
At the moment, there is a high percentage of the workforce (mostly represented by Generation X) across the world with real difficulties in using digital tools within the workplace and this is impacting in a negative way both productivity and the workflow within the organisation.
Developing learning programs that help them gain digital skills will be critical in the next years, as the requirements of the modern workplaces and the transformation of many of today’s jobs could lead to a stron technological unemployment trend which might leave heavy marks on economies and the society.
And even if today’s younger generations have been heavily exposed to technology since very early in their lives and they are true digital natives, they still need training and education about using digital tools purposefully in the workplace. For this, attention needs to be brought to education systems across the world to integrate digital literacy within the curricula of schools as an essential part of the learning process.
At the moment, the gap between skills taught at school and skills required in the workplace is becoming higher and higher and most of it because of this lack of focus on digital literacy.
Last but not least, government policies need to be more open to regulating new ways of work supported by technology. On one hand, it is the rise of the digital nomads and of the remote workers (who are either working on a freelance basis or as part of remote or flexible working companies).
At the moment, it is legally quite difficult for such workers to deal with paying taxes or finding legal ways of justifying their work (since the are huge gaps in legislation related to such regulations of remote or freelance work).
On the other hand, technology offers the opportunity to help close the unemployment gap for vulnerable groups of people (the disabled, the elderly, ethnic discriminated minorities etc). With the help of digital tools, they can be much more easily integrated in the workplace (both on physical or in remote working environments, depending on the needs).
But in order for organisations to create employment opportunities for these vulnerable groups, government policies play an important role in advocating for such approaches, reducing the bureaucracy of these processes and maybe even incentivising organisations for adopting such policies.
To sum up, I believe the impact that technology will have on the workplace will have a massive impact on shaping tomorrow’s society and it is our duty right now to try to foresee the changes coming along in the workplace and the forces driving it so that we can adapt to them in the best possible way.
The Romanian version of this article has been previously published in the Romanian news portal Ziare.com.Ana Marica Economy Education Industry Innovation
The Digital Revolution Within the Workplace
10 May 2016
Small and medium sized are the backbone of Europe’s economies and represent the future, driving innovation and change. Therefore, SMEs are important to economic recovery. This paper examines the issues facing SMEs, including the role of SMEs in Europe’s economy in times of recovery and growth and the effects of bureaucracy and punitive taxes on enterprise.Crisis Economy Industry
Powerhouses of Recovery: Small and Medium Enterprises during and after the Financial and Economic Crisis
01 Oct 2009