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The EU’s “softball” approach to Artificial Intelligence will lose to China’s “hardball” ǀ View

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Opinion piece by Eline Chivot and Daniel Castro

The European Commission’s Joint Research Center released a report that explores the European perspective on artificial intelligence (AI), along with the global AI landscape’s state of play. The report recognizes the value of AI across industry, but while acknowledging the fierce competition on AI taking place between the EU, China, and the United States, it ultimately dismisses the need for Europe to win this global race, arguing instead that for the EU, the more important goal is focusing on developing values and ethics in AI. This is a naive perspective, especially given that China is not only fiercely competing on developing AI, but also aspiring to dominate in AI so as to compete in industries where Europe is leading today. Ironically, even if the EU’s first priority is to shape the values and ethics of AI, it will be severely limited in its ability to do so if it is not leading the development and adoption of this technology.

Europe would be wrong to forget that any competition involves winner and losers—and more often than not, the winners are those who compete with gusto. As described in a Harvard Business Review article, there is a difference between those who play “hardball” versus “softball.” Hardball players, they write, “pursue with a single-minded focus competitive advantage and the benefits it offers...They pick their shots, seek out competitive encounters, set the pace of innovation, test the edges of the possible. They play to win. And they do.” In contrast, softball players “aren’t intensely serious about winning...Instead of running smart and hard, they seem almost to be standing around and watching. They play to play. And though they may not end up out-and-out losers, they certainly don’t win.”

When it comes to AI, China is playing hardball, but Europe is playing softball.

China is not just playing catch-up with the West, as the Commission’s report implies. It is planning to leap over Western economies and seize nothing less than global AI dominance. China is developing a sophisticated national AI strategy and it is allocating massive government funding to capture global market share in AI. China wants to be equal to countries leading in AI by 2020, develop breakthroughs in areas of AI with high economic value by 2025, and by 2030, become the world’s “premier artificial intelligence innovation center,” with a domestic AI industry worth approximately €130 billion. In 2017, China secured 48 percent of global investment in AI startups, while the United States received 38 percent. Clearly European countries are not getting the lion’s share. According to a new study from the Boston Consulting Group, 85 percent of Chinese companies have adopted or are pilot testing AI, compared to 49 percent in France and Germany. China began publishing more AI patents than France, Germany and the UK combined, and has grown that lead considerably.

In the meantime, Europe is going through the motions of competing, but does not appear serious about it. While it is a positive step that the European Commission and member states have prepared a “coordinated action plan” to increase investment, make more data available, and foster talent in pursuit of AI, the AI conversation in Brussels and many European capitals still revolves mainly around the potential risks from AI and the promotion of a responsible, trustworthy, human-centric approach to AI. Case in point: one of the first outputs of the Commission’s High-Level Expert Group on AI is draft ethics guidelines for “trustworthy AI.”

But leveraging an ethical approach to AI will do little to enable Europe’s global competitiveness. European policymakers should be focused on increasing the development and adoption of AI technologies by companies in the EU. McKinsey Global Institute found that Europe was already lagging behind in the AI landscape in 2016, with private investment in AI amounting to €2.6 to 3.5 billion, far less than Asia (€7 to 11 billion) and North America (€13 to 20 billion). This striking gap probably is what Kai-fu Lee, the ex-president of Google China and a venture capitalist in China focused on AI, had in mind when he recently said that Europe does not even have a good chance of getting a “bronze medal” in the AI competition.

Moreover, Europe is only beginning to realize that China's growing acquisition of EU firms and significant investment in the European technology industry (€22 billion since 2005) are the real threat to Europe's economy. And China has shown a willingness to not only compete fiercely, but also unfairly—such as by stealing intellectual property from foreign firms.

Europe should not throw in the towel just yet. Europe has a number of factors in its favor, such as a long-standing commitment to public research and a highly-educated workforce. Plus a recent analysis of the AI startup ecosystem found that Europe is home to twice as many AI startups as China (769 compared to 383). But to be a global leader in AI, this will not be enough. For example, Europe may be publishing more AI research papers now, but China is catching up rapidly with a number of papers that has increased by 150 percent between 2007 and 2017—from about 6,000 to 15,000 AI papers annually. Within the same time period, Europe’s publications had grown by 70 percent, from 10,000 to 17,000 papers annually.

AI is a game changer, but Europe is barely in the game. Europe will not win the AI race by philosophizing on the sidelines or applying the precautionary principle to AI. Rather it needs to play hardball and focus on putting in place the investment, skills, data, and regulations needed to outcompete China.

Eline Chivot is a senior policy analyst at the Center for Data Innovation, based in Brussels. Daniel Castro is the director of the Center for Data Innovation and vice president of the Information Technology and Innovation Foundation.

Opinions expressed in View articles are solely those of the authors.