11 minute read
THE WORLD
Boosting Transatlantic Technology Cooperation
The EU and the U.S. need to address the real technology competitiveness challenge, which is China
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by Robert D. Atkinson*
During the era of the Cold War, the United States and Europe cooperated militarily, but competed economically. At the time, the Soviet Union posed a military, not an economic, threat to the West.
Today, in what could become a second Cold War, this time with China, the U.S. and Europe need to put great emphasis on cooperating economically.
The reason for this is straightforward: From the vantage point of each of the transatlantic partners, China poses a threat to our economic competitiveness.
More transatlantic technology cooperation needed
As such, it is incumbent upon the U.S. and the EU to build upon the initial steps of the new US-EU Trade and Technology Council (TTC). The goal must be, first, to reduce economic tensions between the two regions and second, to foster formal cooperation. This is especially true with regard to supporting advanced and emerging technology development and production.
China: Unfair, state-directed capitalism
As Barry Naughton notes in The Rise of China’s Industrial Policy: 1978 to 2020, China has not only become the world’s manufacturing workshop. It is also seeking to be the world leader in emerging technologies such as biotechnology, robotics, artificial intelligence and others.
What’s more, China is not only seeking absolute advantage on a host of technologies. It is seeking that advantage largely through unfair, state-directed capitalism.
To be sure, both the EU and the United States have industrial policies – but these policies mostly support foundational elements like workforce training, infrastructure and R&D.
China looking for dominance
In contrast, China’s predatory regime, especially subsidies to industry, goes way beyond what is considered acceptable industrial policy.
On top of that, the Chinese Communist Party compels technology transfer for market access, encourages intellectual property theft and operates tax and regulatory policies that discriminate against EU and U.S. firms.
That, combined with real strengths of the Chinese economy – a massive domestic market that lures in foreign investment, a massive technical and scientific labor force and improving research universities – mean
that China is gaining rapidly technologically.
At the expense of EU and U.S.
That gain has and will come at the expense of the EU’s and U.S.’s global market shares in advanced technologies. The result of that shift cannot be underestimated. Initially, China systematically assembled the components needed to be the manufacturing workshop of the world.
This systematic approach has made it hard, even with the Trump tariffs and measures by Japan and other countries, to move production out of China.
Silicon China?
Now, China is seeking to establish the same robust innovation ecosystem that will give it strong reinforcing strengths. China wants to be not Silicon Valley, but Silicon China – and not just for IT, but for every advanced technology.
The list of tech sectors China seeks to dominate is long. It ranges from aviation, battery technology, biotech, materials, clean energy, transportation, machinery and, of course, advanced IT.
If China were to achieve this leadership position, its lead will become self-reinforcing as competitors weaken and China’s advantages (e.g., capital, STEM workers, patents, tacit knowledge) improve.
Not another Asian tiger
If China were simply following the path of the Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan), there would be less to worry about.
All of these countries, as well as Japan, only sought comparative advantage in some industries – as opposed to absolute advantage in most industries.
More crucially, they were (or quickly became) democracies that did not seek to challenge long-standing principles of the rule of law and human rights.
A Maoist global hegemon?
China not only seeks absolute advantage in most if not all advanced and emerging industries. Under the leadership of President Xi, it has become clear that China is reverting to its Leninist and Maoist authoritarian origins.
If China becomes the global technology leader, it reinforces China’s efforts to be militarily superior and a global hegemon. That would give China the ability to hold the West hostage for key products and supplies.
What to do? Three steps
There are three key steps the United States and Europe should take. First, stop fighting each other economically. Resolving the long-standing Boeing-Airbus feud and focusing on the real challenger – China’s Comac – was a good first step.
The United States eliminating its steel and aluminum tariffs on EU imports was a good second step. For its part, Europe, including member states like Germany and France, needs to dial back its “digital sovereignty” agenda which is targeted at the United States and U.S. companies.
Second, both regions need to ramp up cooperation against unfair Chinese economic practices, including cooperation on cybersecurity, investment screening, bringing trade cases before the WTO and cooperative export controls.
Time for more formal EU-US technology policy cooperation
Finally, and most ambitiously, it is time for more formal EUUS technology policy cooperation.
In a world where the development of technology has become much more technologically complex, neither region is large enough to specialize in all major technologies.
Therefore, each region should allow the other region’s companies to participate in government-funded industry research programs, like the EU’s Horizon 2020 program and similar U.S. programs that agencies like the National Science Foundation operate.
Moreover, as the governments roll out or expand specialized technology programs in technologies like 6G, energy storage, battery technology, autonomous systems, quantum computing and semiconductors, there should be joint collaboration between US and EU firms, universities and governments.
Finally, governments should review and minimize or eliminate regulatory barriers to science and technology cooperation, including enabling easier cross-border work of scientists and engineers.
Conclusion
The sooner the EU and the U.S. can stop seeing each other as the competition and work to address the real technology competitiveness challenge – China – the more likely both regions can ensure their economic futures, while upholding critical values.
*Robert D. Atkinson
president of the Information Technology and Innovation Foundation
Chinese arms industry now competes with the big ones
by N. Peter Kramer
The arms race continues despite the pandemic. The US remains the dominant player, but China is on the rise.
470 billion euros: this is the turnover that the 100 largest arms manufacturers achieved last year in the full corona crisis. An increase of 1.3%, and a record. It is extra remarkable when you consider that the world economy shrank by 3.1% last year. The turnover of the arms trade rose for the 6th consecutive year and is now 17% higher than in 2015, according to the annual calculations of the Swedish think tank SIPRI. In that year, it concluded data from the Chinese arms manufacturers in its annual report for the first time.
The 5 major Chinese arms producers in the ranking are making a remarkable catch-up. They are all state-owned and tasked with making the vast country largely self-sufficient in arms production. Take China’s largest arms producer Norinco, which ranks number 7. It strengthened its investments in new technologies and contributed to the development of the military-civilian satellite navigation system BeiDu. The Chinese Casic, number 12, has quickly become a major producer of rockets and space systems. ‘In recent years, Chinese arms manufacturers have been able to take advantage of the large-scale military modernisation programs launched by Beijing’, says the Swedish Peace Institute. ‘As a result, they are now among the most advanced technological weapons manufacturers in the world.’
This is precisely the reason that US weapon giants have started investing heavily in research and development in the field of ‘next generation’ weapon systems. These are weapons in which robotics, cloud technology, artificial intelligence and space intelligence play a major role. The US still leads the ranking of the largest arms manufacturers. In the top 100 are 41 US companies, with well-known names such as Lockheed Martin and Boeing. But their technological lead over Russian and Chinese rivals is seriously shrinking.
This leads to an arms race in space, among other fields. Many major US arms giants have merged or bought military or civilian space companies in the hope of expanding their portfolio of high-tech weapons. Lockheed Martin, the world’s largest arms maker, announced last year the $4.4 billion acquisition of rival Aerojet Rocketdyne, 75th in the ranking. Raytheon Company and United Technologies Corporation merged to become number 3 in the ranking.
Looking at turnover, the gap between the US and the rest of the world is still gigantic. China counts now for 13% of all sold arms, what makes Beijing better than number 3 of the list, the United Kingdom.
Pandemic changes the role of leaders
by Ashok Krish and Rashmi Bhaskar Mukherjee*
The COVID-19 pandemic has blurred the division between our work and family lives, and shifted what we value. It has also fundamentally reshaped our relationship with institutions including healthcare, the government and employers. This new reality requires a new approach from leaders. Increasingly, employees are challenging systems that have traditionally governed the workplace, such as presenteeism, heirarchical management and performance assessment.
Here are five ways leaders can reframe their approach in a post-pandemic world.
1. THE INDIVIDUAL AS A WHOLE
Leaders need to work with ‘the individual as a whole’. An employees’ work persona is just one part of their wider life experience, embedded deeply within the community and wider society. Leaders must shift their mindset to acknowledge that employees’ experience goes beyond work. They must focus on designing holistic policies, structures and systems that are fluid and contextual.
We have seen some good examples of this. During the pandemic some organizations recognised the strain experienced by employees with children during the school break, when holiday camps were not an option. They sponsored activities such as art classes for young children during employee ‘prime time’. These organizations were not only creative in getting the best out of their employees during the most productive periods of the day, but also inclusive as they acknowledged their lives outside work.
2. THE LEADER AS A SOCIOLOGIST
There are lessons to be learnt from the ‘great resignation’. A recent survey of over 30,000 workers conducted by Microsoft found that 41 percent were considering quitting, rising to 54 percent among younger workers. To counterbalance this wave of dissatisfaction, organizations will need to develop fluid structures that are
democratic, agile and versatile. Executives – particularly Chief Human Resource Officers (CHRO) and Chief Experience Officers (CXO) – should draw upon solutions outside of their usual disciplines, looking to sociology and systems thinking.
3. PSYCHOLOGICAL SAFETY, WELL-BEING AND MOTIVATION
The role of leadership is to create psychologically safe spaces for employees to be able to speak freely and bring their whole selves to work. Studies have highlighted the unprecedented level of stress and burn-out for employees during the pandemic. Ensuring employee well-being is particularly important and challenging when staff are working remotely or in hybrid work schedules, according to Amy Edmondson, Professor of Leadership and Management at the Harvard Business School.
“We now have to work a little harder to share what we’re thinking, to ask questions,” she says, adding that there is now a need to be “deliberate” in amplifying voices in distributed working scenarios.
4. EQUITABLE EXPERIENCES
Leaders are responsible for making sure that employees have equal access to opportunities at work. Technology platforms can play a significant role by providing similar access to tools and features, but leaders need to go further. True equity is about creating conditions that generate similar outcomes for diverse individuals – irrespective of levels, backgrounds and social status.
It is a well-known fact that women have been disproportionately impacted by the pandemic. In a recent survey of North American female employees, one in four women said they were thinking about reducing or leaving paid work due to the pandemic, citing company inflexibility, caring responsibilities and stress.
5. INSIGHT OVER DATA
Organizations often have access to plenty of data, but still lack insight when it comes to valuing intangible assets, such as reputation, human capital, and intellectual property. This is an area where leaders need to rethink what they measure. As Donella Meadows, the renowned systems thinker, said: “we value what we measure”.
For example, investments in mental health initiatives alone are not a measure of effective well-being systems. Instead, we need to measure the extent to which the initiatives are being used by individuals who need them.
A remarkable feature of the pandemic has been the focus on these intangible assets, that are by definition harder to measure. These will be key when it comes to acquiring and retaining talent, and account for as much as 85% of the total business value across industries.
*Ashok Krish and Rashmi Bhaskar Mukherjee
Global Head, Digital Workplace, TCS and Director, Experience Reimagination & Future of Work, Digital Workplace, TCS UKI
