Page 53 - ASEAN-EU Dialogue 2018: Regional and Inter-Regional Economic Cooperation: Identifying Priorities for ASEAN and the EU

Chapter Nine
EU’s Role as a Proponent for Tech Innovation
Roberto Benetello

Introduction
If one recalls a time when one would watch certain movies and observe the depiction of a world
so modernised and advanced, one would certainly raise the personal question as to whether
such feats would be even possible to realise. In this current day and age, what was initially seen
as visualisation is now the centrepiece for technology, as nations are building up to the concept
of digitalization and racing to be at the forefront of the 4th Industrial Revolution (IR 4.0). The
utilisation of Artificial Intelligence, robotics and machine learning in various sectors have
proved to be essential in maximising productivity and have assisted organisations in acquiring
these technologies to realise their economic potential at astounding rates. Such is the case for
the European Union, which is seen as a potential digital hub due to its large market size, which
may increase baseline projections of GDP up to 10%. This means that digitalization will be
earning the bloc an additional €2.5 trillion of GDP in 2025, according to McKinsey estimates.
Maserati, world renowned sports and luxury car manufacturers from Italy, in 2015 took to
venturing into the usage of IR 4.0 advanced solutions in the production of their vehicles. This
not only saved 30% of their production time and tripled their production capacity, but also
expanded their design variety, as seen with the Ghibli model which comes in 70,000
combinations. It is within the successful adoption of these evolving technologies that we will
see significantly enhanced performances and gains of competitive advantage. Apart from the
commonly acknowledged notions of labour substitution that stems from the utilisation of AI,
one can also see that it will have the potential to enhance productivity; raise throughput;
improve predictions, outcomes, accuracy, and optimisation; and enable the discovery of novel
solutions and possibilities. These potential opportunities when realised on a larger scale, can
definitely translate into empowering growth of productivity for entire economies nationwide
and on a macro-regional scale. It must be taken into consideration that the near future will
observe a rising aging population, decline of birth rates, and dwindling interest towards marital
commitment. All of which will act as factors that will lead to slow, if not reducing rate of
growth for the European labour supply. Inevitably, productivity growth will need to increase
to sustain economic growth, especially in Europe. It is important to look at what measures can
be considered essential for Europe to take in the wake of the emerging but surely-to-be vibrant
digitalisation market. For the most part, the measures can be observed through aspects such as
the embracing and advocating for digitalising industrial development, driving investment
towards the direction of technology and digital advancements, as well as consideration towards
the question of human capital.

EU’s Course of Action
It is imperative that we see Europe assert the role of trendsetter and tastemaker in spearheading
the world into the techno era. This can be evident when we start to see European governments
set ambitious digitalisation targets for their own public sectors, leading by example while
raising efficiency, and improving citizen interaction and delivery of citizen services – as
Estonia has done. It is also instrumental that the EU accelerates efforts to complete a ‘digital
single market’, as common legal and regulatory frameworks can enable digital companies to
scale within and beyond individual countries, and realise the potential of the single market. In
a socially concentrated context, European governments could strongly support the enabling,
creation, and growth of large-scale digital platforms and digital innovators. Apart from
acknowledging that digital platforms have proved instrumental in boosting cross-border

47