AI is the Key to European Competitiveness

AI is the Key to European Competitiveness

Without a doubt, artificial intelligence is one of the most transformative technologies of the 21st century. It has the potential to radically change our society and economy. According to a study by the German Economic Institute, AI could boost the German economy by €330 billion in ten years. Every third company in Germany is now investing in AI. Companies that miss this opportunity to profitably deploy AI applications will struggle to remain competitive in the future.

Europe must retain its sovereignty

Since the establishment of the European Union, free rule-based trade has been one of its key features and contributed to its prosperity. Russia’s war of aggression against Ukraine shows that autocracies cannot be reliable partners for liberal democracies. Using platforms and data-based AI applications from authoritarian states can have serious consequences for our security and economic competitiveness.

Mario Draghi’s report on the future of EU competitiveness also highlights the fact that we need to take action. Appropriately, it focuses on innovation, placing a special emphasis on reducing Europe’s dependence on other countries. The report is a vital wake-up call for Europe’s competitiveness and could be a great opportunity if we take it seriously. Several of its recommendations overlap with the Federal Government’s positions and ongoing activities.

My aim is to make Germany and Europe global pioneers in the digital transformation and, at the same time, strengthen the continent’s technological autonomy and security.

Thinking beyond Europe

AI applications in particular are based on collecting and analysing large volumes of data. This data may contain business secrets or sensitive personal characteristics. Using foreign AI systems or platforms may lead to data being transferred to other countries, where competing companies or governments could analyse it. We should therefore limit ourselves to using AI systems from countries that share our values, such as the G7 or OECD countries, especially in critical sectors.

In 2023, we adopted common guardrails for advanced AI systems such as generative AI with the EU and our G7 partners – France, Great Britain, Italy, Japan, Canada and the United States – the first of their kind. In the Hiroshima Code of Conduct for Organizations Developing Advanced AI Systems, we agreed that AI should be developed in line with our values. AI must not be used to harm our democracies, manipulate people and support terrorism or other criminal activities. Over 50 states and regions, including all EU Member States, have already endorsed it. The aim is for AI developers to voluntarily commit to the standards set out in the Code of Conduct. In the G7, we are currently working closely with the OECD to promote the implementation of the standards.

At the same time, we must not become dependent on foreign big business, even from friendly states.

Developing our own AI solutions is key to protecting our values and business secrets, as well as remaining globally competitive.

This is not about protectionism; it is about the ability to take decisions and actions of our own choosing.

Innovation-friendly regulation as a success factor

The EU AI Act is the world’s first comprehensive regulatory framework for AI and shows that the European legislature is proactively shaping technological developments. However, when implementing the regulations, it is imperative that we ensure proportionality and consider the needs of the business community, so that we do not inhibit innovation.

Overregulation places European companies at a disadvantage compared with global competition and drives innovation abroad. That is why I am in favour of maximizing freedom to innovate, for example in AI sandboxes.

MISSION AI

We must focus on start-ups and medium-sized enterprises, the backbone of the European economy. That is why my Ministry launched MISSION AI as part of the Federal Government’s Digital Strategy. We are leveraging this initiative to promote the growth of trustworthy AI in Germany.

As a key project of the Digital Strategy, MISSION AI backs data spaces as a foundation for AI innovation. To this end, it is developing specific solutions, such as AI-based security and quality monitoring, to improve the quality and conformity of data in data spaces.

At the same time, we are organizing matchmaking formats to bring together microenterprises, small and medium-sized enterprises (SMEs) and start-ups and facilitate market access for AI applications in medium-sized enterprises. Several collaborative projects were already established at the first event, which was held in Heilbronn in July 2024.

We are also developing a voluntary minimum standard compatible with the EU AI Act for AI applications below the high risk threshold.

On one hand, it aims to increase user trust in AI technologies, while on the other, it seeks to give AI providers applying the standard a competitive advantage, and offer AI operators that use the AI components a defined level of reliability. We debuted the minimum standard at the 2024 Digital Summit. The next step will be to trial it and the associated test criteria and procedures with AI applications already in use, to ensure that they are suitable for use in practice. In this way, we can guarantee quality and trustworthiness without inhibiting innovation.

The minimum standard is based on the ‘Ethics Guidelines for Trustworthy AI’ of the European Commission’s high-level expert group on artificial intelligence, AI HLEG. As a result, it guarantees compliance with European AI regulations and standardization. With the minimum standard, we are promoting AI quality, trustworthiness and transparency, so that the ‘AI made in Germany’ or ‘made in Europe’ brands can succeed.