Good ideas should have no borders. Nokia’s people are drawn from more than 160 different nationalities working across 130 countries. We are an international organization with a global approach to innovation, but with Finnish roots and our significant European presence, we also have a strong stake in the Old Continent’s future.
Historically, Europe has been an innovation engine, with its ideas and inventions sparking significant scientific, economic, and social progress. But in recent years, that engine has been running low on steam.
While Europe is still home to world-leading companies, the European Union has fallen behind both the U.S. and China in key technologies, endangering the EU’s climate, digital, and defense goals and making its desire for strategic autonomy harder to achieve.
Europe needs to master new technologies so it can regain its economic competitiveness and ensure a prosperous and secure future for its citizens.
Artificial intelligence is already changing the way we work and is set to transform industries, the labor market, and the global economy. Generative AI combined with other digital technologies could add between 0.5 to 3.4 percentage points annually to productivity growth, equivalent to between $2.6 trillion and $4.4 trillion, according to McKinsey. The IMF estimates that AI will affect almost 40% of jobs globally and up to 60% of jobs in advanced economies.
AI is the headline technology, but the two supporting acts are just as important. Data crunching is the fuel that powers the Generative AI engine, whose processing power can only be delivered through cloud computing and networks—5G and fiber broadband networks today, with 6G coming into the mix from around 2030.
It is clear that if Europe wants to regain its economic competitiveness, it must master AI, cloud, and networks—and become a better home for innovation more generally through incentivizing investment in research and development, deepening the EU Single Market, and creating a more favorable business environment.
Go faster on digital
The European Round Table for Industry’s latest competitiveness report described its findings as an “ice-bath”: The EU is losing global market share and industrial competitiveness.
To accelerate digitalization, Europe needs secure, reliable, and high-performance connectivity. European policymakers should permit operator consolidation, where appropriate, so European telecom operators can achieve more scale and increase profitability to invest. Ultimately, consumers pay the price when it comes to poorer connectivity, with less than half the investment per capita in digital infrastructure in Europe compared to the U.S.
Radio spectrum also needs to be allocated more quickly and with greater coordination among member states. We cannot afford to repeat the delays of 5G deployment, so this issue must be resolved well ahead of the arrival of 6G. We should support European telco operators’ efforts to incorporate AI into their networks, as this will help them meet the increasing performance and energy-efficiency demands placed on their networks, as well as improve network monetization so they can augment much-needed investments.
Another way to accelerate digitalization is to make green financing available for connectivity solutions through inclusion in the EU Taxonomy system.
Last but not least, we must ensure that only trusted equipment is used in all parts of the network, not only in 5G networks.
Back your innovation champions
Europe may not have Big Tech, but it does have global players in innovative sectors such as aerospace, pharmaceuticals, information technology, semiconductor machinery, and telecommunications.
The EU should support its innovation champions on the international stage by challenging unfair business practices and by using trade tools, where necessary, to level the playing field.
Businesses invest more in research and development of new technologies than governments and academia. However, companies will only invest in R&D if they believe they can secure a return through commercializing and bringing to market their new innovations.
Nokia spends over €4 billion on R&D each year, and in 2023 we filed patents on more than 2,300 new inventions, with significant technological breakthroughs in optical networking and 6G.
Europe can better support its technology creators through a more joined-up and strategic approach to rulemaking, including by ensuring fair patent licensing to encourage businesses to invest; through stronger public-private collaboration to target investment on priority areas; and by completing the EU Single Market to expand the commercial potential of new innovations.
View the economy and security as two sides of the same coin
Increasingly, the same technologies that support strong economic growth also underpin modern defense and security solutions.
For instance, Nokia provides 5G private wireless networks to factories, mines, ports, and the defense sector. Whatever sector or industry, our customers want the same thing: secure, reliable, and scalable connectivity.
Trust has also never been more important in technology. At established European companies, whenever we innovate, whatever we create, building trusted technology should always be the starting point.
More must-read commentary published by Fortune:
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.