IBM Vision 2024For a responsible, open and inclusive digital Europe: A new partnership between technology, public policy & society

Executive Summary

Securing citizens’ trust in digital solutions and services is critical to the success of the EU’s digital economy. To earn that trust, industry needs to up its game, regulators need to weed out problems, and both should work together to raise the bar for a trustworthy digital future. In strengthening technology sovereignty, the EU should focus on building trust - choosing partners that have displayed their trustworthiness, data stewardship, and security in Europe for decades, regardless of the geographic location of their headquarters.

Earning trust means handling data responsibly. It means developing open source solutions. It means explaining AI clearly and making it accountable. It means upskilling society in order to future-proof jobs. And it means using precision regulation to target negative practices and fix tangible problems while avoiding unintended economic consequences.

A new European Commission and European Parliament is an opportunity for industry and the EU’s decision makers to work together in three areas:

Enhancing Responsibility for the Digital Future

Companies across all sectors need to show responsibility in developing technologies, handling data and conducting their business.

The public and private sectors need to work together to strengthen collective responsibility around areas such as: targeted regulation to strengthen trustworthy AI; regulation to drive online platform responsibility; supporting the Organisation for Economic Co-operation and Development (OECD) efforts on digital tax; and stimulating new technologies that accelerate sustainable growth.

Encouraging Openness

Open solutions, standards, interoperability, data flows and international collaboration all offer unparalleled benefits to the European economy. They create a flexible environment in which emerging technologies can flourish.

EU policy makers and businesses can successfully collaborate to: develop trustworthy self-regulatory codes of conduct for cloud services providers; ensure that digital trade is part of trade agreements; continue international collaboration in EU research programmes; boost blockchain take-up in the public and private sectors; and build European HPC capabilities and IP.

Promoting Inclusion and Skills

AI will transform 100 percent of jobs and revolutionise the skills required to succeed in 21st century careers. Companies and governments must recognise their workforces are a strategic renewable asset. Education, re- and up-skilling are essential to helping students and professionals build the right skills for the digital era. Inclusion must underpin workforce development.

EU policy makers and business must engage in: shaping curriculum development together; stimulating vocational education pathways that involve strong engagement of business; advance the testing and scaling-up of effective business-sponsored models for workforce reskilling and upskilling; and unblocking the EU’s 2008 diversity and inclusion proposal.

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Introduction

The new European Commission and European Parliament takes up the reins in the midst of a digital revolution that shows no signs of slowing down. Innovative technologies like artificial intelligence, blockchain and cloud computing are expected to transform our economy and society fundamentally. The European Union wants to be at the forefront of the revolution - driving European innovation and building its own technological sovereignty. Europe rightfully prioritises trust in technologies - with their responsible management by industry, society and government essential to maximise benefits and mitigate risks.

Collaboration across a range of industrial sectors and the EU institutions will be essential if we are to deliver a successful and competitive digital Europe and a responsible, open and inclusive digital future for all. IBM will be at the forefront of that collaboration. Here we map what we think are the opportunities for EU policy makers to work with industry.

IBM uses technologies like AI, cloud, blockchain and IoT to help our clients transform their industries. Reinventing since 1911, today we are one of the largest technology employers in the EU. With Watson, the AI platform for business, powered by data, we are building industry-based solutions to real-world problems. For more than seven decades, IBM Research has defined the future of information technology. Today we have scientists from 50+ nationalities working in Europe on cutting-edge research.

Vision 2024: A new partnership to build trust

While the Juncker Commission prioritised the Digital Single Market, results are mixed. The legislative impetus brought some clear benefits to businesses and citizens, such as ending data localisation and geo-blocking, but did not deliver adequate harmonisation.

Securing citizens’ trust in digital solutions and services is critical to the success of the EU’s digital economy. To earn that trust, industry needs to up its game, regulators need to weed out problems, and both should work together to raise the bar for a trustworthy digital future. This means handling data responsibly. It means developing open source solutions. It means explaining AI clearly and making it accountable. It means upskilling society in order to future-proof jobs. And it means using precision regulation to target negative practices and fix tangible problems while avoiding unintended economic consequences.

This is an IBM Policy Lab publication. The IBM Policy Lab is a new forum providing policymakers with a vision and actionable recommendations to harness the benefits of innovation while ensuring trust in a world being reshaped by data. As businesses and governments break new ground and deploy technologies that are positively transforming our world, we work collaboratively on public policies to meet the challenges of tomorrow.

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IBM Vision 2024For a responsible, open and inclusive digital Europe: A new partnership between technology, public policy & society

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What’s the opportunity?

New technologies are changing society at an unprecedented pace. But there is growing mistrust in how these technologies collect, store and use data. Europe must continue to show global leadership in shaping technology that embeds ethics and human values. The public and private sectors need to work together to strengthen collective responsibility and encourage businesses to adopt principles for ethical, responsible and transparent data usage. In strengthening technology sovereignty, we should focus on building trust - choosing partners that regardless of where they are headquartered have displayed their trustworthiness, data stewardship, and security in Europe for decades.

Why is this important?

Today, it’s not only technology companies that are digital companies. Companies across all sectors rely on digital technologies and data to run their businesses. Every company must demonstrate that they are deploying digital technologies responsibly and for the greater societal good.

What can EU policy makers do?

The EU should focus on shaping an open and responsible ecosystem, promoting innovation, and driving job creation. The EU should support companies who prioritise responsible use of data and digital technologies. Any regulation to target negative practices within this framework must be precise and tailored lest it cause collateral damage across the EU’s rich digital ecosystem.

Technological Sovereignty

IBM understands why there are calls to strengthen Europe’s own technological capabilities. Policy makers and the public rightfully expect that tech can be both innovative and trusted. Europe has an opportunity to be the global leader in trusted innovation. However, European customers would be ill served by a move toward digital protectionism. Simply put, where data flows, growth and innovation follow.

When strengthening Europe’s technology capabilities, governments would be best served by working with partners that have strong commitments to Europe; have invested in European talent and data center capacity to help Europe be successful; and have displayed their trustworthiness, data stewardship, and security in Europe for decades. IBM has been investing and innovating in Europe for more than 100 years. We have a strong record on trust, responsibility, and data stewardship. We have developed deep roots and created wide ecosystems across European business, research, and academia – investing in European initiatives in Quantum Computing and Artificial Intelligence. We will continue to support the EU as it becomes a leader in digital policy based on values, not geography.

RecommendationMake Europe’s technology stronger by working with partners that, regardless of where they are headquartered, have strong commitments to Europe, have the capacity to help Europe’s tech success and show their trustworthiness, data stewardship and security in Europe every day.

Enhancing Responsibility for the Digital Future

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Data Ethics

Companies in all sectors should take action to implement responsible and ethical data handling. The debate around data ethics should highlight the values and norms to be upheld by responsible companies. The GDPR focuses on individual rights but does not consider the broader societal implications of new digital technologies. How data is handled is a critical part of a company’s trusted relationship with customers and in order for the digital economy to be successful, citizens, organisations and governments worldwide must have confidence in how their data is used. To this effect, professional codes and guidelines together with co-regulatory efforts will play a crucial role.

Recommendation• Deploy a multidisciplinary approach

to policy that mobilises stakeholders (similar to that of the European Commission’s High-Level Expert Group on Artificial Intelligence).

• Promote the sharing of industry best practices on data usage.

Artificial Intelligence

AI will transform our economies and societies. It has enormous potential for social good. There are also valid concerns about risks in areas including bias, safety, privacy and transparency. Much work has been done in the EU and elsewhere to set out principles to guide the human-centred and ethical development of AI-based solutions. The next step is to develop these high-level principles to a more detailed and specific level, and, where necessary, to introduce appropriate regulation.

The challenge is that AI is not a single technology and it has an extremely broad range of applications, from the trivial to the profound, in widely differing sectors. As policy makers worldwide consider how to address questions of trust in technology in general and AI in particular, IBM has

consistently advanced the principle of precision regulation. We do not believe that a broad-ranging or horizontal regulatory approach is feasible. Rather, to be effective, any regulation should be targeted to address legitimate concerns arising from specific uses of AI while promoting innovation, protecting consumer rights and ensuring accountability. This approach emphasizes carefully targeting policy to address legitimate concerns, such as in the areas of privacy and civil rights.

Industry must be proactive in offering solutions that address these concerns. This includes developing and adopting principles and governance practices to guide the development and use of AI solutions as well as implementing practical tools that help mitigate the risks. They should also engage in multi-disciplinary and multi-stakeholder fora to further develop the principles for the development and use of AI and share perspectives broadly as experience with real-world usage grows.

Recommendation• Continue the work of the High-Level

Expert Group on AI as it moves to develop more detailed guidelines built on its ethical principles.

• Focus any new regulatory approaches on specific use cases where identified risks need to be addressed.

• Encourage Member States to provide regulatory sandboxes to allow companies to test AI applications in a controlled environment.

• Encourage Member States to invest in education, skills development and human capacity-building so that citizens are empowered to take advantage of AI.

Online Responsibility

Dominant online platforms have immense power to shape public opinion but they face little regulation or liability. We believe that companies should be

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responsible for harmful societal effects their online services can have, ranging from impact on children and elections to facilitating criminal and terrorist activity. Online platforms should only be exempt from liability in cases where they apply a standard of “reasonable care” and take action to curb illegal uses of their services. Responsibility for harm prevention is most appropriately borne by those who can moderate and curate content. Precision regulation can be effective in compelling them to remove specific online content such as terrorism, hate speech, trafficking of children and illegal drug sales.

RecommendationIncrease accountability for services that disseminate harmful or illegal content—which should be moderated—by introducing precision regulation that assigns more online responsibility and mandates reasonable care without damaging the broader data economy.

Cybersecurity

Public-private partnerships are vital to enhancing cyber awareness and protection. By collaboratively and voluntarily exchanging real-time incident and threat information we can prevent and mitigate cyber-attacks.

IBM believes that the European Commission and European Union Agency for Cybersecurity (ENISA) should work more closely with industry-led cyber security initiatives such as the Charter of Trust for Cybersecurity - of which IBM is a founding member - to further raise awareness and preparedness on cyber security. Governments should not restrict themselves to using only home-grown solutions to build cyber defences: state of the art levels of protection will often be a mix of trusted national and international expertise and services.

Recommendation• Develop the EU Cybersecurity Act to

build stronger and more harmonised cyber security certification schemes based on international standards.

• Facilitate sector specific incident and threat information sharing schemes in Europe.

• Encourage governments to leverage best-in-class security responses by working with trusted partners beyond borders.

• Work closely with the Charter of Trust to achieve these aims.

Digital Taxation

There is significant concern that some players in the technology industry are not paying levels of tax that align with profits generated in the countries where they operate. Governments rightly want to take action. While the OECD is the best forum to develop a global approach to digital tax, we acknowledge the political imperative for EU Member States to introduce interim targeted measures and we do not oppose national implementation that is consistent with the European Commission’s Digital Services Tax proposal.

Recommendation• Seek an agreed upon approach to the tax

challenges of digitisation at the OECD that builds on current international rules for most enterprises and specifically targets abuses of tax rules

• Should OECD efforts fail, pursue the existing EU initiative on Digital Services Tax ahead of divergent national measures and ensure it remains narrowly targeted.

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Sustainability

The application of technology to accelerate sustainable growth is a global, urgent opportunity. IBM is advancing the adoption of data-driven applications – including more accurate and predictive weather forecasting to better monitor renewable energy use, blockchain solutions to incentivise plastics recycling, and quantum computing for predictive environmental modelling and carbon-capture technology. But individual initiatives are not enough, and as Europe embarks on a Green Deal, we must work together to halt the devastating effects of climate change and protect our environment.

IBM supports putting a price on carbon. A carbon tax, specifically, will put in place strong economic incentives for energy companies to reduce carbon emissions and for energy consumers to reduce their energy consumption. IBM has reduced the carbon dioxide emissions associated with our consumption of energy by 32% since 2005. We are on track to achieve our goal of a 40% reduction by 2025, a rate consistent with what scientists say is needed to limit warming to between 1.5 and 2.0 degrees Celsius.

IBM is a strong supporter of the Paris Agreement and we have publicly called for the United States to remain in it.

Recommendation• Provide incentives for new technologies

such as data analytics, AI and Blockchain that can help other sectors achieve environmental objectives.

• Establish stakeholder platforms between the IT and other sectors to incentivise the uptake of digital solutions to environmental and sustainability problems.

• Promote the repair, refurbishment, upgrading and remanufacturing of used goods by skilled and trained personnel as a key component of the circular economy instead of regulating such activities as waste treatment operations.

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What’s the opportunity?

Open solutions, standards, interoperability, data flows and international collaboration all offer unparalleled benefits to the European economy. They create a flexible environment in which emerging technologies can flourish. Open source and open solutions are driving innovation in cloud computing by avoiding lock-in and allowing users to switch workloads from one cloud to another more easily.

Why is this important?

By removing barriers between innovators, countries and sectors, we can promote the free exchange of ideas and data, while staving off digital isolationism. This drives creative, scientific and technological advancement and is essential for the EU to become a global digital leader.

What can EU policy makers do?

Policy makers should encourage openness by promoting cross-sectoral and international collaboration and future policy programmes, and by educating stakeholders on their importance for the European economy.

Open Source

Open source is a well-established way of creating and maintaining world class software, but this hasn’t always been the case. IBM’s decision 20 years ago – much against the trend at the time – to support Linux as its main server operating system was the catalyst for a change in mindset towards open source. Today, Linux is the most used platform for development. IBM’s continuing belief in open technology led to its acquisition of Red Hat in 2019. But not all open source is created equal: while a broad range of open source software is available, not all of it is enterprise ready, either because there is a lack of governance or it is not effectively maintained.

Recommendation• Promote the development of

procurement guidelines for open source software.

• Further develop and promote the European cloud strategy with open source as a mechanism to avoid vendor lock-in.

• Educate stakeholders on the Commission’s role in standardisation and open source and its importance for the European market.

Cloud

Businesses are starting the next chapter of their digital reinventions, modernizing infrastructure and moving mission-critical workloads across private clouds and

Encouraging Openness

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multiple clouds from multiple vendors. Flexibility and portability are key. One example of innovative cloud computing is Cloud Foundry. Governed by an independent foundation, Cloud Foundry is an IBM-backed, open source, multiple cloud application platform that provides the flexibility and portability required by both the public and private sector.

Further transparency and self-regulatory codes of conduct are needed to improve the data portability and cloud switching that will give cloud users greater flexibility and control. IBM supports EU and national efforts to further strengthen trust in cloud computing, while ensuring long term and significant investors are not excluded from the market. IBM is one of the founders and signatories to the EU Cloud Code of Conduct, which has established high data-protection and information-security standards for cloud services. The transparency created by industry-led best practices, such as the EU Cloud Code of Conduct, will contribute to an environment of trust and create a high default level of data protection in the European cloud computing market.

Recommendation• Continue to support the self-regulatory

codes of conduct for cloud service providers that will improve data portability and prevent vendor lock-in, as they move forward to implementation under one governance structure and one legal entity.

• If a European Cloud Strategy is pursued, avoid limiting it to companies based simply on where they are headquartered, but rather on the values of trust, responsibility and data stewardship that companies demonstrate daily.

Blockchain

IBM believes that blockchain will do for trusted transactions what the internet has done for the flow of information. In areas as varied as supply-chain management, food traceability or digital-identity management, blockchain is now transforming a whole spectrum of organisations.

IBM is working with hundreds of partners and organizations in developing the Hyperledger project to deliver the necessary capabilities for open source blockchain for business. We have also put forward key principles for enterprise blockchain: they must embrace transparent governance, and trusted access should be the guiding principle. They should also be designed around common standards to prevent vendor lock-in, and participants should be empowered to control who can access their data and under what circumstances. Finally, wherever possible, developers should favour open source frameworks.

RecommendationEncourage Member States to facilitate the development and adoption of blockchain and distributed ledger technologies by:• Testing public sector use cases through

the European Blockchain Partnership.• Working with stakeholders to identify

the necessary resources and strategies to help governments, businesses and citizens adopt blockchain technology.

Research

Today’s societal and scientific challenges can rarely be addressed by any one organisation or country. The EU has created a world-class culture of collaboration among academia, corporations and SMEs by promoting cross-border and cross-sectoral research cooperation.

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This is a truly unique asset, and a compelling advantage for research and innovation. We need to continue encouraging such cooperation, protecting the unique position the EU has built as a global leader in research.

RecommendationBuild on the success of research programmes such as Horizon 2020 by continuing to encourage research cooperation with companies that have a strong base in Europe, resisting any efforts to restrict participation on the basis of a company’s headquarters location.

High-Performance Computing (HPC) & Quantum Computing

IBM fully supports the EU’s ambitions to be at the forefront of global advances in HPC and quantum computing. We believe success requires European and international partnerships between industry, academia and governments to drive basic research, create talent and skills, and explore how these technologies can be used for Europe’s economic advantage.

Europe should invest not only in the development of the underlying technologies but particularly in software, and in helping European companies make use of the best available HPC and Quantum computing, wherever they are developed. With HPC, the major competitive advantage will come from its use across many industry sectors, and from building a vibrant ecosystem of developers, systems implementers and users. To achieve the EU’s HPC goals within a reasonable timescale and budget requires collaboration between many different companies, universities, research institutes and public authorities, and a platform on which to build. We believe

the OpenPOWER architecture provides such a platform – royalty-free and without risk of patent-infringement. The OpenPOWER Foundation was established in 2013 by IBM as an open technical membership organization to develop the most open and high performance processor architecture and ecosystem in the industry. With the August 2019 announcement that IBM would release further key technologies and greater access rights for the POWER architecture to the community and that the OpenPOWER Foundation will integrate with the Linux Foundation, developers have the assurance that open governance principles will apply.

IBM’s quantum programme is a global effort with significant research and development in Europe. Our worldwide centre of competency for IBM Q technical support, for example, is in Montpellier, France, while in Dublin, Ireland, the IBM Research Lab focuses on quantum algorithms. In September 2019, we announced a significant partnership with leading European research organization Fraunhofer-Gesellschaft to advance quantum computing research and experimentation in the region.

RecommendationEnsure European research scientists and early industry adopters have access to the most advanced HPC and quantum computers available by:• Continuing to fund initiatives such as

EuroHPC and the Quantum Flagship.• Using OpenPOWER as a platform on

which to build European HPC capabilities and IP.

• Working with industry, academia and governments to create regional and topical centres of excellence for quantum computing, with a particular focus on skills development.

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Data access and sharing

Machine learning and AI systems require vast amounts of data. Companies and governments are looking for simple and trusted ways to share data. To meet this challenge, the previous Commission launched several initiatives that allow companies to exchange data in an open and flexible manner, whilst preserving their freedom to decide how and with whom they want to share it. Similarly, the Linux Foundation introduced data license agreements (Community Data License Agreement or CDLA) that enable the sharing of data, similar to open source software. The CDLA permits data to be freely used, modified and republished, with no prohibition on the commercial use of data.

Recommendation• Promote voluntary data sharing practices

instead of imposing horizontal ex-ante data sharing obligations.

• Resolve the main obstacle to data sharing - the complexity of data sharing agreements - by promoting initiatives such as the CDLA.

Digital trade & data flows

Digital trade provisions allow data to flow between countries, prevent governments from mandating that data be kept locally, prohibit customs duties on electronic transmission, and protect source code, algorithms and encryption keys. Digital Trade provisions will create new opportunities for European companies to export their products and services and must therefore be included in future trade agreements.

Recommendation• Re-assess the European Commission’s

position on data flows and ensure that its template digital trade chapter contains data flows provisions that will remove unjustified and arbitrary data localization measures in third countries that have no practical benefit in terms of data privacy or security.

• Oppose arguments that cloak data protectionism under the banner of data protection.

• Support the conclusion of an agreement of the WTO eCommerce negotiations by the next WTO Ministerial Conference in summer 2020 that: 1) enables cross border data flows; 2) prohibits unjustified data localization measures; 3) prevents the introduction of custom duties on electronic transmission; and 4; protects source codes, algorithms and encryption keys.

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What’s the opportunity?

AI will transform 100 percent of jobs and revolutionise the skills required to succeed in 21st century careers. Companies and governments must recognise their workforces are a strategic renewable asset. There is tremendous opportunity to work together to reform education and policy, and rapidly scale innovative new approaches to skills training, education and re-education - all grounded in a focus on lifelong learning.

Why is this important?

Education, re- and up-skilling are essential to helping students and professionals build the right skills for the digital era. The economic benefits of advanced technologies and the Digital Single Market – particularly the jobs created – must be for the many, not just an elite few. To quote IBM’s Chairman, President and CEO Ginni Rometty, “our economy works best when our employees can be who they are, without fear of bias, discrimination, or inequality – in the workplace or in their communities.”

What can EU policy makers do?

To create a more inclusive workforce of the future, the European Commission should focus on areas such as scaling up best-practice education and effective business models, and work with business to develop education pathways that deliver in-demand skills and a more inclusive workforce.

Diversity and inclusion

In 2008 the Commission proposed a directive which offers protection from discrimination on the grounds of age, disability, sexual orientation and religion or belief beyond the workplace. This new directive would ensure equal treatment in the areas of social protection, including social security and health care, education and access to and supply of goods and services which are commercially available to the public, including housing.

RecommendationMake every effort to unblock the 2008 diversity and inclusion proposal so that Member States can move forward with implementing crucial policies to prevent discrimination and ensure equal rights.

Skills

There is great opportunity for governments, businesses and educators to partner to smooth transitions from education into work as well as within labour markets. National governments must modernise education policies and systems to emphasise in-demand skills, better align educational curricula with the realities and requirements of modern careers and prepare more workers for new jobs. Apprenticeships and innovative models – such as IBM’s P-TECH, that combine second and third level education with applied workplace skills – can be an effective route into new careers. These approaches can make the tech industry more diverse, more inclusive and more committed to bringing in people with non-

Promoting Inclusion and Skills

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traditional backgrounds. Access to prosperity should not be determined solely by whether or not someone has a traditional university degree.

In a labour market situation where the shelf-life of skills is getting shorter, opportunities for re-skilling of the existing workforce is also becoming increasingly important. IBM’s SkillsBuild programme offers digital learning content and personalised coaches to help job seekers develop the technical and professional skills needed to re-enter the workforce. Learning paths range from professional and essential digital skills to core web development skills to non-technical skills such as customer service and support. Trainees are offered the opportunity to acquire digital badges that show that badge earners possess verifiable, in-demand skills and knowledge.

Recommendation• Increase coordination and best

practice sharing between all players on curriculum development.

• Encourage the design of vocational education pathways that involve strong engagement of business with the school and higher education systems.

• Support testing and scaling-up of effective business-sponsored models for reskilling and upskilling.