Investing in strategic digital technologies in Central Europe will help us overcome the crisis, protect against the next one and ensure our security.

Why do we not have therapies or a vaccine, let alone respirators and lung ventilators? We could have had all of that, but we said no. We chose not to have the mechanisms, the factories, the systems to make these things. We chose not to build.

No, there are not the words of an agitator of an ultra-left, communist militia, but spoken by Marc Andreessen, one of the most influential and richest investors in Silicon Valley.

He is the man who made the Internet browser as we know it and who, with his superfluous company, stands behind companies like Facebook, Twitter, Skype, Foursquare, GitHub, Pinterest and many others. He wrote a comment entitled “It’s time to build”.

Lousy and underfunded infrastructure

Marc Andreessen

Of course, Andreessen encounters the situation in his home country, the United States, where things are much worse than in our country. Yet, in many respects, it also concerns the problems of Central Europe and Czechia.

Even before the crisis, many in the United States complained about lousy and underfunded infrastructure, crumbling roads and bridges, and the New York subway, for example, smelled more like a slum than the world’s financial artery.

In the crisis, they found that they did not have enough protective equipment, masks, respirators and lung ventilators. There, too, they were printed on 3D printers and engine manufacturers reoriented themselves to medical facilities. Even the world’s largest economy has found itself unprepared.

Despite the slight optimism of banks and economic recovery, we are unlikely to return to prosperity and a V-shaped economic development. According to the OECD, our decline in growth will be the fifth-largest in the world, as we are going down a high hill.

The industry that has fed us so far has fallen by more than a third, and our main trading partner, Germany, has seen the biggest drop in exports since 1950. It is time to invest heavily in public and private funds to overcome the crisis, as New Deal did in the 1930s.

But it would be a mistake to build a new Golden Gate. In the twenty-first century, we must invest above all in our future prosperity.

The motorway will not protect us

It is in the United States that a remarkable initiative has emerged that unites the two political camps, otherwise irreconcilably dispersed in the year of the presidential election.

Influential Republican and Democratic senators and congressmen have introduced a bill calling for an astronomical investment of  100 billion dollars over the next five years in technologies that will enable “new discoveries, the creation, commercialization of research, and production based on new technologies.”

Key areas included artificial intelligence, robotics, automation, advanced manufacturing and more. Similarly, Twitter chief billionaire Jack Dorsey has donated a third of his one billion dollars’ worth of shares in his financial technology firm to fight the pandemic, but the rest will go to development projects.

Similarly, we need to make it clear that the motorway to Mohelnice and the D1 will not protect us from another pandemic. We certainly need strategic supplies of medical supplies, but if we hope that the second wave will not come, we may face another and fundamental crisis that we will not anticipate.

And we may find ourselves in the position of French generals looking sadly at the Maginot Line and recalling the armaments lesson of the previous war.

At the same time, many point out that the most modern technologies did not take us out of the crisis, although they made quarantine more pleasant for us and even call it a failure of the current system of capitalism.

Yes, thanks to Zoom we were able to communicate, Netflix provided us with entertainment and Amazon as well as our local players brought food and other goods home, but they did not save lives. Technology companies came to help, but we can hardly talk about saving lives!

Similarly, hospitals have protected advanced cybersecurity systems, and in the background, many critical parts of our lives are driven by artificial intelligence. Analyses of big data are massively involved in drug and vaccine development.

Safe Central Europe

It is these state-of-the-art technologies that are at the heart of the new economy with high added value and salaries. Yes, we need to digitise public administration, encourage homework and reform education, but these are preconditions for prosperity, not the future engines of the economy.

And as we have seen, and perhaps will see, our dependence on manufacturing and the automotive industry is bad for us. This applies to the entire Central European carland from the Elbe to the Danube.

Investing in the category of strategic digital technologies has the fundamental advantage of stimulating education, science and research, the growth of new companies and at the same time enabling the maintenance and development of jobs in crisis.

The role of strategic technologies in our common security is absolutely crucial. AI and decentralised systems are today in the eminent interest of both the USA and the European Commission, and especially China and Russia.

The Digital Silk Road project has stalled with the crisis, and we have the opportunity to build independent capacity and defend ourselves in the future from influences that have adversely affected us in the past. It is already certain today that medical and biotechnologies will be in a similar position as in the last century were the reserves of oil or uranium.

Examples of supplies from China are more than eloquent. Building self-sufficiency makes sense while maintaining a free and open market.

The goal of Europe and every EU member state should be to build and maintain capacity in these selected categories, as is already common today in Western countries, such as the Netherlands. The private sector can play a significant role in this role, but we cannot do without the clear position and intervention of governments themselves.

The main disadvantage is that we are small for them as one country and we do not have much capacity ourselves. The biggest disappointment from the development of new systems such as eRouška or Smart Quarantine is that the neighbouring V4 countries developed these separately and independently.

The V4 countries have nations that understand each other, share a similar culture, economy and often a comparable legal system. Yet, we lack the tools to share big data, both medical and otherwise, to jointly estimate developments and other waves of the pandemic.

In short, the ten million people are not statistically significant enough to collect data and include enough scientists and developers to do so. Sixty-five million has at least six and a half times the potential. It is, therefore, a pity that we do not use it yet.

 

 

This article is part of the #DemocraCE project. A Czech version is available in Lidové noviny.

#DemocraCE Fellow. Jan Klesla is the Director of the Institute for Digital Economy (IDE) and a former economics reporter, editor and commentator. He has focused on the digital economy, particularly investments and regulations in the area of the technological disruption of traditional industries. Currently, he externally advises the Czech government on issues of digital transformation and AI specifically, and is one of the co-authors of the National Artificial Intelligence Strategy.


Eastern European Futures

In 2009, the European Union and six of its Eastern neighbours launched the Eastern Partnership (EaP) with the stated aim of building a common area of shared democracy, prosperity, stability and increased cooperation. A decade on, however, progress has been mixed.

Visegrad Insight is published by the Res Publica Foundation. This special edition has been prepared in cooperation with the German Marshall Fund of the United States and supported by the International Visegrad Fund.

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