A foresight report explores different scenarios for Big Tech by 2040 – deriving policy recommendations for the EU’s research and innovation policy.
The European Commission published a foresight report on the future of Big Tech in Europe, focusing on implications for research and innovation (R&I). The publication follows a scenario-based approach, from which it draws different conclusions formulating policy recommendations concerning the EU’s R&I policy. The policy brief projects scenarios as far as 2040.
In this analysis, Big Tech is referred to as the largest corporations that prioritise high technological intensity as a key pillar of their business development. Further, the term is often linked to the US GAFAM (Google/Alphabet, Apple, Facebook/Meta, Amazon, Microsoft) or the Chinese BAT (Baida, Alibaba and Tencent) corporations.
These very large, private Big Tech companies are rooted in research and development and impose an unparalleled influence on production and consumption relations, due to their oligopolistic position. Their intermediary roles in socio-cultural, political and science domains combined with their demand for resources ultimately raise the question of whether the Big Tech influence is beneficial for society.
In light of this development, the EU faces several fundamental agenda-setting questions. The relevance of Big Tech developments for the EU’s R&I policy is exemplary illustrated by the private funding provided through Big Tech corporations. Within a single year, the leading five Big Tech companies directed over double the financial support towards R&I compared to the funding designated by the EU for Horizon Europe 2021-2027, amounting to €95.5 billion.
The report then presents four different scenarios, showing how some current trends around Big Tech could develop over the next two decades. These scenarios are presented without any reference to desirability or likelihood, solely serving as strategic habitats for deriving policy options. This approach aims to show how EU policies might have to be changed to avoid or anticipate some of the outcomes described in the respective scenarios.
The scenarios are organised based on two key dimensions: the degree of openness in international interactions and the inclination towards extensive research- and development-based scale, scope, and network economies. In the first scenario, ‘Winners Tech All’, Big Tech dominates, replacing traditional markets and raising concerns about concentration, competition, and privacy in Europe. The second scenario, ‘Pax Technologica’, envisions Europe negotiating a multipolar tech landscape through robust regulations, striking a balance between innovation and consumer protection. Scenario three, ‘Re-matching’, sees a diverse tech recovery in Europe, with viable alternatives to Big Tech emerging and a super-cycle of productive investment taking place. ‘Closet Liberalism,’ the fourth scenario, represents a decentralised, bottom-up approach that fosters a competitive European tech landscape, requiring regulatory framework adaptability and promoting individual innovation and economic freedom.
The main conclusions of this report, outlined as policy recommendations cross cutting all scenarios mentioned, are that the European Union must prioritise developing its own tech leaders alongside regulatory efforts. The report suggests benchmarking EU and national R&I budgets against both historical performance and strategies employed by global tech giants. It further emphasises the need for significant ‘big bet’ investments in Europe, coupled with an experimental approach fostering serendipitous breakthroughs in technology and research.