3 Questions To… Axelle Lemaire, a specialist in innovation and digital policies, former Minister in charge of Digital Affairs and Innovation in France from 2014 to 2017, now working as the Global Head of Terra Numerata, an open innovation platform developed by the strategy consulting firm Roland Berger.
We often hear that Europe does not have anything like the GAFA or BATX. As a key player in the expansion of the French Tech movement, uniting the French digital startups worldwide, what should the European Union do to keep up with this race? Are there key initiatives that should be strongly supported?
It is often considered that the USA creates, China copies and the EU regulates. If you think of what the situation will be in five years, the new setup could be China as the country which creates, the USA as the regulating country and the EU both creating and regulating.
Regulatory challenges are now better understood at higher levels, with a more acute awareness of the dominant position occupied by the big tech players. Indeed, large technology companies have become so huge on the global market, and so present in our daily lives, that they might somehow be hindering innovation and access to market, thereby restricting open competition. Calls for change are more vocal, and even the USA are paying more attention to this situation. The trick will be to bring evidence of the value created through the collection and use of data outside of classic business models, and to relate competition issues to new horizontal and data-driven business models.
"Europe is better equipped to offer to businesses and citizens alike a trusted and secure digital environment than any other regions"
Antitrust regulation was historically well designed to address monopolistic or oligopolistic situation in the banking or energy sectors, but the rules need to be adapted to grab these new models. Europe has always been one step ahead when considering these matters. If one strongly believes that the future will develop through technology push, regulators will have to adapt and legislate in real-time, have companies open their APIs and share their data, and this new future implies deep structural changes for policy makers. But Europe is better equipped to offer to businesses and citizens alike a trusted and secure digital environment than any other regions, and that is a winning argument in the long run, as long as the competition remains free.
Against this background, there still can be room for the emergence of new players, which is good news for European companies. I am optimistic for new startups to flourish, following the example of the increasing number of unicorns in France, getting from 1 to 8 unicorns in recent years.
However, the real question is: what moves do we want to make at the European level to leverage this trend harmoniously? My number one recommendation would be to invest in research and long-term projects rather than back private investment only with a short-sighted obsession on quick return on investment. Breakthrough innovations usually come from research labs or entrepreneurs who are former or present researchers. This is our strongest asset in Europe, a continent where research, innovation and education are increasingly linked.
Data is a key driver in the digital transformation. However, central administrations, local authorities and public agencies generate important volume of information that most often remain unused due to a lack of data strategy and suitable resources. To overcome this, the French Digital Republic Bill was passed in 2016 (named after you: Lemaire’s law!) and introduced the principle of open data by default. This legislation is now applicable to the entire public sector in France, including every local authority with more than 3,500 inhabitants. Is this enough to guarantee that open data creates value?
To recall the context, when I was negotiating this bill as a Government member, neither the principles of open data by default nor online privacy were considered serious matters, except in specific specialized instances. We are past this today. Public institutions now understand that the massive amount of data they are producing and collecting is precious. Data is sometimes compared to the new oil, a comparison I disagree with as it relates to proprietary rights and limited resources. Data is rather like air or light as the more it circulates the more it creates value.
The challenge for successful open data policies is not only to produce data that are well qualified, reusable, portable and machine readable, but to find ways for other stakeholders such as entrepreneurs, associations and citizens to get involved and to share and use the data produced in the bosom of public institutions. Some national or local authorities proactively engage in open data policies by creating platforms for instance, but the ability to demonstrate the value of such policies (democratic value -thanks to the transparency it brings- but also economic value) is of great importance.
There are multiple illustrations of valuable mixes between public, transactional and users' data.
We know that startups and innovative companies strive on their use of data, especially in the mobility and utilities sectors, and that data sharing can have a positive impact on lowering the bills for consumers, reducing environmental damage, improving mobility, implementing smart cities, etc. There are multiple illustrations of valuable mixes between public, transactional and users' data. But the culture of secret is still dominant and such examples are still too rare to attract and convince a sufficient number of stakeholders to embark in a data sharing journey.
There is a need to create new frameworks of cooperation around concepts such as "data for the public good" or "general interest data", where public authorities can lead as data orchestrators in their relations with concession holders or other private entities. The digital republic bill has led the way by creating that new concept, but the concrete implementation can be complex and needs to be balanced with privacy rights and business confidentiality. Somehow, it so appears that when the value of open data and data sharing is not directly seeable, actions are not taken. Though the democratic value of such data is obvious, immediate business considerations can shatter hopes of developing the positive externalities promised by strong policies in terms of open data. However, the public sector has to move fast in this respect, or it bears the risk of being left aside of the promise of smart data and artificial intelligence for the public good.
You have always been involved in topics related to education, CivicTech and technologies for the benefit of the common good. Indeed, “Tech for Good” has recently become a motto for many initiatives. Would you say this is only a “purpose washing” trend or are we witnessing a real change in business approaches? How can entrepreneurs balance economic performance and the general interest?
I am currently working on a study that will be entitled "Fifty Shades of Good". The title itself shows that it is impossible to subsume all the different initiatives relating to Tech for Good under one category. The common starting point of all these projects is increased awareness among citizens and consumers, that translates into more pressure on corporate companies to produce "good goods".
I was recently reading the front page of The Guardian explaining that a third of pollution's emissions are the doing of only eight companies (oil and gas mainly), five of them being American companies. It made me wonder once more whether we were ready for huge changes and fit to face the great environmental challenges ahead. I think the answer, for now, is no. Though awareness on these issues is growing, I doubt these changes will come from very large industrial companies, which, though I reckon are in some cases sincere and ready to change, are facing too huge a challenge to be able to move fast enough.
So, I believe that change will come from new initiatives launched by startups, associations, foundations, governments collaborating with the private sector, not only to mitigate bad sides and damages triggered by commercial activities (pollution included) but also to bring positive social and environmental change.
In the end, I am convinced that consumers and citizens are the fertile ground where transformation can happen.
I believe that the French ecosystem is full of hope, as many entrepreneurs are putting the environmental and/or social impact at the heart of their business model. These initiatives are likely to have a real impact. In the end, I am convinced that consumers and citizens are the fertile ground where transformation can happen. When consumers behave as committed citizens they have the power to change things. It is only with empowered citizens and sincere purpose-driven organizations that we are likely to observe any fundamental change in the way companies create value beyond business.
TO GO FURTHER:
"La promesse de l'intelligence artificielle : l'action publique doit-elle être prédictive ?", in La Revue des Juristes de Sciences Po, n°17, June 2019.
"Mixité dans la FinTech : où sont les femmes ?", with France FinTech, April 2019.
"GovTech en France : état des lieux et perspectives", with Public, November 2019.