stein@opensky
As a mobile comms guy, over the last year, I have been involved in several discussions around how we can make 5G the success that has been promised – but also about the wider ambition on digital transformation. About 5G, although most consumers consider 5G to just be a “faster G than 4G”, the backdrop to this is that 5G has really been designed for industrial applications and to support industries in their journey of digital transformation. This journey has, however, not yet started (although 5G is available in quite a few markets). As a Norwegian citizen, this commentary is primarily focused on the Nordics, however. Refer also my accompanying article on “Making 5G a success – or waiting for 6G?”.
Europe lagging behind
A few years ago (in 2020), my old friend Bengt Nordström wrote an article (in Swedish) about how Sweden “messed up its lead in telecoms”. Being a Norwegian and also there in these “good old days” myself when 2G was being developed and the Nordics were leading on mobile comms, I would expand this concern to “the Nordics”. It has more and more become clear in the recent years that China, Korea and the US are driving the 5G and 6G development - and it is all about taking “technology lead”. Refer also my previous article on “5G? 6G? Hypes, geopolitics and business” on mobile comms.
Since then, Ericsson’s various executives with Börje Ekholm in the lead have for years been complaining about ”Europe falling behind” on mobile and on innovation (exemplified here, here and here) – very much due to European fragmentation and regulation.
For Artificial Intelligence it is a similar story. AI is already all over us, mostly coming out of the US (many of us are already using ChatGPT on a regular basis) and the US clearly wants to have the global technology lead on AI. This is also in the interest of China and other countries and regions, including Europe – but Europe is far behind. Europe also wants to have a digital lead, however, like the other countries and regions - be it for 5G or 6G, on Artificial Intelligence, cyber security, quantum computing etc.
Taking the digital lead
In the Nordics, we see similar ambitions. The Norwegian government has clearly stated that Norway shall become “the world’s most digitalized country” (see here – in Norwegian). In one sense, this sounds very ambitious – but on the other hand, Norway is already one of the most digitalized countries in the world – mostly meaning having a very high degree of broadband infrastructure and many “digital natives”.
In Norway there are various organizations focusing on ICT, innovation and digitalization, including “Digital Norway”, “Innovation Norway”, “ICT Norway” and more – which is good – and they all support the government in its ambitions in their own areas. 5G and AI are among their main areas of concern.
In Sweden, we see the same. The Swedish technology industry association “TechSweden” is also worried about Sweden lagging behind on AI (quite in line with Bengt Nordström’s frustration above on mobile) – and, as in Norway, the suggestions are generally about increasing the use of AI, growing the competence on AI – and using the public sector to drive it forward. Being exposed to EU regulation is also a key factor (see below).
So what does “being digitalized” mean? Using technology is one aspect. It does, however, not mean taking the “technical lead” (on 5G, 6G, AI, quantum computing etc) - which the global trade war between China, the US etc is all about. The EU may have such ambitions as well (and it probably will not work?), but in Norway and Sweden this is naturally an ambition that can be given up from the start.
The regulatory scene
In Europe, also wanting to be leading on AI, the EU AI Act was launched in 2023, with the noble ambition to make sure that “AI systems used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly. AI systems should be overseen by people, rather than by automation, to prevent harmful outcomes.” As usual, Europe follows the tradition of using regulation, opposed to the US letting the market forces free and thinking about it later (having supported the growth of the global American tech sector). In Europe, data protection and privacy are in much focus (ref. GDPR) while in e.g. China, it is not such a big concern.
The regulatory scene is very different in Europe, China and the US – and there are also clear differences in scale. China (as also India) are big enough to create global scale simply by developing technology domestically – while Europe and the US are quite comparable in scale. Further, with the EU not being one country but many, also prioritizing local (per country) competition over consolidation, it is very difficult to compete on scale. The same applies for innovation – being hampered by regulation and lack of scale. The US is trying its best, however, to overcome their scale disadvantage versus China at political level by boycotting Chinese vendors and technology – and hoping to drag their allies along.
Nordic cooperation, the Defense sector and national security
In many areas, there is a strong tradition of cooperation between the Nordic countries. The Nordic telecom operators jointly invented the NMT 1G mobile communications technology, which was a key reason for the later European collaboration on GSM (2G) – and the Nordic operators later even established a common Nordic GSM specification for the sourcing of GSM in the Nordics (a work I personally took part in). Also in other areas, there are strong such traditions.
Now, as Sweden and Finland have joined NATO, we see increased cooperation between the armed forces in Norway, Sweden and Finland – which is encouraging. What we still need to see more of, however, is the same in the area of national security. All the countries are strengthening their national security laws, with an increased focus on national sovereignty etc. National sovereignty in the ICT sector is not a bad ambition, e.g. offering local / national control of data and applications, providing security and resilience in critical situations as well as allowing regulatory and fiscal oversight.
There is, however, probably more to do on Nordic collaboration. In other words, while strengthened security and resilience is needed in these days of increased geopolitical threats, there is a need to define how to work and to work more with your allies. A simple example in this area is that, although Telenor and Telia operate in all the Nordic countries with local business units, getting security clearance for people working across borders is still a tedious process.
5G and 6G for digital transformation
To go back to some of the concrete areas in digital transformation, for 5G and 6G I would simply refer to my accompanying article on “Making 5G a success – or waiting for 6G?”. It is clear that a strong and robust digital infrastructure is a pre-requisite for digital transformation – and wireless communication as well as a strong broadband fiber infrastructure are critical for this.
See also my earlier article from some years ago “Going digital – what is it really about?”. It is somewhat old now, and focused on companies wanting to do digital transformation, not on government strategies - but probably still useful to some extent.
Artificial Intelligence
To remain a nation of digital natives, it will be important to stay in touch with the technological development in the ICT area and to build competences across the people and companies in the country. These areas are therefore very important elements of the national strategy for digitalization as developed e.g. in Norway. It must be recognized, however, that global competition for people with knowledge on AI is very strong in all countries.
It is probably unrealistic for small countries like Norway and Sweden to compete with tech giants like Google, Meta, Amazon or Nvidia on AI, however, being digital natives, we possess a lot of data, at least within specific sectors. Sharing of data within sectors, development of local large language models, using specific local data – as well as establishing incubators, sandboxes and various national incentives promoting local competences and “lead” within some areas could therefore be useful to promote AI in becoming “the world’s most digitalized country”.
See also my earlier article from almost three years ago (before the EU AI Act): Artificial Intelligence - Friend or foe? – with some thoughts around trust in AI.
Summary
The geopolitical battle these days it is all about technology leadership, be it on 5G, 6G, Artificial Intelligence, cyber security, quantum computing etc – and the main players are the US and China together with their proxy companies of tech giants. There is also an industry war between American tech giants and mobile operators across the globe that have been going on for a decade or so – demonstrated in areas like “net neutrality”, “level playing field” and more. In Europe this has resulted in GDPR, the EU Digital Services Act, the EU Data Act, the EU AI Act etc.
As an article on “taking the digital lead”, I would summarize as follows:
Prepare for the digital future: Norway (and Sweden) are well placed to become the world’s most digitalized nations. As a country, we have no chance to become technically leading in any of the areas, but we should work on building technology competences across people and companies, be it on 5G, AI, cyber security, quantum computing etc.
Reaping the promised benefits of 5G: As a country, the broadband infrastructure in Norway is mostly there (although still needing to improve towards gigabit) we need to facilitate and drive the take-up and use of 5G for industrial automation. As commented in the accompanying article on “Making 5G a success – or waiting for 6G?”, we can leave 6G aside for now. Let the standards people work on that for now - but rather focus strategically on the business and commercial aspects of making 5G a success. Mobile and fixed broadband are pre-requisites for digital transformation. Whenever 6G comes to the market, it is still unclear who with make money from it (maybe not the operators).
Getting on top of AI: There is no way to compete with global tech companies on AI (or with the US or China), but we can try to exploit the national or local data we control (generally or on a sector basis), share data within sectors, develop a national AI infrastructure – and establish incubators, sandboxes and various national incentives promoting local initiatives.
Regulatory: I see little chance of Europe getting together in a way that can create sufficient scale to compete with countries like the US or China. It is too fragmented. What can help to some extent, however, is to allow more industry consolidation within countries or within Europe. This is something the GSMA and European mobile operators have been pushing for a decade or so – without much success so far. It could, however, improve the business situation for certain companies – although probably not on technology development.
Promoting digital transformation with 5G: As commented in my accompanying article on 5G etc, it is required to educate the B2B market on the benefits and solutions for industrial use of 5G for digital transformation and specifically to support SMEs on it.
Promoting digital transformation in general: Companies, and in particular SMEs, need help on how to attack digital transformation. Many consultancy companies exist that can support in this area, large and small – and probably often expensive. An easy start to this is my earlier article on “Going digital – what is it really about?”.
Increased Nordic cooperation: My last point is on Nordic cooperation. On mobile comms, we have Telenor and Telia both operating across the Nordic countries. Historically, before they became competitors, they were often cooperating – and maybe that time has passed. The Nordic authorities, however, are not competing and could benefits from more cooperation. As referred above, the armed forces have started in this area due to NATO – but more can be done in the national security area. The Defense sector may have more flexibility in this area - but anyway …
To round off, CES is going on in Las Vegas this week, so we may learn more about tech and in particular AI in a week or so (mostly consumer focused though).
In any case, I hope to have provided some food for thought early into the new year … 😊
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