Hypotheses
Over the course of 2 one-day workshops, all 12 foresight files were presented to the members of the group, who were able to comment on them and add to them. Working from the material in the files, hypotheses on how the macro-variables might evolve were built collectively, distinguishing between:
- Trend-based hypotheses: which relate to dynamics already under way.
- Contrasting hypotheses: which take up uncertainties, controversies and the seeds of change.
- Disruptive hypotheses: which relate to disruptions.
Trend-based hypothesis: an active but slow and compromised will to regulate…
Europe continues its regulatory effort, and even attempts to strengthen it, but its results are often held back by the cumbersome and slow nature of the procedures (e.g. the right of veto over the application of a regulation), which contrast with the speed of business models and technological advances. Consequently, the EU encounters difficulties in enforcing regulations suited to the advance of large digital companies and its progress in terms of industrial, technological and environmental policy is limited by restricted application or take-up by stakeholders
Regarding the difficulties of regulating large digital companies, this phenomenon continues with the tax regulation of digital activities. Multinationals tend to impose their diktat on the countries concerned and are able to pay regulatory fines. Countries that host the headquarters of these companies work against common EU regulation (e.g. Ireland). Negotiations then remain blocked, or the big tech companies have already found another solution. The same applies to regulating uberization through self-employed worker status and through competition regulation. The EU is a pioneer, but the outcome will always be mixed. The large digital companies will already have found another solution, while small and medium-sized companies that cannot cope with this regulation find themselves increasingly forced into insolvency and to cease trading (e.g. Take Eat Easy).
In industry, the EU continues its efforts but once again the impact of the measures taken remains mixed owing to the cumbersome nature of the system. Small and medium-sized industrial firms in particular do not benefit sufficiently from the resources offered by the EU, owing to a lack of knowledge of the possibilities offered by the various calls for projects and the long time needed to submit funding applications. Moreover, European regulation is a brake on the technological development of industry. In the field of robotics, for example, advances depend on upstream reflection on ethics (e.g. the decision of the European Expert Group set up by the European Commission in 2019). Regarding data protection, which is a central subject of European regulation, the results are uneven with regard to national policies. The strengthening of the GDPR is effective in France, and indeed felt to be constraining, but more nuanced depending on the EU country.
On environmental questions, the EU continues to be a pioneer worldwide in terms of regulation, but the social divide is widening between populations sensitive to these environmental questions and others for whom economic and social realities take precedence.
Contrasting hypothesis: enhanced effectiveness
European regulation becomes more effective, owing to new arrangements for adopting regulations (majority of member states vs unanimity), better communication of incentive policies and greater flexibility in their application.
Application procedures are thereby streamlined and strengthen the EU's position with regard to multinationals, and more particularly large digital companies. Thus the tax on digital activities - as a binding regulation - has become effective. Self-employed worker status is now recognised and adopted in European regulation. This entails better protection, now automatic, for uberized workers, without having to rely solely on case law or appeals. Likewise, the regulation "on commercial practices between platforms and businesses", intended to regulate the balance of power between big tech companies and their partners, becomes effective thanks to majority voting. This regulation works in favour of manufacturers collaborating with digital platforms.
Moreover, the EU's incentive policies now carry more weight in relation to economic activity. European funding procedures are streamlined and manufacturers are now able to respond to them and to benefit from them more quickly. Technology regulation has been relaxed with fewer ethical considerations regarding robotics, thereby fostering the development of innovations arising from artificial intelligence.
Finally, the greater effectiveness of European regulation also concerns environmental policy. Majority voting has made it possible to transform directives and opinions, which depended on national will, into common and mandatory regulations at European level. Thus, the take-up of environmental policy has been harmonised at European level.
Disruptive hypothesis: European regulation overtaken
Two disruptive hypotheses with the same consequence: a loss of power for European regulation in favour of global (1) or national (2) regulation.
1. Towards global regulation
Owing to its lack of effectiveness (a cumbersome, time-consuming system disconnected from international economic and financial activity), the EU gradually loses power and regulation is now conceived at global level. It is therefore international bodies (e.g. the OECD) that are in charge of regulation, taking precedence over European regulation. The OECD's initiative under way in 2019 for international regulation of the taxation of digital activities is the first concrete step that opened the way towards this globalisation of regulation. Consequently, the EU decides to ally itself with powerful new partners such as the Asian countries in order to push through binding regulations targeting the big tech companies and as a counterweight to the United States and other countries resistant to environmental progress (e.g. Brazil).
Through this new way of operating, the bargaining power of multinationals diminishes. There is now a digital tax applicable to the entire activity of large multinationals and no longer only at European level. The same applies to the GDPR. On the other hand, this system weakens the regulation undertaken by the EU on the protection of uberized workers and on commercial regulation between digital platforms and partner companies, in favour of a liberal logic.
Moreover, this way of operating calls European industrial policy into question, but the regulation of technologies, including AI, by international bodies (such as the OECD, G20, etc.) allows for fairness between industrial companies wishing to innovate. Conversely, this way of operating strengthens the environmental policy previously established by the EU. In view of the multiplied climate disruptions suffered by China, that nation accelerates its energy transition. Thus, China sides with the EU and its exemplary regulatory model in order to put pressure on the US and other climate-sceptic countries (at the G20, COP 25, 26, etc.). International application of an environmental approach finally materialises.
2. Towards a return to national regulation
The social divide leads many countries to break away from the EU: BREXIT, FREXIT, GREXIT, etc. Regulation refocuses at national level, but with a desire for overall international governance.
Consequently, international regulation of large multinationals and digital companies remains effective: a tax on digital activity introduced by the OECD; application of the GDPR at international level and reflection on AI within international bodies.
However, these defections from the EU lead to regulations less favourable to the countries of the former EU, now in the minority and less well represented. For France, this leads to an overall weakening of the regulation previously initiated. Self-employed worker status is strengthened in France, as is the regulation of the commercial relations of digital platforms. The application, however, has very little impact on the large digital companies, with derisory financial penalties and a balance of power that does not allow France to ban these companies' activities.
This new way of operating has a particular impact on French manufacturers, with an industrial policy more targeted at these players but with more limited resources. Likewise, these companies face unfair competition owing to strong national regulation on the use of AI (notably through robotics ethics) compared with other countries (US, China, Germany, etc.).
Finally, environmental questions remain topical but the EU's exemplary role loses its supremacy. Following the same logic as hypothesis 1, China could side with the European countries in favour of harmonised and powerful environmental regulation at European level. However, the risk remains of seeing China side with the climate sceptics alongside the US.