European failure to grab digital opportunities risks leaving it flailing at the margins

Geopolitical strategists used to largely concern themselves with the possession of territories and the domination of sea routes. More recently, the capacity to control airspace and outer space has changed the equation of national strength, and now one other element has entered that equation: a country's presence in cyberspace.

Chinese policymakers have not taken full account of the various elements of geopolitics but have rightly paid great attention to the rapidly evolving domain of cyberpolitics.

The West, by focusing almost exclusively on what it perceives as the limitations and the imperfections of the Chinese Internet, has not yet fully realized the significance of digital transformation in China. Digital China, which brings together the threads of the country's global projection and of its quest for innovation, is one of the most significant stories of our time.

The Industrial Revolution that began in Europe in the 18th century opened a new era in the history of mankind, but left China marginalized for 150 years as a consequence of its inability to rapidly connect with the changes associated with machines. The China of today stands in stark contrast, marked by an openness to scientific advances and the desire to be at the forefront of technological progress.

Following a painful decay whose causes were as much internal as external, China is now, in spheres stretching from biotech to the Internet, from nanotech to aeronautics and space exploration, in a quest for relevance. More generally, the ambition not to be a passive spectator in a Western-led globalization but to stand as a source of modernity is one of the defining elements of the Chinese renaissance.

The Qing Dynasty (1644-1911) could not generate the Industrial Revolution or rapidly adjust to the changes it wrought, but modern China is proving to be a catalyst of digital transformation.

Global cyberspace, like the post-World War II system of international relations, is bipolar, with the United States and China at either end. This digital bipolarity is reflected in the competition between Internet companies: Google, Twitter, YouTube, Amazon, eBay, Uber, Expedia and Apple Pay are the icons of digital America while Baidu, Tencent's WeChat, Youku, JD.com, Alibaba, Didi Chuxing, Ctrip and Alipay symbolize China's cyberspace. In a sense, global cyberspace is a tale of two Internets.

Today, the two top languages of the World Wide Web are English (851 million users) and Chinese (704 million) but with the rise of the Internet, penetration in China (50 percent, compared with 87 percent in the US), Mandarin may soon become the most used language on the Internet.

South Korea, whose digital economy represents 10 percent of its GDP, is in many ways a reference point for the information age, but with 50 million inhabitants the country's impact is intrinsically limited and it cannot affect the dynamics of a bipolar cyberspace.

Some would argue that despite the quantitative dimension of the Chinese Internet, China has been qualitatively a mere follower of Silicon Valley. However, by choosing to protect the development of its own giants it has not only been able to narrow the gap aptly, but the country's existing digital ecosystem has put it in a position to genuinely innovate in the infrastructure and the systems of cyberspace.

The data that Chinese Internet companies have been accumulating give them an absolute advantage in what will be soon the world's largest economy, and in the field of e-payment, where more than 200 firms serve Chinese consumers, China's initiatives have become driving forces.

The significance of digital China is even more striking compared with the state of the Internet in Africa, Latin America, the Arab world or even India, whose engineers continue to contribute to the success of Silicon Valley. The European Union finds it satisfying to be the user of tools developed by US companies even if such dependence, from a commercial and a security perspective, is an incredible long-term weakness.

Google Italy, Google France and Google Germany have certainly enriched the lives of Europeans, but they are variations in a universe centered around Googleplex in Mountain View, California.

Alibaba, the e-commerce giant created 16 years ago by Jack Ma and whose IPO raised a record $25 billion on the New York Stock Exchange in 2014, is increasing its presence in the European Union in a move that will immediately benefit Sino-European trade relations. However, when European companies export to China through trading platforms conceived by Alibaba, they become dependent on a new kind of vehicle upon which they have no direct control.

A long-term view of European interests in the information age calls for the development of an ambitious European digital strategy at the top of Brussels' priorities. These days a power that ignores the importance of cyberpolitics condemns itself to irrelevance.

Europe deserves better than linguistic variations on the Google main theme and should also be able to grow e-commerce platforms that can compete with Amazon and Alibaba. In that context, the European Commission's team for Digital Economy and Society should work at the regulatory level for the digital single market, but it should help to shape the conditions for the emergence, beyond startup companies, of European digital global businesses.

Any long-term European digital strategy has to take into account the creativity of Silicon Valley, but the vision of a New Digital Silk Road will allow Europe to keep pace with Chinese cyberspace as it evolves. While cyber mistrust is not an issue in relations between Brussels and Beijing, a converging Sino-European Internet has to complement Belt and Road connectivity.

The discoveries of new continents, starting with America, marked the beginning of Globalization 1.0. and equipped with the instruments of the Industrial Revolution, Europe has been in a position to play a preeminent role in the world's affairs. At the dawn of Globalization 2.0, an expansion into unlimited e-territories is combined with the injection of new digital technology into production processes.

Could it be that the civilization at the center of Globalization 1.0 ends up at the periphery of Globalization 2.0? Though we obviously have no clear answer to that yet, Europeans should nonetheless meditate upon two historical turning points.

During the Renaissance, Italian cities were leaders in trade, banking, science and art. Following the discovery of the New World, the European center of gravity gradually shifted from the Mediterranean Sea to the Atlantic Ocean. Incapable of coordinating their efforts to reach the necessary dimension to maintain their rank in a new geopolitical configuration, the Italian states declined, and one had to wait for the unification of Italy in the second half of the 19th century for the Italian peninsula to regain its place on the geopolitical map.

When Emperor Qianlong (1711-1799) made it impossible for his empire to have normal relations with 18th century Europe, the economy of the Qing Dynasty still accounted for more than 20 percent of the world economy. But, convinced of China's superiority, the Son of Heaven failed to foresee that the age of machines would change the distribution of power, and his complacency led to a humiliating decline.

If Europe fails to find the political wisdom to deepen its integration and the strength to fully enter the information age as one of its co-creators, it risks, after gradual marginalization, to end up at the periphery of a new global order that would have been shaped without its effective participation.

Romano Prodi is former prime minister of Italy (1996-98, 2006-08) and former president of the European Union Commission (1999-2004). David Gosset is director of the Academia Sinica Europaea at China Europe International Business School, founder of the Euro-China Forum and of the New Silk Road Initiative. The views do not necessarily reflect those of China Daily.

(China Daily European Weekly 01/01/2016 page9)