Costs and benefits of digital autonomy in sharper focus

Making more targeted policy choices

‘Understanding the costs and benefits of policy measures to strengthen the position of Europe and the Netherlands in the digital domain helps us to make more targeted strategic choices. We have become highly dependent on a limited number of non-European suppliers for all kinds of digitalisation at different technology layers, such as the digital infrastructure, chips, cloud infrastructures, the data layer, and so on.

We have now started mapping costs and benefits of one of the layers, namely the European data sharing infrastructure, with a focus on Common European Data Spaces (CEDS)’, TNO researchers Claire Stolwijk and Carine van Oosteren explain.

Strengthening strategic autonomy

These CEDS offer an alternative to Big Tech, as more than 90% of all European data is stored on US servers. A dedicated European infrastructure for data use and sharing increases the strategic autonomy of EU Member States.

In this way, citizens, businesses, governments, and other organisations will have better access to and control over their data. CEDS should also protect European values, such as equality, the right to privacy, and making data more accessible.

Refine method

To identify the costs and benefits of measures, TNO plans to use the so-called ‘social cost-benefit analysis’, a widely used method to understand the consequences and risks of policy choices. The qualitative impacts are translated into euros to weigh up costs and benefits.

‘That is by no means a simple exercise’, according to Claire and Carine. ‘The digital domain is much less tangible than physical infrastructure, for example, and various policy instruments are deployed, including legislation and R&D investment.

The impact of these instruments cannot always be attributed one-to-one to a specific technology, which makes it more difficult to accurately identify the costs and benefits of measures at each technology layer. We are therefore happy to discuss this with external experts from the business community and policymakers in The Hague and Brussels. We need their help to refine the method.’

Regulation and industrial policy

According to Claire and Carine, the question is how independent Europe can truly become from the US and China. Either way, it makes sense for the Netherlands and the EU to continue to focus on the two spearheads of regulation and industrial policy.

Successful examples of the first spearhead include the General Data Protection Regulation (GDPR), the Digital Markets Regulation (DMA), the AI Act, and the Chips Act. Making USB-C mandatory for computers, tablets, and smartphones has also shown that the EU can have a global impact through regulation.

The EU is also making targeted investments in technologies, such as home-grown chip production, to become less dependent on a few countries or companies outside our continent.

Better substantiation

‘All these developments make it necessary to have a clear picture of the costs and benefits of specific measures. This should help policymakers and politicians to make more informed choices.

Together with governments, industry, and knowledge institutions, we want to further develop the application of cost-benefit analysis in the digital domain, ultimately enabling better-informed policy choices for digital strategic autonomy.’