Photo: Representatives from industry and chambers of commerce with membership in the B9+ meet to discuss the upcoming D9+ meeting in Prague, Czech Republic, March 29, 2022. Credit: Conferderation of Industry of the Czech Republic.
The report explained that on all these measures, D9 countries stood far in front of large EU countries. Estonia’s e-Estonia integrated digital tools into all aspects of public life: schools, taxes, voting, and banking. The Baltic trailblazer set digital literacy high on its list of priorities, including coding in its national curriculum as early as 2014. The D9 countries outperformed most of Europe when it came to innovation and entrepreneurial experimentation. On average, venture capital investment was double that of large economies in proportion to gross domestic product. Stockholm produced more unicorns per capita than any other city in the world. Swedish success stories such as music streamer Spotify and fintech leader Klarna showed how European tech companies could become successful global players.
The D9 stood to gain the most from a more connected, digitalized, and open Europe. Its companies could thrive in a competitive environment. It also stood to lose the most if Europe failed to digitalize, the report warned. Europe would fall behind in global competition. The report urged the digital frontrunners to band together and use their perspective to “shape Europe’s digital policy debate.”
The (Un)structured Digital Nine
Swedish Minister for EU Affairs and Trade Ann Linde read the BCG report and heard the message. In September 2016, she responded by creating the Digital 9. The original grouping of nine countries included Sweden, Denmark, Finland, Belgium, Luxembourg, Netherlands, Ireland, and Estonia, as well as the UK before it departed the EU. From the start, the D9 was meant as a political initiative. Ministers in the national capitals provided leadership, not civil servants in Permanent Representations to the EU. On the EU level, there was already a group of “like-minded” countries (a replica of the D9) that coordinated on digital issues.
The D9 would be informal and flexible. A rotating chair of six months, chosen on a first-come, first-serve basis, would lead. Whoever wanted to take up the chair would simply put their hand up.
Photo: Emmanuel Macron President of the Republic of France at a press conference after the end of the 2 day European Council and Euro Summit, the EU leaders meeting at the headquarters of the European Union. The French President does a statement and responds to questions from journalists from international media and press. EU leaders and heads of states have on their agenda to discuss on the 2-day summit the topics of the humanitarian pauses in Israel’s war with Hamas, push for humanitarian aid corridors into besieged Gaza, the support to Ukraine after Russia’s invasion, economy and the migration crisis situation. EUCO in Brussels, Belgium on 27 October 2023. Credit: Nicolas Economou/NurPhoto.
Meetings would be held biannually and organized by the chair. Beyond this requirement, the D9 chair held no formal responsibility. Agendas remained fluid, based on the issues of the day. An open door to additional membership prevailed. The D9 could (and soon did) become the D9+, welcoming countries interested in boosting their own digital agendas. Since 2016, the group has expanded to the East and the South. Czechia and Poland joined in 2018, and Spain and Portugal shortly later. Slovenia and Romania are currently observer countries. The expansion has caused tensions. The Eastern and Southern countries are well behind the Nordics, Baltics, and Benelux in digitalization.
The Digital Frontrunners’ Pro-Digital Mandate
Originally, the D9 shared a central goal of boosting a digital update and fueling the continent with a sense of optimism vis-à-vis tech. D9 countries aimed to lead by example, demonstrating the benefits of new technologies and promoting their startups and SMEs.
The D9 began with clear asks of EU leaders. It wanted to see a follow-through on European Commission President Juncker’s promises for the digital single market. Each D9 country created a one-pager with its objectives. Enabling free data flows, ending mobile phone roaming charges, and loosening geo-blocking of streaming video content represented common themes. All aimed to allow citizens to receive digital services across EU borders.
While pressing to bring down artificial digital borders, the D9 countries supported strong digital regulation. The D9 was never intended to combat the creation of EU tech regulation. The Nordics, in particular, have a strong tradition of consumer protection. They fought to increase the responsibility and liability of e-commerce platforms over dangerous products and counterfeits. This type of regulation holds companies responsible when harm is inflicted on consumers.
Even as they embraced strict regulation, the D9+ aimed to boost innovation and digitalization. The D9+ served an ideological purpose of leading by example. Europe as a whole would benefit from digitalizing, not just the frontrunners. In 2016, the race for digital dominance was well underway, with the US chasing ahead on innovation and China ramping up tech investment. Europe had to catch up to remain competitive, and all member states needed to be on board for that to happen. The D9+ wanted to show the benefits of digitizing public services and businesses and increasing digital literacy.
By coordinating their domestic policies, the group could demonstrate how a country could update its economy for the 21st century. They could share lessons learned on what measures would work depending on a country’s priorities and needs.
Diverging Digital D9+
Despite sharing much in common, the mostly small, digitally savvy D9+ members must bridge important differences. No country has yet stood up to take clear leadership of the group.
Europe’s Tech Trot
The European Union’s Track Record
By 2024, many of the initial questions fueling the D9+ have been answered. Europe is digitalizing, if slowly. The challenge is now to turn this gentle trot up to F1 speed. Without acceleration, the continent risks being left in the dust as China and the US speed ahead.
The bloc wants to promote its digital economy, as well as bolster innovation in tech. The digital single market has ended mobile phone roaming, harmonized rules for selling goods online, and stopped some unjustified geo-blocking. Even France and Germany, the largest EU economies, and long digital laggards, have woken up to the reality that Europe needs to digitalize to remain competitive. France is birthing unicorn digital startups, moving up in the EU’s DESI digitalization index from 13th place in 2016 to 9th in 2022 (see DESI Rankings). French artificial intelligence (AI) startup Mistral AI was recently valued at $2 billion. In December 2023, French President Emmanuel Macron upended negotiations over the EU’s AI Act, urging the continent to avoid overregulating new innovative technologies.
While all Europeans now agree on the need to digitalize, disagreements have emerged on how to boost the digital economy. Two camps have formed. France’s European Commissioner, Thierry Breton, believes in “digital sovereignty,” promoting European tech through protectionist means. The vision is of a “European” digital ecosystem running on its standards, localizing data within the EU, and limiting access for large US tech firms. A “legislation avalanche” (or tsunami, depending on your preferred metaphor) accompanies this worldview. The controversial Cloud Certification Scheme risked separating European cloud systems from those in the US. A “fair share” program looked to force American tech companies to pay for European telecom infrastructure.
The other camp, championed by the D9+, stands for a more open approach to digitalization, viewing interdependency as inevitable — and preferable. In this view, Internet services are inherently global, so partnering with allies becomes essential to keeping European companies competitive and defending a democratic Internet. This is particularly true of the US, the EU’s strongest trading partner and most powerful ally. If Brussels alienates American tech companies, it will fail to boost its own digital sector. France’s Mistral recently signed a deal with Microsoft to use the US company’s cloud. European tech companies rely on the US to remain competitive globally.
Credit: Factofoto via Alamy.
This open, positive, pro-digital view comes with tough regulation. D9+ governments supported the Digital Markets Act, which aims to crack down on large US tech firms’ dominance, and the Digital Services Act, which attempts to rein in illegal online speech. They approved the AI Act, which will expand access to and use of data within Europe. Although the practical effects of these pieces of legislation remain unclear, Europe has emerged as the undisputed global leader in tech regulation.
The continent’s digital performance is cloudier. The digital single market has yet to reach its full potential. European companies still struggle to scale up. While doing business across different countries has become easier, European countries still enforce legislation differently. The General Data Protection Regulation, for instance, varies across the continent, making compliance a costly challenge for European businesses looking to expand beyond their national borders.
The Digital Nine’s Track Record
The D9+ members have shown how the group can be impactful. They weighed in with a non-paper against a French-led cloud certification scheme, which would have limited US hyperscalers in EU markets. A majority of the D9+ members also led the counterattack against the French-led Fair Share proposal, which would have broken the Internet by forcing Internet companies to pay extra for access to telecom infrastructure.
Overall, though, the group punches below its weight. It gathers every six months, sometimes accompanied by a vague press release, often without announcing concrete outcomes. In 2017, Sweden addressed a Commission proposal on the free flow of data and the future of work. Later meetings in Ireland and the Netherlands addressed tackling artificial intelligence and bolstering the digital single market. According to participants, the meetings lack leadership and a clear sense of direction. It is unclear who is in charge, and so the conversations remain surface-level and lack concrete outcomes.
In a few cases, the group has successfully coordinated a joint response. In 2019 in Warsaw, the D9+ released a non-paper on the Digital Services Act, the content moderation law being negotiated. While it agreed with the need to limit illegal online content, it requested that regulators give companies clear guidance so the law would avoid harming innovation. Similar coordination happened regarding other pieces of legislation such as the AI Act. A D9+ statement called for a joint European market on AI.
On thought leadership, the D9+ has attracted interest from other countries and businesses. As member states sought to digitize their economies, the D9 became the D9+: Czechia and Poland joined in 2018 as they were ramping up their digitization efforts. Portugal entered in 2019 as Lisbon focused on promoting AI, where it now ranks second in Europe on the DESI ranking, just behind Denmark. Spain joined, too, as a sign of its desire to modernize its economy.
But enlargement has also clouded the group’s mandate. The group now lacks a clear identity. While most of the original members rank highest in the Commission’s Digital Economy and Society Index, some new members do not (see DESI Rankings). The D9+ is no longer a group of like-minded, highly digitalized nations. It is a group of countries that are interested in digital, to varying degrees, and in different areas. While this is part of the group’s original mandate of becoming a thought leader on the continent, guiding other countries through their digitalization processes, some cohesion must remain for the D9+ to be effective.
The Digital Economy and Society Index (DESI): is an index monitoring and measuring Europe’s digital performance and tracks the progress of EU countries on their digital competitiveness. The indicator comprises of five dimensions (i) Connectivity (ii) Human Capital (iii) Use of the Internet (iv) Integration of Digital Technology and (v) Digital Public Services.
Expansion makes coordination difficult. Each country comes with its own set of priorities. Portugal cares about submarine cables because of its ambition to establish the country as a secure docking point for Internet infrastructure. Sweden is most concerned with scaling up its startups. Denmark and Spain are keen to crack down on large US tech firms, while other D9+ members such as Finland and Ireland promote a strong pro-business voice.
The D9+ has attracted interest from business. Chambers of commerce and industry groups from the D9+ countries created the Business 9+ (B9+), a partner coalition. Ahead of D9+ meetings, the B9+ releases a statement on their desired priorities. Unlike the press releases of the government-led, official D9+, the B9+ statements are all accessible online. This stakeholder engagement, if channeled, could lead to a fruitful partnership between the public and private sectors.
For the most part, though, D9+ engagement with the private sector has failed to reach its potential. Ahead of a 2023 meeting in Poland, the B9+ released a statement advocating the free movement of cloud services within the EU, strengthening collaboration with the US, and rethinking the controversial Data Act. The D9+ summit and subsequent D9+ meetings failed to address any of these issues.
Part of the problem is the large divergence between the rotating six-month presidencies. The recent Belgian chair generated strong stakeholder engagement, including hosting a D9+ Stakeholder Forum in Brussels and including the business B9+ in the subsequent meeting with D9+ telecom ministers. Business leaders and ministers discussed the digital topics of the day in small groups. Both sides appreciated the discussion, but for many business groups, this was the first meaningful interaction with ministers.
Tech businesses are in desperate need of structured means to ensure that governments will listen. Fears are growing that SMEs will drown under the avalanche of new EU regulations. Business wants impact assessments carried out testing and understanding the consequences of new regulations.
Credit: SeventyFour Images / Alamy Stock Photo.
Many business groups remain unaware of the D9+. Others have attempted to engage but the informal structure makes it difficult. Only the big multinationals and national chambers of commerce, mostly American, have sufficient resources. Amazon released a paper ahead of the 2023 Poland ministerial asking for increased investment, stronger cooperation with US companies, and a strengthened digital single market. If large US tech firms are the only voice that gets heard in the D9+, it is not fulfilling its calling within the EU.
Updating and Upgrading the D9+
Updating the D9+: A Mandate Fit for the Digital Decade
The D9+ needs to update its mandate as the EU promotes a “Digital Decade,” promising a digital transformation of the continent by 2030. Clear deliverables of the Digital Decade include making all key public services and medical records 100% digital; guaranteeing that 75% of EU companies use AI, cloud services, or big data; and doubling the number of unicorns in the EU. Other targets aim at achieving 80% digital literacy among the European population and increasing the number of information and communication technology specialists. These are the right goals, but Europe is not on track to achieving them.
This paper has identified four updated goals for this group to enable Europe to reach its digital potential:
Ensure Effective Enforcement: As Europe moves to implement an onslaught of new legislation, it needs to guarantee this is done consistently. The EU will not be a single market if each country interprets new regulations differently. The D9+ should play a key role in coordinating implementation. Since each EU country adopts a regulation, the group’s capital-based structure should be leveraged to ensure the same rules hold across the continent. This would help tech companies “code in” compliance, reducing the cost of new rules over the longer term.
Be A Leading Voice Against Protectionism: The EU should avoid the path of protectionist digital development as both unfeasible and undesirable. Internet services are and always have been inherently global. Data centers are dotted around the world. Different standards dominate new technologies and services that are distributed across national borders. Creating a narrow European digital environment is counterproductive and not technically possible. The only country that has succeeded in creating a closed national Internet is China with its authoritarian, protectionist cyber sovereignty strategy. Strengthening ties with like-minded democracies — particularly the US — is crucial, particularly for emerging technologies such as AI that require heavy investment and access to data and expensive infrastructure. The D9+ can provide positive alternatives to a protectionist ideology. It should emphasize the importance of investing in digital skills, research, and development, or promising European tech firms. It should also complete the goals of the digital single market, ensuring an interoperable Europe in which businesses can thrive. Preserving a positive, rather than negative, digital message is even more crucial today, given a potential change to an isolationist, protectionist administration in the US and a nationalist shift within Europe.
Double Down on the Digital Decade: Beyond countering protectionist policies, the D9+ should push for proactive measures to help Europe achieve its Digital Decade goals. The group should call for additional investments in digital skills, research and development, and other initiatives that create a business-friendly environment. It should encourage the establishment of a pan-European capital market to boost startups. A single market for services would also facilitate the expansion of many tech companies across borders.
Focus on Impact Assessments: It is easy for Commissioners in Brussels to dream up new regulations based on the hot topics of the day: data, large tech companies, and AI. Often, these target powerful American tech companies. It is difficult to calculate the downstream effects on European startups and SMEs. The D9+ needs to become the defender of European startups, unicorns, and scale-ups. If the group had stepped up to support generative AI, for example, debates around the EU AI Act could have been streamlined. The EU is unlikely to stop regulating digital, but the D9+ should provide a note of caution and clear-headed guidance to any new restrictions. It should ensure that the impact assessments are done by those with a high level of expertise, particularly regarding emerging technologies. The regulatory process must be transparent and involve experts and the private sector at each stage, ensuring that policies coming out of Brussels are more effective and boost innovation.
(Jan 16, 2009). Credit: Douglas O’Connor.
Upgrading the D9+
For the D9+ to become a loud, effective voice, it needs a structural upgrade.
Potential improvements range from setting up a central secretariat to publishing frequent policy positions. To build on what the group has achieved, the D9+ should consider practical changes to enhance its influence.
But D9+ governments seem skeptical. They express contentment with the current informal structure and want to make sure that capitals, not EU Missions in Brussels, remain in the driver’s seat. It is unrealistic that the D9+ will become a venue for issuing position papers on each proposed tech regulation. The different member governments never could achieve consensus.
Yet while avoiding a radical revamp, the group’s functioning could be improved. The recent Belgian chair infused the D9+ with new momentum. The current Irish chair, and upcoming Danish chair, need to keep up the progress.
Our paper identifies several paths for the group to upgrade its impact:
A Mission Statement: Although the D9 has existed for close to eight years, it still lacks a clear mission statement. Rather than focusing on the shiny digital issue of the day, the group should concentrate its efforts on a set list of priorities. Talking about AI after the launch of ChatGPT or the Metaverse after Facebook’s rebranding is useful. But it is too reactive. The group needs to refashion its identity as a positive, pro-digital group, and update this message for the big debates of the next decade. It should take a strong stand against French-led protectionism and in favor of coherent implementation of tech regulation. In addition to clear long-term goals, each chair can set its own priorities for the six months in which it leads the D9+. These should be communicated, along with dates and an agenda for the ministerial, before the end of the outgoing chair so businesses and other member countries can prepare.
Set Membership Standards: If Europe’s frontrunners are not aligned, they cannot lead by example. Even though the group should remain a docking point for countries looking to digitalize, a filtering system for membership in the D9+ is needed. One option would be setting clear criteria for membership, guaranteeing that the DNA of countries as highly digitalized (by EU standards) remains. Spain tried to establish such rules during its chair. This strategy might prove difficult, as it risks creating a “union within a union.” An alternative would be to set clear commitments for any country that wants to join. Each country would be required to commit to certain core values.
The mission statement could serve as a basis for those values. Other formal criteria could include a commitment to establishing a Ministry of Tech and Digitization or achieving a high ranking on the Digital Economy and Society Index.
Upgrade Stakeholder Engagement: While the D9+’s flexible and informal structure should be retained, the group needs to increase its dialogue with both business and civil society. It cannot become an advocate for European business without a solid connection between the two sides. The Belgian chair did a good job of organizing D9+ stakeholder engagement, but the dialogue between the public and private sectors needs to be continuous and impactful. Regular engagement should exist between the D9+ and the B9+. Shareholder engagement events should be a staple of each chair, in and around ministerial meetings. This needs to include meeting with local businesses, otherwise the D9+ cannot be an effective voice for them.
Boost Political Participation: If the D9+ aims to influence the European agenda, then it needs strong political backing. The group should schedule its biannual meetings ahead of a telecommunications ministers meeting, or around important tech summits. This would ensure a) that attendance is high because everyone will already be in the same place at the same time, and b) that the agenda can be focused on how to coordinate a position for the upcoming meetings.
Boost Visibility: It is ironic that a group dedicated to digitalizing Europe lacks a website. One should be created as a repository for all relevant information about the D9+, its mission, position papers, press releases, and so on. Governments holding the chair should become responsible for updating and maintaining it. Although the D9+ can remain informal and operate under Chatham House rule, it should at least become visible to the outside world. This requires no more than a simple, single-page website.
Conclusion
Europe needs a clear, positive voice on tech to remain competitive and keep pace with fast-evolving technologies. The D9+ can become this voice, but only if it updates its aims and improves how it functions. Europe’s small digital frontrunners are well-positioned to provide leadership. They must raise their voices for open European tech and make sure they are heard.
About the Authors
Lucinda Creighton is a non-resident senior fellow at the Center for European Policy Analysis who served as Irish Minister of State for European Affairs from 2011 to 2013.
Clara Riedenstein contributed significant research and editorial support to this report. Clara provides research and analysis to CEPA’s Digital Innovation Initiative.
CEPA is a nonpartisan, nonprofit, public policy institution. All opinions are those of the author(s) and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
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Publish date : 2024-04-18 07:00:00
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