Europe needs to embrace 5G — before it’s too late

Did you know that the Finnish telecommunications company Nokia is one of the main players in the global mobile infrastructure market? It produces everything to build 5G networks – from antennas to routers and other equipment – and massively exports its products to the USA, Japan, and China.

At first glance, this sounds great – it’s just more proof of Europe’s ability to build and export high tech products. However, when taking a closer look, Nokia’s example reveals a worrying tendency: it seems that Europe is helping to develop tech innovations somewhere else rather than creating the necessary environment to cultivate them here. 

While Nokia creates and exports components of 5G networks, the USA and China put them together into systems that create added value to benefit the regions. It’s like Europe’s selling flour, eggs, and sugar, while others use them to bake the cake – which they will one day sell back to Europe.

I want to draw attention to this problem before it’s too late. Because at the moment, Europe risks becoming mere consumers of other regions’ tech solutions. 

The root of the problem – the lack of legal tech infrastructure

The 💜 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!

What Europe needs in order to escape this unfavorable situation is a legal tech infrastructure – not just laws and regulations, but also a collaboration between decision-makers, tech companies, law firms, and other stakeholders. 

In other words, we need to build an ecosystem where technologies can not only be invented and tested but also commercialized and used in practice. 

At the moment, the situation is as follows: 

There are so many technological inventions available – in smart mobility, telemedicine, and other areas. However, Europe cannot take advantage of them because there is no legal infrastructure that would allow the practical use of these inventions.

While Americans are just a step away from using robotaxi services and UAE’s police widely use drones in different missions, the only country in Europe where the use of such technologies is at least theoretically possible, is Finland.

The country’s transport law, written years ago, doesn’t explicitly state that there has to be a driver in the car in order to drive it. Today, this legislative loophole, coincidentally, works at the benefit of autonomous vehicles. In reality, however, the country isn’t actively pursuing the implementation of unmanned cars – just like the rest of Europe.

Overly protective and with lack of tech knowledge

The reason why Europe still doesn’t have the much-needed legal tech infrastructure is that the local lawmakers are not adequately informed about the needs of tech companies. It feels that they simply don’t understand which laws should be created so that these regulations would be open enough to technology, whilst being protective enough towards people.

So, Europe does what it does best – restricts. As a result, for example, the region’s laws regulating 5G technologies are notably more prohibitive when compared to the USA, not to mention China.

I’m not suggesting that we need to take an example from China when it comes to lawmaking. But I do think that Europe’s policymakers focus a lot on protecting people from potential threats but don’t pay enough attention to understanding the benefits.

Take self-driving cars as an example: smart transport systems have the chance to lower the infrastructure development costs, make city traffic more efficient and roads safer, and significantly cut down CO2 emissions. These are all measurable and monetizable benefits, and that’s exactly how policymakers should think about tech when rolling out new regulations.

The local startup ecosystem is suffering

Europe’s protectionism and hesitation to introduce laws that support next-generation tech already have a massive negative effect on the region and its startup ecosystem. 

I see a tendency that startups that are building their solutions on 5G technology are fleeing Europe and trying to get to the USA or China at all costs. These countries have taken the first steps to 5G commercialization, and that means two things for startups: one – their product will be understood because the public is familiar with the technology. And two – they have better chances to attract funding because their innovation can be launched in the local market.

For example, AirDog, the Latvian drone startup, failed to attract investment from European investors, then succeeded in the USA. When you think about it, this makes sense – investors look at the local market and whether the product can be sold there. If the startup cannot commercialize its product locally and the only option is export, investors see the business as too risky. Hence, they avoid investing.

What I’m saying is: until we create the opportunity to commercialize these next-generation products here, we risk losing great innovations and future billion-dollar companies. Needless to say, that will leave serious damage to our economy. 

Europe needs to become more open to disruptive innovations, and the sooner the better. But to do that, this issue needs to be understood and addressed purposefully at the level of governments and policymakers.