Frank Verhage

Frank Verhage is a ‘company doctor’ and currently CEO of SALD.

9 March 2022

The EU’s initiatives to ‘redigitalize’ Europe represent an enormous opportunity for the Netherlands, argues Frank Verhage.

The mathematical roots of computer technology lie in Europe, the first computer was developed in Europe and the world’s leading provider of lithography systems for the semiconductor industry is based in Europe, more precisely in the Netherlands. However, from a global perspective, Europe has been lagging in information technology for decades. All well-known computer builders are based in the USA and Asia, as are the largest software manufacturers. ASML, SAP, Infineon and a handful of other companies are the only European ‘big names’ on the global IT map.

The new Dutch Silicon Valley around Eindhoven is a shining example of how new innovative strength with promising startups and a growing corporate landscape is emerging on the periphery of one of these three companies. But that’s not enough to let sick man Europe catch up with the world elite in digitalization.

To turn the tide, the European Commission (EC) last year presented a vision and paths for digital change in Europe by 2030. This vision for the digital decade revolves around four core themes: skills, infrastructures, government and business. The EU labeled this as a “grand vision for the future,” but let’s call a spade a spade: it’s a recovery plan for the digitalization of Europe. One thing is certain: if Europe doesn’t actually succeed in playing a key role again in the global struggle to master digitalization, our future will be in a bad way. So it’s not a question of ‘if’ but of ‘how’ and ‘how quickly.’

This is exactly what the EC is attempting to do now. With the General Data Protection Regulation (GDPR), the Digital Services Act (DSA), the Digital Markets Act (DMA), the European Digital Identity (EUID) and most recently the European Chips Act (ECA), Europe is trying to improve all areas of digitalization. The spectrum ranges from data protection and digital sovereignty to the semiconductor industry. Given the American and Asian dominance, one might dismiss these attempts, depending on the specific area, as too little too late. But as a restructuring manager, I know that it’s possible to bring companies that seem devastated back to new times of glory. Based on my experience, I’m convinced that the efforts of the EC to make Europe a serious player on the world stage of digitalization have a good chance of succeeding.

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The newly created framework conditions, such as giving a European semiconductor industry a significant boost with the European Chips Act, are promising. But the EU regulations are of course only a framework. It’s up to us, the entrepreneurs, to fill in this framework and, for example, to call up the subsidies offered. Admittedly, this isn’t always easy because it involves a lot of effort and bureaucracy. But for the European Chips Act alone, 45 billion euros in public funding is available until 2030.

The enormous sum is based on the knowledge that in the future nothing will work without microchips. Whether cars, washing machines, factories or space stations – without the tiny integrated circuits everything is doomed to stand still. This isn’t news, but chip activities have been pushed to the top of Europe’s political agenda since the acute shortage of chips worldwide manifested itself. Suddenly, policymakers realize that one of the largest and most innovative chip developers in the world, TSMC, is located in one of the most insecure countries: Taiwan, which China considers to be a renegade province. This global uncertainty harbors immense opportunities for Europe.

In the Netherlands, with ASML as the European nucleus of the semiconductor industry, we have a huge opportunity to generate a Silicon Valley-like spirit of optimism from around Eindhoven, to catapult our country – and Europe – to the forefront of digitalization in Europe.