European tech companies barely compete with their U.S. counterparts. The so-called “magnificent seven” U.S. tech firms are 20 times bigger than the seven largest in the EU, and they make 10 times as much revenue. The problem is Europe’s obsession with rules and regulation, which hampers both profit and innovation.

However, economist Renaud Foucart argues that Europe’s dearth of global tech leaders might have its advantages. The major U.S. tech companies generally comply with European laws to maintain access to the EU, and since these firms often offer the same products worldwide, that means European rules effectively apply to everyone. So, Europe, as an independent regulator, is well placed to prevent potential abuses of market power by U.S. tech giants.

While Europe and the U.S. could fight it out in a battle for tech dominance, their different approaches actually present a unique opportunity in the current race for AI. While the U.S. is a market leader in artificial intelligence technology, it faces stiff competition from China, where regulatory concerns couldn’t be further from those in Europe. The combination of European regulation and an unrestrained U.S. might prove to be the best chance for the West to write the global rules of the AI game according to its own values.

Sam Phelps

Commissioning Editor, International Affairs, The Conversation U.K.

Europe’s tech industry is lagging behind the US – but it gives the continent a chance to write the rules of the game

Renaud Foucart, Lancaster University

The lack of large, global European tech leaders might actually be a blessing.

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