On 29 September, the newly launched EU-US Trade and Technology Council (TTC) met in Pittsburgh. The TTC is a new dialogue format between the EU and the US to coordinate on technology issues, and to deepen transatlantic trade and economic relations, based on shared democratic values.

The importance of the EU-US partnership

At DIGITAL SME we believe that the EU-US partnership is fundamental for Europe’s businesses and prosperity. The US is the EU’s largest trade and investment partner. The bilateral relationship between the US and the EU accounts for 40% of global trade in goods and services, with a total trade value in goods of 556 billion euros[1]. When it comes to digital services, however, the relationship is less balanced. US companies have taken the majority of the Business-to-Consumer (B2C) market share for many digital services in Europe, such as online search, social media, operating systems, web browsers[2]. While there are 1.2 million digital companies in the EU[3], including over 10,000 digital platforms[4], the majority of platforms used by EU citizens on a daily basis are US-based. The ten most valuable digital companies in the world are either US-American or Asian[5].

A note of caution

Against this background, DIGITAL SME strongly welcomes the creation of the EU-US Trade and Technology Council (TTC) but wants to raise a note of caution: The current proposal for a Working Group on SME digitalisation focuses on “promoting SME access to and use of digital technologies”. In our opinion, the potential activities and actions proposed under the Working Group miss to recognise the potential for digital empowerment of SMEs on both sides of the Atlantic. SME digitalisation should not be seen as a one-way street from larger technology providers towards SMEs as end-user. SME digitalisation is more than platformisation. Data intelligence, platform business models, selling online, and other forms of SME digitalisation can happen both with the dominant digital players, but also with the help of digital SMEs. 1.2 million digital SMEs in Europe, i.e., close to 4% of companies in Europe, can enable the digital transformation of businesses on both sides of the Atlantic, and join forces with their innovative counterparts in the US.

Seeking true benefits for SMEs on both sides of the Atlantic

The TTC provides a unique opportunity for the US and the EU to collaborate on trade and technology, based on shared democratic values and a strong partnership. Working with Europe’s closest partner and ally to define a set of shared principles and joint initiatives can help to ensure that citizens and businesses on both sides of the Atlantic have the freedom to autonomously choose their own digitalisation path and help to bring prosperity to our societies.

Therefore, besides establishing a track on SME digitalisation, SMEs should be represented in the TTC industry forum exchanges and other tracks, such as Working Group 1 – Technology Standards, Working Group 2 – Climate and Clean Tech, Working Group 5 – Data Governance and Technology Platforms.

Most importantly, the EU-US partnership needs to formulate a more inclusive and enabling approach to SME digitalisation that builds on the capabilities of all digital companies, including digital SMEs, on both sides of the Atlantic. This approach needs to build on shared values and concerns for contestable digital markets. A strong dialogue on SME digitalisation needs to recognise SMEs as providers and developers of digital technologies, not just as end-users, and to enable them to choose their own digitalisation path.

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1) European Commission DG Trade website, Countries and regions: United States, 2021, available at: https://ec.europa.eu/trade/policy/countries-and-regions/countries/united-states/; Trade volume according to Eurostat, see: https://webgate.ec.europa.eu/isdb_results/factsheets/country/details_usa_en.pdf

2) European Commission, Digital Markets Act Impact Assessment support study, 2020, pp. 23-25, available at: https://op.europa.eu/en/publication-detail/-/publication/2a69fd2a-3e8a-11eb-b27b-01aa75ed71a1/language-en

3) European Commission, Annual Single Market Report, 2021, available at: https://ec.europa.eu/info/sites/default/files/swd-annual-single-market-report-2021_en.pdf

4) https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/digital-services-act-ensuring-safe-and-accountable-online-environment/europe-fit-digital-age-new-online-rules-businesses_en

5) https://www.investopedia.com/articles/markets/030816/worlds-top-10-technology-companies-aapl-googl.asp