There was a time when it was true to say that most innovation took place in the United States, only to be imitated and copied ad infinitum in China.
No longer. “Made in China” once meant cheap products, often counterfeit and always of low quality, but these days, China is increasingly at the forefront of everything that has to do with state-of-the-art technologies and engineering, from decarbonization and energy to AI.
So much so that it seems obvious the US trade war is little more than a last-ditch attempt to slow down China by depriving it of what little it still doesn’t manufacture, namely the most sophisticated microprocessors. However, this defensive strategy is short-term, typical of a backward looking West that still pretends borders mean something, and moreover, has simply incentivized China to reach its goal sooner.
In reality, Europe is scarcely different. It hopes to make regulation its competitive advantage, while failing to understand that regulations provide no advantage beyond fining foreign companies that want to market their products and services here.
What’s more, paradoxically, Brussels fines precisely the companies whose products and services have the biggest market share, that is, the most successful and those that, therefore, we here in Europe want.
So far, the strategy has worked, and the reason is easy to understand: in addition to being a heterogeneous and large market, with 27 member states and a population of more than 450 million, a significant number of whom have an average income higher than that of many other territories comparable in size. Therefore a very tempting target. Enough, at least, for companies in other countries to accept, albeit reluctantly, the obligations and one-off fines imposed on them by the EU’s regulators. It is, basically, the price of doing business in Europe.
Not that there is anything wrong with all of the regulations proposed by the European Union, which usually end up being applied in one form or another in the rest of the world. In reality, they are rooted in Roman and Napoleonic law, which aim to protect people’s rights above all else, even if this means more limitations for companies when it comes to marketing their products and services.
Which is all well and good, but what happens if companies that until now have accepted the price of European regulation see new markets emerging and decide that Europe is no longer the priority? Not that they’re going to stop selling their products and services here, but maybe holding back on their newest ones.
If Europe’s regulators tend to see all new products or services as suspicious or a possible threat, what is the solution? So far, simply launch them anyway, and pay the corresponding fines. But increasingly, the solution is to launch in the rest of the world, skip Europe, and keep older versions there until they have gained traction in other markets.
The result? If you drive a Tesla in the United States, its Full Self Driving can get you from one side of the country to the other without you having to touch the steering wheel or pedals. But in Europe, even if you have paid for that feature, forget it: the regulator forces you to take the steering wheel every few minutes, prevents the vehicle from making decisions on its own and even takes away features you had previously. All this despite the fact that the safety of these features is more than proven, that they are infinitely safer than manual driving, and that there is a huge amount of evidence to show this. But if you’re European, too bad.
It’s the same story with Apple: the AI features incorporated into iOS 18 will not be available in Europe, where although we will be able to purchase new smartphones or update those that allow it, we won’t be allowed access to these features. Basically, our iPhones will have been sterilized, because our regulator intends to protect us to such an extent that it is not worth Apple offering us the real ones — lest we hurt ourselves.
Are we prepared to accept being treated like children by our regulators, unable to enjoy a product or service because we’re not prepared to defend our rights? A certain amount of protection is one thing, especially knowing the excesses of some companies, but to the point of effectively preventing some from selling their products here?
The fundamental question is whether the world’s most educated, best-informed, and culturally sophisticated market is willing to accept second-level tech, and being prevented from accessing a broad portfolio of attractive products and services due solely to the overzealousness of its regulators.
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This post was previously published on Enrique Dans’ blog.
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This post was originally published on here