{"id":1525,"date":"2025-01-16T10:22:33","date_gmt":"2025-01-16T10:22:33","guid":{"rendered":"https:\/\/ipfray.com\/?p=1525"},"modified":"2025-01-16T18:42:09","modified_gmt":"2025-01-16T18:42:09","slug":"europe-has-one-foot-in-the-morgue-nokia-and-ericsson-to-hold-eu-innovation-summit-today-call-on-withdrawal-of-harmful-sep-regulation","status":"publish","type":"post","link":"https:\/\/ipfray.com\/staging1\/europe-has-one-foot-in-the-morgue-nokia-and-ericsson-to-hold-eu-innovation-summit-today-call-on-withdrawal-of-harmful-sep-regulation\/","title":{"rendered":"Europe has “one foot in the morgue”: Nokia and Ericsson to hold EU innovation summit today, call on withdrawal of \u201charmful\u201d SEP regulation"},"content":{"rendered":"\n
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Context: <\/strong>Europe\u2019s tech sector lags behind those in the U.S. and China. In the U.S. for example,  the \u201cMagnificent Seven\u201d U.S. tech firms\u2019 spend on R&D was equal to 50% of Europe\u2019s entire public and private sector R&D spend across technology and other areas in 2023 alone \u2013 and this has led to a \u20ac450 billion gap in tech R&D spending (June 20, 2024 McKinsey Global Institute report<\/a>). This gap has contributed to a 20% productivity disadvantage per year (May 2024, ECIPE Policy Brief<\/a>). Nokia\u2019s President and CEO Pekka Lundmark and Ericsson\u2019s President and CEO B\u00f6rje Ekholm are among senior European technology leaders who have been vocal about the need for urgent action to support Europe\u2019s technology sector.<\/p>\n\n\n\n

What\u2019s new: <\/strong>Nokia and Ericsson are today holding a \u201cNew Industrial Ambition for Europe\u201d summit in Brussels, which aims to \u201ccatalyze the momentum across the EU to implement the actions required to deliver future European digitalization success, including a more supportive regulatory environment and making the region more attractive\u201d (January 16, 2025 Nokia press release<\/a>). The event will be addressed by chief executives at Nokia, Ericsson, SAP and ASML, as well as top European policymakers. Discussions around withdrawing the proposed EU regulation on standard-essential patents (SEP) are on the agenda but the event also aims to discuss how Europe can implement the Draghi and Letta reports and the 5G Security Toolbox.<\/p>\n\n\n\n

Direct impact:<\/strong> The summit marks the first time that Nokia and Ericsson have come together to organize an initiative like this, demonstrating how urgent they believe these issues to be. SAP and ASML’s involvement is also significant, given their size – they are Europe’s two largest tech companies by market cap (US$305.37 billion and US$295.45 billion, respectively) and the closest thing the region has to Big Tech. Although it must be noted that they are small compared to the U.S.’s Magnificent Seven (Apple’s is US$3.58 trillion, for example).<\/p>\n\n\n\n

As reported by ip fray<\/strong> earlier this month, Europe owns a 17% share of 5G SEPs, but it has lost out in every other field that matters, including operating systems, enterprise software, cloud computing, smartphones, social networks, crypto and AI (January 3, 2025 ip fray<\/strong> article<\/a>). Without any change, it will practically be impossible for Europe to get anywhere near the top of the food chain, with its most promising companies destined to be acquired by non-European players.<\/p>\n\n\n\n

Wider ramifications: <\/strong>The event comes after Poland took over the rotating presidency of the EU Council on 1 January (for the first half of 2025) and there has been intense lobbying pressure to get it to prioritize the adoption of the SEP regulation. Nokia and Ericsson have emphasised in their announcement that Europe must \u201cenforce fair business practices\u201d if it is to catch up and get ahead of other countries, and, they said, this will include the withdrawal of \u201charmful proposals like the current legislative proposal on SEPs\u201d.<\/p>\n<\/div>\n\n\n\n

As well as Nokia, Ericsson, SAP and ASML, today\u2019s event will be joined by European Commission Executive Vice President for Tech Sovereignty Henna Virkkunen, Deputy Minister of Digital Affairs for Poland Dariusz Standerski, and former Italian Prime Minister Enrico Letta.<\/p>\n\n\n\n

Before becoming an EU commissioner, Mrs. Virkkunen was also vocal about the withdrawal of the EU SEP regulation. In a speech in the Hemicycle (plenary hall) of the European Parliament in February 2024, she highlighted the importance of strong patent rights and the shortcomings of the bill at the time, including how it would negatively impact Europe\u2019s competitiveness in the development of 5G and 6G technologies (September 17, 2024 ip fray<\/strong> article<\/a>). She said: <\/p>\n\n\n\n

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\u201cThis proposed compromise does not take into account patent protection and creates too much regulatory burden, especially to the standard essential patent holders.\u201d<\/p>\n<\/blockquote>\n\n\n\n

It is worth noting that while R&D comparisons (as indicated above) are one metric by which Europe’s status can be measured – they are not even the tip of the iceberg. Market capitalization and venture capital funding are a bit more indicative of where Europe really stands in comparison to the U.S. and China. These are the U.S. Magnificent Seven’s market caps:<\/p>\n\n\n\n

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  1. Apple:<\/strong> US$3.58 trillion<\/li>\n\n\n\n
  2. Nvidia:<\/strong> US$3.36 trillion<\/li>\n\n\n\n
  3. Microsoft:<\/strong> US$3.16 trillion<\/li>\n\n\n\n
  4. Alphabet:<\/strong> US$2.4 trillion<\/li>\n\n\n\n
  5. Amazon:<\/strong> US$2.34 trillion<\/li>\n\n\n\n
  6. Meta:<\/strong> US$1.55 trillion<\/li>\n\n\n\n
  7. Tesla:<\/strong> US$1.37 trillion<\/li>\n<\/ol>\n\n\n\n

    Meanwhile, Europe’s top tech companies by market capitalization do not even come close to those numbers (SAP: US$305.37 billion and ASML: US$295.45 billion).<\/p>\n\n\n\n

    Also, unlike Nokia and Ericsson, SAP does not have an outbound licensing program for SEPs (it is also not known to own any cellular SEPs and may not own any SEPs at all). But the company may be heavily involved in some of the other agenda items for today, which include:<\/p>\n\n\n\n