Publication date of this edition of A&T and the blog: Tuesday, 6 December 2022
2022 saw the launch of the Luxembourg Metaverse1, an interactive virtual reality space where internet users can use a digital avatar to take part in events and visit various places (for instance, digital points of sale, exhibitions, etc.) without leaving the comfort of their living room. Although still in its infancy, this ambitious project heralds a wind of change in the way that social and economic interactions generally take place. It must be acknowledged that the ever-increasing integration of digital technologies, coupled with lower costs of data collection, storage and processing, has promoted an environment in which the digital and physical worlds overlap. The concept of the datasphere has come into being – and is destined to develop rapidly.
In just ten years, between 2010 and 2020, the total volume of information stored globally in computer systems has increased 32 times. And that’s not all: according to forecasts by the International Data Group2, this volume is set to triple again by 2025!
Big Data, which is used to refer to this omnipresence of voluminous, diverse, and rapid data too complex to be processed by the human mind alone, has been creating a buzz for over ten years. Often likened to 21st-century black gold, its potential elicits wonderment, but numerous questions as well. There is now a technology that can exploit data to generate significant economic, social and environmental benefits: artificial intelligence (or AI), that is, “the set of theories and techniques used to create machines capable of simulating human intelligence3”.
New services, new competitive advantages
AI can be a driver of progress, for example through the improvement of medical diagnoses or a better use of resources thanks to intelligent technologies (e.g. smart cities, traffic management for better mobility, sustainable agriculture, etc.). Moreover, its rollout gives rise to the birth of new industries, new goods and services and new processes that generate considerable competitive advantages in all economic sectors, from the most traditional to the most innovative.
For businesses, the new data tools offer numerous benefits. For instance, they make it possible to improve decision-making processes, secure and increase revenue while reducing costs, optimise all production processes (thereby increasing a company’s investment capacities and innovation), achieve productivity gains, and seize new business opportunities. The Big Data revolution marks the beginning of a new gold rush, where the speed of technological integration will reward the most resilient and agile companies with competitive leverage (referred to as first-mover advantage).
Currently, firms and economic powers compete in the field of Big Data and AI to establish their technological superiority and guarantee their economic competitiveness on the international scene. To achieve this, the world’s main economies, including Luxembourg, have already embarked on their journey to become data-driven economies, i.e., ecosystems that systematically rely on the collection and analysis of data in their value creation process, in order to become more efficient and resilient.
The Grand Duchy has already started to lay solid groundwork towards this goal and is building on its advantages to adopt new data- and AI-related technologies. These include modern digital infrastructures (e.g. MeluXina, and 5G), growing social acceptance, the position of a leading financial centre, the presence of a burgeoning research and education ecosystem, as well as the participation in many innovative and ambitious initiatives in the field of Big Data, such as the GaiaXproject to set up a European secure data infrastructure, or the design of a Luxembourg sovereign cloud4.
Having a suitable regulatory framework
Despite all these favourable factors, it is vital that Luxembourg redouble its efforts to accelerate its transition to a competitive and attractive data-driven economy model. For this, one of the priorities should be to ensure a regulatory framework that suits the needs of companies, guaranteeing both security and competitiveness. The proposals for European regulations on data (the Data Act) and AI (the AI Act) are currently being negotiated at European Union level. As these texts will define the foundations on which this technology will develop in Europe in the years to come, they are undergoing rigorous monitoring by the Chamber of Commerce. It has issued a number of proposed amendments and comments aimed at influencing the legislative content and ensuring a viable economic environment for Luxembourg companies.
To establish harmonised rules for access and fair sharing of data (in the context of B2B, B2C and B2G relationships) and to facilitate the change of cloud and edge service providers: these are the objectives of the Data Act currently being defined. On the face of it, it is an initiative conducive to the development of a data economy. I say on the face of it, because there is one pitfall that must particularly be avoided: an excessively restrictive approach which would result in legal and technical obligations that are too rigid and costly for companies, especially in terms of compliance. In addition, other adaptations to the proposed regulation are necessary. The Chamber of Commerce and FEDIL have thus published a common position5 to demand, among other things, rules that are proportionate and adapted to the objectives, better guarantees to protect the commercial secrets of companies, shared responsibility between stakeholders during the process of changing cloud provider, or even the possibility of using an already existing alternative dispute resolution body (instead of shouldering the cost of creating or certifying a dedicated body for B2B data transfers).
The Chamber of Commerce has also analysed the proposal for an AI Act (the first legal framework on AI) which aims to provide developers and users of AI with clear obligations relating to the different cases of use of this technology. In this area, it draws attention to the importance of weighing the obligations laid down, so that they are proportionate to the different levels of risk to the rights of individuals, as identified by the European Commission. Here again, we must at all costs prevent regulations from muzzling innovation in Europe.
For the European Union to be innovative and competitive in the field of new data technologies, it also seems essential to adapt the current regulatory proposal on other points. Without being exhaustive, it would be necessary, for example, to ensure that the provisions are suited to all companies (from the largest to the smallest), to make the regulatory sandpits more attractive, in order to allow companies to test AI products in a controlled environment, or even extending the period of transposition of laws in order to give companies time to acquire the required skills through recruitment or training.
Alongside its efforts on the above-mentioned proposed regulations, the Chamber of Commerce, as a privileged partner of Luxembourg business, undertakes many other initiatives to facilitate the digital transition of companies. For example, it maintains a permanent economic and legal watch, notifies draft laws, publishes informative documents (e.g. guides on cybersecurity and electronic invoicing) and organises services (such as Go Digital) and events (for instance, the Ready4AI conference cycle) to support its members in their technological adoption. Lastly, it has also more recently published Actualité & tendances “Intelligence Artificielle et Big Data: guide pour naviguer dans la future « data-driven economy » luxembourgeoise” (“Artificial Intelligence and Big Data: a guide to navigating the future Luxembourg data-driven economy”).
A new gold rush has begun. Data properly controlled and used today will bear fruit tomorrow to benefit both business and society.
- 1 https://virtual-rangers-metaverse.com/
- 2 The International Data Group (IDC) is a multinational that specialises in consulting and market research in the field of information technology.
- 3 Larousse Encyclopaedia definition
- 4 A sovereign cloud is a cloud hosted and operated exclusively at national level for greater security.
- 5 www.cc.lu/toute-linformation/actualites/detail/joint-position-paper-on-the-proposal-for-a-data-act