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We are looking forward to a lively discussion.

Bradford demolishes myths about Europe’s declining international standing by showing how the European Union’s stringent regulations raise the standards of producers across the globe. “This may well be the single most important book on Europe’s influence to appear in a decade” judged the magazine “Foreign Policy”.  “The Brussels Effect” shows how the EU has acquired such power, why multinational companies use EU standards as global standards and why the EUs role as the world’s regulator is likely to outlive its gradual economic decline, extending the EU long into the future.

“EU Insights” is hosted by Shirin Wheeler, Principal Advisor and Head of Video & Social Media at European Investment Bank (EIB). With a track record of more than 20 years in the BBC as an on air presenter/reporter, Shirin is passionate about facilitating the vital dialogue on the challenges that face us between politicians, institutions, the business world, NGOs, press and the public.

If you want to take part at the event, please register by 17 December, 2020 at events@united-europe.eu.

Dr Pousttchi compared digitalization to a triangle, with the first edge being technology, the second edge economy and the third edge human behavior and society. “These three are not separate, but interdependent,” Prof Pousttchi stressed. The decisive difference between real and fake digitization is to understand their interdependencies. To understand them requires deep knowledge from all three areas. Otherwise it is not even possible to ask the right questions, let alone to find correct answers and big tech companies like Google, Apple, Facebook and Amazon are not interested in telling the truth about the implications of what they are doing.

Research shows the impact of these companies on the old economy and how technology, data and artificial intelligence allow them to take control and move in between the old economy and their customers. It allows them to monopolize the end user and the customer interface and take over the complete margin of the old economy. That is their future business model. Users, enterprises or even governments don’t even want to know the truth. It is frightening what Apple or Google are capable of doing with mobile phones. The result: Billions of euros are invested from taxpayers money to close the gaps in mobile networks instead of reorganizing the way frequencies are distributed.

In enterprises, digital projects are designed not to disturb the core functionality of the enterprise. It looks digital on the outside, but keeps the old processes on the inside: Fake or facade digitalization and Potemkin villages. The study “Management in the 1990s” of Massachusetts Institute of Technology’s  already showed that technical knowledge is necessary for optimal IT deployment, but it is not sufficient – the decisive step is to rethink business processes. This continues to apply without restriction to modern digital technologies.

What needs to be done in Europe? Education needs to be transformed: Young people are not only digital natives but also digital naives. The education system failed them, because computer science is not mandatory in school. Billions go to schools to build Wi-Fi, Internet access and buy devices instead of reorganizing the way to learn. Education is the first task that needs to be immediately addressed.

SMEs need to have the ability to enter the digital world and transform three dimensions: the value creation model, the value proposition model and the customer interaction model. Enterprises have to reinvent how they work with digital technology in mind. Europe needs innovative products and new business models. Above all: Regulation does not solve all problems. Europe needs innovation in order to get back in the competition.

Looking at the success of the large enterprises from Silicon Valley, it’s their deep knowledge and not their agility on the strategic level. When technologies and their impact are fully understood, the major task will not be a technical one: it will be to reengineer business processes, revenue models and customer interaction, ending up with a new version of our traditional economy. Because the old economy creates workplaces while the new economy only creates stock value.

In other words: In order to assure the future of European enterprises, Europe needs to digitally re-engineer them on the one hand and purposefully change the rules on the other so they can compete and succeed for the benefit of society. And Europe needs executives who are educated and willing to do this work.

Professor Key Pousttchi is a long-term expert on digitalization and digital transformation, author of eleven books and professional keynote speaker. From 2015 to 2020, he held the SAP Endowed Chair of Business Informatics and Digitalization at the University of Potsdam. During the Corona crisis he wrote two new books which will appear in autumn 2020: “Digitalisierung für Manager – Den digitalen Wandel systematisch verstehen, um das Unternehmen voranzubringen” and “Die verblendete Gesellschaft – Warum uns keiner die Wahrheit über die Digitalisierung sagt”.

Please listen to the podcast here

According to Kalff, the competitive advantage of European companies lies in their contract design, the multitude of possible business models through the European Patent Office and the multitude of SMEs compared to large companies.

Unlike in the USA, the loyalty obligation within the EU is anchored in the law. Appropriateness and fairness are regarded as guiding principles. According to Kalff, the Union thus has a clear advantage over American, British and Irish rules, which treat the loyalty obligation only within the framework of existing treaties. This situation in Europe also facilitates the outsourcing of innovations by large companies, which are increasingly dependent on the cooperation of several partners: Investment in partnerships to optimize value creation.

For the improvement of the EU economic system, to “strengthen the already strong”, Kalff recommends a modern civil law, the establishment of specialised courts for IT and AI solutions, an improvement in the quality of legal advice with improved access for SMEs and investment in decentralised, European mechanisms for conflict resolution.

According to the author, the orientation of the financial markets must change. Shareholder models are too geared towards control and risk transfer and thus inhibit innovation. In an international comparison, the profits of listed companies in the EU with favorable conditions such as low tax rates and low inflation are not sufficient.

Using further comparative examples from the legal, capital and value systems, Kalff showed why Europe was never in a better position to develop its own competitive form of capitalism and thus set standards for the rest of the world. Several examples can be found in his book.

Many thanks to our corporate member EY for the premises.

The guests, who numbered more than 200, were welcomed by Jörg Rocholl, director of ESMT Berlin, and Wolfgang Schüssel, president of United Europe e.V.

In his welcoming speech, Schüssel said that the question was not whether one was an optimist or a pessimist. Much more interesting is the fact that “we should be positivists who make the ideas contained in the book possible”.
CDU leader Kramp-Karrenbauer then introduced the book with a keynote speech on Europe. She stressed that the subject of Europe was important to her personally and that her speech went “beyond normal courtesy”. She said that her words came from a place of “deep conviction”.

The question is whether we still want to play a role in Europe in the future – and how we can strengthen this vision of Europe. In addition to major projects such as security, defence and freedom, we are also asked to consider “how we can defend Schengen internally and externally as a concept for open borders and thereby create acceptance for the future”.

The book is a very exciting response to this question, not because its individual chapters are confined to simply saying that we are all pro-Europeans – which they are not – but “instead because it clearly states where the challenges are to be found, where progress has already been made, and where there is still some catching up to do”.
Among other essential points, Kramp-Karrenbauer stressed how important it is to strengthen innovation in Europe in order to stand up to the United States and China. She warned against individual nations in the EU attempting to ‘go it alone’, for example in matters of climate protection. Because it is important for the solution to be European, cooperation between the EU member states is needed here. “If there is one issue that needs to be tackled globally and Europe-wide, it is the fight against climate change,” said Kramp-Karrenbauer. However, according to the Handelsblatt, although demands such as this often appear in print, it is also emphasised how little has actually happened. This is reflected in Sven Afhüppe’s criticism in his opening speech: “There is no lack of knowledge; there is a lack of implementation.”

According to Kramp-Karrenbauer, the book arrives at the right time and with the right ideas. It is not a question of whether we want ‘more’ or ‘less’ Europe; the general sentiment regarding Europe as a whole was positive. Instead, the issue lies in making the label ‘Made in Europe’ apply not only to goods and products, but also to positive achievements, values and principles.

Those who want to strengthen Europe must tell a story, said Deutsche Bahn CEO Richard Lutz in the subsequent panel debate, in which he discussed Kramp-Karrenbauer’s speech and Europe with Ingrid Hengster of the Kreditanstalt für Wiederaufbau management board, manager Simone Menne and United Europe founder Jürgen Großmann.

“The topic of Europe must be emotionally charged,” Lutz noted. Inspiring young people – who perhaps take peace, prosperity and freedom for granted – to embrace the concept of ‘Europe’ is essential. The panellists see strengthening Europe as another priority.

Hengster called for a more socially equitable balance in the EU in order to help regions with weak growth and to offer people opportunities in their home countries. Simone Menne goes even further, advocating the “abolition of nation states” and seeing a common European tax and social-welfare policy as a step towards this goal.

Großmann, on the other hand, warns against too much zest for action. The dream of a ‘United States of Europe’ is not feasible, in his opinion. But he also sees it as the task of politics to spark new enthusiasm. “Enthusiasm is important. But we must also make the facts of why it is important to fight for Europe clear to ordinary people.” Above all, Europe needs leaders – not just in the political sphere, but in sports as well. “We need someone like Jürgen Klopp, for example,” Großmann says. “In Great Britain, he made more people vote for Remain than many politicians could.”

All textes of the book will be published until the European elections in English and German on the website of United Europe and Handelsblatt Online.
The German edition of the book is available here.

In this book, 30 CEOs, medium-sized companies and start-up entrepreneurs from Germany, Austria, Finland and Spain for the first time reflect on the future of the continent.
The authors are furthermore Hannes Ametsreiter (Vodafone Germany), Werner Baumann (Bayer), Martin Brudermüller (BASF), Marcus Braun (Wirecard), Wolfgang Eder (voestalpine), Tom Enders (Airbus), Ignacio S. Galán (Iberdrola), Angelika Gifford (TUI, ProSiebenSat.1), Matthias Hartmann (IBM Germany),  Antti Herlin (Kone), Timotheus Höttges (Deutsche Telekom), Richard Lutz (Deutsche Bahn), Tina Müller (Douglas), René Obermann (Warburg Pincus International),  Peter Oswald (Mondi Group), Jörg Rocholl (ESMT Berlin), Kasper Rorsted (Adidas), Rolf Schmitz (RWE), Christian Sewing (Deutsche Bank), Johannes Teyssen (E.ON), Frank Thelen (Freigeist Capital), Andreas Treichl (Erste Bank), Hans Van Bylen (Henkel), Carola Gräfin von Schmettow (HSBC Trinkaus), Ralf Wintergerst (Giesecke+Devrient), Reinhold Würth (Würth Group), and Dieter Zetsche (Daimler).

The result is a reform programme for the troubled Europa AG, which is unique in its kind – and which belongs in the specifications of the new EU Commission. No political soap-box speeches, but concrete recommendations for action and a vision with which Europe can stand up to the enemies of democracy and free trade. Because: “Hand on heart – no democracy in the world is perfect, but Europe’s democracy remains a beacon in a slowly darkening geopolitical world,” Wolfgang Schüssel, President of United Europe, writes in his foreword of the book.

The book is published by Herder-Verlag and available in book stores and on the website of Herder-Verlag here.
All articles also appears in Handelsblatt in German and on Handelsblatt Online and the website of United Europe in German and English until the European Elections.

Under the title “Europa kann es besser. Wie unser Kontinent zu neuer Stärke findet. Ein Weckruf der Wirtschaft” (“Europe can do better. How our continent finds new strength. A wake-up call for the economy”) a reform programme for the troubled Europa AG has been created, which is unique in its kind – and which belongs in the specifications of the new EU Commission. No political soap-box speeches, but concrete recommendations for action and a vision with which Europe can stand up to the enemies of democracy and free trade. Because: “Hand on heart – no democracy in the world is perfect, but Europe’s democracy remains a beacon in a slowly darkening geopolitical world,” Wolfgang Schüssel, President of United Europe, writes in his foreword.

On 12th April, the project will be presented in a major Handelsblatt cover story. From 15th April, the articles will appear in Handelsblatt and on Handelsblatt Online and the United Europe website in German and English until the European elections.

Also on 15th April, the article series will also be published as a book by Herder-Verlag.
On 6th May it will be officially presented in the presence of Annegret Kramp-Karrenbauer at the ESMT Berlin, the invitations will be sent out shortly.

In his lecture Krastev analysed the causes for the new division between Eastern and Western Europe and why the trend towards backward-looking nationalism and EU scepticism is particularly high in the young member states. Krastev explained the turn towards illiberal democracies in Eastern Europe countries like Poland and Hungary as a “Central European paradox”.

According to Krastev the biggest problem is that Europe has become a victim of its own success. Peace is taken for granted, there is no external threat, we take the world without war as given, and the power of unification is irrelevant for the younger generation today. Memories of war and dictatorship are no longer the pillars for today’s peace and democracy. “The younger generation have its own wars”, Krastev said.

One of the main causes of the democratic crisis on the EU and the crisis between East and West is that Eastern Europe is imitating the West – what mainly means Germany. This is very difficult in terms of Germany’s special history.

East Europeans often believe that Germany is made for them. It’s the country where most of them are emigrating. And: East-Europe is not afraid that Germany will lead. Its afraid that it will NOT.

But today – mainly after the immigration crisis starts in 2015 – East European countries want to keep sovereignty and do no longer want to imitate western values. On the other hand more and more young potentials leave their country of origin to work in more prosperous member states. 69.000 people left Hungary in the last 10 years, in Romania they are even 62 percent. If this continues, the business model is not going to survive: public health can no longer be guaranteed and the languages in small member states disappear. Today the most difficult thing in Eastern Europe is not to find an honest politician but to find a nurse. That’s why in Eastern Europe people fear more the people who are leaving their country than the ones who are coming. The Czech Republic with only 4 percent of emigrants is a big exception.

That leads to the question how to make European mobility not a one-way street. And how to create a common understanding between both parts of Europe.

In Poland 74 percent of the population believe that the European Union works. So it seems that the political problem with nationalism and populism is not a problem of the inhabitants but of the government. A European army and military budgets are widely discussed at the moment. But Europe’s problem is not the military budget. It’s about a culture of change which is very difficult to gauge.

Even in a country like Poland only 15 percent of the population declare Russia as a major security threat. Interestingly enough because of the trade tensions the United States is perceived as a major threat. But it’s not simply that different countries have a different threat perception.

Krastev, who has spent three months in Washington last year, said that Trump is a demonstration of a major change in America’s policy. This change will not disappear after Trump’s presidency. In a certain way America is starting to reconsider its role in the world. The usual political style disappears and with it the view that the United States perceives itself as the guarantor of the world order. Nowadays the US are going to be more focused on its national interest than before.

This is why Europe has to push to get something back on a strategic depth, not because of global conditions but because of the changing world.

We are seeing a cultural and political shift which do resemble in its dynamics the movements and demonstrations that happened in the 1970s, Krastev emphasized. 1970 the pressure of systems came from the left, today they come from the right. Also, Trump’s national economic interests can be compared to Anti-EU-parties. The difference to 1970 is, that the level of political violence in movements like Red Army Faction were much higher than we have now from the right-wing parties. From this point of view for Krastev the biggest problem is if today’s centre right parties can succeed by doing the same with some of the pressure which have done their predecessors from the left in the 1970s.

East Europeans often complain that the view from West to East is missing. They are feeling not being a serious part of the EU and not valued enough. Western Europe should pay more attention and respect to the Eastern European and Baltic countries. They do not appear sufficient in Germany’s consciousness, and that offends them.

Conclusion: Imitation is a very competitive relationship which does not longer work. We have to change our perspectives and need to accept that people and cultures in the East are different and diverse and should approach more each other. In times of dissolution of so many old partnerships this is more important than ever.

Photos: Georg Wilke

“A TALE FOR TWO EUROPES”
The Age of Imitation and its Discontents

in Vienna, Austria, on 27th February 2019, at 18.30 h, at Winter Palace of Prince Eugen

Ivan Krastev is one of Europe’s leading political intellectuals. Born in Bulgaria, he is Chairman of the Centre for Liberal Strategies in Sofia and Permanent Fellow at the Institute for Human Sciences in Vienna.

In his lecture he analyses the causes for the new division between Eastern and Western Europe and why the trend towards backward-looking nationalism and EU scepticism is particularly high in the young member states.
Krastev explains the turn towards an illiberal democracy in Eastern Europe, Poland and Hungary as a “Central European paradox”. The EU is seen by these governments and their voters as a political and social safety net. They assume that Brussels will already put the brakes on its irresponsible political parties and politicians. Out of anger and disappointment they then support a political elite that lacks real commitment to liberal values.
According to Krastev, one of the main causes of the democratic crisis is that most EU governments cannot escape the dilemma of globalisation and simultaneous national sovereignty. While advocating free and global trade, they also want national control over the economy, especially in crises.

The lecture is given in English.

Registration by 11th February, 2019 at events@united-europe.eu.