President Toomas Ilves is a straight talker. Raised in New Jersey by Estonian refugees, he worked as a Radio Free Europe journalist before returning to his parents’ homeland and becoming his country’s president from 2006 to 2016. During that period, he helped turn the former occupied Soviet republic into a thriving, tech leader.
A CEPA Distinguished Fellow and member of the International Leadership Council, President Ilved visited the CEPA headquarters in Washington. The conversation has been edited for clarity.
Economic competitiveness is the topic du jour in Europe and boosting technology innovation is center stage in the debate. Is Europe competitive in technology?
Not at the moment. The fundamental problem with tech innovation in Europe is the absence of a common or single capital market, which is really the competitive advantage the United States has over Europe, and which is why some of the best and brightest companies in Europe in technology moved to the United States. In my own Estonia, there’s a company called GrabCAD started by this young, young guy at the Technical University. He received €200,000 for his startup. So, what do I do? I invite him to come and have coffee and tea and cookies. And he tells me “Well, very nice. Thank you, Mr. President, but I move the United States in two weeks.”
Why are you doing that?
Well, I can’t get any investment here. He moved the United States, and half a year later, received $5/6 million investment. A couple of years later, he sold it for something like $100 million.
This happens because Europe doesn’t have a serious equity capital market. A second problem is overregulation.
Could you give specific example of European overregulation?
The Digital Markets Act was not very well thought out from a cyber security point of view. It banned side-loading because otherwise Apple has a competitive advantage. But there’s a reason to avoid side-loading: security. Apple vets all of its apps for security. Just as the European Union requires that all new legislation be looked at from the point of view of environmental impact, all new legislation must be looked at from the from a cyber security perspective. I think people really have only recently begun to understand the vulnerabilities that we face in cyber.
What about EU AI Act?
It certainly hasn’t helped the EU to become an AI power. If you say, “Oh, can’t do this, can’t do that,” that’s the wrong starting point. You don’t really know what you can or cannot do beforehand, right? Not all the people involved in legislating in the European Parliament are adept at understanding technology.
If you had a sort of magic wand to increase Europe’s competitiveness, what would it be?
There is one big problem that we have to help to overcome. We need to make it much easier for people to live and work in Europe. I mean the equivalent of the US’s H-1B visa. It’s hard to come to work in Europe. We actually have quite a few foreigners in Estonia, but they’re mainly from Europe itself, because you can move around with free movement of labor. America is making a big mistake, given the hostile attitude towards foreigners that we see emerging there. For Europe, it’s a huge opportunity.
How should Europe attempt to resolve tensions with the United States?
European leaders are taking the right path — not reciprocating the really nasty language that’s coming out of the United States. When the President states that the whole idea of the European Union is to screw the US — that’s just wrong. The US fostered and encouraged the whole idea for Europe to develop and be a market, and also to keep Europe from killing each other. That was the idea of the original Schumann declaration. proceeding to the Coal and Steel Community, up to the EEC, the Economic Community up to 1995 and the European Union. It’s been a slow, steady progress of mainly economic integration, right? Of course, people say “Well, what about military?” and that’s been a problem.
How should Europe approach China? Do you think that Europe and the US can work together to compete with China?
There is a general distrust of Chinese technology in both Europe and in the United States. In Europe, there’s also a fear of competition. Because frankly, the Chinese are rather good at things. When it comes to telecommunications, there’s wariness. On the other hand, protectionism keeps out very good Chinese electric vehicles.
The US did itself no favors for itself when it cut off SARS intelligence satellite to Ukraine, or when (former President Joseph) Biden limited the range of HIMARS. When the President of the United States says “Well, we’re happy to sell the F-47 but we’re going to tone it down when we sell it,” this is not the signal you want to send if you want to have people buying your stuff, right.
It’s a horrible choice. You don’t really trust the Chinese — and the United States seems to have gone out of its way to say, “don’t trust us either” right?
Toomas Hendrik Ilves is a Distinguished Nonresident Fellow and member of the International Leadership Council (ILC) at the Center for European Policy Analysis. He served as President of Estonia from 2006 to 2016.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
2025 CEPA Forum Tech & Security Conference
Explore the latest from the conference.
