Mention of Brazil’s ‘market reserve policy’ is still capable of sending a chill through technology enthusiasts of a certain age. Introduced in the 1970s, when the country labored under a military dictatorship, the policy sought to impose a ‘Brazil-first’ approach to new developments in computing and data-processing. Imports of newly popular ‘minicomputers’ were strictly controlled.
It didn’t go well. The country’s ‘own-made’ computers were expensive and often clones of the leading American brands. A black market flourished. And young entrepreneurs were left watching the rest of the world leap ahead in technology.
Ana Paula Assis was one of them. Now senior vice president and chair for IBM Europe, Middle East, Africa and Asia Pacific, she told me that the attempt to control the global market for tech was a fool’s errand.
“Achieving sovereignty should not force a trade‑off with the openness and flexibility European organizations need to compete in the age of AI”
Ana Paula Assis, senior vice president and chair for IBM Europe, Middle East, Africa and Asia Pacific
“I lived in Brazil during the period of the market reserve policy, which didn’t allow the importation of mini-computers and micro-computers to the country,” she said. “In the early 1990s, when they decided to abolish the policy, we found out how much further behind we were, to the point that you had to really go to the black market. I think we have very practical examples that reservation or protectionism is not the way to go.”
The debate on technology protectionism is back. This week, the European Commission, the executive arm of the European Union, announced the latest stage in its ‘Made in Europe’ push. It wants to promote domestic cloud, AI, and semiconductor industries, often at the expense of the major global players such as Google, Microsoft, and AWS.
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“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable, and our services secure,” Commission President, Ursula von der Leyen, said. The European Parliament has just announced it will switch to the French search engine, Qwant, as its default information service, rather than Google. Last month, the Dutch central bank announced its cloud services would now be supported by the Lidl-owned provider, Schwarz Digits.
Concerns among technology leaders and the businesses they serve are growing. The EU is throwing up protective walls in a world where services are global, and technology needs to be able to work seamlessly across borders. The adoption of agentic AI—which is embedded across systems—only increases the risk of unintended consequences.
“The EU is highlighting important issues—openness and reducing vendor and technology lock‑in—but much will depend on how this package is actually implemented,” Assis said. “Technological sovereignty is about building the right controls to strengthen oversight, with decisions grounded in technical safeguards.”
“Achieving sovereignty should not force a trade‑off with the openness and flexibility European organizations need to compete in the age of AI.”
Approaches to digital sovereignty are a growing source of tension between the U.S. and Europe, with President Donald Trump saying the EU’s proposals are “all designed to harm or discriminate against American technology”.
The resident of the White House goes too far, but there are legitimate questions about what the EU is attempting to achieve at a time when anemic growth is a primary concern. Arguments about sovereignty can often sound like arguments for protectionism.
“I normally approach sovereignty as more about building bridges than building walls,” Assis said. “It’s understanding what are the level of capabilities that you need to maintain within certain boundaries but not creating a model that will isolate you from the rest of the world. When a country decides to shut the doors for innovation, it can have a competitiveness-hindering effect.”
Fears over where data resides geographically, and the possibility of the American federal government being able to trigger a kill switch on services for those countries or institutions it doesn’t care for, can be mitigated. There are air-gapped solutions that “are absolutely insulated from any intervention”, Assis said (IBM recently signed an extension to its cloud services deal with BNP Paribas, the French bank).
Europe often wonders aloud why there is no Google on the continent. Over-regulation and different country approaches to fundamental issues such as capital markets and digital freedoms is one reason. Few would solve such a dilemma with more rules. The opposite approach is likely to produce better results.
This story was originally featured on Fortune.com
