Vienna/Stockholm. It is China and the United States that are taking the fast path to the digital future. Europe hesitates, remains in its comfort zone. However, to make life easy between Lisbon and Riga, more risk would have to be taken, says Marcus Wallenberg in an interview with the "Wiener Zeitung". The Swedish banker and industrialist calls for a rethink, out of complacency, explains what the next steps could be:
"Wiener Zeitung": Mr. Wallenberg, Mario Draghi's term as President of the European Central Bank (ECB) will end soon. He has never raised interest rates in the euro area during these eight years. Was this right way to go?
Marcus Wallenberg: Mario Draghi has focused on creating stability after the financial crisis. He succeeded. It is difficult to say whether, during his term of office, it would not have been possible to raise interest rates. These extremely low interest rates are definitely very unusual.
Should he have raised interest rates?
The low interest rates may have been a suitable remedy against the financial crisis, but they also carry a risk. Because low interest rates lead to a low value of the currency, which increases the export rates. However, it is often forgotten that productivity must then be increased in order to remain competitive.
The US Federal Reserve has recently lowered its interest rates. Is economic growth still a benchmark for a successful economy?
I think so. But these are very unusual times. We live in a time of upheaval, the digital transformation. In order for Europe not to be left behind, we need to find a way for investments to flow back into the system. Otherwise, it will get difficult in global competition. Without investing in the future, we lose competitiveness. There are many areas to invest in: green infrastructure, green innovation, etc.
How will the digital transformation change the European ecosystem? Will many jobs be lost?
Well, many new jobs will be created. We (Wallenberg Foundation) have set up a research programme on artificial intelligence, autonomous systems and software. From studies we know that many of today's jobs are being replaced. It is therefore necessary that we retrain people so that they can get along in this new digital world so that they can be productive. That's a big hassle, but it's doable.
How do you want to prevent people from falling by the wayside?
We have to start with the kids. Software development could be a subject at school.
What do you suggest for people over 50, who have worked all their lives in the same job, who now have to learn something completely new? How should these people be motivated?
The times will change now. That's what people need to understand. And we have to change with these times. It is up to governments and businesses to explain this. We start an online university for our employees in our Skandinaviska Enskilda Bank (SEB). They get retrained, they can take digital training, they learn about digital technology, etc. Everyone gets their chance, nobody is excluded.
Could an unconditional basic income cushion the period of upheaval?
I know countries where the unconditional basic income was tried. It did not work very well, I do not know why. I think most people like to earn money, like to have a job. I'm not sure if it's best to just distribute the money.
Four years ago, the European Commission presented an action plan to create a Capital Markets Union. It has not been implemented until today. What do you think about this idea?
Two-thirds of European funding comes from banks. In the US, on the other hand, 80 percent are financed through the financial market. For Europe, therefore, it would be strategically advantageous if we also develop in the direction of the financial market. The basis for this would be a uniform capital market - but at the moment there are still individual capital market laws in each country. That would have to be unified. European financial and political forces have to work together, coordinated efforts would definitely be very helpful.
When it comes to cooperation we also have to talk about Sweden. According to its EU Accession Treaty, the country would have to introduce the euro, but defends itself against it, deliberately fails to meet the criteria set for it. Do you support that?
Swedish politicians do not want to bring up the issue at the moment. We are not in the Eurozone, but I think that should change. Sweden should join the euro.
If there is a common financial market, should there be also a financial transaction tax?
In Sweden, the financial transaction tax has already been tried. (Olof Palme put it in 1984, it was abolished in 1992, note). It did not work because the trade volume from Sweden was moving abroad.
Are there models for Europe in terms of innovation?
Yes, Israel is such an example. There, they drive innovation very strongly and even have their own innovation authority. Their success proves them right. There are more Israeli high-tech companies on the Nasdaq (largest US stock exchange, note), as high-tech companies from Germany and France together.
Is Europe shy of innovation?
We live a very good life in most parts of Europe. But we have to be careful that we do not become complacent. In order to make progress in the future, we need to change our attitude, we must be prepared to take risks. Starting a new business, creating a new innovation is not risk-free, you can fail, we have to learn that. There will be no other choice. Because we have only one way to compete in global competition, it is innovation.