Europeans want to be able to access online content anywhere, anytime and on any device. Meeting this demand means unleashing the pent-up growth that we have been depriving ourselves of for decades.All the evidence points to the development of a Digital Single Market being instrumental in future growth, as DIGITALEUROPE Director-General John Higgins highlights…
The potential of creating a Digital Single Market (DSM) is well documented. The European Policy Centre believes that as much as 4.1 per cent, or €500bn could thus be added to Europe's GDP between now and 2020.
President Barroso, quoting a European Commission study, stated that: "A truly Digital Single Market could boost EU GDP by as much as €110bn a year," in his 27th
February 2012 letter to 12 prime ministers. At a time when Europe is struggling to find a way out of the doldrums, policymakers with a sense of responsibility wouldn't discard these figures lightly.
However, GDP numbers do not tell the whole story. The conference 'A Digital Single Market by 2015 – a driver for economic growth and jobs,' hosted by the Danish Presidency earlier this year, shed interesting light on the ways to pick this low-hanging fruit and reap the social benefits of digitally fuelled growth to the fullest extent.Connectivity
Europeans want to be able to access online content anywhere, anytime and on any device. Meeting this demand means unleashing the pent-up growth that we have been depriving ourselves of for decades. In today's acronym-happy world, it also means delivering a barrier-free DSM.
Industry is ready to deliver in keeping with applicable law. Broadband is getting faster in Europe, but very high-speed connections are not yet widely available. Although 42.2 per cent of fixed broadband lines ran at no less than 10Mbps per second in July 2011 (up from 29.2 per cent a year ago), only 6.5 per cent were at least as fast as 30Mbps and less than one per cent at least 100Mbps. The EU is not yet delivering on the 2020 high-speed targets of the Digital Agenda for Europe. At the end of 2011 one-third of households in the EU did not have a broadband subscription according to Eurostat's latest figures. One reason might be that legal frameworks inherited from the analogue era are not adjusted yet, thus inducing a shortage of content people want to play or watch online. Neelie Kroes, Vice-President of the Commission in charge of the Digital Agenda, confessed publicly that she couldn't understand why this adjustment is taking so long. Kroes proceeded to phrase item three in DG CONNECT's mission statement: 'Promote greater use of, and public access to, digital goods and digital services, including 'cloud' computing, in order to boost the European single market.'Trust
This is the key ingredient for growth in online trade, especially across borders. Driving e-commerce from today's 3.4 per cent of overall retail sales in Europe to 15 per cent would deliver €200bn or 1.7 per cent of Europe's GDP by allowing consumers to benefit from more options and lower prices. Markets are the point where supply meets demand and thus resemble twin-faced Janus: trust-building is essential on either side. Indeed, neither buyers would flock nor sellers would set their stalls into places littered with 'No trespassing' signs or teeming with policemen. Fostering confidence is a more subtle art based on open, rather than guarded, dialogue. Ted Shapiro from the Motion Picture Association observed at a conference on enforcement of IP rights that: "Business is not a matter of enforcement, but of providing services".
Kroes put it in similar terms in item four of the DG CONNECT mission statement: "Ensure that those goods and services are more secure, that people can trust the rapidly evolving technologies that surround them, and that people have the right skills and confidence to use them as part of everyday life."Digital mindset
However painful it might be for some grown-ups to borrow from their children, thinking digital is vital for European growth. The McKinsey report, unveiled at the eG8 Forum last year, has suggested that the ICT sector is directly responsible for 5 per cent of Europe's GDP but contributes 50 per cent to Europe's overall growth in productivity. Moreover, ICT-intensive companies grow 25 per cent faster than others. Kroes is a true believer in the merits of digitally-driven creativity and innovation.
Items one and two of DG CONNECT's mission statement read respectively: 'Foster creativity through a European data value-chain in which anyone can share knowledge'; and 'Support the kind of high-quality research and innovation that delivers imaginative, practical and value-enhancing results'.Data
The above considerations boil down to betting Europe's ability to grow on our ability to harness the potential of 'Big Data'. Innovative use of data is sweeping into every industry and business function as an increasingly important resource alongside labour and capital. Under the caption 'From basic content to data explosion', the Boston Consulting Group estimates that global internet traffic will go from 30 exabytes per year in 2005 to 966 by 2015.
Europe is holding its own in this regard: the internet economy contributes 8.3 per cent to the UK GDP vs 4.7 per cent in the US. Getting timely access to relevant data and providing better framework conditions for digital entrepreneurs with the ideas and skills to harvest the enormous potential of big data is a key component of a 'job-rich recovery' as the Commission put it in its recent eponymous communication. This need has arguably inspired item four in DG CONNECT's mission statement and also item five ('Work with partners globally to support an open internet'), as a productive use of data would know no border.
As President Barroso argued in his aforementioned letter, the Europe 2020 flagship offers a clear strategy for economic recovery and there is no dearth of concrete proposals to turn this plan into reality. The missing link to implementation lies with some member states being better aligned than others on this vision. Brussels is only where the journey starts. Real action takes place – or fails to – in various capitals and, more importantly, within each square mile of Europe's shimmering industrial and social fabric. So why don't we follow the path set by consumers in the world's largest and most affluent market? Industry will be more than happy to provide the networks and devices that make for the connectivity required. Governments have 'only' to lift the remaining stumbling blocks that stand between industry and consumers. This suggestion is neither new nor without a name: it is called the Single Market.
What is new is the engine behind it: a digitally powered Single Market is much closer at hand than in analogue times, regulation permitting in.This article first appeared on publicservice.co.uk: Banking on 'Big Data'.