February 29, 2012
A Response to the Letter from David Cameron and Eleven EU Leaders for a Growth Plan in Europe
By Patrice Chazerand, Director Digital Economy and Trade Groups, DIGITALEUROPE.
On 18 January 2012, David Cameron and Mario Monti issued a joint call on the upcoming European Council scheduled on 30 January to unleash the growth potential pent up in a fragmented market. French President Sarkozy was not amused: “There are clearly now two Europes: one that wants more solidarity and regulation between its members, and the other that is attached to the sole logic of the Single Market,” he commented.
On 20 February 2012, unrepentant David Cameron and Mario Monti were at it again: they convinced ten fellow prime ministers to call on the next European Council to focus on the “low hanging fruit” of European growth, starting with the Digital Single Market. Their reasoning, originated in the Monti Report of 2010, is impeccable. Though the other fifteen member states have yet to take sides, this initiative portends another rift within the EU, a family feud between Merkozy and Camonti, according to a creative journalist in a clear reference to the tragic Montaigu-Capulet wars of the Renaissance.
It shouldn’t be that way though. To be sure, the original European economic community (EEC) created more than fifty years ago was driven by the values of economic liberalism. But, it has gradually morphed into a more complex, one-of-a-kind political Union, whose incredible success was based on three key drivers: competition, cooperation, solidarity. At this juncture, the EU needs only more of each ingredient, or a catalyst to build them into a powerful mixture likely to get the EU economy out of the doldrums.
The French presidency of the G8/G20 had a vision of what the prime tool is to address the perfect storm we are undergoing: the internet and the ecosystem that drives it. Accordingly, they convened the first-ever ‘eG8’ prior to the G8 meeting in Deauville in May 2011. Unfortunately, our global leaders’ vision fell short of inspiring a communiqué bold enough to build upon the quintessential enabler of a borderless world, Information and Communication Technology (ICT). Simply because a healthy political European Union cannot do without a powerful economic engine, we can no longer afford to postpone the benefits of digital technology and its role in enabling a fully-fledged Digital Single Market.
The Monti Report, the Cameron-Monti joint statement, the “letter of the twelve” aimed to bring to fruition an endeavour launched decades ago under the watch of President Delors. Indeed, by affording location-free access or experience, ICT is the ultimate border-buster: the world is at everybody’s fingertips. By driving down production, distribution and transaction costs, it enhances competitiveness: innovation feeds European business with leading-edge solutions that make it more competitive. By turning every user into a creator, every citizen into an active contributor to social life, it nurtures creativity, cultural diversity and commitment to the “polis”. In short, digital technology is the enabler we need to shore up the three drivers of the EU economy.
Competition is embedded in human nature. Digital technology enhances competition by opening the world to European business and Europe to global business. It affords information ready for processing, commenting and spreading to others in a flow that bonds communities together across borders. For the EU twenty seven, research concludes that eliminating barriers to the expansion of the digital economy based on the free flow of information and knowledge could deliver 4% additional GDP growth over the next ten years, a gain of €500bn and similar in scale to the growth dividend achieved as a result of the EU’s historic Single Market program that culminated in 1992. Although this may look like the ‘big bazooka’ Mr Cameron used to dangle in front of his domestic constituencies as the ultimate crisis buster, it qualifies for a stream of pent-up growth that, together with his fellow prime ministers, he feels compelled to tap, simply because, “It is now time to show leadership and take bold decisions which will deliver the results that our people are demanding,” they write in a more sober fashion.
When the internet morphed into Web 2.0, thorough mass-collaboration became possible instantly. Whether for experts working on research, game creators developing new software, architects designing a new project or designers shaping a new model, the virtual workplace feels at least as effective and less cumbersome as physical premises.
The digital paradigm creates entirely new forms of collaboration reflected in as many new business models which in turn generate new jobs. Global youth unemployment has reached its highest level on record, increasing from 11.9% in 2007 to 13% in 2009. Currently, it reaches as high as 49% in Spain: no wonder Madrid is among the twelve signatories. With an average of 21%, the EU should think twice before denying growth-based employment to its youth. Besieged by sluggish and seemingly jobless growth, unleashing the job-creating power of digital technology seems compelling indeed: it creates 2,6 new jobs for each it makes obsolete. As suggested by the Twelve, the EU should see to it that its services markets open up on the scale needed, simply because, “They now account for almost four fifths of our economy”. Once presented with the opportunity of a Single Market for services, European business will appropriate the internet as effectively as citizens around the world have appropriated social networks.
Beyond mass-collaboration, the internet is yet unparalleled to bring together individuals keen to share help, passion, entertainment, and political engagement. As ageing populations keep growing around the world, digital technology helps senior citizens to age better. In a different vein, oppressed minorities are able to vent their case in the open and promote democracy. In short, digital technology is great at bridging gaps between generations, countries, social classes. It turns each and every user into a citizen of the world who may empathize or work with communities throughout the globe. 73% of Europe’s 16-24 year olds are “digital natives”, born into the digital world over the past 20 years, while many emerging economies boast even higher ratios of youth and potentially digital natives. Those fast-growing digitally skilled generations are the quickest adopters of new consumer-empowering solutions and other digital tools which challenge the old economic and social order. Economic opportunities, employment and level of civic engagement of these generations will depend crucially on the ability of today’s leaders to put in place the policy and regulatory frameworks most prone to accelerate the digital transformation of our economies.
At this time of turmoil in financial markets, aeronautic-style language swamps the headlines; entire regions are taking a nose-dive as a result of the economy stalling. Digital technology has a proven record of being powerful enough to rev up the economic engine and provide the world economy with the lift to get it out of the doldrums. Some of the world’s largest and most successful companies are spearheading the recovery on the other side of the ocean. A unified digtal Europe has the same capaicty.
On designing the EEC, Europe’s forefathers intended to put an end to recurrent wars between two leading nations. The EU that we as citizens enjoy today has grown well beyond their dream. Not only bringing peace but also prosperity to 500 million people and making our daily life as a community the envy of the world.
Those two leading nations cannot afford to ignore a call for growth and jobs and let a feud develop between the “Merkozy” and “Camonti” families that would prove as lethal as the wars they managed to eradicate thanks to the EU. The European Union is not a toy to be played with in fair weather and discarded when the riding gets rough.digital-europe