March 25, 2015
By John Higgins, Director General of DIGITALEUROPE
The digital single market has been identified as a key plank in Europe’s economic revival, after the worst recession in living memory. I’d go a step further and say that the digital single market isn’t just about getting Europe’s economy back on its feet, it’s about re-fitting Europe with the skills, infrastructure and mindset needed to make the most of the digital transformation of the world economy. Failure will not only be a lost opportunity, it will consign us to the economic slow lane for generations to come. It’s that important.
The European Commission is close to finalising a strategy for how to embark on this re-fitting exercise. We’ll get a first glimpse of it in the coming days.
We’ve already heard about some of the things it will be prioritising: updating copyright, completing the reform of data protection rules, overcoming the geoblocking of TV content. This consumer focus is to be welcomed because without consumers there’s not much point in any kind of single market.
However, two other aspects of a digitally-powered single market are equally important and require urgent attention in parallel to consumer-focused efforts.
First, Europe’s infrastructure must be re-shaped so that it can carry an explosion in the quantity of digital content that will soon be pumping through its networks. And second, we need to encourage all areas of Europe’s economy and society to engage with the new technologies.
It is estimated that three quarters of the potential economic benefits from the digital transformation now under way will be felt by Europe’s existing industries and its public services such as health and education.
This process of sharing the digital dividends of innovation among traditional sectors has been called Industry 4.0. It refers largely to the new digital tools available to all economic players, from the largest industrial conglomerates to the entrepreneur starting a company in her garage.
In order for the wider economy to be a part of the digital transformation it needs skilled employees first and foremost. We have a serious shortage of people with the relevant digital skills in Europe.
More effort is needed to equip Europe with the relevant eSkills needed to share the benefits of technologies such as data analytics, cyber safety and the Internet 0f Things (IoT). The need is right now. It can’t wait until tomorrow.
Industry also needs a regulatory approach that is geared to embracing innovation and technological change, rather than a cautious mindset that encourages inaction or worse whenever the outcomes are uncertain.
And finally the digital transformation requires an infrastructure capable of handling the avalanche of data headed our way.
The providers of this infrastructure need investment, and to get it they need the flexibility to be able to adopt business models that will make their networks profitable. This isn’t an ideological statement – it’s basic economics.
The task of drafting a strategy for the digital single market is huge. Not only must European policymakers tackle these key areas simultaneously, they must also bear in mind the global context.
The digital revolution is a global phenomenon. Many of the companies that pioneered the new technologies, especially in the highly visible consumer market are not European. The temptation is to take a protectionist approach and build walls rather than build on what has got us this far. This is defensive thinking and it will do Europe no good at all.
Germany didn’t win the football World Cup last year by insisting on imposing their own game rules. They did it by competing against the rest and playing the global game better than anyone else. The European economy can do the same if it embraces the global digital transformation, and keeps the goal in its sights: generating jobs and growth.
European policymakers need to be bold, ambitious and show vision in order to reap the benefits of the Digital Single Market. It’s not an easy undertaking, especially given the time pressure for results, but we can’t afford to fail.digital-europe