We are a “latecomer” in the introduction and exploitation of new technologies. However, there is political will to continue the necessary reforms at a rapid pace, says Nikos Pappas, Greek Ministry of Digital Policy, Telecommunications and Media.
The Digital Post: What are the key points of Greece’s National Digital Strategy? What do you expect to achieve in the long term?
Nikos Pappas: The Greek economy, after 7 years of crisis and recession, has shown several signs of recovery. Growth has returned after many years and it is expected to reach 2% for 2017, unemployment has fallen by 6% over the past 2.5 years, while new jobs exceed the number of 350,000 from 2015 until now.
At the same time, investment grew by 11.2% in the first half of 2017, the general industrial production index by 6% in the same period, exports increased by 25.8% in May 2017 and tourism broke a new record of 30 million arrivals in our country for 2017.
But these figures are not meant to stay on paper.
Our government’s goal is to diffuse the benefits of growth across society, that is to achieve an equitable growth. As Ministry of Digital Policy, Telecommunications and Media, we are already contributing to the joint effort to exit the crisis and rebuild society by combining new technologies with science, knowledge and entrepreneurship.
By making all citizens participate in the new digital revolution, eliminating the digital divide and offering equal opportunities to all Greeks, we give the country a new push forward.
Our digital policy is in accordance with the objectives set by our National Strategic Plan for Growth, as for us, this sector consists the “main sector of all sectors of the economy”. This is a strategic pillar of development, on which we are going to “build” the growth of all the other sectors – while in the meantime we will make good use of the high level of human potential that we have as a country – and, thanks to the resulting multiplier effects, we will “prepare” the next day for Greece.
In view of the above, we have designed and developed the National Digital Strategy which focuses among other things on:
1. Accelerating the digitization of the economy and 2. the transition of Greek businesses from a traditional to a modern mode of operation, which explores and integrates Information and Communication Technologies (ICT).
In this context, we have set the following four priorities: i) Promoting the digitization of small and medium-sized enterprises (SMEs), (ii) Enhancing openness and e-commerce, having as key aims the dissemination of e-commerce and e-invoicing, (iii) Greece’s participation in the 4th Industrial Revolution, supporting actions related to the introduction and expansion of sensor networks, smart grids, autonomous systems, and the implementation of “smart cities” actions – as operators of creating critical mass for the development of relevant technologies by Greek companies, (iv) Accelerating the coordination of national policy for the Single Digital Market with the operation of a central structure that will act as a center of digital excellence.
Our goal is to strengthen our competitiveness and productivity without leaving any citizen behind. Our goal is to bring “the future into the present, for everyone”.
TDP: Greece suffers from relatively low levels of digital literacy and digital skills. What are the plans to tackle this issue?
NP: We have no illusions about where our country stands: due to responsibilities of previous governments we have stayed behind. We are now ranked 26th in the DESI index against 28 countries in Europe, as we have achieved one of the top five performances in the EU in the last year.
We are a “latecomer” in the introduction and exploitation of new technologies. However, there is political will to continue the necessary reforms at a rapid pace, but also to take advantage of the highly skilled workforce (with more than 5,000 graduates each year in cutting-edge sectors of technology) that the country has, without leaving society behind.
We are working in collaboration with Panteion University on the first platform for Greece of massive open online courses (MOOCs) with very first subject the Education in Media and Digital Technologies. We want the citizens of the country and – above all – children and young people to be able to decrypt, encode and process modern technologies. We want them not only to be the recipients of this signal, but also creators and equal partners in a development effort based on knowledge and information economy. We want citizens to feel safe and confident in managing new technology and data. And we make it real.
High-speed networks are also included in our planning, so that every corner of the country, every household in Greece reaches a fiber optic network.
Two major nationwide projects – the ‘Superfast Broadband’ and ‘Rural Extension’ projects – with a total budget of around € 500 million, have already been approved for the deployment of a nationwide broadband access network in urban, island, mountainous and minority areas. The two projects are fully compatible with the EU-approved National Plan for the Development of Next Generation Networks (NGA Plan). The process has already begun for the development of the state-of-the-art technological infrastructure needed for the country in order to carry out the transition to the digital economy and to create a new competitive development model.
Moreover, our action on the development of the Internet in the Greek islands is focused on the provision of state subsidies to the permanent residents of thirty-five (35) remote Aegean islands in order to acquire a mobile broadband Internet connection for about 11,000 households and at least 22,000 eligible citizens. Our goal is to achieve a significant increase in the penetration of broadband in the Greek territory, but also to make the beneficiaries familiar with the modern and rapidly evolving broadband services and applications.
A similar program has already been implemented for the first-year students of Greek Universities and Technological Educational Institutions, and will soon be extended to benefit vulnerable social groups such as Persons with Disabilities.
Worth mentioning, among other actions, is the project of the digitization of Public Administration: a project on digital circulation-management of state documents, in which digital signatures will be used.
A pilot project was initially implemented at the Ministry of Digital Policy, Telecommunications and Information. Its cost for the Sate rose over 59.5 thousand euros, which will be recovered from the first month of its operation, as the annual savings expected for our Ministry will amount to 700.000 euros. In the following period the same system will be installed in all Ministries, and then will pass to Local Government Administration and Chambers. Due to the operation of the new platform, besides the digitization of Public Administration, we are estimated to achieve savings of 400 million euro per year for the entire public sector.
TDP: One bright spot is Greece’s thriving startup scene. How the government is supporting its development?
NP: It is our main priority to create a favorable environment for start-ups in the Information and Communication Technologies (ICT) field. Supporting the openness of start-ups and forming business clusters as well as research and development support actions have begun to bear fruit and their completion will be stepped up in the future.
Another worth mentioning initiative is the integration of businesses involved in the sector into the Needs Entrepreneurship Program, which provides about 120 million Euros for the support of Greek start-ups. In addition, as part of private initiative funding, we participate in the “Fund of Funds” program, which, in cooperation with the European Investment Fund, provides financing of 260 million euros to small and medium-sized enterprises, giving priority to ICT.
TDP: What are from your point of view the most important actions of the European digital single market strategy?
NP: I recently welcomed in Greece the Commissioner for Digital Economy and Society, Mariya Gabriel. It was her first trip to a member state after taking up her duties. We are collaborating closely with the Commissioner on a number of issues, including the modernization of public services, which, as it is clear, goes through their digitization.
I think we are halfway in terms of our transition to the digital single market. If we succeed in what consists the first priority of Digital Policies for Europe and which is nothing else but the development of digital skills of European citizens, then we will actually make the difference.
Besides, to us, everything starts from and ends up to the citizens. It is for their sake that we want to bring the future into the present. Actually, it is for everyone’s sake.
Picture credit: Theophilos Papadopoulos
Innovation is the backbone of Europe’s capacity to export products and hence to support its economy. This is why any policy adopted by our decision makers should always take account of its impact on the ability to innovate, says Brian Ager, Secretary General at the European Round Table of Industrialists (ERT).
The Digital Post: How the global rise of protectionism with increasing adoption of trade restrictive measures, is playing out in Europe? How could it impact on Europe’s competitiveness in the innovation and digital sectors?
Brian Ager: Although protectionism is on the rise worldwide, it is not the silver bullet to address imbalances, as some argue. On the contrary, protectionism is likely to damage European economies.
The EU is a very open economy. While global markets have overall expanded over the last ten years, the EU remains the most important exporting region (in terms of goods and services combined). More than 30 million jobs in the EU depend on trade. Therefore market access, the elimination of trade and investment barriers and adherence to a rules-based global trading system are crucial to the competitiveness of the EU economy and to safeguard employment.
Protectionism may hamper international competition by limiting opportunities to invest abroad. Competition is however essential for economic and technological development, not only in manufacturing, but in particular in the services sector. The EU remains the biggest foreign investor globally and the biggest destination of FDI (although with a sharp decline over the last decade).
We also look forward to positive signals from the US, the most important trade partner for the EU, especially after the protectionist opinions expressed by President Trump. The transatlantic partnership should also include the digital arena. For example, the international free flow of data is a prerequisite for European industry to optimise global business operations through digital technologies.
Existing direct and indirect restrictions to the free flow of data, introduced by countries around the world, however tend to be unnecessarily protectionist and undermine the competitiveness and growth of European companies.
The digital economy is rapidly developing worldwide thanks to the many innovations made. However, we should remain aware that these innovations heavily rely on easy access to market, knowledge and capital – and are characterised by global value chains.
Take for instance micromechanical sensors invented and produced in Germany to equip cell-phones assembled in Asia and then distributed worldwide. From this perspective, the temptation of protectionism seems to go against the tide and put at risk countries that would take this route.
TDP: What are the main findings of your latest Benchmarking Report regarding Europe’s performance in innovation?
Brian Ager: The merits of this report is that it points out where the big key issues are, like the relatively slow pace of digitisation in Europe or the tough global competition in the innovation area. It also recognises that innovation is becoming a critical factor for competitiveness.
In addition, the Benchmarking Report emphasises the strengths of Europe and the EU in particular. For instance, the innovation performance is overall good, with some countries obviously more advanced than others.
Innovation is the backbone of our capacity to export products and hence to support our economy. This is why the report also highlights that policies should take account of their impact on the ability to innovate.
TDP: What are your main recommendations to Europe’s decision-makers as regards supporting Europe’s innovation and digital sectors?
Stimulating innovation and adoption of new technologies as the main driver of sustained economic growth in Europe. Evaluation of every legislation and policy measure with respect to its impact on innovation throughout the policymaking process. (Innovation Principle).
Strengthening of the internal market, in particular by completing the Digital Single Market.
Unleashing the benefits of digitisation by investing in digital infrastructure, key technologies and skills development; supported by a robust regulatory framework, covering security in cyberspace.
Enabling start-ups to scale up by boosting entrepreneurship, access to funding and cutting red tape.
Last but not least, ensuring access to foreign markets while maintaining a level playing field.
TDP: Is the Digital Single Market strategy delivering on its promises to boost Europe’s competitiveness in the digital sector?
Brian Ager: The construction of the Digital Single Market is a key example showing how European cooperation can bring benefits to all.
Europe should strive to achieve a global leadership role in the digital revolution by swiftly implementing an EU-wide harmonised framework, and by setting up standards for the Digital Single Market. This will boost the European economy, make it more competitive and create new jobs across all sectors.
Digitisation brings new opportunities for innovation and for the deployment of new technologies. Europe – as an innovation-driven economy – should grasp these opportunities and turn them into a real competitive advantage for its companies.
Progress made by the European Commission in delivering its Digital Single Market Strategy is a step in the right direction.
Picture credit: Andrew Stawarz
Europe can still be a rather bumpy landscape for innovators, although innovators should learn to market better their achievements, argues Robert Madelin, Senior Adviser for innovation within the European Commission and former Director General at DG Connect.
The Digital Post: What are the major challenges facing the DSM strategy?
Robert Madelin: The Strategy itself identifies several challenges under its 16 actions. It’s also clear that some of the changes brought in by the Strategy will imply winners and losers. The main political challenge is whether we are ready to accept this because we care enough about improving our society.
RM: We have entered the Fourth Industrial Revolution, a period where everything is changing and evolving so fast that it is difficult to grasp what’s next. Under these circumstances, the successful strategies should go to the basics. The Digital Single Market strategy is precisely future-proof in this sense, since nobody knows what the future is. Delivering infrastructure, capacity, industrial transformations, skills awareness, cyber security while investing enough in research into Quantum, Big Data and 5G: This is a good portfolio effort. But it’s impossible to avoid taking risks in a period of big change. The Digital Single Market Strategy take such risks and it is likely that some of its actions will fail.
TDP: On 1st September 2015 you were appointed senior adviser for innovation within the European Commission. Jean-Claude Juncker tasked you with drafting a policy review on innovation in Europe. What can you tell about this report?
RM: I think the missing piece is often the recognition that research is a component of European innovation and competitiveness. Let me put this in figures: less than one euro in five spent by European companies on innovation is poured into research. Moreover, in some areas we don’t have a positive conversation about innovation. At European level we don’t have a conversation at all. What we have, instead, is little pockets of reaction to disruptive innovation.
This resistance to innovation may be legitimate or not, but it is difficult to act on it if we don’t have a proper debate. That’s why Europe can still be a rather bumpy landscape for innovators and that’s the problem we have to fix. The report should be released by the end of June.
TDP: So are you saying that Europe is not a positive environment for innovators?
RM: Let’s talk first about the environment in the world. In 2015 the communications firm Edelman carried out an extensive survey on innovation by interviewing tens of thousands people in a hundred countries.
What came out is that two out of three respondents understand that innovation is good for growth and jobs, but only one out of three think that innovation is doing something good for the planet as well as for their communities and families.
I believe this proves that innovators are marketing their intentions and achievements very poorly and that’s not true only in Europe. The same survey tells us that Europeans want innovation to primarily look at issues such as health, family, community, environment. The two things fit together.
Everybody wants innovations, and wants innovation to benefit the areas they care about. Therefore, the vision underlying the European approach to innovation is right: ‘responsible innovation’ is a key concept within our research programme Horizon 2020. That’s the theory. As far as the execution is concerned, we are beginning to learn.
Coming to your question, is the atmosphere positive for innovators? Not yet. Can it get better? Yes. Do we understand how to? I think so. Are we working on it? Yes.
TDP: Let’s switch to the telecom sector. What do you think should be the priorities of the upcoming review of the telecom framework?
RM: The reason to have a telecoms framework is systemic empty competitive mechanisms in the market. Now we have to revisit how far that’s a problem. We’ve already narrowed enormously the number of markets to which the regime applies.
The second question to ask is to what extent we need a framework. We still do because telecoms it’s a network industry. But how do we tune the framework to ensure the best possible supply of infrastructure? That’s a big problem that we haven’t fixed yet.
Of course, everybody has different views on the best answer to this. My personal view, having been for five years Director General of DG CONNECT at the European Commission, is that the theory of the ladder of investment doesn’t reach to fiber to the home.
If it doesn’t work, we need to apply another theory: Which means we might need to either invest more public money or structure differently the market in order to generate very high speed connectivity investment.
This is part of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger Juhan Lepassaar and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Dennis Skley
The Digital Single Market strategy is a step in the right direction but the Commission must speed up its implementation, says Brian Ager, secretary-general of the European Roundtable of Industrialists.
The Digital Post: What is your general opinion about the Digital Single Market Strategy?
Brian Ager: We thought that it was an important first step to get everybody behind a common approach, and I believe it was a good move. I think it’s important to get an orientation, to get it out there and see what the reactions are.
TDP: Do you think this strategy is enough business-friendly? Can it provide a sufficient conducive investment climate that will help Europe catch up with other markets in the digital sector?
BA: Only time will tell. To be fair, a few legislative proposals have been already presented. But for the rest, the Strategy is only a piece of paper that in itself is worthless: it’s what flows from that that will matter. It is now important that the Strategy is translated into a series of policy measures that are the right ones. Are they going to be implemented effectively? And are they going to be implemented in a coherent way across the whole of the Union? If you can tick those boxes, then you’re likely to see investment flow. But the Strategy in itself it doesn’t. Well, it is better to say that it will not automatically lead to investment.
TDP: Do you think that the Strategy may lead to over-regulation?
BA: I think it’s a possibility. But this must not happen, if we’re serious about digital economy, because if it does, then you strangle the digital potential of the whole continent. Another matter of concern is that the implementation is too slow.
TDP: A number of observers from outside Europe pointed out that Europe is using a punitive approach towards US internet success stories or internet companies. Some are even talking about “digital protectionism”.
BA: The Internet economy is global by definition: if you want to seize its opportunities you need to take a global approach for a global market. I can’t see how Europe could be protectionist, it wouldn’t work anyway.
TDP: What do you think of the European Commission’s plan on Industry 4.0?
BA: Our first reaction is that overall the plan is a good step in the right direction. But I can’t help but notice that it was presented almost one year since the digital single market strategy was unveiled. We need to speed up the entire process.
TDP: Many fear that Industry 4.0 will be a huge job killer.
BA: I don’t think it’s so much doom and gloom. We feel clearly it will lead to some job losses, but it should also lead to the creation of other jobs, because you’re switching the economy from one type of activity to another. To be sure, the development of Industry 4.0 will lead to a switch from more low-skilled jobs to more high-skilled jobs. This change brings us to another crucial point, that is the responsiveness of the education systems. An extra effort is needed to drive our students towards math, technology and science-related studies, including math, physics, engineering and computer science. Today the industry complains that it’s missing half a million ICT engineers, software engineers, even mainstream engineering. The problem can be addressed only if we start working from the basic education. As far as the exiting work employment is concerned, we need to think very hard about vocational training, lifelong learning, re-skilling, because things are going to come along faster and faster.
This is part of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger Juhan Lepassaar and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Matt
The Digital Post spoke to Juhan Lepassaar, Head of Cabinet to Vice-
President Ansip, about the latest progress of the Digital Single Market strategy.
The Digital Post: How is the implementation of the Digital Single Market (DSM) strategy progressing?
Juhan Lepassaar: So far, we have adopted two key proposals on the harmonisation of digital contracts rules and on portability of digital content. In addition, in February the Commission presented legislation intended for greater coordination in the use of the 700 MHz band for mobile services. Last month, we also published a package on Industry 4.0 and e-government, containing a number of non-legislative actions that will help create the right environment to boost the digitalisation of the European industry.
During the month of May, we are going to unveil our e-commerce package, which will include actions to tackle unjustified geo-blocking and other forms of online discrimination practices. We will also present a proposal for the review of the audiovisual media services directive and a communication on the role of online platforms. Before the summer break, we plan to move forward with the public-private partnership on cyber security.
Then, the next big things are the review of the European telecoms framework in September or early October and the next steps of the modernisation of EU copyright rules. Finally, in autumn we will act on the free flow of data, we will table proposals on VAT for digital products and on corporate enforcement rules.
TDP: According to a number of observers some proposals would actually mean more regulation on tech industry at the expense of their capability to innovate and invest. Are these fears justified?
JL: We believe that these fears are unjustified. We do not want to undermine the way the digital economy operates. Our proposals are balanced: they allow enough flexibility without adding more regulatory burdens. Take the example of digital platforms. The commission has concluded that it wouldn’t be judicious to have a horizontal regulation on platforms because they are way too diversified. Hence, we are opting for a problem-driven approach.
That is, once a problem is identified and clearly defined, we might act through regulation or opting for self-regulation initiatives. We’ve already applied this approach on the issue of hate speech on digital platforms. That doesn’t mean that existing rules on certain areas like platform content, transparency or the issue of the so-called value gap will not be further clarified within the DSM initiatives.
We aim to simplify the environment for tech industry in Europe. This is what we do by harmonising rules in different areas. For example, one clear set of rules for consumer protection in the EU, rather than a patchwork of 28 different national regimes, makes it easier for businesses to grow across borders. In the end, this is actually about less rules and better regulation.
TDP:What are the key elements or the strategy to fix the EU-US digital divide?
JL: First, reducing the regulatory fragmentation. That is the key issue that differentiates the European market from the US. Second: access to finance for our tech industry. We have set out an agenda, which will reduce fragmentation and bring down the barriers for businesses opening to them a market of 500 millions customers.
TDP:Businesses in the United Kingdom and other countries are concerned about the cross-border tax system. How the Commission intends to modernise the VAT for digital products?
JL: There is a difference if a business has to deal with 28 taxation authorities or only one. What we want to ensure is that, especially small and medium size businesses when they do business across the borders will only deal with their own tax authority and the rest is taken care of by tax authorities between member states. The commission in its digital single market strategy has already highlighted the fact that in the area of e-commerce we need a taxation threshold to protect the smallest businesses. We will act upon this with our proposals that are forthcoming in December.
TDP: The upcoming revision of EU telecoms framework will revolve around the usual dilemma, more deregulation versus more competition. How do you strike that balance?
JL: That’s a good question. Telecoms operators are right when they say they face regulatory burdens that new players do not. It is our job to determine whether we can reduce the regulatory burden to all and whether there are still any areas where we need to make sure that all the players that provide same services also abide by the same rules. I think the answer is a bit of both approaches.
TDP: What are the plans of the commission with respect to industry 4.0?
JL: The plan that the Commission published last month includes issues like standardisation and interoperability as well as measures to boost Cloud Computing and Big Data technologies in Europe. The proposal is also designed to help digital public services to inter-connect with each other across borders so that businesses, if they want to do business across the borders, can do it easily without having to submit the same information to different public authorities.
The plan also links up to the forthcoming initiatives on the free flow of data. It is also very important that the revision of the telecoms framework touch upon the issue of spectrum, which is a commodity increasingly needed by the industry for the internet of things or self-driving cars for example. All in all, Industry 4.0 relates to all DSM initiatives.
This is the first of a series of interviews held during the conference "Digital Single Market: Bridging the Gap" organized by the British Chamber of Commerce in Belgium. The event featured keynote speeches from Commissioner Oettinger and Robert Madelin (EPSC). Other speakers included senior EU officials, parliamentarians, trade bodies and business leaders who discussed the future challenges for business in the areas of fintech, e-health and industry 4.0.
Picture credits: Metropolitan Transportation Authority
If we do not open up this band in Europe as soon as possible we will not be able to get the benefits from 5G. Europe lagged and lag behind regarding 4G but took the lead of 3G. Now we need to take back the lead.
Picture credit: phys.org
The European Commission’s strategy for “digitizing” industry that was unveiled today is a good step in the right direction. The digital industry will play its part but we need a business and policy environment that maximises our chances to take advantage of this opportunity.
In the build-up to last May’s unveiling of the Digital Single Market (DSM) strategy DIGITALEUROPE urged the European Commission to focus its efforts on preparing Europe’s economy for the digital transformation. This week’s package of initiatives does just that.
We are getting to the meat of the DSM, and not a minute too soon. Last month at our Masters of Digital event the final panel discussion involved speakers from agriculture, auto manufacturing and financial services, talking about how digital technology is already redefining their industries.
Just three years ago discussions about how drones and automated tractors can improve farmers’ efficiency, how 3D-printed car parts can help build cars tailored to local market conditions, or how a phone could replace a bank card would have sounded like science fiction. It involves science but it’s not fiction.
These are a few examples of how the digital transformation is already underway.
The technology package of initiatives unveiled today correctly identifies some of the core elements of the digital transformation.
And contrary to what some feared, it isn’t a rush to regulate. Instead, there are some pragmatic suggestions how Europe should make better use of the technologies on offer. Innovation in the areas of high-performance computing and cloud needs to be encouraged in an inclusive way.
The proposed “innovation hubs” are an excellent idea. To be truly effective they will need to be embraced by Europe’s business community. We’ve seen really great examples of this in some of Europe’s leading cities.
The focus on developing digital skills is also to be welcomed. It is important to ramp up efforts to ensure Europe has the digital skills we need to make the most of the digital opportunities. I would add that policy makers and educators themselves need training to appreciate the impact of new technologies.
The inclusive approach seen in the cloud initiative is also evident in the approach to ICT standardisation laid out by the Commission, with its emphasis on collaboration between public and private sectors. We have a unique opportunity to master digital for the benefit of all Europeans.
The digital industry will play its part but we need a business and policy environment that maximises our chances to take advantage of this opportunity. This week’s announcements by the Commission are a good step in the right direction.
DIGITALEUROPE wants two things for Europe; first, for us to get the best from digital – to have strong productive economies, efficient public services and citizens enjoying digital technologies as part of their daily lives.
And second we want Europe to be a great place for the digital sector – including DIGITALEUROPE’s members – to thrive and grow. Put simply – ours is a vision of a Europe that has mastered digital.
We see around us everyday the great promise that digital technology offers. We watch the transformation of great European businesses. We hear about new tech, and tech-driven businesses growing and thriving, and we see the increasing attractiveness of many European cities and regions to investors.
But are we doing enough to harness the potential of digital technologies?
DIGITALEUROPE measures the DSM elements against a set of principles we think are pre-requisites to achieving our vision – the masters of digital vision. They include the following:
– Does the initiative take us towards a single market fit for the digital age? Does it break down national silos?
– Will it encourage innovation and entrepreneurship?
– Is the initiative simply shielding the status quo from change? For example, by protecting an incumbent industry or national icon, or trying to protect jobs threatened by technological progress or just new fair competition?
– Are new rules really needed or could existing rules be used more effectively? And if they are needed have the policymakers designed them in the least burdensome, and most straightforward way possible?
– Does the initiative recognise the global nature of digital? If so will it encourage European companies and citizens to want access to products, services and customers from around the globe? And will it allow European businesses to take advantage of a global approach to standards?
– Finally, and most important of all, will the DSM encourage economic growth and the creation of good quality European jobs?
This week’s announcements appear to uphold these principles. The emphasis on collaboration with industry that runs through all the separate elements of the technology package bodes well for Europe’s on-going digital transformation, and its ability to boost growth and create jobs in the digital age.
Picture credits: Lukas Budimaier
The Digital Post speaks with FTC Commissioner Julie Brill about the new ‘Safe Harbour’, the implications of the EU privacy reform, and privacy issues arising from the boom of the Internet of Thing.
The Digital Post: The European Union and the United States of America have reached an agreement on a new Safe Harbour data treaty. What are in your view the main achievements of the deal? What would have been the concrete risks if an agreement weren’t signed?
Julie Brill: The main achievement of Privacy Shield is that it provides strong privacy protections for European consumers and creates a framework for more parties to engage in active supervision and stronger enforcement cooperation. With respect to commercial data practices, Privacy Shield will provide stronger privacy protections than Safe Harbor did – through beefed up onward transfer requirements, and in other ways.
Privacy Shield will also establish more active supervision of the program in practice, so that the Department of Commerce, the European Commission, European data protection authorities (DPAs), and the FTC can detect and address any issues that come up. Privacy Shield will also provide a well-defined process for consumers to complain about the data practices of Privacy Shield companies.
The FTC will remain committed to giving priority to complaint referrals from DPAs, and there will be a better process in place for following up on these complaints. And even in the absence of referrals from DPAs, the FTC will continue to aggressively look for violations of the Privacy Shield principles.
Finally, in the area of national security, the United States agreed to take the unprecedented step of designating an ombudsperson to take complaints about surveillance activities that relate to Privacy Shield. This is in addition to the significant reforms that Congress and President Obama have made to surveillance practices in the past few years.
The risks if Privacy Shield hadn’t been agreed upon would have been that consumers and businesses would have continued in the limbo in which we currently exist, where some mechanisms to transfer personal data from the EU to the U.S. are still allowed, but they are expensive, opaque, and much more difficult for the FTC to enforce.
Of course, Privacy Shield still has many steps to take before it receives approval. If it were not approved, then companies – particularly small and medium enterprises – would lose out because of the time and resources that they have to put into alternative arrangements for data transfers.
But consumers also would lose out because they would have far less transparency into which companies are handling their data, the rules governing data transfers, and where to go to complain if they believe their rights are not being respected.
TDP: According to some observers, the new agreement won’t be sufficient to meet the concerns of the European Court of Justice. What is your opinion?
JB: It’s important to remember that the CJEU’s Schrems decision did not address national security surveillance practices in the United States. Rather, the case was based on the court’s concern that the European Commission’s adequacy decision in the year 2000 did not address U.S. privacy protections relating to national security surveillance.
It is hard to say how the CJEU would have assessed a full, accurate record concerning surveillance practices and privacy protections in the United States, had those facts been before the court. In any event, the U.S. has enacted significant reforms since the Schrems case was referred to the CJEU, and the U.S. is making further commitments through Privacy Shield.
On the whole, I believe these protections meet the CJEU’s standard of “essential equivalence to the EU legal order”, but we will have to wait to see if Privacy Shield is challenged to know whether the CJEU agrees.
TDP: Is the GDPR going to widen the chasm between EU and US regulatory approaches to data protection? How the FTC is working on this issue?
JB: The GDPR incorporates several provisions that either appeared first in the United States or are by now very familiar to companies and enforcers in the U.S. Examples include a focus on reasonable data security through a continuing process of risk assessment and mitigation, a general security breach notification requirement, heightened protections for children, privacy by design, and a recognition that deidentification can reduce privacy and security risks.
There are some differences between the European and U.S. versions of these provisions, but overall they show how developments in the U.S. can influence the direction that Europe takes.
On the other hand, some provisions of the GDPR move further away from the U.S. approach. A prime example is the GDPR’s right to be forgotten article, which extends to all data controllers. This expansion is a sharp contrast to the very targeted and specific provisions of U.S. law that help individuals keep some information about themselves obscure.
Companies and regulators on both sides of the Atlantic need to start working out answers to the many questions that the GDPR raises. That’s one reason that I think it’s so important for us to move beyond the issues surrounding mechanisms for data transfers that have dominated the discussion for the past several months.
With the announcement of an agreement on Privacy Shield in the past several weeks, I hope we now can begin to discuss the GDPR and issues like big data and the Internet of Things in a more sustained and meaningful way.
TDP: The FTC has been focusing on privacy issues related to the booming sectors of Internet of Things and Big Data. What are the risks? How regulators should deal with this very sensitive issue?
JB: There are important roles for enforcement, policy development, and business and consumer guidance in the Internet of Things and Big Data ecosystems. On the policy and guidance front, the FTC has been taking a close look at the potential benefits and risks of the Internet of Things and big data.
We have hosted public workshops, taken public comments, and written key reports on the broad range of technical and economic concerns that arise from having many more connected devices, huge volumes of personal data, and rapidly improving analytics.
We heard a lot about the exciting possibilities to solve problems in health care, transportation, the environment, education, and other areas; but we also learned about significant risks. Security is a huge challenge with the Internet of Things.
Not only are many devices being offered by companies that do not have long track records with data security, but these devices are also being used in ways that collect highly sensitive information and create physical risks to consumers.
With respect to big data, we found that there is a potential for unfairness or discrimination to enter through biases in data collection and analysis. Some of these issues could get companies into trouble under fair lending, credit reporting, or other laws. Other issues arise in settings that these laws do not cover, but companies still need to be aware of them because they may be deceptive or unfair.
Enforcement also plays an important role in the FTC’s approach. We have already brought enforcement actions relating to privacy and security violations with IoT devices. We have the authority to stop unfair or deceptive practices – whether or not they involve new technologies and business practices – and we will use it in appropriate cases.
Picture Credits: g4ll4is
The Digital Single Market is not about bits-and-bytes, not about technologies, not about virtual media. It is about the people, it is about the citizens, it is about the jobs, quality of life and civic participation. Therefore it is important to look into the role of regions and cities in making the Digital Single Market work for Europe.
Our task is to boost digital skills, learning across society and the creation of innovative start-ups. We need to ensure digital literacy and skills for citizens, workers and jobseekers. This also includes the need to imbed digital technologies in education in order to prepare the future generations. We are looking forward to the European Commission’s New Skills Agenda 2016, which promises the promotion of life-long investment in people.
Not only is it enough to have local and regional authorities involved, we must engage our citizens and business to co-create and develop regions and cities together with all stakeholders, if we want to be successful and create thriving entrepreneurial ecosystems in our regions. Public sector, universities, schools, and the private sector all have to actively participate.
The main task of the European Committee of the Regions is to create a “bridge” between the policies and actions. In Europe, we need to connect to digital world in our everyday life in schools, universities, civic organisations and companies. Broadband connectivity in all regions, including remote and rural areas, is a prerequisite for this. The European Commission should report regularly on progress made in overcoming the digital divide, particularly at regional and local level.
Poor profitability means that in the rural areas there is often no market-driven development of high-speed broadband networks, so that the support options at European and national level need to be consistently further developed.
We need to engage cities and regions to invest in digitalisation and broadband connectivity and to use different financing including innovative public procurement and other funds. Here partnering is key to create growth and boost European economies.
In addition, we must continue to promote synergies between different programmes and financing instruments like EU structural funds and Horizon 2020 and European Fund for Strategic Investments (EFSI), and promote European multi-financing and integrated European funding in order to support cities and regions to reap the full benefits from the Digital Single Market. Cross-border, transnational and inter-regional cooperation are also crucial to exchange the best practices between regions.
Entrepreneurship is one of the strongest drivers of growth and job creation. Digital and web entrepreneurship in particular have the potential to boost the economic recovery of Europe. Cities and regions can create a favourable climate for innovations through their interaction with citizens, universities, civic society and local businesses. They have a pivotal role in creating a friendly environment for public and private investments and necessary conditions for the strong startup ecosystems.
In my own city, Espoo, I have participated in the creation of several initiatives to promote innovation and entrepreneurship, such as Aalto University, Startup Sauna, Urban Mill, and the Espoo Innovation Garden.
Investing in entrepreneurial culture and entrepreneurship education is an investment in the future. We have to make sure that promising entrepreneurs can obtain the funding they need to start a business. We have to cut down the regulatory burden our entrepreneurs face. We have to support start-ups that are ready to grow and internationalise, and we should also equip entrepreneurs with the necessary skills to successfully start and run a business.
The CoR is promoting entrepreneurship in Europe’s regions via the European Entrepreneurial Region (EER) awards, created in 2009. EER regions provide us with living examples that illustrate what regions and cities can do to promote entrepreneurship education.
One of the very first EER winners was Kerry County in South-Western coast of Ireland. The County has focused on the early stages of educating future entrepreneurs via Junior Entrepreneur Programme, which introduces entrepreneurship in schools for pupils from 8 to 12 years. The programme has been so successful that it was adopted nation-wide, with 10.000 pupils participating in 2015.
Along with digital divide, we should address the question of innovation divide in Europe. Particularly in rural regions, the public sector is a driver for change and a key player in raising local awareness. There should be a focus on innovation in the public sector itself, as well as on rethinking management processes in public institutions. This will enable these regions to catch up.
Commissioner Carlos Moedas highlighted in the CoR plenary session the new role of cities as the new global powerhouses for progress and societal innovation. Cities create favourable conditions for urban innovation – the synergic interaction between universities, civic society, local and international businesses as well as citizens. This is why we must renew the Urban Agenda to include the Digital Single Market, entrepreneurial spirit and human smart city initiatives.
Picture credits: Danka & Peter
European Commission’s plans to overhaul the telecoms rules across the bloc are most likely to encounter the hostility of a powerful, yet unsuspicious ‘lobby’: national regulators.
An opinion issued in mid-December by Berec, the Body of European Regulators for Electronic Communications, appears to anticipate a confrontation with Brussels.
The Commission has made a top priority to “break down national silos” in the sector’s regulation with the aim of building a genuine single market for telecoms.
Berec’s opinion is keen to stress that any such achievement “will always be the product of 28 competitive and well-regulated national markets”. While the executive president Jean-Claude Juncker recently proclaimed that he wants “to see pan-continental telecoms networks”, regulators respond that “physical networks are and will remain national.”
No need to be a telecom expert to guess that the two institutions may have diverging views. This is nothing new. Disagreements of this sort adumbrate a struggle of power that has been playing out for some time.
Telecom regulators stood firmly against several attempts by former digital commissioner Neelie Kroes to exert more control over their domestic decisions.
Now they fear that the upcoming reform might curtail their sway in national markets while increasing the Commission’s competences in what is meant to be a fresh shift of power.
Little wonder that Berec’s opinion appears to air scepticism at the idea championed by Brussels that the current rules governing the sector need a robust modernization as well as more harmonization.
By contrast, the organization is vocal in praising the existing legislation – although admitting improvements are required – precisely because it leaves regulators enough room for manoeuvre, namely the “ability to address the particularities of their national markets”.
Greater EU harmonisation should happen only where it makes sense, while preserving national differences, Berec argues. Thankfully, the Commission believes that a fair chunk of those differences are leading to overregulation or regulatory uncertainty that might hinder investment at a time Europe needs to accelerate the rollout of digital networks so as to compete with the rest of the world.
The mobile sector is a textbook case. Ensuring greater consistency in radio spectrum policies at EU level – a measure the Commission has announced to be part of the reform – will generate mobile network cost savings, as well as additional benefits associated with improved coverage, capacity and network performance, observers say unanimously.
And yet Berec does not appear to share this idea. To the contrary: It says that “top-down harmonization” might result “in inefficient use of” radio spectrum, “hampering rather than supporting innovation”.
The Commission is expected to unveil its proposal for the review of the EU’s regulatory framework for electronic communications as early as this spring.
These rules addressing the regulation of service provision, access, interconnection, users’ contractual rights and users’ privacy were last revised in 2007-2009. The reform constitutes one of the 16 strategic actions of the Digital Single Market strategy unveiled with great fanfare in May last year.
Berec’s opinions are not binding but must be taken in “utmost account” by the European Commission, according to the EU law, meaning they cannot be simply neglected, not least because telecoms regulators are often tasked with implementing the bloc’s rules.
It is worth noting that in the past years some regulators chose to ignore Brussels’ decisions or even the implementation of pieces of European legislation.
At the same time Berec voiced strong criticism at a bunch of key Commission’s proposals. For instance, it objected to a wide spectrum of measures put forward under the “Connected Continent” package, which was also designed to accelerate the building of a single telecom market.
That is why the European Commission should strengthen the dialogue with regulators before putting out the new legislation so as to minimize their influent opposition (in the past they lamented that they have been not consulted).
The fact is that further integration in the sector’s regulation is key for the future prosperity of the bloc and is a stepping stone towards a digital single market. Berec ought to come to terms with this basic truth even this means a loss of powers for the national regulators.
Photo credit: Jesse Loughborough
In order for the Digital Single Market to live up to its full potential, we need to open up and re-think old models, and thoroughly change our mind-set. An excellent example of such a forward-thinking, inclusive and transformative tool is the model of open innovation.
Working for the benefit of citizens and businesses has always been the EU’s driving philosophy and nothing makes a stronger case for that than our efforts towards the completion of the EU’s Digital Single Market (DSM).
We are proud to have laid the groundwork for the timely and successful implementation of the European Commission’s DSM Strategy, a key project expected to add an estimated 500 billion euro to the European economy and provide a substantial boost to job creation.
In order for the DSM to live up to its full potential, we need holistic introduction and support processes that involve all stakeholders equally.
We need to open up and re-think old models, and thoroughly change our mind-set. An excellent example of such a forward-thinking, inclusive and transformative tool is the model of open innovation.
Open Innovation 2.0 (OI2) is a new paradigm based on principles of integrated collaboration, co-creation of shared value, cultivation of innovative ecosystems, unleashing exponential technologies, and extraordinarily rapid adoption. I see the DSM the same way – a collaborative space for consumers, NGOs, the public and the private sectors to all benefit from.
OI2 is revolutionary in that it allows citizens to have an active role in the innovation process – to work together with industry, academia and the public sector to come up with new ideas and stretch the boundaries of technology and societal behaviour to create new markets, products and services.
All of this happens accessibly and in real time, including prototyping and experimentation to determine each idea’s potential for upscaling, thereby transforming consumers into co-creators.
Such an open and transparent ecosystem, however, also poses its own challenges around the assessment and protection of intellectual capital and the establishment of trust and cooperation.
OI2 enables Europeans to deliver the highest and most innovative results by leveraging all the talent and resources of the community. And as supporters of OI2 like to say ‘innovation can be a discipline practiced by many, rather than an art mastered by few’.
We need to combine and double down on our efforts in order to strengthen stakeholders’ trust in a modern, future-proof and sustainable framework for Digital Europe; to uphold the rights of all online consumers and introduce policies that support entrepreneurship and innovation.
The Digital Single Market is a machine made up of many different parts, with innovation at its core. It wouldn’t work at full speed if some or any of these parts were not working harmoniously with each other. It will also not work if innovation is not protected and incentivised. It is the responsibility of all of us to make sure it does.
This contribution was originally published in the Open Innovation Newsletter (special December 2015 edition) of European Commission’s Directorate General for Communications Networks, Content & Technology.
Photo Credit: Daniel Foster
Despite what many people may think, there is no real lack in capital supply for Europeans interested in launching their own start-ups in the digital domain.
The rise of (digital) technology start-ups is a global phenomenon, with extensive start-up ecosystems – such as the one in Silicon Valley – being replicated all over the world. Like any other region, Europe is highly interested in reaping the economic and societal benefits of a flourishing start-up economy.
In a recent speech, Neelie Kroes (the former Commissioner for Europe’s Digital Agenda) stated for instance that two out of three (!) new jobs in Ireland are created by start-ups in the first five years of existence.
Not all is rosy, though. Critics often say that it remains hard for European start-ups to get access to the proper financial means to kickstart their businesses.
But is that really the case?
It’s definitely not their biggest problem. Despite what many people may think, there is no real lack in capital supply for Europeans interested in launching their own start-ups in the digital domain.
Virtually each region has done a good job in developing the appropriate funding mechanisms to support start-ups’ launch activities. In other words: it’s not (all) about the money. As a matter of fact, three bigger threats to European start-ups’ longer-term growth can be discerned – culture, regulation and mindset.
A first issue is Europe’s fragmented market – not so much from a geographical perspective, but rather from a cultural one. Indeed, in spite of all good intentions, it remains difficult for European start-ups to sell their products across ‘cultural’ borders. The use of different languages is one obstacle, of course, but divergent social aspirations and cultural values are equally important barriers.
For example, selling a solution for personalized online advertising might be perfectly acceptable in one region because of the advantages it brings (instead of being spammed, one only gets to see those ads that are in line with his/her interests), but it may fail completely in cultures where this is perceived as a direct assault on people’s privacy.
Intra-European legal and regulatory barriers present additional obstacles. A concrete example is the burden that accompanies the launch of pan-European digital health solutions, with each European country having issued its own regulations related to the development, sale, usage and reimbursement of products and services in the digital health realm.
And finally, there’s mindset. Contrary to the US, where everything is big and aimed towards rapid international expansion, European start-ups typically have a more ‘provincial’ mindset. In today’s global, digital economy, though, that’s a major shortcoming. In order to really succeed, start-ups should have international ambitions right from the start.
As we observed already, none of those barriers exist in the US – making this geographical and cultural region a single, big ‘unified’ market with more than 320 million consumers.
Both its scale and transparency make it an easier target to introduce products and grow. A bit ironically perhaps, even conquering the rest of the European market is typically easier if done from the US…
So, how can we address those challenges? I see three important lines of action, in which European policy makers have a major role to play:
– From a regulatory perspective, measures should be taken to further unify the European market – so that its full potential of more than 500 million consumers and potential investors can be tapped.
Streamlining regulation in domains such as digital health, for instance, would already open up a wide range of growth opportunities for potentially hundreds of European start-ups.
Obviously, this would not help us overcome the cultural boundaries overnight; but to that end, instruments are already in place, such as the European Network of Living Labs (ENoLL), to help companies investigate how people will respond to new products and features – before the actual market launch.
– To foster the pan-European growth of start-ups and overcome the provincial mindset, a number of good initiatives have already been taken as well.
One concrete example is the creation of EIT Digital, which helps European start-ups accelerate their growth – o.a. by finding European and worldwide customers for their products and solutions, or by helping them raise funds.
– And finally, when it boils down to securing first customers, Europe should investigate the concept of ‘innovative procurement’– a best practice that has already been widely adopted by the UK and US administrations. It requires government bodies and local branches of big multinationals to allocate a certain percentage of their public procurement activities to innovative start-ups.
As such, start-ups can more easily get the necessary credentials and references to continue growing their businesses. According to certain estimates, public procurement is worth €2,000 billion to the EU economy – so dedicating even 1% of that amount to innovative procurement still equals €20 billion per year to support the European start-up ecosystem.
But also for that, a cultural and regulatory shift is required…
photo credit: Shumona Sharna
In case of Brexit, UK tech would risk losing out on what is the most vibrant and growing sector of the UK economy, argues Tech London Advocates founder and chair Russ Shaw.
The Digital Post: How the UK government’s increasingly restrictive approach to immigration is affecting the domestic tech sector and why?
Russ Shaw: The pipeline for tech talent needs to be much larger, but the government’s increasingly restrictive approach to immigration is slowing this down. Experts predict that by 2020 we will suffer from a shortage of 300,000 digitally-skilled people. Members of Tech London Advocates have consistently identified a shortage of talent as the single biggest obstacle to the continued growth of London’s technology sector. The UK needs a growing, not a shrinking pool of skilled tech workers.
The Digital Post: Is this having an impact, or could it have an impact, on the European tech ecosystem as a whole?
Russ Shaw: London has been branded the most important tech hub across Europe, with the number of companies in London’s digital technology sector increasing by 46% since the launch of Tech City five years ago. Further restrictions to immigration policy could cause a redistribution of tech companies and leaders across other European capitals. Countries with more flexible immigration policies and respected tech reputations will attract much more EU and global talent deflected by UK immigration policy.
The Digital Post: The government immigration plans are not only targeting non-EU citizens. The Home Secretary openly called into question the free movement of workers across Europe. What this mean from the perspective of the UK tech industry?
Russ Shaw: The UK’s tech sector thrives off its diversity and international community. Thus, calling into question the free movement of workers across the Europe will distance us from the very tool central to much of the UK tech industry’s success.
The Digital Post: What would an EU exit mean for UK tech?
Russ Shaw: UK tech would risk losing out on what is the most vibrant and growing sector of the UK economy. Businesses will look to expand elsewhere and miss out on being part of EU-wide initiatives like the Digital Single Market, currently under development and discussion within the EU.
According to research conducted by business intelligence company Duedil and the Centre for Entrepreneurs, immigrant entrepreneurs have founded one in every seven companies in the UK and employ 1.16m people around the country. We need to continue to build the attractiveness for entrepreneurs doing business in London and across the UK in order to retain and nurture the best talent and create job growth.
photo credit: Jens Aarstein Holm
It would be wrong to assume that putting operators and Over-The-Top players under the same regulatory framework will provide the ultimate solution to the current imbalances. A true level playing field needs to be created on a fiscal level too, says Gérard Pogorel, Professor of Economics and Management at the Ecole Nationale Supérieure des Télécommunications.
Digital Single Market strategy: Is the European Commission heading the right direction?
I believe yes, and I am very optimistic. The European Commission and the European Parliament seem very committed to opening new horizons. The priorities of the European Commission indicate that they consider the digital economy from a truly holistic perspective putting innovation, investment and growth at the forefront.
They show that Brussels is placing digital at the heart of the future European economy. Against this background, the main priority is to make the European Single Market attractive to investors.
We cannot talk about innovation or growth if the market is not attractive to investors. Telecoms and digital services regulation, as well as new legislation on data protection, are central elements of a consistent framework conducive to investment. I really think that it is with this in mind that the Commission is trying to re-organize things. This is very positive.
The Commission has signalled that it wants to create a level playing field in electronic communications by putting telcos and OTT under the same rules. Is it feasible?
It has to be done, the question is how. Any action should be considered from a global perspective. It would be wrong to take a purely defensive stance. It is important that the players that operate in Europe are put on the same level playing field, but it is even more important that they are encouraged to innovate and invest. They should all contribute financially. That is why a level playing field needs to be created on a fiscal level too. For the moment the fiscal situation in Europe is unbalanced.
We have, on the one hand, telecoms providers paying lots of taxes, say on radiospectrum. On the other hand, we have other players providing the same services, which pay far less taxes or no taxes at all. I believe that it would be wrong to think that putting these services under the same legal framework is the ultimate solution. Requiring OTT players to contribute to the universal service or the emergency number is not enough.
The important thing is that they contribute a fair share in terms of taxes and investments. That’s the main point. The playing field has not only to be leveled, it has also to be opened to innovation. We have to make sure the market is open to new entrants and innovators.
The European telecom sector is said to have an investment problem. What is your opinion?
The European telecoms sector is not attractive to investors for a series of reasons. The first reason is excessive fragmentation. Some people say that this is not important and that Europe can function with hundreds of operators. On the contrary, it is very important because size matters, for instance in terms of access to equipment or influence on the design of devices.
Big operators can enjoy a much more powerful position than small operators. That is why fragmentation is very detrimental to investment, and there should be some level of consolidation of the market. T he regulatory framework should be more oriented towards dynamic efficiency.
photo credits: Daniel Hansson
Which EU countries have been so far successful in exporting digital services and which are not? The result is surprisingly mixed.
Earlier this month the European Commission presented its new strategy of the Single Digital Market. Several of DG Connect’s most important goals are to give everyone a fast connection to an open internet and to support European innovators, entrepreneurship and start-ups.
The creation of a true Single Digital Market should impact the export performance of firms active in the digital economy. This columns ask which countries in Europe have been so far successful in exporting these digital sectors (i.e. services) and which are not. The result is surprisingly mixed.
The figure below shows the relationship between the exports of digital services on the vertical axis and an index measuring the so-called network readiness of countries on the horizontal axis.
This latter index on is taken from the World Economic Forum which measures the extent to which an economy is prepared to apply the benefits of information and communications technologies (ICTs) in order to promote economic growth and well-being.
Included in this measure is whether countries have the latest technologies available, whether firms absorb technology, or whether multinationals bring in new technologies into the domestic economy, etc.
Data-intensive services exports and network readiness index (2012)
On the vertical scale, digital services are defined as the producers and users of data services. The producers of data services are those active in sectors such as data processing services, software publishing services, telecommunications, or internet publishing and broadcasting services.
These are sectors that bring forward data in their production process, which is then used in many other sectors inside the wider (downstream) economy. Using much disaggregated data, it is possible to measure in great detail how much each and every industry uses these data services from data producers.
Unsurprisingly, the biggest users are at the same time the producers. Users of data services are therefore in turn telecoms, software publishers, internet publishers, data processing and hosting services firms, but also sound recording industries and the motion and video industry.
Taken together, these services are data-intensive as they work a lot with data. Using a different data set and connecting data-intensive services with trade, the vertical axis shows how much each country in the world actually exports these data-intensive services as defined above. This export measure is put in logs.
The figure shows that there is a pretty clear relationship between the readiness of a country in terms of ICT networks and the level of exports a country has regarding data-intensive services. In other words, a stronger ICT network in countries is positively associated with exports of services which intensively use data and the ICT network.
Countries with low network readiness show low levels of data-intensive services, but countries with high network readiness exhibit a higher level of services which precisely depend on a strong ICT network in order to transmit data. In the figure above, the European countries are given in blue and are marked with their 3-digit country code. It shows that overall most European countries are doing well.
However, there are countries which are doing better than others, even between countries sharing a similar level of network readiness.
For instance, although some countries such as Italy, Spain, but also Poland and Romania have an average score on ICT networks, they nonetheless are very successful in exporting data-intensive services compared to Lithuania, Estonia and Slovenia which actually share a similar level of ICT network.
Similarly, countries such as Great-Britain, France and Belgium are outperforming Scandinavian countries whilst actually having the same potential to export when looking at their ICT networks.
In fact, surprisingly Finland and Denmark export as much data-intensive services as Romania and Poland despite having a much higher network readiness index.
What can we therefore say about the success of Europe’s new strategy of the Single Digital Market?
Well, in terms of trading it, much scope still exists for the Nordics and the Baltics to improve their performance in exporting in the digital economy of Europe. Perhaps the Commission’s new digital strategy should focus first on these countries and try to figure out why these are the underperformers.
This post was originally published on the ECIPE (European Centre For International Political Economy) webpage.
photo credit: Peter Bromley
The more nation states try to build radio spectrum customized policies on a country-by-country basis, the slower the auctions happen, the later consumers get LTE, says Christopher Yoo.
The DSM strategy is a huge opportunity for Europe, he stresses, but it requires a genuine commitment by member states towards opening their borders: in the Internet economy refusing change is not an option and if you protect your domestic economy you’ll simply be left behind.
Europeans have to make sure that they do not cave in to people who oppose increased competition stemming from creating a pan-European digital market across borders, adds Professor Yoo. This change can be very disruptive but it will ultimately yield tremendous benefits.
photo credits: drew baker
Much of what the Commission proposes goes in the right direction although some actions, such as plans to harmonize copyright, could stir controversy. Even US tech giants might be less worried than expected.
On May 6th, more quickly than expected, the European Commission released its much anticipated “Digital Single Market Strategy” (DSM).
The Juncker Commission has made the DSM the top priority of its five-year term, claiming €340 billion in potential economic gains, an exciting figure that should be supported by quantitative research analysis.
Much of what the Commission proposes in the 20-page document seems to go in the right direction, setting out three main areas to be addressed:
– Better access to digital goods and services. The Commission claims that delivery costs for physical goods impede e-commerce, pointing the finger to parcel delivery companies; that many sellers use unjustified geo-blocking to avoid serving customers outside their home market; that copyright needs to be modernized; and that VAT compliance for SMEs should be simplified.
– Creating the right conditions for digital networks and services to flourish by, encouraging investment in infrastructure; replacing national-level management of spectrum with greater coordination at EU level; looking into the behavior of online platforms, including consumer trust and the swift removal of illegal content and personal data management.
– Maximising the growth potential of our European Digital Economy by, encouraging manufacturing to become smarter; fostering standards for interoperability; making the most of cloud computing and of big data, said to be “the goose that laid the golden eggs”; fostering e-services, including those in the public sector; developing digital skills.
It is understandable that the Internet provides a channel for businesses to reach consumers more widely than traditional media, both in their own markets and abroad, and for consumers to have a wider choice and bargain-hunt more effectively.
In a truly single digital market there are opportunities to scale up that are not present in the much smaller national markets.
More controversial are the commission’s plans to harmonize copyright law, in particular its plan to ban “geo-blocking”, the practice of restricting access to online services based upon the user’s geographical location.
However, the most problematic point concerns “platforms”: the digital services, such as Amazon, Google, Facebook, Netflix and iTunes on which all sorts of other services can be built upon and which have come to dominate the internet.
Worried that the mainly American-owned platforms could abuse their market power, the Commission will launch by the end of this year an assessment of their role.
However the fact that most of the 32 internet platforms identified for assessment by the Commission are American and only one (Spotify) is European, hints more towards the fact that it is harder for new firms to scale up rapidly rather than abuse of market power.
What it is interesting is that Mark Zuckerberg doesn’t seem to consider a Digital Single Market a disadvantage for Facebook.
Instead, he supports the idea. Facebook has to deal with different laws in every country and a single set of regulation for the whole European continent would actually make things easier for Facebook.
The digital economy also depends on the availability of reliable, high-speed and affordable fixed and mobile broadband networks throughout Europe. There are no good reasons to still have national telecom laws in this field.
How will Europe successfully deploy 5G without enhanced coordination of spectrum assignments between Member States?
Let us not forget that these networks do not only have an economic value; they are increasingly important for public access to information, freedom of expression, media pluralism, cultural and linguistic diversity.
The following two pieces of legislation are related to the DSM:
– The General Data Protection Regulation (GDPR), replacing the 1998 Directive that generated the data protection regimes of 28 Member States, with a single one, was proposed by the Commission in 2012, has undergone amendments by both the EP and the Council of Ministers and could be adopted in 2015 or 2016.
– The Telecoms Regulation, reviewing the 2002 Telecoms Regulation to cover net neutrality and roaming fees, was proposed by the Commission in 2012, was amended by the EP and is currently with the Council, which has scaled back the EP’s amendments.
The upcoming negotiations on the Telecoms Single Market will give a hint of the challenges to come in creating a Digital Single Market over the next years.
There is concern among those who produce professional content that their role is being marginalised in the debate around the Digital Single Market, which is too often over-simplified into a matter of balancing interests of “users” and “creators”.
The task of sorting the wheat from the chaff, of finding the new J K Rowling among the thousands of self-published wannabes – maybe needles and haystacks would be a better analogy – falls, in professional media production, to the producer or publisher.
For the purposes of this article I’ll use producer as a generic term encompassing editors and publishers, as well as those who, in the music, film and TV business, will have ‘producer’ as their job description.
At the moment, there is increasing concern among those who produce professional content that their role and their interests are being marginalised in the heated discussions in Brussels around the Digital Single Market, or reduced to derogatory comments about “intermediaries”.
This is not the fault of the European Commission. It is the Commission’s job to question whether legislation is needed to ensure that the success of the single market can be replicated in today’s online, connected world.
And if the purported GDP benefits of the DSM ever become tangible then clearly this will have been a great EU success story. But when discussion turns to the DSM’s impact on the content sector, this is too often, maybe as a function of today’s tweet-driven politics, over-simplified into a discussion about balancing the interests of “users” and “creators”.
These are important stakeholders but reduction of the digital content business to a two-sided debate between users and creators ignores the whole series of business processes which work the original creative idea into something the user will wish to pay money to watch, read or listen to.
There is a risk that the discussion may overlook processes like paying large advance for a book which has just been pitched by the author and which might (but might not) cover its costs; or selecting and marketing those ideas which have the potential to succeed – it has long been a rule of thumb in the music business that the record company will lose money on nine out of ten releases; or getting the distribution strategy right.
Here, the trick is to use the internet as one platform among many so as to maximise distribution. For example, the political drama Borgen, produced by Danish public television but with financial contribution to its production and development from other broadcasters, is now a success in many European countries.
But this is thanks not just to the quality of the programme itself but also its marketing and distribution: by selling the national rights to broadcasters like the BBC or VRT in Belgium, the rightsholders knew that their show would be scheduled and promoted in such a way as to attract the interest of an audience which has high expectations of the “subtitled drama” slots on those channels.
An internet-driven distribution strategy – streaming the content, presumably with subtitles, and relying on word of mouth, social media or recommendation engines to bring an audience to the frankly rather arcane subject of Danish coalition politics – would not have worked.
The internet has had a profound and positive impact on the content businesses by easing distribution of both professional and amateur content. It is a great opportunity for the commercial content business.
Digitisation has also encouraged the production of content, sometimes blurring the line between amateur and professional. For instance, the group of citizen journalists – basically activists with cameraphones – from the Kiev Maidan are now running a respected online TV channel, Hromadske TV, or there are many examples of You Tube stars and bloggers establishing viable businesses and solid fanbases among their particular niche audience.
But although the Internet is an exciting distribution platform, it does not finance content production, and for all the digital enthusiasm one hears in the Brussels bubble these days, the fabled ‘disruptive’ effect of the internet has yet to affect the content sector in two ways.
First, to date, few online content ventures have broken through to, and changed, the mass market in the way that the “Tin Drum” or “Anarchy in the UK” did.
The shifts have happened in distribution rather than production of content. Secondly, and more importantly, those advocating disruption as an end in itself have yet to come up with a new model of ensuring that the people who make the content get paid.
The producer and publisher, like any other business, seek to ensure recoupment of investment, maximise audience and viewership – which translate into revenues that flows back to the creator or creators.
The model works offline and is increasingly working online, although there are issues around revenue sharing between platforms and the creative sector. And it’s in Europe’s interest with the creative industries accounting for €509 bn of EU GDP and seven million jobs.
If the current system is to be challenged – and to date we have seen no evidence of a viable alternative – then the European content producers need to be at the heart of the discussion.
photo credit: Zé Pedro
If we want the European digital sector to thrive we should focus more on promoting a cultural change than on regulatory intervention, argues MEP Kaja Kallas.
What should be the right regulatory conditions to help the European digital companies emerge and become global leaders?
I feel that very often less is more. If we think about all the possibilities we have today and all the new business models that have emerged, then we should keep in mind that these have been created in a rather innovation-friendly regulatory framework in that field. We should therefore be very careful before introducing new regulations.
What we should however promoting is a change in the way we treat failure in Europe – not through regulation but through cultural change- failure is not a bad thing, it shows that at least you tried. If more people are not afraid to fail, then more people will be encouraged to start something new.
The growth of the app economy is certainly creating jobs. However, in the eyes of its critics it may, by disrupting traditional business models, be also destroying jobs. How would you respond to these concerns?
Daron Acemoglu and James Robinson have written a very good book called “Why nations fail?” In that book they show through different historical examples how people have always tried to protect the traditional sectors whereas in order to be successful you should embrace creative destruction.
It means that yes, old jobs will disappear, but new jobs will emerge. You can fight against the knitting machine but if it has already been invented, it will come sooner or later and the craftsmen will have to find new jobs.
How the European Union should address the “threats” the app economy poses on trust and security?
Trust and security are important pillars of the internet economy; service providers have understood this as trust is at the heart of their business model which means that the market already regulates this to some extent. However, from the policy makers side we have to ensure that the right framework is in place for people to trust service providers with their data.
This means that it must be clear that the person is owner of his or her own data and he/ she can decide who can access and use this data.
In November you voiced skepticism about the European Parliament’s resolution requiring the unbundling of search engines. Why going down this way is a bad idea?
I think the debate was on wrong grounds – it was about one company in particular. My statement was that it is wrong for the parliament to start intervening in the investigation procedures that the Commission is already conducting.
The Commission has the right to demand unbundling if it finds that the search engine is an essential facility and abuses its dominant position.
The Commission has the tools to deal with this and the Parliament should not make it political.
How do you see the debate about the so-called principle of “platform neutrality”?
It is a very wide question. In general it seems to me that there is a push from some stakeholders to shift the discussion from net neutrality to platform neutrality that would only be applicable to one US Company. I do not think this is right as we might end up harming our European companies even more.
There are many layers to this discussion. First, the use of one platform does not necessarily preclude the use of another similar platform. If one is more user-friendly than the other one, people will change from one to another, as the switching costs are often quite low.
In addition, due to low barriers to entry and the limited cost of creating internet platforms, new ones can emerge quickly.
On the other hand, some platforms might have network effects that can make market entry more difficult for the newcomers.
Thirdly, many of the business models of internet platforms are built on unneutrality.
photo credits: Johan Larsson
Last December Estonia became the first country in the world to offer “e–residency” for people interested in using its advanced digital services. Although the initiative is still in its pilot phase, figures show that it is generating strong interest worldwide.
In December 2014, the government of the Republic of Estonia launched a novel initiative called e-residency. Anybody and everybody from all over the world (EU included) can apply to become Estonia’s e-resident.
They can now get a digital identity (based on a smart ID-card) issued by the state in order to use the digital services that both public and private sector have on offer.
Although e-residency entails neither residency in traditional sense nor citizenship or not even any right to travel to Estonia/EU, more than 17,000 people have signed up to the interest list.
They are drawn by the possibility to get everything done digitally, like it has been the case for Estonian regular residents for quite some time already.
Indeed, Estonia has become known as e-Estonia because of the extent to which digital solutions have penetrated everyday life of people and companies, also public servants and ministers even.
Due to a strong digital identity and the fully legally valid digital signing it allows, Estonians literally do nearly everything digitally: sign any documents, set up a company online (and really fast – Estonia holds the world record for company registration with 18 minutes), do all banking transactions or send reports and applications to government.
Estonian citizens can even vote online for the parliament, which 31% of voters just did these past 2 weeks in latest elections.
Now such opportunities will be open for e-residents as well (except online voting perhaps). This is appealing for the rising number of digital nomads and companies out there.
60% of people interested in e-residency have signed up for business reasons. They want to be able to launch and run their company digitally, with no middlemen and little hassle on the way.
Truth be told, e-residency is still in its beta or pilot phase. Currently you can apply only in Estonia itself, plus have to visit the police and border guard service station twice (once to apply, the other to get the card). At first, only core services are open like signing, banking, business registry.
Still, close to 1,000 people have already come to apply for the e-resident ID-card and large majority already carry one in their pockets.
The reason for quick and preliminary beta launch was greater-than-expected interest by potential e-residents, once the initiative was announced. Also, Estonia is a strong start-up country (check out #Estonianmafia) and our government tries to act the same way.
We try to act and develop fast, build the services with the first users that we now have, iteratively improve and scale the offering all the time.
By end of April 2015 we will extend the application opportunities to our embassies and representations abroad, while also requiring only one visit to our offices from there-on. Applying for e-residency will become much more convenient rather soon.
Second, we are working with a variety of private sector companies and also public agencies to improve the services available to e-residents. We are improving the existing ones but more importantly launching complete new services that are useful for e-residents, in particular.
2/3 of the first 1,000 applicants hail from EU member states. 37% of first e-residents come from Finland alone. This reflects well the scope of the beta phase (you have to physically come to Estonia), plus the initial target group.
E-residency first and foremost is useful to anyone already having business or other relations with Estonia. They can now manage their investments or trade with Estonian partners or temporarily reside here more easily, handling all necessary matters online and from a distance.
At the same time, 17% of first e-residents come from Russia, 5% from Ukraine, another 4% from US and so on. Altogether some 55 countries are represented in the applicant pool, reaching well beyond EU.
This reflects the further objective and benefit of e-residency – it brings new users and companies here, at least in digital service space.
Besides making business and life more efficient and easier for our existing partners, this aim of increasing the market has been the target of Estonian government behind e-residency.
If we do not make enough babies ourselves, we can at least make Estonia bigger in digital realm! The companies from banks to digital content providers and anybody able to move part of business value creation online have now more and new users for their services, which should bring more revenue, work and tax income for the whole country.
The companies that have new opportunities do not have to born-and-bred Estonian ones only. In the Digital Single Market, these new users from outside EU can have access to the whole European digital service space as the Estonian digital identity is a trusted and accepted one.
So, we welcome partnerships with start-ups and already big players from all corners of Europe to join us in innovating services to these new e-residents.
We already see increasing interest for e-residency from entrepreneurs and other individuals in Asia, US and beyond. These are people who want to enter EU market, but are looking for a suitable gateway and highly like the ability to run their business hassle-free from a distance. Any services that benefit them in this way is more than welcome.
All the Europeans can also apply to e-residency, especially if you do not have proper digital ID on offer in your home country and if you want to make use of efficient and exciting Estonian digital services.
In the years to come, such a need should decrease though as digital IDs hopefully will be offered more in all EU member states. But you do not have to wait all this time, feel free to use the Estonian ID in the mean-time.
Our government will be happy if we reach 17,000 e-residents by beginning of 2018 when we take over EU presidency. Same time, we work under a slogan of 10 million e-Estonians, to set the ambition high and think outside-the-box.
We aim to figure out how to create services and environment that would be useful for a truly wide range of people. Then we will have truly made both Estonia and the EU Digital Single Market bigger.
You can check out more information on e-residency and sign-up to mailing list at www.e-estonia.com
photo credits: Steve Jurvetson
Starting from robust copyright rules, Europe needs to forge a level playing field for smaller European actors who work everyday to deliver a diversified cultural offer in the digital market.
How and why can independent music thrive in a truly European digital single market? What are the best regulatory conditions?
Creating a truly European Digital Single Market means getting rid of restrictions that create barriers to reaching across the EU, and to do that you need the best digital infrastructure with rules to match.
The key asset for independent labels to work in the digital market and break artists in across borders is copyright
Europe needs to strengthen copyright because it represents real value in our digital market. This will create better conditions for smaller music companies to take risks and break new acts. No one wants a market where only bigger labels are visible simply because copyright isn’t robust enough for smaller labels.
This debate is important because smaller labels take the biggest risks and account for 80% of all new releases in Europe today, as well as 80% of the sector’s jobs. Constantly expanding their focus, they are at the forefront of Europe’s digital market.
[Tweet “YouTube’s behaviour reveals why the status quo just isn’t good enough”]
Independent musician Zoë Keating wrote recently about how YouTube, the world’s biggest music service, had been dealing with her. This is the same sort of censorship-style negotiating tactics the Google-owned company exerted on independent labels last summer.
The EU institutions now have the opportunity to strengthen copyright so that we can create new growth and make sure this type of distortion is no longer possible.
A birds-eye view of things is often revealing and the copyright debate in Brussels no less so… Lots of scurrying going on, with those who are trying to undermine copyright often supported by the incumbent big tech sector.
While seeming to stand for the interests of users, or in some cases even creators, some voices push an old-world view which promotes transferring value from creators and their partners to global online superpowers who, in typical incumbent fashion, show scant regard for innovation and responsibility while trying to get rich and powerful from other people’s creations, property and data.
Avoiding tax is another hobby it seems. One independent music company was reported in recent years to have paid in the UK more tax alone than Google, Apple, Facebook and Amazon combined.
To liberate the Single Digital Market the EU needs a new rulebook. Europe’s citizens and businesses look to the EU to take the lead. From search, to data protection, to taxation, to how big online players engage with smaller actors, the time to act is now.
[Tweet “Clear rules on what global online powerhouses can and can’t do are a must”]
Together with robust copyright, a new rulebook could deliver a dynamic market. An innovative and secure online world for citizens is essential. And so is a level playing field for smaller European actors who work everyday to deliver a diversified cultural offer in the digital market.
A key element to achieve this is the principle of non-discrimination which should apply to how online music services deal with labels and artists. Of course it should also apply to search and data.
[Tweet “Independents don’t need special treatment. They need a level playing field”]
Independents see the digital market as a fundamental leveller, full of opportunity for smaller cultural and creative actors. For that promise to be fulfilled, the digital market needs to become more open, competitive and diverse and of course safe and fair.
What priorities should be addressed in the Digital Single Market proposal?
IMPALA has identified ten areas of work in a recently published Digital Action Plan. A top priority, in order to strengthen copyright and stop the transfer of value already mentioned, is to stop abuse of the so-called “safe harbours”, to use an American expression.
The “safe harbour” provision in Europe was designed to exempt neutral carriers or “hosts” of information online from liability as regards the copyright in creative works.
Today it is being abused by giant media businesses who act as distributors but try to take on the responsibilities of a host. As part of the review of copyright, we believe it is time for the EU to intervene.
The doubt around this has helped big tech to capture the lion’s share of the value created online through the distribution of creative works, to the detriment of creators and their partners.
[Tweet “The EU #copyright framework should ensure online distributors cannot pretend they are mere hosts”]
By clarifying that companies who build a business around facilitating access to creative works cannot rely on the host exemption, the EU will take a big step towards establishing the healthy online environment that the Digital Single Market initiative is meant to foster.
Creating a healthy online environment also involves taking a robust view on how it works, and of course this touches on the wider debate, including how certain operators deal with liability and anonymity for example.
[Tweet “IMPALA’s Action Plan is about delivering a distortion-proof Digital Single Market”]
The ten points of IMPALA’s Digital Action Plan:
1. Reinforcing the rights that drive the digital market and grow Europe’s copyright capital
2. Giving citizens the best digital infrastructure in the world
3. Improving pluralism and diversity online as well as offline
4. Revisiting the “rules of engagement” online
5. Growing Europe’s “missing middle” by improving conditions for smaller actors
6. Effectively tackling websites which are structurally infringing
7. Increase investment through a new financial approach to culture
8. Introducing greater fairness in taxation
9. Mapping how creativity works and measuring the sectors adequately
10. Placing culture and diversity at the heart of Europe’s international work
[Tweet “We need Europe to build a regulatory framework that provides a diverse and safe online ecosystem”]
Better transparency rules are also needed for organisations, think tanks and other voices such as coalitions and lobbyists. Policy makers need to know who is really saying what.
“Astroturfing” is a tactic commonly used in Brussels by deep-pocketed companies wanting to make it appear as though a message is coming from many different corners when it’s really just their own view being echoed and amplified, often via projects and organisations that are supported directly or indirectly.
Decision makers need a guide to another world wide web – the web of influence. Better transparency rules and monitoring are the answer.
[Tweet “We need the world wide web of influence to be fully transparent”]
A right balance between the need for more digital/harmonized rules on copyright and the necessity to protect authors/creators
The reason why people who work in the music ecosystem need copyright to be robust is that it is the fundamental trading tool which allows them to be remunerated. If creators don’t have copyright, the fruits of their labour can be transferred and they don’t have the economic and moral freedom to decide what happens to their work. Even the essence of freedom of expression is undermined.
Copyright also allows for innovative business models to spring up in the digital market. Spotify and Deezer are just two examples. They are world leading European streaming businesses giving unprecedented access to citizens to the widest diversity of music while remunerating artists and their partners such as labels and other rightholders.
To get the balance right, it is also important to understand the role of the various players in the creative process. Independent labels are more solicited today then ever before by artists wanting to partner with them.
Independents take their responsibilities seriously and are proud of their track record. Being the biggest investors in the process, they take risks and work with their artists to help them build a career.
They have a range of deals and revenue options which they work out with their artists (royalty splits, profit share after costs, advances, etc.). Again it’s all about balance and flexibility. What suits one artist and label won’t necessarily suit another.
[Tweet “Labels need sufficient revenues for today’s artists and to invest in the next generation”]
Independents work hard to open new opportunities for their artists and are often ahead of the pack. They were the first to license Napster, in 2001, and they have been at the forefront of the digital market’s evolution ever since.
Independents see those who love music not as mere consumers but as fans, as people who are eager to experiment and this is a great match.
To facilitate this dynamic, independent music companies and other rightholders have developed licensing systems for platforms such as YouTube on which fans can upload “content”.
By licensing platforms, the dissemination of user-generated content is covered. This allows creators and their partners to be remunerated for the use of their works, while ensuring that music fans can upload and share their artists’ favourite works without having to “worry” about copyright rules.
The system also gives creators freedom to say no to any use of their work they don’t agree with, a vital part of any creator’s personal rights over their own work, and of course their freedom of expression.
In other words, these platforms generate money on advertising, creators get a share, and users enjoy free access and sharing of music. So, beware of any push for exceptions that could help these platforms argue they can share even less revenue with creators or worse, no revenue at all.
To strike the right balance, decision makers need to get rid of barriers to this type of innovation, which certain players stifle by trying to hide behind the host exemption, either by not taking a licence at all or by under-licensing and not paying properly.
When it comes to harmonisation, it is crucial to look at how the market works in Europe. Independent labels build networks all over the continent. Local independent companies work with other European companies, but also with partners from outside the EU. Repertoire gets licensed country-by-country to different independents who have local market expertise.
From this, they generate revenue that they re-invest in new talent. With a music market already marked by high levels of concentration, it is vital that Europe fosters this way of working.
For creators, territoriality is part of the fundamental principle of freedom to decide what happens to their works and this must be reinforced. Creators choose territorial partners who give them the best chance to break borders.
[Tweet “Birds have wings, creators have copyright”]
So the EU can achieve balance by delivering digital rules that improve protection of creators and other rightholders in the online environment, and ensure that European cross-border cooperation is promoted through territoriality, and not undermined.
Access to “content” is one of the main reasons people go online. The market in Europe is the strongest and most diverse anywhere in the world. So let’s not undermine Europe’s strengths to the benefit of a few multinationals. Let’s build on our strengths.
[Tweet “Let’s make Europe the best place in the world to invest in copyright, take risks and be an artist”]
How streaming services can help independent music in Europe
Streaming is crucial. Streaming services are open platforms, where music fans access the music they want to listen to at their convenience. This effectively works towards levelling the playing field for smaller artists and labels.
Independent music companies created Merlin (www.merlinnetwork.org), a digital rights licensing organisation representing the rights of independent record companies on a worldwide basis. Merlin negotiates and concludes contracts with music services, including streaming services such as Spotify, Deezer, Beats, YouTube and many others.
The results are impressive. Independents are seeing considerable growth in streaming. This is due to the nature of those platforms and the ways independents use them. With streaming platforms, there are multiple entry points (social media, email, artists’ own channels, etc.) which independents capitalise on.
As Merlin CEO Charles Caldas puts it: “Once you liberate consumers from tightly controlled storefronts, and give labels direct access to consumers in the way these platforms allow, our sector will continue to grow, and thrive.” Building on streaming is imperative.
[Tweet “Building on streaming means fostering healthy trading practices, licensing and competition”]
The challenge for Europe now is to take the steps required to build the right environment for creativity.
photo credits: Pablo L. Alvarez
We have great minds in Europe, highly-qualified young people, good infrastructure, financial resources, strong industries. And yet not a single world tech champion has emerged in Europe in the last 30 years. A specific StartUp initiative within the Digital Single Market Strategy is the right way to address these concerns.
European StartUps expect the European Commission and policy-makers in Brussels (and across the EU) to deliver an ambitious and clear signal that the Digital Single Market Strategy will address their needs and expectations. And this for one single and clear objective: be able to grow and scale in Europe.
However, this cannot happen by magic, nor by chance.
We have great minds in Europe, highly-qualified young people, good infrastructure and financial resources. I see this everyday in our activities with the European Young Innovators Forum in our more than 16 hubs across Europe.
Yet, our best people are leaving – or willing to – to StartUp ecosystems that are more welcoming to their ambitions. We have a world-leader automotive industry, yet the automated cars are coming from Google or Apple.
We have strong industries but not a single world tech champion has emerged in Europe in the last 30 years. I believe that a specific StartUp initiative within the Digital Single Market Strategy is the right way to address these concerns.
The European StartUps Initiative would see a set of measures addressed specifically to support highly innovative small companies and create the conditions for the emergence of a strong pan-european tech scene.
Such an initiative would send an unequivocal message to the emerging –and everyday stronger – European ecosystem, but not only. It will also be a signal to foreign investors that something is changing in Europe and there are more opportunities and potential deals to be concluded in this continent. The story-telling is as important as the content.
Moreover, such an initiative would not only be symbolic but would have an concrete effect: unlock startups growth and scale capabilities. How do we achieve this?
One key measure –and highly symbolic – would be the creation of a European Statute for the highly-innovative small companies.It’s nice when European leaders and policy-makers talk about regulatory simplification. It would be even better if they actually do it.
One statute, that would enable European StartUps to operate in the Digital Single Market without any obstacle and burden would be a great step and would definitely attract investment for young entrepreneurs and innovators.
Investors want simplicity and certainty. Such a statute would also facilitate the emergence of a true European Venture-Capital Market where capital flows more easily to different startups ecosystems.
Finally, copyright. We need to adapt it to the Digital Single Market. It’s a shame that Spotify had to leave Europe due to regulatory issues to be able to grow and scale.
A StartUp initiative would not be successful if we do not work on the ecosystems and people’s skills. It goes together. One supports the other. Making the European startup ecosystem stronger means supporting the diversity of actors who act as the enablers and builders.
It is through them that young entrepreneurs and innovators could access better mentoring and training opportunities, improve their digital skills and be connected to other innovators and entrepreneurs in Europe and the world.
On February 18th, the European Young Innovators Forum organized a European StartUp showcase at the Global Innovation Summit in the Silicon Valley as part of its Disrupt Europe Year activities.
I can tell you that American investors were seduced by the bright European minds and ideas. And you just need to visit the Silicon Valley to discover that there are more Europeans entrepreneurs than any other nationality. It’s great time that Europe seize the opportunity, the innovation train is leaving, and we shouldn’t be the losers of the digital boom.
European efforts to create a Digital Single Market mean much more than the usual work on finalisation of legislation. A comprehensive approach is needed to understand and unleash the benefits of a truly connected continent.
The key question today is to understand the scale and the real impact of the digital revolution. The internet is a general purpose technology, as few inventions in the history have been and like those of Gutenberg or Bell, has completely changed the world.
We need to use an holistic approach to understand the different aspects of the forthcoming digital challenges, so that we can build tools that will allow us to fully exploit and benefit from new technologies.
The impact of the creation of the European single market has been crucial on many areas. The process of building the single market itself has provided already valuable lessons to the European economy. Notably the resulting common set of rules that simplified the legal framework for business and consumers alike.
[Tweet “The idea of the digital single market works as a multiplier”]
The digital single market adds value through the digital drivers that are present in all sectors of the economy.
Today, we are not only seeing a massive development of the ICT sector – we are also experiencing the spread of “ICT development” in all sectors and all branches of the economy. The benefit and value this spread brings, is a result of the growing number of digital factors found in the economy today.
Those digital factors create new opportunities.
First, the contribution of a new phenomenon: data processing that fuels the data driven economy. This changes the way we manufacture, increases the productivity, provides new ways of allocation of resources, improves energy and transport efficiency, supports the smart cities development and lays the basis of a future of internet of things.
The result is that we are confronted with a completely new economic reality. It extends from the “connected car sector” delivering various types of content – via the neutral platforms model, (defined as collection of goods and services provided in a fair way) – to the “app economy”, enabling everyday decisions of users while influencing their environment and the economic landscape.
This new reality is leading us to a new model of products and services; consumer oriented, aiming to meet our expectations, our needs. So the phenomenon of the personalisation emerges. Everything can be personalised, tailor made to our individual taste. But very often the trade off is disclosing the knowledge of our habits, our needs and eventually giving up privacy.
Therefore we are faced with the conflicting realities this new economic landscape presents. On one hand, disclosures that contribute towards the profiling of individual behavior as the means to monetise privacy and on the other our will to defend “the digital I”.
This is the reason why we need to have a data and privacy protection regulation in place, where trust is fundamental for the new digital economy.
Only by ensuring more trust we can build the right framework for the growth of new kinds of public services: the m-health in healthcare; new forms of teaching and dissemination of MOOCs influence in education; access to open data and public knowledge; and as far as the cultural activities are concerned, access to more opportunities thanks to the new European copyright rules, related to the authors and clearer definitions of the public domains.
Hence is obvious, that Big Data development, personalisation of products and services, data protection and digital security are relying on internet access and the framework for global connectivity.
The connectivity is the other great opportunity and challenge as it needs to serve the previously mentioned services and the ever growing number of connected devices. It is evident the need for investments in the area of infrastructure tailored to these future requirements of a digital, fully connected economy.
This translates into considering systemic, structural incentives for European operators to complete their work on 4G networks while beginning the preparation for next generation 5G infrastructure.
The internet is changing all aspects of our life: from the economic to the social and private. It redefines our position as consumers, as producers, as workers and as citizens.
[Tweet “The internet represents today a new and important opportunity to rethink our democracy”]
A new concept of citizenship is taking shape, opening new possibilities for participatory democracy, by enabling online consultations, rendering the decision making processes more transparent and making the citizens a valuable source of knowledge for the public authorities.
This new model of shared democracy is a good foundation for the shared economy. Moving forwards towards its implementation, by developing further the internet, its governance and its infrastructure, we should not forget the dark aspects it also brings.
As the virtual aspects, values and principles of the internet are crossing over to the real world, we should highlight the interconnections that these form related to: the clear rule of law, the respect for fundamental rights, the transparent tools for law enforcement.
The digital era is challenging us. The new is the added value of the paradigm shift.
We have a unique opportunity to move from open, creative minds to open societies and via the open governments to an open, much more collaborative economy with new competitive advantages.
But it requires the awareness that European efforts to create the Digital Single Market mean now significantly more than the usual work on finalisation of legislation. “More” means an holistic approach that will allow this digital package to provide comprehensive results and benefits.
The way for the paradigm shift is: from a new technology to a new socio-economic model of development.
photo credits: Dan Foy
Alessandra Poggiani, the director general of the Agency for Digital Italy (Agid), tells The Digital Post how the government is working towards the objectives of the Digital Agenda for Europe. “Embracing the digital economy is not only a question of growth and new opportunities for Italy. It is also a question of democracy”, says Ms Poggiani.
phot credits: Giuseppe Moscato
As an understanding of ICT is a requirement in nearly 90% of professional occupations, embedding coding skills in both formal and non formal education should become a priority – especially in Europe where a massive shortage of tech workers is looming
As technology becomes further integrated within our society, it has become increasingly important for young people to understand the world around them. Few stakeholders in employment and learning doubt the importance or relevance of learning programming.
[Tweet “Europe is expected to face a shortfall of over 900,000 technically skilled employees by 2020”]
In the UK alone, it is estimated that there will be a shortage of approximately 249,000 workers for technology based jobs by the same year. The creation of a European Digital Single Market is one of the top 10 priorities of the European Commission.
As an understanding of ICT is a requirement in almost 90% of professional occupations, the lack of skilled experts which Europe is currently experiencing, will hinder the advancement of a hyper-connected single market.
To overcome the the gap, coding skills need to become embedded in both the formal education systems through curriculum development, and in non formal education such as after school clubs. The success of this will depend on a strong collaboration between Government, civil society and industry.
CoderDojo is a global community of after school, free programming clubs for young people. It is focused on giving kids and young people all over the world better access to the magic behind the technology that surrounds us.
CoderDojo clubs (Dojos) run all over the world on a weekly basis, giving young people between the ages of 7 and 17 the opportunity to learn how to develop computer code, websites, apps, programs, games, and to explore creatively with technology.
Young people who attend Dojos also learn complementary skills of logical thinking, problem solving, presentation and communication skills. As of January 2015, there are over 560 active Dojos in 56 countries, 370 of these clubs are spread across 27 European countries.
In England, schools are introducing aspects of computer programming to children as young as five. Estonia has assigned €70,000 to an e-enabled program called Proge Tiger which aims to teach children from 7-19 how to code.
The program offers teachers resources and training as well as supporting their schools financially in order to buy the equipment they need. These initiatives are part of the reason that the English and Estonian governments some of the most proactive institutions in promoting and supporting coding among young people.
A recent survey of 20 EU countries, conducted by the European Schoolnet, delivered encouraging results in relation to the introduction of programming to school curriculums. Twelve of the countries already have integrated coding at a secondary school level while 7 countries plan to do so. However the introduction of coding into curriculums is not enough.
For young people to become truly immersed in coding, afterschool clubs like Dojos are required to facilitate this extended learning. Children attending Dojos are driven by their own motivation, learning at their own pace, exploring and creating technology in a way that interests and excites them.
[Tweet “Acquiring an understanding of computer coding is extremely important within our society…”]
…if we want to create a European Digital Single Market. Without it, the majority of citizens will remain passive consumers and will be at the mercy of programmers and technology giants.
The creation of a European Digital Single Market will bring with it great opportunities, with the European Commission estimating that it could produce up to €250 billion in additional growth and could also counteract rising unemployment rates.
Commissioner Ansip recently wrote in a recent blog on the development of the DSM strategy that, ‘ We should only set out what is realistic, what is achievable and what can be easily understood. This should not become a ‘catch-all’ strategy, in the sense that it promises and talks a lot – but does not contain anything that can be done properly, or has any real impact’.
I would echo his sentiment, but apply it to digital education. For Europeans to develop the necessary skills to succeed in the Digital single market, a combination of supporting of informal learning programs, like CoderDojo, and the implementation of computational thinking courses into formal education systems is required. But most importantly, real tangible support is needed from a range of stakeholders including European institutions, national governments, and industry leaders.
There are many ways to get involved in CoderDojo, if you are intersted in mentoring at a local Dojo please see zen.coderdojo.com and get in touch with the Champion. For more information on starting a club see www.coderdojo.com. Or Get in touch e-mail: [email protected], Newsletter: Sign up, Twitter: @CoderDojo
photo credits: Crown Copyright -Arron Hoare / www.coderdojo.com
The combined efforts of promoting the digital sector and a sound tax policy appear to be stimulants that are helping Spain’s economy recover. The new European Commission should look closely at these simple pioneering approaches.
Investments require a good framework to restore growth. Valdis Dombrovskis, Vice President of the European Commission and ex-Prime Minister of Latvia, accurately pointed this out during the Martens Centre’s annual Economic Ideas Forum in Slovakia.
Europe is in desperate need of restoring growth across the Member States. The International Monetary Fund has warned there is now a four in ten chance the Eurozone will slide into a third recession since the financial crisis. The triple dip is already a reality for some countries in Europe.
Two months ago, a new European Commission took office. It’s an opportunity for a fresh start and to find ways we can improve economies across the region. We know there are solutions to the similar problems faced in different countries.
We need to look to the digital economy. We need to think digital in everything we do. The Internet economy will impact every business and industry over the next few years. The success of Europe’s economy will, in large part, depend on how we promote the information and communications sector.
Our regulatory model desperately needs modernization if the private sector is to be encouraged to invest in the networks needed to support a European renaissance. Only a future-focused regulatory framework that embraces technological change will facilitate the much-needed investment in infrastructure, technology and research.
Creating a digital single market is the unique solution for the development of investment, making it possible to attract more money from the private sector to push the recovery and to decrease the high level of unemployment. According to its priorities, the new European Commission will soon present an ambitious plan to achieve a truly connected digital single market. It may draw some inspiration from Spain.
Last year, the Spanish government approved the Digital Agenda for Spain, which, among other goals aims to boost the digital economy; improve e-Administration and adopt digital solutions for an efficient rendering of public services; boost research and development; and promote digital inclusion and literacy and the training of new ICT professionals.
[Tweet “Is it coincidental that Spain is the best performing among the crisis hit Southern States and that its start-ups are booming?”]
According to data gathered by Venture Watch, startups in Spain raised €158 million for the third quarter of 2014, a 187% increase compared to the same period in 2013. Google recently announced it’s opening a new campus for entrepreneurs in Madrid “because of the thriving entrepreneurial spirit in Spain.”
Adding to that initiative, Spain has also announced a package of income and corporate tax cuts in an effort to increase investment and consumption across the country. Spain’s corporate tax rate would drop from 30% to 25% by 2016. Overall income-tax rates will drop by 12.5% over the next two years.
The combined efforts of promoting the digital sector and a sound tax policy appear to be stimulants that are helping Spain’s economy recover.
Digitalization permits simplification of procedures and the Doing Business 2015 of the World Bank shows improvement of the Government with a progress of 19 positions in the rankings.
The benefits for the economy are already clear. The unemployment is decreasing from the top levels of the last years and the economy is one of the most well performing in the Euro Area.
To break out of the present negative downward spiral and avoid economic freefall and stagnation, President Juncker and his team during their first 6 months must look closely at Spain’s simple pioneering approaches and bring forward an agenda that opens markets, encourages investment and propels entrepreneur led growth and employment creation.