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
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.