EU digital policies
‘not good enough’

22 May 2006

Despite progress by various countries in embracing technology and broadband, Europe’s policies for the digital economy are not good enough and more needs to be done to harness technology to enable economic growth and job creation, the EU Commissioner for the Information Society and Media Viviane Reding said last week.

In the first annual progress report on i2010 — the digital economy element of the EU’s strategy for growth — Reding said that to get the full benefits from Information and communication technology (ICT), EU member states need to deploy more ambitious plans to exploit it.

She said that member states need to step up their efforts to improve access to broadband internet connection, facilitate the EU-wide circulation of digital content, free up radio spectrum for new applications, integrate research and development (R&D) and modernise public services.

“Europe’s policies for the digital economy have made some progress but I do not think that this is good enough,” said Reding. “While we see first good results of the EU’s policy to promote competition and investment in the telecom markets, it is worrying that in ICT research Europe continues to lag behind its competitors, investing about half as much as the US.

“ICT is today contributing less to European productivity growth than it did 10 years ago.

“I call on EU leaders to develop a stronger sense of urgency in their national reform programmes and also not to shy away from cross-border competition in the telecom sector. Only through stronger investment in ICT research and effective cross-border competition will we ensure that the great potential of ICT is used to lift our competitive performance across the economy,” Reding said.

Economic growth in the EU improved in 2005 and is forecast to be around 2pc in 2006. But this is still well below the annual GDP growth of 2.7pc in the US in 2000-2005.

The ICT sector has continued to achieve above-average growth and is still the EU’s most innovative and research-intensive sector, standing for 25pc of the total EU research effort and 5.6pc of the GDP between 2000 and 2003. ICT also generated at least 45pc of EU productivity gains in 2000-2004.

Despite various member states identifying R&D and innovation as key cornerstones of economic growth, various national reform programmes have failed to give impetus to key drivers of growth such as convergence of digital networks, content and devices.

However, there is some good news. Broadband subscriptions grew 60pc across Europe in 2005, reaching 60 million people or 13pc of the European population.

Reding also expects impetus for ICT to emerge from the EU E-Government Action Plan which could see savings of €300bn a year across 25 European countries through 100pc electronic invoicing and electronic public procurement. The strategy also includes a plan to ensure that by 2010 all citizens will have access to digital TV, PCs and mobile phones.

By John Kennedy