Europe prepares to unveil digital master plan to take on Silicon Valley

23 Apr 2015

Europe wants to take on Silicon Valley

The EU is to propose plans for a single unified digital marketplace that could restore the region as a world technology leader, add €340bn to European GDP and create 3.8m new jobs.

On 6 May the European Commission will unveil proposals for the single digital market to counter the growing dominance of US tech firms like Google and Facebook in Europe.

The Commission wants to create a common market for digital goods, including content and services, and protect two million enterprises and 33m jobs that span networking infrastructure, telecoms, automotives and manufacturing.

It is understood that 41pc of these enterprises don’t use digital technology, which is worrying considering the looming opportunities of connecting hardware with the internet of things (IoT).

Restoring Europe as a world leader in ICT

The EU strategists believe that by harnessing these opportunities and reducing the barriers to trade within the 28 member states the continent will have the chance to drive economic recovery by embracing the digital age.

Included in the strategy is a plan to enable telecom operators in Europe to compete with ‘over-the-top’ services like WhatsApp without being subject to regulatory hurdles and unnecessary bureaucracy, according to Reuters.

Strategists believe that a single digital European market could bring in €340bn to European GDP and create 3.8m new jobs.

According to the Wall Street Journal, embracing digital could also reduce the cost of public administration by 15pc to 20pc.

To achieve these objectives the EU will need to move more aggressively towards breaking down barriers in cross-border online trade in a move that will span taxes, copyright laws, VAT rules and online purchasing.

Only 15pc of European consumers bought goods and services from another EU country in 2014 and only 44pc did so domestically. Only 7pc of SMEs in the European Union sell cross-border.

In Ireland, for example, 91pc of SMEs’ websites are incapable of processing online transactions and only half of businesses’ websites are mobile ready, according to research by the IEDR.

Planet of the apps

The European Commission’s vice-president for the digital single market, Andrus Ansip, at a conference yesterday on the EU apps economy, pointed out that one fifth of all apps on Earth are produced in Europe. “I think this could be higher,” he lamented.

“While there is solid ground for the EU app economy to develop further, there are also barriers and bottlenecks that are holding back our tech companies.

“For apps, this not only affects the larger companies but particularly independent developers in start-up businesses.

“Without a well-functioning digital single market, it is difficult for new ventures to emerge and scale-up in Europe, and lack of risk capital makes it harder still.

“Start-ups find it hard to recruit and retain the right talent to fill the job vacancies.

“There are interoperability issues between platforms. And regulatory differences around the EU’s 28 countries do not help either – copyright and consumer laws, for example. Regulation should really not be an obstacle to the development of new products and business models.

“It all makes it difficult – for start-ups especially – to market their bright ideas to a single market of 500 million customers.”

Ansip said that in a few weeks the European Commission will present its long-term strategy for building a Digital Single Market.

It will be based on three main pillars: improving access to online goods and services across Europe; creating the right conditions for digital networks and services to flourish, and looking to the future to maximise the growth potential of the digital economy.

“Our objective is to create an environment where innovative web entrepreneurs and other innovative businesses can take full advantage of their potential — a flexible and supportive business environment for start-ups and entrepreneurs.

“Removing barriers will be a big part of the strategy; modernising copyright rules will be one of the first initiatives, for example, to make them fit for the digital age.

“We will also address areas like unjustified geo-blocking, ICT standardisation and interoperability, wireless and broadband connectivity,” Ansip said.

Connected Europe image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years