Digital Single Market? – ‘yes, but…’


This is a reposting of an article first appeared on (here the original text)

A Digital Single Market is a huge opportunity for Europe. Independent academic research has concluded that realizing the Digital Single Market by 2015 would yield 500 billion € additional revenues for European industries and hundreds of billions of new tax revenues for governments. The idea was launched in 2010 as part of the Commission’s work program: Agenda 2020. The political commitment to the initiative has been endorsed in many European Councils, most recently in October 2013. The European ICT industry welcomed the initiative and committed to support it by providing expertise and partnership in the implementation.
Now, after almost four years only modest progress can be reported. The issues have turned out to be more complicated and controversial than expected. Therefore, the latest European Council conclusions deserve special attention. For the first time the key issues have been addressed at this level in one single document. Investments in the digital infrastructure, the Digital Single Market, skills and innovation are the keys for European growth and jobs in the coming years. On the other hand, statements in the conclusions which refer to the need to implement the Digital Single Market while respecting national competences in spectrum management and cultural diversity in copyright reform may indicate that some of the old controversies will again impede the developments towards the Digital Single Market.
Digital services for consumers across Europe call for new, fair, simplified and harmonized rules for spectrum usage, consumer protection, VAT, privacy and copyright framework. These structural reforms are not only necessary in order to restore economic growth and confidence in Europe, but also to provide European industries with a level-playing-field with their international competitors.
Europe is at a crossroads. We are about to lose the game. Today, digital service markets are dominated by global players primarily from the US or China. Due to its fragmented business environment Europe has not been able to develop any companies that would make similar foot prints in the global market place. This development is alarming because more and more of the value generated in different industries is collected by these global service providers leaving Europe as a distribution market without any capability to compete for the value. In the same vein Europe is losing opportunities to benefit from the new developments such as cloud computing and big data, which may turn out to be catastrophic, as indicated by the recent discussion on on-line espionage.
At the same time we should not forget that Europe is still a leader in Network manufacturing. Companies like Ericsson, Alcatel Lucent and NSN are global leaders even though they face heavy competition from Asia. They have gained significant revenues from the massive investments taking place in the US to deploy 4G networks. European leaders need to address the bottlenecks that are impeding such investments in Europe. We should also recognize that European operators are active in all the continents. Maybe Europe would benefit from having some international operators active in the European markets.
For these reasons it is not only important but most urgent to create the Digital Single Market. Europe must not lose this opportunity. If the development continues to follow the traditional path where the lack of political commitment from the Member States and short term national or specific lobby group interests will dominate the debate we will in a few years’ time read similar comments as we read after the completion of the Lisbon Strategy: The Swedish PM stated in 2009: ‘Even if some progress has been made it must be said that the Lisbon agenda has been a failure’. Europe cannot afford another failure.

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