Race for the prize

The EU needs to press ahead with its ambitious plans for the digital economy or risk being left behind.

European leaders are pre-occupied with escaping from an economic crisis and trying to ensure that the same problems do not occur again. But they would be wise to devote some attention as well to a longer-term concern of equal significance to Europe’s economic future. The issue is how Europe can stay in the race as the digital economy develops. The digital future will, if embraced effectively, bring growth and jobs – and if ignored, leave Europe relegated to the technological second division. 

There are a wide range of challenges. Take the new applications and devices that have become such a common feature of daily life. Millions of Europeans search on Google, chat with friends on Facebook and play with the latest gadget from Apple – but none of these companies is European. Or look at the declining number of computer-science graduates that Europe is turning out just as demand for these skills is rising. Or consider the unrealised potential of European industry and commerce because the single market has still not made cross-border online business easy for traders or customers. Or reflect on the alarming statistic that while more than half of all Europeans use the internet every day, nearly a third have never touched it.

The goals

The EU is starting to respond. Attaining digital competitiveness was a central aspiration when, in March last year, the European Commission launched its Europe 2020 strategy – a series of proposals to prepare the EU economy for the challenges of the decade ahead. The Commission’s digital agenda followed two months later, with the stated aim of maximising “the social and economic benefits” of technology.

The digital agenda is ambitious in its scope, and member states have committed themselves, on paper at least, to the digital dream. But they remain divided on numerous issues, from copyright protection to how to encourage the take-up of high-speed internet.

The hurdles

Europe knows it needs to raise its game. It fears being left behind by the US and countries in Asia. Policymakers know that they must make use not only of regulation, but also of public money. That is why they authorised investments of a record sum – €1.8 billion – as state aid on broadband infrastructure in 2010. And state support today means a competitive economy tomorrow, according to the Commission.

But technological advances will mean nothing unless citizens adapt to the thrust of the digital economy and become confident consumers. High on the list of questions to be addressed is privacy. Will consumers feel comfortable if more of their personal data becomes stored online? Reaping the rewards of the digital revolution will depend on much greater integration and transmission of data across platforms, services, databanks – and on widespread acceptance by the public of such new practices. That will be determined largely by how effective the EU makes its privacy laws. Its current review of data protection legislation is long overdue.

If the benefits eventually match the EU’s aspirations, Europe stands to gain much. But there is a long way to go, and the speed of technological progress means there is less and less time to get there.

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