Economic Growth

Europe must bring the single market to the digital world

Neelie Kroes
Non-Executive Member of the Board, Open Data Institute
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The Digital Economy

Winston Churchill said, “If you do not take change by the hand, it will grab you by the throat.” Digital change is ready to take the European telecoms sector by the throat, and that should be a worry for the whole economy. Many companies are heavily indebted or prime takeover targets, investment levels are low and the sector is divided into many competing interest groups despite obvious common ground.

I can assure you that, in the digital world, it does not take long for a corporate rabbit stuck in the headlights to become corporate roadkill. Digital corpses can already be found on both sides of the Atlantic, from BlackBerry to Nokia’s handset empire. If European telecoms companies want to avoid becoming corporate roadkill, they need to embrace change.

The Internet is now part of all economic sectors and social milieu. Since 2008, Europe’s app industry alone has generated 800,000 new jobs. These are neither Mark Zuckerbergs nor interns. They include 300,000 software developer roles – the sort of solid middle class jobs Europe is crying out for, the sort of small businesses that are the lifeblood of innovation. These jobs depend on high-speed connectivity.

But Europe’s regulations and companies aren’t providing for enough of that connectivity. That’s why we need to get rid of barriers to investment and wake up and face the future.

If we don’t change collectively, Europe’s competitiveness will slip just as the opportunities of the big data revolution arrive on our doorstep – hurting not only ourselves, but putting a brake on global growth.

Avoiding that means giving up the cash-cows of the past – like mobile roaming income – and focusing on the data-driven business models of the future. It means admitting that fighting to protect voice and SMS income makes no more sense for telecoms than protecting income from faxes.

In exchange for these cash-cows, the income opportunities of cloud computing, machine-to-machine networks and 3D printing await.

Every significant economic sector today – whether logistics or cars, healthcare or manufacturing – is building its future business models on the availability of high-quality digital infrastructure. They are all part of the digital economy alongside the Skypes and the Spotifys we associate with technology success.

That is why telecoms either enables every sector it touches, or becomes the economy’s Achilles’ heel. The choice is ours.

So let’s make sure we bring the single market – the cornerstone of European integration and competitiveness – to the digital world.

Europe has a strong high-tech research programme in place – progressing game-changing technologies like graphene and 5G mobile. More and more companies are joining efforts to upgrade the digital skills of the population. But these efforts can only truly succeed if complemented by a telecoms single market in Europe.

Let businesses and consumers use and sell telecoms services freely, in one market, not 28 national markets. Let us prove that Europe can make globalization, digitization and its political institutions work to support the basic interests of its population.

It sounds easy, but it is not. George Orwell reminds us, “To see what’s in front of one’s nose needs a constant struggle.”

Read more blogs on Europe.

Author: Neelie Kroes is Vice-President of the European Commission.

Image: A visitor checks out cloud computing applications in a computer fair in Hanover REUTERS/Fabrizio Bensch.

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