Digital holds key for EU’s return to growth
As we have seen in the UK over the last five years, digital is a powerful enabler of entrepreneurship, enabling new firms to enter and compete in existing markets or create entirely new ones. As these companies grow and achieve scale, they quickly generate new wealth and jobs. Indeed a recent report by celebrated venture capitalist Sherry Coutu highlighted that so-called “scale-up” firms are responsible for almost all net new job creation.
To get its economy moving again Europe needs more of these new innovative and sometimes disruptive companies, and that is why having an ambitious vision for Europe’s digital future is so important.
Where the EU can make a difference is through the creation of a digital single market (DSM). The benefits of companies competing efficiently to bring new valuable digital products and services to a single-scale market of 500 million people will be huge.
The UK government called on the EU to take bold steps towards an open, flexible market with a regulatory framework that reflects the dynamic nature of the digital economy
Easy access to a market of that size will help small, emerging, innovative companies with great ideas and great people to grow and scale quickly. It will mean that in the world of digital innovation Europe can compete with the other big-scale markets of the United States, China, India and others.
It will mean that our next generation of young people can look forward to a future of creative, interesting and rewarding work. It will also mean that consumers are empowered, protected and confident to transact anywhere across Europe.
So how does Europe deliver on this vision? Earlier this year the UK government set out a clear and practical vision for Europe’s digital future, which has been widely welcomed by technology companies of all sizes across the Continent. It called on the EU to take bold steps towards an open, flexible market with a regulatory framework that reflects the dynamic nature of the digital economy.
For business, it is clear that the DSM needs to achieve three things: first and foremost, it must make it easier for consumers to manage their lives online by increasing clarity, certainty and trust in e-commerce, and the use of personal data; secondly, it needs to make it easier for companies of all sizes to bring innovative ideas to market across the EU quickly, with as little legal uncertainty as possible; and finally, the DSM needs to enable public services across Europe to become digital-by-default so they are less costly to deliver and more valuable for European citizens.
Achieving these three objectives will not be easy. European governments will need to work with the flow of global change and not against it. They will need to recognise the global nature of digital and the fundamental importance of open global standards. They will need to find faster and more flexible mechanisms for driving change.
Policy-makers will need to focus on doing a few things well and leave room where appropriate for industry-led innovation and self-regulation to mitigate problems.