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How the EU is boosting its Digital Economy

by Natascha Zeljko

Mariya Gabriel, the European Commissioner for Digital Economy and Society, talks about global competition, the challenges to succeed within China and US and why female empowerment is important to digital transformation

At the moment there is a lot of discussion about whether old-economy Europe is falling behind. Is the race for digital supremacy over?

No, far from it for the simple reason that the race is just at its start. The next wave of the digital revolution with 5G, IoT, and AI will deepen and further accelerate the transformation of our society and economy.  But it is true that the global competition is fierce and that the EU as a whole is still lagging behind the world leaders in R&D investment and in big online platforms that are now gatekeeping access to consumers. This is a wakeup call – the top 20 digital companies in the world are either American or Chinese; none are European. This is not to say that the EU does not have strong assets. Our education system, research institutions, scientific output, and manufacturing industry are excellent.

One area where the EU is clearly at the top is digital framework. To use just one example: Europe’s General Data Protection Regulation (GDPR) has already effectively set the global standard for data protection, not least because any business or organization operating in, or accessed from, the EU has to comply with it. The headline-grabbing new technology releases from US or Asian firms are just the tip of the iceberg, the consumer interface if you like. Where Europe is particularly strong at setting the global agenda is in all the rest of the iceberg, the part under water – the standards, the regulations, the frameworks. This might sound boring compared to the excitement of a shiny new phone or operating system but it is the engine of the digitalization of our society.

What are the concrete measures the EU is taking up to boost its digital economy?

Europe has an important role to play in technology and innovation. As I mentioned before, we have plenty of excellent digital companies, technological expertise, and infrastructures here in Europe and the EU is doing a lot to support them. This can be financial support – for example, through the new Digital Europe program under which we have proposed to invest €9.2 billion from the next seven-year EU budget in key technologies such as AI or supercomputing, or in developing Europe’s digital skills. But we also support them in other ways – for example, through digital innovation hubs bringing together academia, industry, and startups working in the same field to speed up the route from concept to application.

Would a common European digital project — a kind of equivalent to Airbus — be a solution?

Comparisons are always dangerous and the two domains are very different. But what I take from your question is whether we need to have big European actors in the digital. My answer is, “Yes, definitely.” This is firstly an issue of strategic autonomy and sovereignty for Europe in a context where security threats are more and more important. This is also a matter of competitiveness;  big actors, such as the GAFA, are organizing the markets around them, which gives them power that no company has ever had in the past.

“The good news is that we have already started to work in this direction with the Digital Single Market.“

Could you give us some ideas of infrastructure reinforcements?

And the good news is that we have already started to work in this direction with the Digital Single Market. We have progressed a lot to address online obstacles such as geoblocking. We have also started to adjust the legal environment to new technologies, such as blockchain, which will give a edge to European actors in these areas. Finally, we have considerably reinforced our actions to build digital infrastructures based on European technologies. In these regards, the Euro High-Performance Computing Project is seminal and will provide for strong European actors and top class infrastructure for the whole society. We also have launched a similar project in the area of micro-electronics. The DSM is just a start and we will certainly need to do more to foster our strategic autonomy and our capacity to reap the right value from our creativity in digital. Personally, I think that a comprehensive industrial policy for digital – including strong action on skills – big projects, R&D, and closer links between regulators and our digital companies will be necessary to respond to these challenges in the near future.

Finally, we should not forget the dense network of SMEs and startups which are very important for our future. Small and medium-sized businesses like La Ruche qui Dit Oui bring together consumers, food producers, and suppliers from all across Europe. The Belgian city of Antwerp is working alongside Copenhagen in Denmark and Helsinki in Finland to develop an Internet of Things platform that will enable them to be among the first ‘smart’ cities in Europe.  

We have a classic conflict of objectives: on the one hand, to promote digitalization, to create good framework conditions for companies and innovation, and on the other hand to guarantee the secure handling of data. What is the solution to this dilemma? Or is this not a dilemma at all and the answer is a European seal of quality?

Innovation and the need to handle data securely are not at odds but rather go hand-in-hand. For example, the General Data Protection Regulation is of fundamental importance for the development and growth of the European Digital Single Market to the benefit of European citizens and businesses. Secure handling of data contributes to an increased trust in products and services of those companies that embrace data protection, improving their competitiveness. This new rulebook is in fact the friend of innovation; it is future-proof to face challenges of evolving technologies. Companies will embed data protection in their products and services, in line with the ‘data protection by design’ principle. And knowing that the same rules apply across the whole of the EU is a real help for companies wanting to operate across borders.

What are good examples of a successful European digital offensive?

As far as specific European digital projects are concerned, I’ve mentioned a couple already in my earlier answers – and you can find many more success stories from every corner of the European digital sphere on the Digital Single Market website.

In broader digital policy terms, the obvious success in terms of immediate impact on European citizens has been the ending of international roaming charges for Europeans travelling abroad, as well as the ending of geoblocking of digital content or making it easier for people to buy goods online in different member states.

When it comes to investment, the proposal of Digital Europe, the first-ever EU program dedicated to the capacity building and deployment of digital technologies, is a major feat. It has been very well received by the Council, and Parliament and I am positive it will emerge strong out of the upcoming budgetary discussions for the next financial period.

“More women in digital jobs could create an annual boost to the EU GDP of €16 billion“

Digital and women: in your opinion, how could female empowerment and more diversity inspire the digital transformation?

The digital transformation is happening at the same time as we see a widening of the digital gender gap. The low number of young women taking up STEM (science, technology, engineering and mathematics) studies is one of the main reasons for the digital gender divide that is so evident in ICT-related professions and could also be a factor in women’s access to corporate management positions in the digital industries.

So yes, I firmly believe that female empowerment can have a positive impact. More women in digital jobs could create an annual boost to the EU GDP of €16 billion, according to a report on Women in the Digital Age we published last year. Yet that same study also found that young girls refrain from education in STEM fields because of a lack of inspiration and role models. This is why the STEM education and career opportunities should be better highlighted to female students at all levels, and starting early on. But business also has a role to play – attracting women into digital roles should be a key focus for all European businesses, not only to improve the diversity of teams, but to ensure the future sustainability of rapidly growing industry.

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