6 May, 2014

A 'Techie' Vision From a Fountain-Pen Head

Europe's path to growth is paved with tablets and smartphones, but first it needs a truly single digital market.

I am not really a techie. I still prefer the feel of a newspaper in my hands. A poem by Rilke does not have the same meaning for me on an iPad as it does in the dog-eared pages of a much-treasured book. I've had the same mobile phone for nine years. I cannot separate myself from it, even though I can't use it to call someone on Skype. Most of the numbers and letters on the keypad have faded as a result of the thousands of calls I made during the financial crisis. To people I truly appreciate, I still write letters with a fountain pen. And I am convinced that the complexity of European politics cannot always be explained in a 140-character tweet.

Yet it would be foolish not to embrace new technologies. I am impressed by the transformative power of digital technologies. The Arab Spring has shown that oppressive regimes can be brought down swiftly when social media empower the people. I find it a desperate move by Turkish Prime Minister Recep Tayyip Erdogan to try to limit free expression by blocking Twitter and YouTube. Social media know no borders and operate in a decentralized manner. This is very good for democracy.

It's also good for economic growth. Over the next five years, the most important task for European politicians will be to bring Europe back on track to growth and jobs. We need to overcome the consequences of the financial crisis, which started in the U.S. but caused six million people in Europe to lose their jobs. Our priority has to be to find new sources of growth and jobs—without creating new debt. I am convinced that the transformative role of digital technologies can be used to this end.

The Internet and digital communications can transform our economies as profoundly as the steam engine did in the 18th century or electricity did in the 19th century. For instance, building up an electronic land registry could support Greece's economy. Finland and Estonia have become strong European economies by relying on digital technologies. Europe's path to growth is paved with tablets and smartphones.

As the next president of the European Commission, my top priorities would include forging a fully digital Europe—and a fully single digital market. Europe should become a continent where using your mobile phone is as simple and cheap abroad as it is at home; where consumers can download a song or a movie on their iPhones without problems wherever they are in the EU; where Internet users know that their personal data are well protected, regardless of which country they live in, which service they use or where in Europe they buy online. In short, Europe must become a continent where the use of digital technologies is seamless for citizens, while opening up interesting opportunities for businesses.

If we make the right choices now, the digital sector can grow seven times faster than EU GDP overall in the years to come. European Commission figures suggest that Europe's so-called "app-economy" workforce will rise to 4.8 million people employed by 2018, from 1.8 million in 2013, with revenues more than tripling to €63 billion from €17.5 billion. The potential is huge—but it calls on policy makers to recognize the importance of founders and start-ups in modern, dynamic economies.

Too often, the power of the digital is praised by politicians in Sunday speeches and political conclusions that aren't followed up come Monday morning. Now, it is time for action. I want the next Apples, Facebooks and Microsofts to be European companies. Europe is lagging behind in digital technologies—not because we are not innovative enough. After all, it was Europeans who invented the GSM standard that made mobile telephony successful around the globe.

Europe nevertheless suffers from a tremendous disadvantage, which is felt much more in the digital world than offline. This disadvantage is the fragmentation of Europe into 28 separate markets, following the borders of the 28 EU member states. Faced with this fragmentation, even a very competitive company will not start selling a new digital product or service in Europe when it has to adapt it to 28 different regulatory conditions. Today, digital commercialization most often originates in the U.S., where new products and services benefit from the outset from one market consisting of more than 300 million potential consumers.

We can offer even greater opportunities in Europe, with 500 million potential consumers for new digital products and services—if we tear down our regulatory walls and finally move from 28 national markets to a single digital market. For this to happen, we have to get serious: We have to end the regulatory silos in telecoms and copyright regulation, in data protection and in the application of European competition rules. This requires political determination. There will be resistance, as the current fragmented regime has created very convenient, well-protected comfort zones for some players. But Europe would miss a historic opportunity if we fail to tackle this challenge head-on.

In 2006, leading representatives of my centrist political family took the initiative to eliminate excessive mobile-roaming charges in Europe. At the time, this idea was vehemently opposed by socialists from Germany and Britain, who were worried about the impact of borderless competition on national monopolies; and by economic liberals across Europe, who believed that the market would be best placed to solve the roaming problem. In the end, the position of my political family prevailed, and mobile roaming charges have been reduced by more than 80%.

Now, we need to take the next step with the same determination. If we want to have pan-continental telecoms networks, cross-border provision of digital services and a wave of innovative start-ups in Europe, we need to move away from the outdated logic of thinking that national markets are the right point of reference for digital products and services. For this, digital policy needs to move beyond the world of techies and become a priority of mainstream politics in Europe.

As European Commission president, this is what I would work for. I will probably never lose my inclination to use a pen or leaf through a book, but I will work tirelessly for policies to bring about a digital single market at the service of citizens, growth and jobs. Europe needs to change to become competitive again. This is what I would stand for as commission president.

 

Published in The Wall Street Journal