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Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise and the Information Society

A Framework for Growth

Baltic Sea Region e-Business Forum

Riga, 28 September 2001

Ladies and gentlemen,

The information society has been on the top of the EU agenda since the Lisbon summit more than a year ago. The conclusion of the summit was clear: economic growth is closely linked to the speed with which we are able to manage new information and communication technologies.

The goal is ambitious and somewhat rhetorical to a Nordic:

"to become the most competitive and dynamic knowledge based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion".

What we did not know at the time, but came to learn, was that "new economy" related stock market had reached its peak just two weeks before the Lisbon Summit.

Now when we look around, we see redundancies, staff reductions, and shutdowns. For many, fortunes quickly made were quickly lost. The party is over.

And what about our strategy, you ask. Is Lisbon over, gone with the crash?

My reply is firm: no, it is not over.

Lisbon is not over. What is over, however, is the myth of a non-cyclical world and the hype of the new economy.

The risk now is that the overshooting optimism of recent times will push us to exaggerate the gloominess. We must remember, that opportunities are huge. When new and old economy merge, we create major possibilities for growth and sustainable development.

But there are important conditions that must be full-filled. We need skills for all. We need low Internet cost. People must feel safe in the Internet. And we need content in mother tongue, which is culturally customised.

First on skills. The question of ICT skills remains pertinent at different levels:

There is a continued need for specific high tech skills, at the top of the skill pyramid. We need more competent software people, women and men.

And when old and new economy merge, all employees need generalised ICT skills.

Finally, when we want to create an information society for all, everybody needs ITC-skills. This means: connected schools and Internet-related education, updated curricula, trained teachers, and finally computer literacy for all pupils when they leave school.

Internet penetration in Europe keeps rising at a very fast pace.

About half of all Europeans (45%) use a computer at work. In 8 countries around half of the households are connected.

The Nordic countries are in the lead, while the Baltic's are catching up; 33 % of Estonians use the Internet while 13 % of the Latvian and 9 % of the Lithuanian surf the web. In Poland 14 % are online. Russia is lagging, but the growth rate is high: 7 - 10 % each quarter according to the Web-Vector survey. And in St Petersburg the Internet penetration is over 10 %.

The EU average is 36 per cent in June this year, up from 28 % eight months earlier.

In short, the information society is going forwards. It remains our task to set the right framework to allow growth to continue.

1. The more competition the better

EU telecoms policy has from the outset had one main objective: to provide high quality services at low prices to European citizens.

We have gradually liberalised all segments of the telecoms market. This process reached a peak in January 1998 with the full liberalisation of services and infrastructures in all Member States. And the process was completed this year with local loop unbundling. This step is vital if broadband Internet is to be rolled out quickly.

EU competition law accompanied the deregulation. The EU experience also indicates that rules are needed to generate competition in certain market segments. Hence the importance of independent regulatory authorities.

This process lead to a dynamic market. Telecoms grew rapidly, competition intensified and tariffs fell. Users have more choice and better quality.

There is now strong evidence that the more competition, the better.

The e-Business Forum many themes and speakers demonstrate the promises of eBusiness as an engine for economic growth. However, a prosperous development in the region is challenged by the lack of a sound implemented regulatory framework that can offer predictable future conditions for enterprises.

There is a strong need for a common framework for the development of the Information Society. In the accession countries one need to focus on the implementation of the EU directives in telecommunications and information society services. To promote Information Society Russia need to implement legislation, norms and standards that are compatible with the EUs.

The high penetration rate of mobile phones is a strong European asset.

The transition to 3G is a challenge.

I remain confident, that mobile Internet, the possibility to connect anyone, anywhere, anytime is a compelling asset for an inclusive information society. What we need to do now is

  • to create a legal framework to prevent the fragmentation of the market in the future. We need to learn from past experiences.

  • to invest in content and research and

  • to facilitate deployment with measures such as network sharing

2. Privacy and security: confidence building

People also need to feel secure. They need to trust that privacy is guaranteed on the Internet, and thus need a high level of security.

Europe has already taken several initiatives in this respect:

It has fully liberalised the trade of encryption technologies. These are key to securing confidentiality.

It has also adopted legislation to ensure the lawfulness and mutual recognition of electronic signatures between EU countries. These are key to securing the integrity and authentication of electronic data.

The Commission has also recently published a Communication on network and information security

Let me highlight some of the policy proposals:

We need

  • to raise awareness public information and education campaigns should be launched and best practices should be promoted;

  • a European warning and information system is needed to strengthen the activities of Computer Emergency Response Teams (CERTs) or similar entities and improve the co-ordination amongst them;

  • examine how to best organise at European level pro-active measures to develop forward-looking responses to existing and emerging security threats (e. g. an Information Security Observatory);

  • concerning the legal framework we will set up an inventory of national measures, which have been taken in accordance with relevant Community law.

Our objective is to table a comprehensive strategy on the security of electronic networks before the end of the year.

3. Convergence is complementary

The regulations also need to be adapted to the Internet-driven convergence between telecoms, computers and the media.

Convergence places different distribution platforms on the same market, thus intensifying the fight for eyeballs, the struggle for market share. For inclusiveness, however, the crucial point is the total number of eyeballs. To reach all citizens, to cover the whole population, is a social goal that requires a variety of means of connection.

For market actors this is about competition, whilst, seen from the societal side, different platforms are complementary rather than competing. For both reasons it is important that the regulatory framework remains technologically neutral and works independent of the device as for example mobile phone, digital television and PC.

One important point in this context is interoperability. We all agree that interoperability is crucial to the development of a successful content industry.

Open standards are key contributors to interoperability. They will provide new means of connection to the Internet, new interfaces with the mobile world. In short: they will enable convergence to happen.

4. Content draws eye balls

It is time to speak more about services and less about technologies.

If we want to have an information society for all, the Internet must be in all languages and culturally attuned. This is particularly important in mobile Internet, where people will be paying for the service.

The role of languages is growing rapidly. One small example comes from Russia.

The introduction of a computerised Cyrillic alphabet set brought about an immediate growth of websites in the country, not surprisingly.

    4.1. Government on line

As the number of connected citizens grows, so will the incentive for government to offer efficient and diversified on-line public services. Much progress has already been achieved regarding the use of the Internet by governments

Access to public documents and legislation is improving. That's good for openness and transparency. But it is only a first step. What is still missing is real interactivity, which is the essence of the Net.

It is all very well to be able to find administrative forms on-line and to download them. But having to print them out, fill them in, and then send them back by regular mail does not amount to an e-government. The real change will be true interactivity in public services. A major reform of public services will then become possible. Responsiveness, citizen-friendliness and quality of service will become new standards for public services.

Belgian presidency and the European Commission will organise a high level conference on eGovernment in November.

Our aim is to proceed "From Policy to Practice". From pilot projects to real inter activity. We need to move eGovernment from the IT-specialist to the strategic agenda of all public administrations.

5. European inclusion

And beyond all this, the EU has two enormous challenges: the Euro and enlargement.

The Euro will be in place in less than four months. Aligned to e-businesses the Euro will put immense pressure on transparency on the market place: the Internet surfer can make price comparisons in a very short time.

Enlargement is an enormous and historic task. The Information society will play an important role in bringing candidate countries up to speed in many respects.

At the Göteborg Summit in June, the Heads of Government of the Candidate Countries have launched the eEurope+ Action Plan. This means that they share our political commitment to embrace the challenges of the information society.

As the name indicates, the eEurope+ Action Plan is adapted to the particular needs of the candidate countries. It intends to accelerate reform and modernisation of the economies in the candidate countries and to encourage capacity and institution building.

In particular, eEurope+ recognises that there is a basic need to ensure that all citizens are offered the possibility of access to affordable communications services. Consequently, it is based on four objectives:

  • accelerate the putting into place of the basic building blocks of the Information Society

  • a cheaper, faster, secure Internet

  • investing in people and skills

  • stimulate use of the Internet

together with a whole range of actions in areas like e-commerce, education, e-health, e-government, transport, and environment.

Each candidate country has its own responsibility to prepare its own action plan in order to implement eEurope+. It is expected that the plans will promote substantial private sector investment in the candidate countries.

Information technologies will allow them to leapfrog a series of technological stages that the other Member States have had to undergo. This is encouraging.

Estonia is given as an example. In 1991 it had virtually no modern technology, today it is said to be one of the most wired nations in the world.

The EU's Northern Dimension policy offers a platform for having an Information Society action plan for the region. The proposed Northern eDimension action plan, developed in partnership between the countries around the Baltic Sea and the European Commission, has its focus on a few selected actions to be implemented in the years to come, actions that favours the strengths of the region and builds on the policies eEurope, eEurope+ and national eInitiatives like eNorway and eLatvia.

When eRussia now is implemented, all countries in the region have a national strategy as basis for a closer co-operation and cross border actions to accelerate the transition to a knowledge based Information Society.

  • The Northern eDimension action plan

  • has a regional focus - to stimulate the growth of the region

  • builds on - and shall not substitute or duplicate existing "ePlans"

  • proposes concrete projects to be implemented in cross border actions

  • offers a framework for cooperation and Information Society initiatives

  • can inspire players to take a step forward and put their efforts or money in Information Society development

6. Conclusions

In conclusion,

The information society is and will remain a top priority for the EU.

The spread of the information society all across Europe is in everybody's interest. It can foster economic growth, provide jobs, connect remote places to urban centres and raise living standards.

This has not changed.

But what we need to generate this, is

  • Firstly, we need cheap and secure networks,

  • Secondly, we need skills for the entire population

  • Thirdly, we need content in mother tongue and we need public services on -line

  • Fourthly, we need a modern legal framework in the era of convergence.

And all of this we need throughout the EU of tomorrow, in the current and future Member States.

This is the challenge. We must remain focused and keep the sense of urgency.

Thank you for your attention.

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