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Mr Erkki Liikanen

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

"EITO 2002 Press Conference"

EITO (European Information Technology Observatory) 2002 Press Conference

Brussels, 28 February 2002


Ladies and gentlemen,

Just a couple of weeks ago I listened to an economist who, as he said, set the growth of the knowledge based economy against the "crisis" of the ICT sector in the last year.

This was quite a striking remark, and, with this in mind, I had an opportunity to quickly look at the picture as shown by the EITO Yearbook.

  • ICT sector in Western Europe grew by some 5 percent, which is significantly more than in the USA, where the sector experienced almost zero growth.

  • Overall, Europe's share of the world ICT market rose slightly in 2001.

  • Software, services and applications were resilient in last year's economic downturn.

  • The telecom services market performed better than average.

  • The software market grew by 8% in 2001; driven by factors such as security software and the domestic consumer driven demand for video and audio streaming software.

  • The IT services market grew by 8% in 2001. It reflects pressures on users to improve productivity, integration and implementation of e-Business and to use value chain management and customer relationship management tools.

Last Saturday in Vitoria European telecommunication ministers underlined the importance of eEurope for growth, competitiveness and employment.

There is the need and the will to extend eEurope until 2005.

If we want to increase productivity, we have: first, to promote the take up of the Internet; second to promote the development of digital skills; and third to alert businesses to the need to reorganise. All three elements are needed, not just one.

If we want greater efficiency and equity in public services, we need to take-up the Internet, and in parallel reform public services.

I see five core priorities for eEurope 2005:

  • First, we need to promote attractive content for all Europeans.

  • Second, we have to provide public services on-line.

  • Third, we have to pursue digital inclusiveness for all Europeans.

  • Fourth, we have to promote faster Internet, that is, broadband.

  • Fifth, we have to ensure trust and confidence in cyberspace.

Promoting content, services and applications

In the past, we have put emphasis on technology and regulation. From now on, we must build our policies around users, so that technology really appeals to them.

This new perspective makes it immediately clear that content, services and applications are decisive.

If our goal is an Internet for all, this will only happen if content is in the users' mother tongue. Likewise, content must be available throughout the full range of terminals: the computer, the mobile phone, the digital assistant and the TV set. This is the only way to meet the demand from citizens for diversity of use in different situations, and to make a success of new platforms such as 3G.

Developing contents is of course primarily up to the market. But government can make a difference. We are already moving in this direction with the eContent Programme, whose extraordinary success goes well beyond our expectations. But we can and we must go further.

Today, the public sector is the single biggest holder and producer of content in Europe. There is huge potential in the re-use of public sector information for added value services, which government should facilitate and encourage. We intend soon to propose a Directive to this end.

E-public services

Governments can also make a difference by providing public services online. E-government is now a priority in all our countries. This was confirmed at the eGovernment Conference in November.

But putting public services on-line isn't enough to achieve efficiency gains. As in the private sector, change in the front office goes hand in hand with back office reorganisation and investment in human capital.

Of course, productivity is only one half of the public service equation. The second is equity, as government must serve all citizens.

Health is an area that deserves particular attention. It is of growing importance for European citizens. At the same time we are confronted to rising health expenditure. My conviction is that e-health is a major win-win opportunity: it can help meet this challenge while at the same time increasing the quality of health services. It should therefore be an important part of eEurope 2005.

Another major issue for government is to ensure social and human cohesion in the knowledge society. eLearning can be a main contribution here.

Digital inclusion

All Europeans should be given the ability and opportunity to participate in the benefits of the knowledge society. Digital inclusion is a social imperative of the welfare state. But it is also a condition for economic growth.

No part of the EU territory can be excluded from the knowledge economy. This means that all regions and cities must have access to a state of the art communications infrastructure. This is primarily up to the private sector. But where there is a market failure, in outlying or depressed areas, government must step in, through licensing obligations, incentives or financial support.

The Internet is being used by a growing number of companies of all sizes and all sectors, as well as public administrations and individuals. The number of regular users in the population has now passed 40% and the share of SMEs with an Internet connection is above 70 per cent.

However there is still a limited use of the Internet for e-commerce purposes, as the recent eEurope benchmarking report indicated. This indicates that the main benefits of the e-Economy are still to come.

In 2002, the Commission will intensify the debate on the impact of ICT on the economy and deepen its co-operation with all stakeholders. To this end an open consultation on the e-Economy has been launched this month on the Europa web site of the Commission.

This year, EITO is specifically addressing the issue of ICT and sustainable development. In principle, ICT has the potential to underpin sustainable development. However, a full analysis of its direct and indirect effects is still needed.

While the quantitative effects are measurable in terms of economic development, more effort needs to be made to improve the assessment of the environmental and social impact of ICT. A debate on this issue is welcome.

Participation of SMEs

Ultimately, the goal is to boost the development of the e-Economy in Europe. For this, the full participation of SMEs in e-business is important.

European SMEs still lag behind larger enterprises in the use of the Internet.

Their major concerns are related to the lack of clear commercial benefits and to security and commercial problems associated with e-business and e-commerce transactions.

In addition, the reliability and the speed of the different national networks vary considerably across Europe.

In 2001 a survey by Eurostat revealed that the percentage of SMEs which used e-business for purchases in the EU countries ranged from 5% in Greece to 36% in Denmark. It also showed that more than 75% of e-business sales are within the country of origin of the supplier.

The Commission intends to use benchmarking to identify successful national policies in order to learn from best practice and to define, together with Member States, quantitative targets for helping SMEs to use ICT and e-business more effectively.

eEurope 2005 can give further boost to the use of the Internet by SMEs, building upon successful initiatives such as "Go Digital".

Promoting broadband access

Infrastructure takes me to the next priority: broadband. Why do we need broadband?

First, because once people are connected, they want higher speed.

Second, because this will allow the provision of new and better services, both in the commercial and public sectors. Broadband is the key to greater productivity gains and social benefits.

Today, high-speed Internet access is mostly via ADSL and cable modem. But faster access technologies will rapidly be needed, both for new services and to achieve full territorial coverage. Therefore, satellites, third-generation mobiles, fibre optic and fixed wireless access will quickly have to become part of the equation.

Upgrading legacy infrastructures and rolling-out new networks is primarily a task for the market. But there is an important role for public authorities:

At EU level, we have to maintain favourable legal conditions. Unbundling has started to kick in, though not without delays.

And we have a new telecoms framework that is technology neutral. This will stimulate competition between platforms and thus accelerate investment in broadband.

Overall, what we need is a European strategy for broadband which harnesses activities at all levels of government.

The role of public authorities should be to facilitate the development of a secure, trusted and inter-operable infrastructure. They should also commit themselves to e-learning and e-government, including the use of mobile broadband for public services.

But, we need to be realistic about broadband. The apparently compelling potential case for wider broadband use must be underpinned by sound business cases i.e. economically viable commercial applications for which consumers and businesses are ready to pay. If not, initial investment and demand won't be sustained.

Security and confidence building

A final key factor for the development of the knowledge society is user trust and confidence in the network and the service providers. Today's reality is that a growing number of users experience security problems. In the past year, spamming has tripled and virus attacks have doubled.

This is where we face yet another dilemma: we want an Internet that is as open and as easy to use as possible; but that makes the Internet more vulnerable. This is why we have always tried to strike the right balance between freedom and security.


To conclude, I believe there is no doubt that there is a strong rationale for extending the eEurope activity until 2005.

Europe needs content for all in the user's language. The public sector has an important role to play in this respect through public sector information and e-government. A balanced strategy requires strong emphasis on digital inclusion. It must be complemented by ambitious broadband and security components.

Now, the requirement is to make sure that whatever actions or measures we undertake, they truly make a difference. We should not carry on with eEurope for the sake of it. We must make a difference. This calls for vision and above all political commitment.

I thank you for your attention.

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