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SPEECH/10/87

Neelie Kroes

Vice President of the European Commission

Commissioner for the Digital Agenda

Economic growth in Europe

Figures and graphics available in PDF and WORD PROCESSED

Address at TEFAF ICT Business Summit

Maastricht, The Netherlands, 12th March 2010

Ladies and gentlemen,

The European Fine Art Fair (TEFAF) can proudly call itself the world's leading art and antiques fair. What is especially relevant to my remarks today is that TEFAF has continued to grow through the crisis. TEFAF has grown when other fairs are cutting back or shutting down. There are lessons here that others in Europe can copy. TEFAF adapts to its circumstances: adding new sections, changing focus, refusing to be complacent.

TEFAF has decided: "The world is changing, so we are changing to." This is exactly what Europe needs to do, and the EU's new Europe 2020 strategy that has just been presented by the European Commission is our plan to make it happen.

This strategy shows us how to choose prosperity over decline. We must act on this choice. Why? Because:

  • We are back to performance levels of the late 1990s and

  • We have wiped out 20 years of efforts to repay public debt and added 7 million people to unemployment queues. In addition to the economic waste, this unemployment also means great social dislocation that is not easy to overcome.

Therefore, without new investment in new sustainable forms of growth we will have no way to pay for the social protections and pensions we now take for granted.

We must act. And if we do it together, we can succeed. Having invested so much in the EU's Single Market, now is the time to see it as our friend, our best asset. For creating jobs, for giving consumers choice and for giving our SMEs a way to grow. 99% of our businesses are SMEs. If we do not support them to grow, then Europe does not grow.

What do we propose? Concrete action to boost growth and jobs

The most urgent actions are getting the banking system working and getting public finances back into shape. Following on from this immediate work is the long-term need to deliver smart growth. I have a role in that as Commissioner for the Digital Agenda, but more broadly smart growth refers to investing more in young brains and getting rid of the barriers that stop our excellent science from getting to global markets.

To give you one example of the barriers to smart growth: protecting a patent is 13 times more expensive in the EU than in the US. How does that help you as entrepreneurs? It does not!

A second example is that we are failing to use the technologies we now have for low-carbon transport and greener farming. Just think of this: we lost 4% of growth because of the crisis, and we can get 1% of it back just by increasing energy efficiency between now and 2020.

Likewise, the environmental protection industry created around 3 million jobs in the past decade, and the clean technology market is forecast to triple by 2030. I want Limburg and other regions to be a part of this high-tech green future.

How can we win the battle for growth?

Our job is to lift the speed limits on the economy – in a sustainable way. That is easier said than done. You may ask me: 'how will the EU deliver?'

The answer is with your support. Government doesn't create jobs, you do. But we can help to create the conditions for innovation and jobs – and that is my promise. Through less red tape, through strategic investments and through respecting a culture of enterprise we can make progress.

National Governments are realising they cannot tackle these huge issues on their own. Whether it is a problem with sovereign debt, banks, our climate, the need for R&D. Together is the only feasible way.

Making a clear and short list of priorities is also needed, or else nothing will get done. This is why we have set only five big targets for 2020:

  • 75 % of the population aged 20-64 should be employed

  • 3% of the EU's GDP should be invested in R&D

  • The "20/20/20" climate/energy targets should be met

  • The share of early school leavers should be under 10% and at least 40% of the younger generation should have a higher education degree

  • 20 million fewer people should be at risk of poverty.

These are big ambitions for the core issues that will transform the future of your businesses and families. And at the heart of these goals is an ambitious Digital Agenda for Europe.

Digital Agenda for Europe – how it will affect you

This Digital Agenda is effectively my slice of the Europe 2020 strategy. It will be the work programme which I will take on with my Commission colleagues for the next five years.

The Digital Agenda will consist of 6 key themes, which will have an impact on your daily life – both as businesspeople and as citizens:

  • Fast internet: this is the backbone of future business. How fast? At speeds like 100 megabits per second, you are sending and receiving important information quicker than you can blink your eyes.

  • Digital Single Market: are you sick of it being hard to buy and sell things across borders when you are online? We aim to end this patchwork of national markets.

  • Digital Citizenship:  you need skilled workers; you want access to online public services; you deserve protection of your rights online. My co-ordinating role will make this a reality sooner.

  • ICT research and innovation need greater priority: we don't get amazing new technology by accident. It takes blood, sweat and tears and it also takes money. We will mobilise and create the incentives for more public and private R&D to support entrepreneurs throughout the life-cycles of their innovations.

  • Trust & Security: it sounds obvious, but if you don't trust technology you are not going to use it. We are not forgetting this basic fact in our strategy.

  • Interoperability: a digital society can only take off if its different parts and applications are interoperable and based on open platforms and standards.

You can see my focus is concrete action. This is all about matching good infrastructure and frameworks with your energy and ideas.

To illustrate what I mean in the context of Limburg, let me talk now about high-speed broadband and of the high-quality internet that it will support.

High quality internet

High-quality internet is like Digital Oxygen. For people, businesses and public services everywhere in Europe, including Limburg.

For example, there is great work being done in here to help older people to live independently and to monitor their health from home. Involving the provincial authorities and several companies, this work is creating better lives, new jobs and taxpayer savings. Full broadband coverage – indoors and outdoors – is crucial for bringing these ideas to life.

Limburg is in a position to be a European leader, due to its geographic position its international outlook, excellent businesses and its world class university. To fully exploit this potential public and private sectors must work together to build the necessary infrastructures and services, whilst we - at the Commission - will be making sure that Limburg can compete on a level playing field with the rest of Europe. This is the route to new jobs and new growth.

The special value of investing in high-quality internet is that is a horizontal investment that lifts all sectors and productivity. Whether it is in helping us to be energy efficient, promoting social inclusion or driving the public sector to be more efficient – it is amazing how wide the impact can be.

Our quality of life is therefore directly linked to what we invest in internet infrastructure.

At a time when companies – especially small companies - are reluctant or unable to build up stock and are struggling to remain competitive it is important that they have access to the biggest possible markets, can get their goods and services to market in the quickest possible time, at the lowest possible price. High speed internet increases their chances in each of these areas.

For governments facing an ageing population and problems of social exclusion – broadband is key. There are heavy investments to be made, but there are also excellent returns in the long run.

So, good networks and broad coverage are fundamental pre-conditions for getting Europe back to growth.

Many Member States' governments are currently in a state of reflection about the challenges posed by broadband and the transition to new high-speed broadband, and are coming up with their individual proposals. To mention a few France Numérique 2012 and Digital Britain have put forward their targets for broadband coverage. And the Breitbandstrategie in Germany calls for connections of 50 Mbps to serve 75 % of the population by 2014.

We need that national action; but we need European coordination alongside it. That is how we will maximise benefits from the EU Single Market, and make investments more attractive to private investors.

So the European Council's call for a unifying broadband strategy represents an important opportunity.

Building on that, the Europe 2020 strategy for smart, sustainable and inclusive growth makes clear that not only should there be "broadband for all" by 2013 - by 2020 all Europeans should have access to much higher internet speeds (30Mbps or more) and fifty percent or more of European households should have access above 100Mbps.

There are many horizontal challenges for promoting high-speed broadband throughout Europe:

  • High-quality in addition to high-speed

  • Consumers should also know real speeds, not theoretical speeds. They feel ripped-off when they get broadband at half, or less, than the advertised speed

  • A regulatory framework that promotes private investment in next generation networks

  • Maintaining close links to regional and local authorities and prudent use of EU budgets, which is crucial to including rural areas

  • Seamless convergence between fixed and wireless is also needed in order to deliver greater productivity. First-class wireless broadband is vital for rural areas

  • And finally – we will not forget that the internet is most useful when it is open, so that innovation and interoperability flourish.

But the challenges are small compared the dividend: jobs, growth and a path out of recession.

Conclusions

As Commission President Barroso said last week: "We need to build a new economic model based on knowledge, low-carbon economy and high employment levels. This battle requires mobilisation of all actors across Europe."

More than that, we have to be hungry for this growth. There is no longer any such thing as easy profits and easy growth in today's global economy.

Make no mistake – the rest of the world is working hard for their growth and making these plans. People in China and Brazil and Mexico and Australia are not assuming anything. Instead they are reforming and innovating and pushing their limits. We have to do the same.


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