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Vice-President of the European Commission responsible for the Digital Agenda
Europe Going Digital
The Italy Summit: New routes for growth, Financial Times Conference, Milan
12 November 2012
In the doom and gloom of the economic crisis we shouldn't ignore the positive opportunities. Now, more than ever, we need to invest in both short term and long term economic growth.
The topic of today does both. The digital revolution brings huge potential to improve lives, save public money and enhance enterprise, employment and wealth.
Twenty years ago, few had heard of the Internet: today, between and 2 and 3 billion people use it.
Already today, it's an 8 trillion dollar marketplace; and a platform for huge innovation. Today, on the fixed Internet alone, one day of traffic is equivalent to a whole year's worth back in 2000.
And it's good for the economy. ICT already represents half of our productivity growth; an extra 10 percentage points of broadband penetration can be worth over 1% on GDP.
But this is much bigger than just the Information and Communications Technology sector. It enables changes to how we buy and sell; how we interact and collaborate; how we govern and hold to account.
This change and innovation are happening everywhere at a rapid pace. We see social media-based campaigns that unseat dictators; an online encyclopaedia written entirely by volunteers; patients empowered to take control of their health; networks of scientists collaborating globally; text-mining that permits lifesaving research; and much more.
Unthinkable fifteen years ago, today these concepts are already 'part of the furniture'.
And the innovations still to come are at least as revolutionary: like cloud computing, the internet of things and smart cities.
Looking ahead, we don't know what the "next big thing" might be. But when it comes to internet innovation, we've only started scratching the surface.
What we do know is that this innovation brings huge benefits for our economy and our society: making it greener, smarter, and more inclusive.
And it brings huge benefits for governments, able to offer better services at lower cost: just what we need right now. e-Procurement alone could save 100 billion euros a year.
To get there, to seize these benefits, first governments need to acknowledge this real potential. And second, they need the decisive vision to act, invest and implement.
And in this context I'd like to congratulate Prime Minister Monti's government. You've taken a big first step, by making the digital agenda a clear priority of your growth strategy.
The "Growth 2.0" decree made on 18 October is a bold, ambitious and welcome programme to make the Italian public sector more efficient.
For example, introducing a digital citizen identity, so everyone can interact digitally with public administrations, meaning efficient services, at billions of euros less cost.
And your vision on healthcare is also welcome. On current trends Italian public health care spending could increase to an unsustainable 10% of GDP in 2020. But going digital, going paperless, can help. Initiatives like e-prescriptions, digital health cards, and digital patient record management are bold: and set an example for the rest of Europe. All together, by 2020, e-health could save Italy 1% of GDP — while improving quality of life for an ageing population.
Of course, for these savings to become a reality they have to be supported by investments in infrastructure and services. So this should be a priority for the national budget.
Work we are doing in the EU can help Italy a lot. Let me briefly present some of our priorities to you.
First, Europe needs fast networks, to support tomorrow's high-bandwidth services.
Imagine if broadband were linked to other essential services – business, healthcare, banking, energy, education.
Or imagine a world with pervasive cloud computing: a technology that could boost our economy by hundreds of billions of euros a year, but which needs fast broadband everywhere.
In that world, data on our networks will rise exponentially. We can't afford to rely on legacy networks that become congested or unreliable.
So we are proposing ways to boost investment in the next generation of networks. Like through a legal framework that delivers certainty, consistency and competition.
And like through public funding to cut risk, build confidence and stimulate leverage. In fact, the digital "Connecting Europe Facility" we proposed could mean 45 million more households with fast broadband.
Other parts of the world are seeing this opportunity, and making this investment. Japan already has over 20 million fibre connections; China is installing 35 million this year alone; high speed networks now pass more than 80% of US homes.
Europe needs to keep up.
A second priority will be to ensure that everyone is on board. Today, nearly 40% of Italian adults have never used the Internet at all. Those 40% are shut off from so much opportunity: shut off, for example, from the 90% of jobs that will soon require some level of digital skills.
But it's not just about improving employment prospects. As the Internet supports and delivers more and more Government services, education, transport, healthcare, commerce: we cannot create a new digital divide. We need sustained action to get every Italian, and every European, digital: with the skills and the confidence to face the future, and to build a competitive continent.
Third, we need the right frameworks to support and enable this digital revolution. Creating an online world that people feel safe to use – protected from hacking or fraud, where they and their children can safely interact and transact.
And we must ensure our rules don't put up barriers to innovation.
Completing the single market in e-Communications alone could be worth €110 billion euros a year.
And fourth, we need sustained support into research and innovation.
For the next generation of digital technologies: like photonics, micro- and nano-electronics, or the future internet.
But also into the applications for our society – for healthcare, for smarter urban living, for the environment.
Already Italy sees the benefit of significant EU ICT funding: over half a billion euros funding nearly 1000 projects. Our proposal on Horizon 2020 would continue that investment, with around one euro in five of the 80 billion proposed set aside for ICT. Designed so it's easier to seek funding, easier to bring good ideas to market, and easier for Europe to invest in tomorrow's growth.
All in all, we need to embrace and prepare for this digital revolution. Because this whole continent needs to stay globally competitive and attractive. Including here in Italy.
I welcome the appointment of a Digital Champion for Italy – because this is a great way to spearhead and lead this work and connect the Digital Agenda with the right constituencies.
Your "Growth 2.0" action plan is a very good starting point: but now this government, and future governments, need to implement it. That extra effort is essential if Italy is to reach the Digital Agenda targets.
As it stands, broadband penetration, computer literacy, and the number of companies online are all below the European average. In fact, coverage by next generation broadband in Italy is only around 10%: just one fifth of the EU level.
In Italy, and across Europe, we need the right networks, the right legal frameworks, the right digital skills, and the right research and innovation. With all these ingredients we can – NO we MUST - become a connected continent, competitive in the 21st century. Thank you.