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European Commission - Speech - [Check Against Delivery]

Turning Europe digital, preparing for future growth

Brussels, 14 April 2015

Speech by Vice-President Ansip at the European Policy Centre in Brussels

 

Ladies and gentlemen,

Thank you for inviting me here this morning.

In just a few weeks, the European Commission will present its strategy for building a Digital Single Market.

As you may know, it will be based on three policy pillars that are designed to unlock the potential of the digital economy and build a digital future for Europe.

To turn this vision into reality and create an open, fair and seamless online environment, several market barriers need to be removed. Consumers could save €11.7 billion per year if they could choose from a range of goods and services from across the EU's 28 countries when they shop online.

Then we need solid and appropriate infrastructure to make it all work. That means addressing issues relating to telecoms and online platforms, for example.

But this is not only about fixing the short term, not only about getting rid of longstanding annoyances like geo-blocking.

It is a lot more. This is about Europe's future. The strategy looks further ahead, to prepare for new growth as the world advances in areas like cloud computing, the Internet of Things – and not forgetting the rapid growth of big data.

Further integrating the digital economy with the physical world has a natural impact on the workforce. Technical progress gives the IT sector immense power to create but also destroy jobs – something we should not forget.

But I believe there will still be a net gain in employment.

The McKinsey Global Institute, for example, has estimated that over a 15-year period in France, the internet destroyed 500,000 jobs but created 1.2 million new ones at the same time.

In a separate analysis, a global SME survey showed 2.6 jobs created for every one that was lost.

Nobody creates more jobs than startups and other young companies; they provide around 50% of all jobs created. This is why everything we do in the Digital Single Market strategy aims to strongly support startups: to help them scale up fast, expand beyond national borders and allow them to make the best use of a digital European market. This is one part of the economy that is largely "born digital".

But let me talk about European industry, which needs to be at the forefront of the ICT revolution to serve the markets of the future.

The potential from digitising industry is huge – just think of automation, sustainable and clean manufacturing, processing technologies, for example.

And not to forget the potential for increasing flexibility, efficiency, productivity, competitiveness – all helping to create jobs.

But so far, digitising EU business and industry has been rather slow.

Their use of advanced digital technologies - mobile, social media, cloud, big data - is even slower. Only 1.7% of EU companies make full use of such technology, while 41% say they are not using any of them.

It is not only industry and the private sector that can benefit from turning digital. Public services can also become more efficient, and save taxpayer's money too.

I will just mention a few estimates of the savings Europe could make:

-                   a 'digital by default strategy' across the EU public sector could save €10 billion a year.

-                   putting the 'once only' principle into effect EU-wide could save some €5 billion per year by 2017.

-                   e-invoicing in public procurement across the EU could save up to € 2.3 billion.

While the EU is due to transition to full e-procurement by October 2018, progress towards this has been slow in many countries.

Then, ladies and gentlemen, there is the digital skills gap.

Despite rapid growth in the ICT sector, creating some 120,000 new jobs a year, Europe could face a shortage of more than 800,000 skilled ICT workers by 2020.

Why? Nearly 20% of Europeans have never used the internet and around 40% do not yet possess the adequate digital skills to fill these vacancies.

This is not a new issue – my predecessor Neelie Kroes talked about this a good deal during her five years here in Brussels.

I think it is time that we ask how this situation has come about. Also, what we can do about it, perhaps on an EU-wide basis – because some level of blame must lie with Member States.

The Commission has been working for some years to help and guide in this area. But we still see big differences in skills levels between EU countries, and different implementation of national skills programmes designed to minimise Europe's digital divide.

What about the future? After all, this is what the Digital Single Market is about.

Data is all important, the basis of everything digital.

It is important as a commodity in its own right, potentially as important to business and society as the internet has become.

Efficient use of data is estimated to raise productivity of businesses by 5%.

Firstly, we need to make sure data is properly protected. Only then can people fully trust online services and have the confidence to use them, especially across borders. That will also give a much-needed boost to e-commerce, for buyers as much as for sellers.

We want to finalise the reform of EU data protection rules as soon as possible. But there is more, because there are other aspects of data to be considered: ownership and management of data flows, use and re-use of data. Management and storage of data.

Take big data – a good example of an emerging area of economic growth, jobs and innovation.

This sector is growing by 40% every year.

Global big data technology and services are set to grow from €3 billion in 2010 to €16 billion this year – seven times more quickly than the overall IT market.

To me, that is the kind of rapid growth that means hundreds of thousands of new jobs across Europe in the coming years.

But is Europe ready for the advent of big data? Perhaps not yet: 29% of larger EU companies see themselves as ready. But more than 50% say they are not.

Another area of obvious growth is cloud computing, across all sectors of the European economy. By 2020, it is due to expand to almost five times its market size in 2013: meaning more value to the economy, more jobs, more innovation.

Since much more data is likely to be stored in the cloud in the years ahead, it is vital to address issues like data storage, ownership and management sooner rather than later.

Lastly, the app economy. In Europe, this is growing fast: a rate of 12% since 2013. This growth is likely to continue, given the consumer boom in things like tablets and wearable devices.

Today the app economy employs 1.8 million people. This is expected to rise to 4.8 million by 2018 – 3 million more jobs in a few years.

 

Ladies and gentlemen,

These are just a few of the issues and challenges that lie ahead with the Digital Single Market.

Going digital is a complex task: almost every aspect of our lives is affected.

Thank you – and I am ready to take your questions and hear your views.

 

SPEECH/15/4770

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