Tuesday, 1 November 2011

Europe's Digital Competitiveness Report 2010

Competitiveness is as important as sustainable public finances for the member states of the European Union. Indeed, growth and jobs are key to higher revenue, less expenditure and better budget balance.

Information and communication technology (ICT) is a key to progress, and the EU offers an institutional framework for mutual learning.

These opportunities are essential for the weaker states in the eurozone and the EU.

Finding EU documents

It would be easier to find COM and SEC documents (preparatory documents) if the European Commission posted them all on Eur-Lex according to date and with all language versions visible through the bibliographic note.

Digital Competitiveness

Let us turn to the contents of one of the cornerstones of the Digital Agenda for Europe, one of the seven flagship initiatives of the Europe 2020 strategy for smart, sustainable and inclusive growth (EU2020):

Europe's Digital Competitiveness Report 2010

(formally the two volumes of the Commission staff working document 17.5.2010 SEC(2010) 627).

The executive summary offered the following declaration on the contents (page 8):

This year’s report focuses on significant developments in the area of broadband, use of internet services and eCommerce, the digital divide, online public services, the economic impact of ICT and the ICT sector. The report benchmarks the relative performance of the EU Member States, where possible compared with other major non-European economies such as the US, Japan and Korea.

With regard to the telecommunications markets (eCommunications), the contents of Chapter 2 Broadband are largely identical with the 15th report on the Single European Electronic Communications Market – 2009 COM(2010) 253 and the accompanying staff working document SEC(2010) 630.

Digital Single Market

The same summary presented main findings about the ideal of a digital single market, one of the main challenges for the Digital Agenda and the Single Market Act (SMA):

The internet has a huge potential to strengthen the single market by providing individuals and businesses with access, at their finger tips, to the entirety of the EU single market, by making them more informed market participants and by making prices more transparent. However, the level of eCommerce and eBusiness varies across Member States, and cross-border transactions are limited. Some 54% of internet users in the EU now engage in eCommerce (ordering or buying) but only 22 % of those e-shoppers have ordered from other EU countries. The main barriers to buying online are the perceived lack of need, security, trust and privacy concerns, and lack of skills. Online businesses also face regulatory and practical barriers to cross-border trading. As a result, more than 60% of cross-border transactions cannot be completed because traders refuse to serve consumers abroad. However, a genuine Digital Single Market, an important source of economic growth, is essential to stimulate the growth of businesses through larger markets and to provide consumers with more choice and lower prices.

Productivity growth

The following reminds me of the great productivity challenges of the Mediterranean EU members, Cyprus, Greece, Italy, (Malta), Portugal and Spain, as well as the other new member states (page 11):

The ICT industry is an important contributor to the growth of the European economy: while representing 5% of GDP, it drives 20% of overall productivity growth. Accounting for 1% of GDP, the ICT manufacturing sector is responsible for one quarter of total R&D investment. Together with ICT investment and take-up by enterprises, the sector drives half of productivity growth, as was the case before the recent economic crisis.


I intend to present and to comment on some other interesting ICT policy findings in one or more blog posts.

Ralf Grahn

P.S. Dear Reader, I am interested in national Digital Agendas and existing language versions, as well as information society plans and IT policy actions in the member states of the European Union. If you know something about national ICT policy and law, I am grateful if you can use the comment section or email me with relevant information.