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.

Denmark: Competitiveness challenges

After Productive and sustainable Denmark as seen by the World Economic Forum (WEF), we look at what Denmark has planned in order to become even more innovative and competitive, in line with the aims of Europe 2020 strategy (EU2020) for smart, sustainable and inclusive growth.


National Reform Programme 2011

Last spring, in line with the European semester and the Annual Growth Survey, each EU member state submitted the final version of its National Reform Programme to the Commission. To a large extent the Danish NRP 2011 builds on the 39-page Danmark 2020 programme from February 2010:

Danmarks Nationale Reformprogram 2011 (Maj 2011; 65 pages)

Thanks to the English versions, the NRPs can be studied more widely:

The Danish Government: Denmark's National Reform Programme (May 2011; 67 pages)

The Introduction offers an overview of the NRP contents:

 Chapter 1 deals with the overall framework for the Danish economy based on the 2020 Plan.
 Chapter 2 focuses on the Danish national targets which will contribute to fulfilling the Europe 2020 strategy and strategies for meeting the targets.
 Chapter 3 identifies the structural bottlenecks for growth in Denmark.
 Chapter 4 describes the inclusion of relevant ministries and non governmental organisations relevant for the Europe 2020 strategy, including their involvement in the drawing up of the national reform programme.

Competitiveness challenges

After presenting the macroeconomic background, the Danish NRP moves on to more specific issues of competitiveness. These reveal a number of challenges to Denmark's future prosperity. Two major ones:

The programme noted that between 1999 and 2009 Denmark recorded the second-lowest annual rate of productivity growth among the OECD countries.

Wage costs in Denmark have risen more than in Germany and elsewhere abroad during a number of years. In the Danish manufacturing industry wage costs are higher than in all other OECD countries except Norway.



Ralf Grahn

Productive and sustainable Denmark

Three magic words: competitiveness, productivity, prosperity.

Studying innovative and competitive independent countries, or states of the USA, much of the Europe 2020 growth strategy (EU2020) is about learning from the best.

Before turning to the WEF pillars of competitiveness, we had already taken a peek at the economy and society of Denmark.

We have also seen that among the 142 countries and territories compared by the World Economic Forum, Denmark ranked eighth according in the Global Competitiveness Index (GCI) 2011-2012 (table 3, page 15):

Klaus Schwab (Editor): The Global Competitiveness Report 2011-2012 (World Economic Forum WEF; 527 pages)

Tables 4 to 7 allow us to get a more detailed view of how competitive Denmark (or another country) is with regard to different groups of criteria or pillars, more fully explained on pages 47-49. According to the summary on page 24, Denmark has quality institutions, infrastructure and education like its Nordic neighbours, but its labour market flexibility is a distinguishing feature.

A fourth magic word is 'sustainability'.

The Sustainable Competitiveness Index (SCI; beta version) was presented by the WEF for the first time. The challenging and interesting SCI tries to determine the level of productivity while ensuring the ability of future generations to meet their own needs. The SCI is an effort to integrate factors of economic, social and environmental sustainability. Denmark came in eighth in the integrated GCI as well.

Country presentation

You find the country presentation of Denmark on the pages 162-163, including the most problematic factors for doing business, as well as the scores for about a hundred different factors.



Ralf Grahn