Europe's Digital Single Market and the 4th Industrial Revolution

The digital single market is full of potential for Europe, but putting it in place requires painstaking work on EU regulation and laws, according to European Commission Vice-President Andrus Ansip.

“The single market was beneficial for everybody, but exists only in the physical world,” said Ansip, who is responsible for the digital single market.

“The DSM does not exist. But it could contribute €415bn a year to the economy, and will increase over the years,” he told an audience at a ‘Conversation With’ event organised by Friends of Europe.

Ansip was talking at a ‘Conversation With’ event hosted by Friends of Europe. The one-on-one discussion launched a series of events, articles and working group meetings on the 4th Industrial Revolution – the spread of automation and data exchange from consumer applications to areas such as manufacturing. One focus will be Europe’s relative lack of digitalisation compared with that of the United States, where business tends to make greater use of digital technology. America has also produced the tech giants of the past few decades, such as Microsoft, Facebook and Google.

“It’s about how to push digital Europe while remaining aware of the impact of globalisation,” said moderator Dharmendra Kanani, Director of Strategy at Friends of Europe. “If we don’t capture it, government will be left behind the curve. What are barriers in the marketplace? What can we learn from US? And what can we learn from business?”

Among the causes of the lag is Europe’s lack of a digital single market. Digital services in the US operate in a market with a population of 300 million. The EU, which has a population of half a billion and a single market in many goods and services, is largely split into national markets for media, telecoms and other digital products.

Though the Commission has long being trying to rectify this, progress has been slow. “When I was prime minister of Estonia, colleagues proposed in 2010 to create a digital single market,” Ansip said. “Everybody supported it and decided it would be digital single market in the EU by 2015.”

Tech companies face various barriers in Europe, including high taxes and a lack of programming skills. Because of these, online music streaming giant Spotify, Sweden’s best-known ‘unicorn’, has been threatening to expand operations outside its hometown of Stockholm, which is known as one of Europe’s liveliest start-up centres.