The next EU policy team could in Europe's 'last chance saloon'

We need to be very clear about what’s at stake in the debate about Digital Europe. It’s not only a question of whether Europe can emerge from its slump in relative productivity and economic growth; it is a question of whether Europe can see itself in the first league of global economic players by the middle of this century. I put it this way because creative, dynamic deployment of digital communications is now fundamental to success in all business sectors.

It’s difficult not to feel that the omens are bleak for Europe. Although the World Wide Web was invented in Europe, the internet platforms that continue to disrupt services, manufacturing and the state itself have their origins and corporate bases in the United States. The U.S. is increasingly considered a global “outlier” in its commitment to an “open internet”, based on the strength of its constitutional commitment to freedom of expression.

At the same time, several Asian countries are investing more successfully in digital infrastructure than most in Europe. Nor is the vital up-skilling of Europe’s young people and its current workforce happening at anything like the necessary pace, in spite of honourable small country exceptions such as Estonia and Iceland.

Europe’s response to these trends presents a picture of two more or less equally strong horses pulling in opposite directions. On the one side there are the advocates of Digital Europe, embraced by elements in the Commission and the European Parliament, and sharing a commitment to borderless digital markets, faster digital networks, upgraded digital skills and more spending on research and development. On the other there’s a primarily defensive camp, swift to take offence at the behaviour of powerful American internet businesses, which certainly merit the close scrutiny of competition watchdogs, but which are most of the time in closer touch with what European consumers want than are their European rivals. Why else would over 90% of European netizens use Google? Great innovation flows not from a posture of nervous anxiety, satisfied with the status quo – it emerges from the confidence and conviction to brave the risks that hold others back.

In the field I have worked in over recent months – intellectual property – I’ve witnessed at close quarters the lengths to which established business interests go to protect their current business models against digital disruption. This isn’t surprising; considering the time horizons that dictate the judgments of most chief executives and mainstream capital markets, it’s rational. But the aggregate result is that corporate Europe continues to favour nationally segmented digital markets, carved out to make money in an analogue world. This fragmentation is also visible in telecommunications, where Europe has over a hundred mobile phone operators compared with four in the U.S. and three in China.

Achieving a single digital market and building upon the transformative achievements of Europe’s original common market is therefore now very difficult. Growing and legitimate concerns about the Internet’s threat to loss of privacy, exposure to criminality and the appetite of the ‘secret state’ presents another set of reasons for Europe’s lawmakers to qualify their response to the economic imperative of digital Europe.

The global growth of Internet firewalls of varying intensity, designed to protect national territories against unwelcome cultural influences, provides further re-assurance for those in Europe arguing for defences against an “open Internet”.

Seen from these perspectives, it may be too late for Europe to recover from the trajectory of relative decline that goes with its current stalemate on the digital economy. With a new European Parliament and a refreshed College of Commissioners, there might be one more chance. Let’s hope so.