DIGITALEUROPE’s response to the Digital Decade consultation

Executive Summary

Following the 2008 crisis, the EU launched its Europe 2020 strategy to overcome the imbalances and weaknesses exposed by the financial collapse. It prioritised economic coordination, set clear targets and responsibilities for Member States, created a substantial institutional mechanism to help them get there, and gave it just enough teeth to keep them on track. The COVID-19 crisis has different origins, but similarly, it has revealed imbalances and weaknesses, notably in our digital skills and infrastructure. As in 2010, now is the time to think big and set ourselves up for the crucial decade to come.

By calling the next ten years “the Digital Decade” and launching this consultation, President von der Leyen has shown the political will necessary to build ‘a stronger digital Europe’. The challenge now lies in matching that ambition with concrete aims and the means to reach them.

Digital technologies have proved essential during the crisis, yet the pandemic has exposed the gaps in the system. Like back in 2010, we must use this crisis as an opportunity:

• We must set ambitious targets for digital transformation and stick to them.
• We must invest wisely and link the funds to national reforms and the EU’s wider digital agenda.
• We must coordinate our efforts and multiply the opportunities for pan-European collaboration.

We in DIGITALEUROPE have been calling for the above efforts since our manifesto in 2019, before the crisis. We are therefore uniquely placed to help set the agenda:

• Although the timeframe needs to be extended to 2030, our Vision for 2025 is a model for what a stronger digital Europe should look like.
• Our key performance indicators can act as inspiration for the common digital targets.
• Our Investment Plan can help direct the funding to those multi-country projects that will deliver the most bang for our buck.
• Meanwhile, as a leading member of the Commission’s High Level Expert Group on Artificial Intelligence, we call on the Commission not to reinvent the wheel for its proposed Digital Charter. A cross-sector group of civil society organisations already agreed on seven principles for ethical AI, which should serve as a basis for any broader digital charter.

Regarding the Digital Compass and its aim to better monitor investments and funds, we must learn the lessons of the recent past. Although it is too early to tell for sure, it seems that the political boldness of the Recovery and Resilience Facility might not deliver on its promise, at least in part due to insufficient governance.

Despite the unprecedented step taken to pool common debt at EU level, the investment projects identified by Member States too often follow narrow national or regional priorities; they lack a European vision. The process is rather untransparent and the draft plans we have seen are unfortunately not clear or coordinated enough.

If we are serious about reaching our digital decade goals and encouraging transformational pan-European digital projects, we must decide what kinds of institutional structures are necessary to get us there. Formed from the ashes of the 2008 crisis, the European semester process could serve as a model for national and EU coordination for today’s moment of need.

To realise the promise of the Digital Decade, we will need a strong Commission, equipped with the necessary funding, tools and personnel. Now, as then, we must turn the crisis into an opportunity for Europe.

And finally, on the international dimension. DIGITALEUROPE fully agrees that “the EU can only success in its digital transformation if it builds a Digital Decade in an outward-looking manner”. The Commission’s Trade Policy Review communication noted that already by 2024, 85% of the world’s GDP growth is expected to come from outside the EU.

If we want our companies to grow and our citizens to benefit, the EU must remain open to international trade and continue to have an open market based on reciprocity and a level playing field.

In this regard, we welcome the recent definition of digital sovereignty by Germany, Estonia, Denmark and Finland in their letter to President von der Leyen.

Our vision for 2025 and common digital targets

A STRONGER DIGITAL EUROPE (Manifesto 2019)

Our DIGITAL EUROPE Vision 2025 is:

For a sustainable, prosperous and stronger DIGITAL EUROPE, we believe that there are 7 key areas of impact that should be addressed by all decision-makers from industry as well as government leaders and public sector institutions:

Digital Single Market

To generate growth and remain competitive in the global digital era, Europe must consolidate its Single Market and address fragmentation. Read more

Inclusion

Fear of technological development should be transformed into opportunities by equipping Europeans with the right set of digital skills. Read more

Green growth

Europe must leverage digital technologies to build a sustainable, low-carbon, and resource-efficient economy and society. Read more

Innovation

Europe must invest in the take-up of digital technologies such as AI and 5G, supporting the creation of cross sectorial innovative ecosystems in sectors where Europe has a competitive advantage. Read more

Trust

Government and industry must cooperate globally to strengthen cybersecurity and protect citizens’ privacy while enabling data flows. Read more

Agile & mission-based policy

Europe must define clear goals for policies and drive agile policy-making processes based on multi-stakeholder engagement and experimentation through regulatory sandboxing. Read more

Leadership

European leaders must define ‘what they want’ and set a clear vision and goals for how digitalisation can improve European society based on common values. Read more

The future of Europe is DIGITAL.

Common digital targets (KPIs)

Back in our 2019 manifesto, we released a set of 22 success indicators that Europe should aim to achieve by 2025. Over the years we have added a few and during the COVID crisis we increased their ambition given the urgency of the situation. We believe the same indicators can be extrapolated to 2030 to fit the digital decade.

The indicators come from a variety of sources, including European Commission, Eurostat, independent think tanks, reports and surveys.

We suggest that the Commission looks to establish a wider group of stakeholders, including industry, to monitor these digital targets over the next ten years, and if necessary, add to them or adjust them. DIGITALEUROPE would gladly be part of such an exercise.

Digital education and skills

A digital Europe should not leave anyone behind. In a rapidly changing world, there is an increasing demand for people to learn how to use new technologies. Without the right skills, people fall behind and businesses suffer.

1.    By 2025, Member States and companies should have completed retraining for 20% of the workforce.

52% are currently in need of reskilling.

2.    By 2025, enterprises in Europe should be providing ICT training to 70% of their employees.

It is currently around 25%.

3.    By 2025, 6% of working women should be ICT specialists.

It is currently 1%.

4.    By 2025, 90% of people who are without formal education should be regular internet users.

It is currently around 70%.

5.    By 2025, 80% of schoolteachers should feel ready to use digital technologies.

At the moment only 40% do so.

Digital for a green recovery

Countries around the world have been unsuccessful at decoupling economic growth from increased CO2 emissions and resource consumption. For every 1% in global GDP, CO2 emissions have risen by about 0.5% and resource consumption by 0.4%. Digital technologies could be a major contributor in helping societies address this challenge. For instance, it is estimated that by 2025 digitalisation could save over 26 billion tonnes of CO2 emission globally – about as much as Europe’s emissions across the same time period.

6.    By 2025, 15% of all material used in the economy should be recovered and re-used. 

In 2019 it was 12%.

7.    By 2025, Europe should capitalise on digital technologies to reduce 20% of CO₂ emissions.

Connectivity & infrastructure

Given the unprecedented transition to mass home working, living and leisure, the quality of connectivity will be more critical than ever. Connectivity will also enable strategic digital technologies like AI and IoT and will allow European companies to grow so that they can come out of the crisis stronger. We need to ensure Europe has the right overall connectivity mix (submarine networks, fibre, 5G) capable of delivering what is required.

8.    By 2025, 70% of European households should have a broadband connection with 100 Mbps or more.

Today only one out of three does.

9.    By 2025, all European cities should have 5G coverage.

10. By 2025, 5G connections should cover at least 200 million users.

11. By 2022, Europe should have made available 100% of the pioneer bands for 5G spectrum.

Digital healthcare

Health data makes up 30% of the world’s stored data. A single patient generates up to 80 megabytes yearly in imaging and EMR data. However, such valuable data is often inaccessible, even to the patient, and nationally siloed and shielded. Especially in Europe, the adoption of Electronic Health Records (EHRs) remains subpar to for instance in the United States, where more than 35% of health records have now been digitalised.

Ultimately, our goal is to accelerate data flows within the EU for better health outcomes for everyone. For instance, a study has shown that AI – which is fuelled by reliable and secure data – can extend average life expectancy by 0.2 -1.3 years. Critically, there is momentum to digitally transform health in Europe since the pandemic challenged 88% of caregivers in providing care and more than half had to reduce their services. For health, moving to digital can save lives.

12. By 2025, 30% of EU citizens should be able and willing to book an appointment with health practitioners online.

It is currently 16%.

13. By 2025, 50% of general practitioners should be regularly exchanging patient data with other healthcare providers.

Today, only 21% of them do so on a regular basis.

14. By 2025, one in three Member States should offer cross-border access to electronic health records. Today only 8% of general practitioners have a system that allows them to do so.

Today only 8% of general practitioners have a system that allows them to do so.

Digital for SMEs & scale-ups

Europe must nurture its SMEs and scaleups, as they are essential to our prosperity. More than just an engine for innovation, scaleups are businesses that hire highly skilled workers, raise Europe’s productivity, and champion European values across the world. They have the potential to become the next tech giants.

Europe has delivered meaningful growth for its scaleup ecosystem with a 20% increase in the number of homegrown scaleups every year in the past decade. While it is a step in the right direction, the number of European scaleups is still less than a third of those in the US. That partly explains why Europe is only home to 12% of unicorns globally, with half of those in the UK.

15. By 2025, Europe should be home to 25% of the world’s unicorns.

Today it is only 12%, and half of those are in the UK.

16. By 2025, 50% of SMEs should be using big data analytics.

Today it is only 12%.

17. By 2025, 20% of capital raised should go to tech companies with female or mixed leadership.

In 2020, only 1.7% of all capital raised went to female-led companies, 7.5% to mixed leadership and 90.8% to companies owned by men.

18. By 2025, 1% of Europe’s GDP should be invested in scaleups.

It is currently 0.5%, lagging behind the US (3.6%) and China (1.3%)

Research & innovation

At DIGITALEUROPE, we are committed to supporting the development of a Research & Innovation (R&I) framework that promotes the flow of knowledge between public research and industry.

Innovation is the most effective way of increasing the well-being of people. When countries and businesses invest in innovative products and services, people’s wealth increase, the quality of their lives improve, and they can target their efforts towards bigger problems.

19. By 2025, European countries should be spending 3% of their GDP on Research & Innovation.

Japan already meets that target with 3.3% spending and in the US it is 2.8%. The EU average is 2%.

20. By 2025, 10% of Research and Innovation spending should be targeted at ICT.

Currently, only 6.9% is spent on ICT.

Privacy & security

With an expected annual growth of around 10%, the data market is one of the fastest-growing part of the European economy. Today there are already over 280,000 data companies based in the EU. This raises new challenges but it also presents, in even greater measure, a vast range of opportunities for Europe to tap into.

Cyberthreats presents a major obstacle to Europe’s path to prosperity. Economic loss due to cybercrime is predicted to reach € 2.5 trillion by 2020, and 74% of the world’s businesses can expect to be hacked in the coming year. Unfortunately, only 32% of European businesses have a cybersecurity strategy. Such global threat requires a coordinated global response.

21. By 2025, fewer than 10% of internet users should be deterred from online purchases due to safety concerns.

In 2019, 15.8% were discouraged from online purchases due to security concerns.

22. By 2025, all large European enterprises should have a clear cybersecurity strategy.

Efforts need to be made for Small and Medium-Sized Enterprises to implement cybersecurity strategies by an additional 20%. In 2015, only 31.6% had formally defined their ICT security policy. On this matter there is a great variance with 72.1% of large enterprises having done so against only 27.1% of small ones.

23. By 2025, Europe should have hired all the cybersecurity professionals that it requires.

The gap between what businesses need and the employment market is expected to rise to 350,000 by 2022.

24. By 2025, 60% of Europeans should trust the internet.

eGovernment

We have seen remarkable improvements in e-Government in Europe over the past years, with most countries already having an operational e-governance scheme. More than half of Europeans use eGovernment services and 38% are using online forms to submit information to their government. However, we are still lagging behind in terms of cross-border mobility, as citizens can use their national ID only for 9% of foreign e-Governance services, with a slightly better figure for businesses at 36%.

25. By 2025, 75% of EU citizens should be using eGovernment services.

26. By 2025, 70% Europeans should be using online forms to submit their information.

In 2020, 38% of individuals have submitted completed forms to their government. This is 5% more than in 2018.

Digital Single Market

Europe has a thriving internet economy which has taken on new importance of the context of the COVID-19 crisis. European citizens’ ability to access goods and services online has been crucial during the pandemic and has also provided a financial lifeline for many small businesses. However, barriers remain for e-commerce so it’s essential that we renew our efforts to complete the Digital Single Market.

27. By 2025, 30% of European SMEs should trade across more than one border.

As of 2019, only 8.4% do.

28. By 2025, 35% of internet users should be ordering goods or services across EU borders.

AI & Data Economy

The potential of digital technologies for the European society and economy is evident and needed more than ever to support Europe’s economic recovery. AI adoption can be part of the response to slowed productivity, helping to tackle challenges of climate change and ageing populations. The positive and trustworthy use of AI will be a cornerstone and it is, therefore, crucial that EU countries make the necessary investments to derive half of their growth from the use of AI.

The impact of data on Europe’s economy is huge and Europe’s leadership is key for its global competitiveness. The EU should leverage the potential of data to advance the digitalisation of our societies, allowing the European economy to stay competitive while respecting core EU values. In 2020, the data economy represented 3% of the EU27 GDP. By 2025, this should be 6%.

29. By 2025, the data economy should represent 6% of the EU’s GDP.

It is currently 3%.

30. By 2035, European countries should derive half of their growth from the use of AI.

31. By 2025, 50% of European businesses should use advanced cloud computing services.

In 2020, 26% of EU companies were using advanced cloud computing services.

Charter of digital rights

The Commission’s stated aim with this part of the Communication is ‘to set the European standard for ethical and fundamental values and human rights in the digital space’.

We believe that there is no need to reinvent the wheel here. The Commission already launched a lengthy – and fruitful – process involving all types of stakeholders as part of its High Level Expert Group on Artificial Intelligence. One of the deliverables of that group – which included representatives of consumers, businesses, academics and trade unions – was to create seven ethical principles for artificial intelligence.

We believe that these seven principles are an excellent base for the digital charter. Artificial intelligence is but one of numerous technological trends that is already having an enormous impact on our lives. It may be new, but the social questions that it raises are not unique. Due to the inclusive process which led to their inception, those seven principles also have legitimacy across a wide range of stakeholders.

The challenge now will be to take these seven principles and provide descriptions and examples that are relevant across all digital technologies.

The 7 key ethics principles for trustworthy AI

The Guidelines put forward a set of 7 key requirements that AI systems should meet in order to be deemed trustworthy. A specific assessment list aims to help verify the application of each of the key requirements:

1. Human agency and oversight
2. Technical Robustness and safety
3. Privacy and data governance
4. Transparency
5. Diversity, non-discrimination and fairness
6. Societal and environmental well-being
7. Accountability

More details can be found here: https://ec.europa.eu/digital-single-market/en/news/ethics-guidelines-trustworthy-ai

The Digital Compass

As we understand this exercise, the idea behind the Digital Compass is twofold:

1. To create a robust governance structure to measure EU and Member State progress towards the digital targets.
2. To create a framework for multi-country investment projects, learning from the experiences with the Recovery and Resilience Facility, and to put forward ideas for a potential pilot.

The governance structure

The creation of the Recovery and Resilience Facility (RRF) marks a watershed moment for Europe. Necessarily, the institutional set-up – the taskforce in the Secretariat General, supported by other DGs – was formed in haste. In May, we will see to what extent the Commission has been successful in encouraging Member States to produce national spending plans that are coherent, target-based and specific.

This model – where the Commission plays a central coordinating role – will be essential to realise the ambitions of the Digital Decade. We will also need to give the Commission sufficient capacity and powers to make sure that Member States live up to their commitments.

In terms of improvements to the current RRF, we find that the process could be more transparent. Member State plans should be published for scrutiny in a formalised way. In that sense, the European Semester process provides some inspiration, with its regular reporting, country-specific guidance and national reform programmes.

We will need to do some more thinking as to how this institutional set-up might look. One way is to create a permanent structure specifically for coordinating digital investments and reforms. Another, simpler option might be to mainstream digital more tightly into the current structures that exist. Although the Digital Agenda was one pillar of the Europe 2020 strategy, it has more or less been forgotten and stayed in the shadow of other economic and monetary reforms.

How to support multi-country investments

Much of DIGITALEUROPE’s work across a number of policy areas is aimed at reducing regulatory fragmentation and enhancing the digital single market. Our members believe that this is one of the main barriers to growth and innovation. Other more unified markets like the US are seen as easier places to do business.

To create a truly digital single market, we need to also invest strategically, with one eye on the bigger picture. This is why in our Digital Investment Plan for Europe’s Recovery, published in October 2020, we outlined 10 areas that we considered top priority for multi-country investments. By investing in a coordinated way, we can boost the impact of the recovery plans.

This is easier said than done, especially within Europe. In our investment plan, we too wrestled with the problem of overlapping competences and multiple funding sources. For example, it is of course of benefit to the whole of Europe’s digital ecosystem that teachers are trained with the latest technologies and modern classrooms. Furthermore, in our recent ‘Scaling in Europe’ report, digital education was placed as priority number two for some of Europe’s most promising young tech companies. But how can we deal with this problem when education policy is mostly set at national or regional level and funding can come from EU, national or regional funds?

Of the national RRF plans that we have seen, there has been a disappointing lack of uptake in multi-country projects. This may change after the Commission has assessed the plans, but the pressure to release the funds quickly may be greater than the impetus to work together with other Member States.

For the Digital Decade, we believe the Commission must play a central role in encouraging multi-country projects. Given our pan-European network of national digital associations, we are well placed to support this process and humbly offer our expertise for a pilot project.

Our Digital Investment Plan for Europe’s Recovery

We believe that the projects identified in our recent publication are examples of the multi-country (or pan-European) projects that the European Commission and Member States should prioritise.

You can read the full document here: https://www.digitaleurope.org/policies/how-to-spend-it-a-digital-investment-plan-for-europe/

The international dimension

DIGITALEUROPE fully agrees that “the EU can only success in its digital transformation if it builds a Digital Decade in an outward-looking manner”. The Commission’s Trade Policy Review communication noted that already by 2024, 85% of the world’s GDP growth is expected to come from outside the EU. If we want our companies to grow and our citizens to benefit, the EU must remain open to international trade and continue to have an open market based on reciprocity and a level playing field.

Therefore DIGITALEUROPE would like to reiterate its four overarching priorities presented first for the Trade Policy Review (see our full response here) to ensure that both domestic and trade policies delivers on driving digital transformation in Europe:

Getting the principles right: “Open Strategic Autonomy” is a key tool to achieving resilience in the European economy, and digital and technological sovereignty – however, it is essential that we properly understand what these concepts mean, and how we can consider them achieved. Europe can continue to champion multilateral, rules-based free trade founded on reciprocity, and still achieve these goals. Indeed, we welcome the following statement from the recent letter from Germany, Estonia, Denmark, and Finland:

“Digital sovereignty is about building on our strengths and reducing our strategic weaknesses,  not about excluding others or taking a protectionist approach. We are part of a global world with global supply chains that we want to develop in the interests of us all. We are committed to open markets and to free, fair and rules-based trade.”

Considering the broad scope of the Digital Decade, and the continued political salience of these concepts as shown above, we reproduce here our principles regarding sovereignty and resilience:

• Achieving digital and technological sovereignty goes hand-in-hand with the ambition of making the EU a worldwide hub for innovative technologies, services, platforms, and the data economy in general. As such, the EU should continue to pursue its strategic interests by investing, building and maintaining its scientific and technological expertise in critical digital capabilities. These enable a competitive and resilient European economy that can contribute to European industrial leadership on a global scale. This will require heavy investment in areas like digital skills, AI, data and cloud infrastructure and data spaces, and the green transformation of industries, if internationally competitive digital offerings are to be available in Europe. Such investments will allow both large and small companies to create innovative new solutions with global reach based on EU values and principles. Efforts towards building European ecosystems (e.g. on data and cloud) should not be pursued purely on a political basis, but must make business sense. The ambition to establish European giants in the data economy is understandable, but must not be pursued in a protectionist spirit, or to the detriment of international collaboration.

• Digital and technological sovereignty should be considered achieved when the EU has a choice in the development of, and reliance upon, technological or digital capabilities in cooperation with qualified international partners who respect European rules and values. Any companies adhering to concrete European rules and values should be considered as potential partners to the EU, irrespective of the location of their headquarters or manufacturing. While Europe may choose to rely solely on home-grown technologies for highly critical applications (e.g. military communications), such critical applications (and safeguards in place to ensure their “Europeanness”) should be defined narrowly, and a multi-sourcing strategy should remain the approach for all other applications. The best way to ensure that the latter remains possible is for Europe to continue to champion multilateral, rules-based free trade.

• Resilience of European industry requires collaborative leadership by Europe beyond its borders and effective scenario planning, with the end result being the ability to avoid, withstand and recover from economic shocks. It does not require cutting ties with the very ecosystems and value chains that have enabled fast and efficient responses in the current crisis. In fact, we believe that diverse and digitally-enabled value chains provide a necessary foundation for the European economy to bounce back and stay resilient and flexible during a period of prolonged uncertainty. Collaborative leadership allows our industrial players to assert their position and to promote open markets, European values, and high international standards reflecting those values. Indeed, promoting a united European position in international standardisation processes has the potential to build resilience into our economy that will strengthen European industry for decades to come.

Leading the way on digital trade: As the world’s leading trade power, the EU should scale up its domestic ambitions and set the global agenda for digital trade. It should leverage all its rich trade policy toolbox to modernise the international trade system so it supports a digitally-transformed world economy. Europe has already taken an important step forward on this question, with a new digital trade chapter, new language on data flows in the EU-UK TCA and a framework for regulatory cooperation, notably on emerging technologies – DIGITALEUROPE considers this a positive development, and welcomes further work along these lines to ensure that European trade negotiators have the tools they need to combat digital protectionism at the global level.

Ensuring coherence across policy areas: Identifying and exploiting synergies between trade and domestic policy areas, such as the post-COVID-19 stimulus plan, will be crucial in achieving Europe’s key green, digital, and industrial ambitions. The Trade Policy Review communication has already highlighted the need for this coherence, and we fully support a similar approach in the “Digital Decade”, with trade policy and international regulatory cooperation more generally being harnessed to drive digital transformation.

Building a trade ecosystem that delivers: Europe must strengthen its partnerships bilaterally and position itself as a facilitator of multilateral dialogue and consensus.The Commission itself notes the need to develop “partnerships and alliances that can underpin European investment in infrastructure, capacity building and the enabling environment, as well as fostering regulatory cooperation notably with like-minded partners.” DIGITALEUROPE will soon come forward with a more detailed paper outlining our approach to the international dimension of global digital cooperation. First and foremost, the EU can only achieve this goal if it dedicates itself fully to strengthening and reforming the multilateral system, where the World Trade Organisation in particular plays a crucial role in opening markets, facilitating trade, removing unjustified technical barriers to trade and leveling the global playing field. Multilateral initiatives – from agreed joint actions at G20 and G7, OECD work streams on Pillar 1 and Pillar 2, to WTO initiatives such as the ongoing eCommerce negotiations or the expansion and implementation of the Information Technology Agreement – are key to building capacities, driving investment, and improving the enabling environment of global digital trade. They play an essential role in integrating developing countries into a global trade system that is open, fair, and based on reciprocity and rules.

Building upon the “Brussels effect”, the EU must seek coordination with all trade partners on these issues, and seek to be a coalition-builder wherever possible. Moreover, the EU should recall the importance of continued alignment on rules and standards within the European neighbourhood and the MENA region in order to support the influence of the European regulatory approach.  However, to set the global agenda, particular emphasis should be placed on developing bilateral relationships with some key trading partners, who can drive Europe’s digital transformation through providing market access for European companies, while also partnering with Europe to cooperate where possible towards global rules in fields such as standardisation, data flows, and regulatory approaches to emerging technologies. Choosing which partners to prioritise for such a strategic approach should be based on three factors:

• The scale of bilateral trade between the EU and third country in question,
• The role played by the third country in global supply chains of relevance to digital transformation,
• The influence of the third country on the development of global rules and standards – regardless of whether they are currently considered “like-minded”, this economic reality must be taken into account.

On that basis, DIGITALEUROPE will soon present its priorities for driving digital growth and partnership with five key partners in our forthcoming paper: USA (see our first position here), Japan, China, India and the UK. While these relationships all present different challenges and opportunities, they are undoubtedly crucial players in developing the global digital economy and the rules that will shape it. Therefore, the EU should strengthen its dialogue with all five partners, while identifying areas for coordinated approaches with the industry.