Broadband access is essential for every European citizen to participate fully as consumers in the digital economy, act as economic actors in their role as online businesses and as citizens in a digital democracy. Indeed, connectivity is critical to eGovernment, which can help facilitate citizens as economic actors, whether operating in small business or larger enterprise. Broadband access provides a bridge that can help exploit the full benefits and efficiencies of online business partnerships and is a gateway to accessing global markets.
Vice President of the European Commission Neelie Kroes, and her colleague Commissioner for Regional Policy Johannes Hahn, have created necessary partnerships between their two policy domains for Europe to succeed in the delivering jobs and growth objective. This is particularly the case with the new member states where significant financial resources have been made available in the EU budget. Our objective is to bring private sector dynamism to these public sector goals and to increase connectivity across the European Union.
As already identified by the commission's DG Information Society, connectivity is the cornerstone to realising all other parts of the Digital Agenda and indeed much of the Europe 2020 jobs and growth plan. Europeans need to be connected if they are to enjoy the significant lifestyle and economic advantages as highlighted in the recent McKinsey Global Institute Study, Internet Matters, published in May 2011.
The report reveals that the internet generated 21 per cent of GDP growth in the last 5 years in mature countries including the G8, South Korea, Sweden, India and Brazil. Importantly, the report identifies that 2.6 jobs are created for every job lost due to the transition to the online economy. Of the individuals and SMEs who are heavy users of web technology, they are growing and exporting twice as much as others. Further, the McKinsey report identifies that internet users benefit from up to 20 euros per month of consumer surplus. This means that if you do your shopping online as a consumer you save up to 20 euros a month through savings generated by online activities like comparison shopping and online administration benefits for applications.
A Goldman Sachs Equity Research European Media Sector report, published on June 6 identifies that 30 million EU households are either connected with inadequate or no connectivity, and therefore present a good market opportunity. It stated that 17 million households in the EU are underserved by broadband. This is corroborated by the commission's own study which identified that a population equivalent to Hungary or Belgium's – that is to say 10 million citizens – is living in the digital divide. This creates a necessity for business to partner with regional authorities to support the implementation of infrastructure and service platforms to help regions make the critical transition to the online economy, and notably would see them increasing their absorption capacity in regards to the funds allocated by the commission to these broadband projects.
Alarmingly, current rates of absorption are relatively low in member states. This is well illustrated by Poland, for example, which has been allocated €984m to invest in broadband connectivity – at year end in 2010 Poland had spent €8.6m, less than 10 per cent. Slovakia has been allocated €81m, and has spent a mere €8,000. Spain has been allocated €164m, and they have spent only 22 per cent of these funds to date. Portugal is another example, having being allocated €72m euros and spent virtually nothing.
The commission has put significant resources behind its broadband goals that by 2020 all Europeans should have access to internet above 30 megabits per second and 50 per cent or more of EU households should have subscriptions above 100 megabits per second. This would be an opportunity for entrepreneurial initiatives to spring out of the European digital economy. Therefore, it is important to identify willing parties among the regional authorities, who for various reason may not have been able to get their projects up and running – we are able to assist them in finding matching funds and operational capacity to move into implementation on the ground.
This claim is supported by Deutsche Bank, whose research also consistently finds that that public procurement, which represents 17-19 per cent of GDP across Europe, can generate significant costs savings without headcount reductions solely through instating more competitive tendering of processes.
Youth unemployment and government deficits need responses. The Eurostat indicator in January 2011 highlighted that in November 2010 the unemployment rate for under 25s was 20.7 per cent in the Euro area and 21 per cent in the EU 27. The European Economic and Social Committee again raised the alarm regarding the continuing to rise of unemployment across the EU, particularly among under 25s. The committee believes that the successful implementation of the broadband package is critical to tackling unemployment.
Increasing broadband access will allow young people to engage in entrepreneurial activity more easily and have access to online training to increase their skills base to have the right profile for job openings. Broadband provides a fertile environment for government services to be modernised and delivered in a more cost effective fashion.
The European Economic and Social Committee's February publication on Investing in Digitally Driven Growth strongly supports the objective of the Digital Agenda to deliver sustainable economic and social benefits from the Digital Single Market – based on fast and ultrafast internet. The committee fully endorses the ambitious broadband target included in the Europe 2020 Flagship initiatives. Further, they indicated that even more ambitious connectivity targets might be needed to be set in a few years' time to keep Europe globally competitive.
What is time critical is the budget allocations from the structural funds which member states will have to deploy by 2013 or the budget envelopes will be refunded to the donor states. National broadband plans must be updated and should include details on required resources, objectives and milestones.
The commission has reviewed these plans and identified best practice examples that need to be adopted in other countries. Given the penchant of local and regional authorities to continue with infrastructure and civil works, they should ensure that at the same time they help facilitate the achievement of the digital agenda targets. For example, we should be asking the questions: where is the duct in each kilometre of road works undertaken and where is the satellite dish for every public building regeneration or construction undertaken with EU money? Connectivity should become second nature. New companies are emerging to capture investment capacity available in the private and public sectors to bring these together and to help make Every European Digital.
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Autor(en)/Author(s): Bridget Cosgrave
Quelle/Source: Public Service Europe, 16.06.2011
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