THE NEW EUROPE IN THE GLOBAL DIGITAL ERA Current Rule-Maker, Future - - PowerPoint PPT Presentation

THE NEW EUROPE IN THE GLOBAL DIGITAL ERA

Current Rule-Maker, Future Investor?

Wednesday 6th November, 17:30 – 19:30 Brussels, European Parliament, room ASP3H1

DIGITAL SINGLE MARKET

The DESI average score increased by 13.5 points, from 39 to 52.5

10 20 30 40 50 60 70 80

DESI, by Member State 2014 2018

Source: Digital Scoreboard

The EU improved the most in connectivity

Source: Digital Scoreboard

1 2 3 4 5 6

1 Connectivity 2 Human Capital 3 Use of Internet 4 Integration

• f Digital

Technology 5 Digital Public Services Variation 2014-2018 of EU DESI, by component

The digital divide across EU Member States remains too wide and has been worsening in key areas

Source: Digital Scoreboard

• 4
• 2

2 4 6 8 10 12 14

1 Connectivity 2 Human Capital 3 Use of Internet 4 Integration of Digital Technology 5 Digital Public Services

EU digital divide by component

2014 2018 Variation of digital divide (in p.p.)

The EU still lags behind other world areas

Source: Digital Scoreboard

10 20 30 40 50 60 70 80

South Korea EU Top 4 Japan US EU 28 EU Bottom 4 China

I-DESI

I-DESI 2016 I-DESI 2013

The EU has been improving but too slowly

Source: Digital Scoreboard

• 10

10 20 30 40 50 60 70 80 90 100 Japan South Korea China US EU Top 4 EU 28

Variation in I-DESI score between 2013 and 2016, by country and component

Connectivity Human Capital Internet use Business technology integration Digital Public Services

DATA DRIVEN INNOVATION & AI: EUROPE IN THE GLOBAL RACE

Data economy value is expected to grow by 83%, from € 377 bln in 2018 to € 680 bln in 2025

Source: European Data Market Monitoring Tool, IDC (2019) * Baseline scenario

• 100.000

200.000 300.000 400.000 500.000 600.000 700.000 800.000 2018 2025*

Data economy value in the EU

Direct impacts Backward Indirect impacts Forward Indirect impacts Induced impacts 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 10,0% Greece Luxembourg Poland Slovenia Romania Hungary Croatia Czech… Slovakia Bulgaria Italy Portugal France Latvia Lithuania Spain Belgium Cyprus EU28 Ireland Malta Austria Finland Sweden Denmark Netherlands Germany UK Estonia

Data economy impact on GDP, by Member State

2025* 2018

However, there is (and there will be) a substantial skills gap

Source: European Data Market Monitoring Tool, IDC (2019)

0% 2% 4% 6% 8% 10% 12% Spain Poland Italy EU 28 Germany France UK

Data worker skills gap in the Big Five countries and the EU

2018 2025

0% 2% 4% 6% 8% 10% 12%

• 2.000

4.000 6.000 8.000 10.000 12.000 2018 2025 in thousands

Data worker skills gap

Demand (left axis) Supply (left axis) Data workers skill gap (right axis)

Approximately 80% of the 100 most promising AI startups worldwide are based in the United States

Source: I-Com elaboration on CB Insight (2019)

77% 6% 6% 6% 1% 1% 1% 1% 1%

By country

United States United Kingdom Israel China Sweden India Germany Japan Canada

The most promising 100 AI startups

No European state has achieved a real critical mass in terms

• f AI startups, with the exception of the United Kingdom

(245), France (109) and Germany (106)

Source: I-Com elaboration on Asgard and Roland Berger (2018) 1 1 1 2 2 2 2 3 3 4 4 4 4 4 6 6 6 12 12 14 22 26 28 39 46 55 106 109 245 50 100 150 200 250 Iceland Luxembourg Slovakia Austria Malta Portugal Slovenia Latvia Lithuania Belarus Czech Republic Estonia Romania Ukraine belgium Hungary Norway Denmark Poland Ireland Italy Netherlands Switzerland Spain Finland Sweden Germany France United Kingdom

European startups in AI, by country

The situation could even get worse after Brexit…..

Source: OECD; EU Commission

55% 14% 13% 3% 2% 13%

Private equity investments in AI startups based in the EU, 2011 to mid-2018

United Kingdom Germany France Spain Ireland Others

European AI initiatives

16.02.17 Resolution of European Parliament 10.04.18 Declaration of Cooperation on Artificial Intelligence 25.04.2018 European approach to artificial intelligence 07.12.18 Coordinated Plan

• n AI

12.02.19 Resolution on a comprehensive European industrial policy on artificial intelligence and robotics 09.04.19 Ethics Guidelines for Trustworthy AI 26.06.19 Policy and investment recommendation s for trustworthy Artificial Intelligence

CONSUMERS IN THE DIGITAL AGE

Central and Northern Europeans purchase online more frequently than those in the Southern and Eastern countries

Source: Eurostat

10 20 30 40 50 60 70 80 United Kingdom Denmark Netherlands Germany Sweden Luxembourg France Ireland Austria EU Estonia Finland Belgium Malta Spain Slovakia Slovenia Czechia Poland Latvia Lithuania Greece Hungary Croatia Portugal Italy Cyprus Bulgaria Romania 1 or 2 times 3 to 5 times 6 to 10 times more than 10 times

Frequency of online purchases in the last 3 months of 2018 (%)

The use of Online platforms and Digital Comparison Tools is increasing but transparency is a concern

Source: European Commission; Source: CMA, 2017 46% 47% 43% 44% 37% 37% 40% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Internet platforms should be required by law to include information on who is actually selling the goods of services presented in the platform. All platforms should include information on who is actually selling the goods or services presented in the platform All platforms should include information on the way they order the results of a search Knowing how the platform ordered the results of the search made me more confident and trusting in the platform Strongly agree Agree Indifferent Disagree Strongly disagree

0% 20% 40% 60% 80% 100% Aware of digital comparison tools Have used digital comparison tools

Proportion of people that know of and have used digital comparison tools in the UK (2017) Results of EU survey on online platforms (2018)

EU consumer policies on e-commerce and protection

Shopping and e- commerce

Regulation 2018/302 (geo-blocking) Directive 2019/770 (contracts for the supply of digital content) Directive 2019/771 (contracts for the sale of goods) Regulation 2018/644 (cross-border parcel delivery services)

Protection

Regulation 2017/2394 (new Consumer Protection Cooperation Regulation) New Deal for Consumers (2 proposals presently ongoing)

POLICY RECOMMENDATIONS 1/3

THE NEXT DIGITAL SINGLE MARKET STRATEGY:

• eliminating the gap between EU countries, especially in certain areas such as skills and the integration of digital technology into

businesses

• adapting data regulation in order to make more room for experimentation and innovation
• encouraging public and private partnerships in the quintessential technologies
• reshaping and upgrading the E-commerce Directive to include new developments, particularly regarding intermediary platforms

and industrial IoT CONNECTIVITY:

• ensuring an investment-friendly ecosystem and guaranteeing the harmonization of rules to attract massive capital
• addressing the digital divide between and within Member States also with the contribution of EU cohesion funds
• encouraging National governments to complete auctions as soon as possible and allow for a fast roll-out of 5G networks
• setting specific financial measures to support connectivity demand and so investment returns

DATA DRIVEN INNOVATION:

• pening datasets and creating a suitable regulatory environment for adopting and fostering innovation
• removing barriers to the distribution and use of government data and, at the same time, encouraging private entities to disclose

data in order to improve market efficiency or solve fundamental market failures

• setting direct incentives (in the form of tax credits or other money-equivalent forms) to encourage companies to take the necessary

steps to implement DDI

POLICY RECOMMENDATIONS 2/3

ARTIFICIAL INTELLIGENCE:

• fostering competitiveness and innovation while assuring the drawing up and the enforcement of the legal framework
• encouraging investments in AI research and production by both public and private entities
• boosting cooperation with the industrial sector
• tackling european fragmented AI ecosystem and retaining top talents (possibly attracting more from abroad). In this respect, the

setting up of a European Institute for AI could play a very significant role

• fostering the right talents and skills not only in research but also in adoption

CURRENT AND FUTURE JOBS:

• encouraging education and training in the field of AI, as well as inter-disciplinarity
• promoting re-skilling and up-skilling
• encouraging the collaboration between humans and machines

CONSUMERS:

• about e-commerce, improving price transparency and strengthening the enforcement of consumer rights and guidance to clarify

what qualifies as an unfair trading practice in the digital world

• ensuring that digital comparison tools work effectively, contributing to lowering transaction costs and delivering better deals, by

enabling consumers to conveniently and efficiently compare and choose between offers from across the market

• ensuring simple, efficient, fast and low-cost ways of resolving disputes which arise from the sale of goods or the supply of

services online

POLICY RECOMMENDATIONS 3/3

CYBERSECURITY:

• encouraging the adoption of a united and coordinated approach on security
• coordinating European cyber practices by increasing the capacity of all Member States to monitor, prevent and respond to

cybercrime

• encouraging investments in startups to allow for the burgeoning of new technologies and practices, as well as a procurement

policy primarily addressed in this area to EU-based companies