The Future of Our Digital World: Why You Should Care about the EU’s Digital Single Market Strategy

Posted by John Jolliffe, Head of EMEA Government Relations

“A Digital Single Market is one in which the free movement of goods, persons, services and capital is ensured and where individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence.”

Launched amid much fanfare in May 2015, the Digital Single Market Strategy laid out the European Commission’s vision for digitally driven economic growth in the EU. As someone who has worked on technology policy issues for over 13 years in Brussels and other European capitals, it’s reassuring to see the EU at last recognise that “(ICT) is no longer a specific sector but the foundation of all modern innovative economic systems.”

But the idea that “Achieving a Digital Single Market will ensure that Europe maintains its position as a world leader in the digital economy, helping European companies to grow globally” reveals a deep-rooted inward-looking mindset which, if not carefully monitored, risks undermining the DSM’s ability to enhance Europe’s international competitiveness.

In the end, what’s missing is any sense of the connectedness and dependence of the European economy on the rest of the world. The implicit message from the European Commission is clear: if only we can get our house in order, the EU can lead the global economy.

This feels like political wishful thinking. And studies such as the recent work by Erik Van der Marel from Brussels-based economy think tank ECIPE on “The Importance of Complementary Policy for ICT in the EU” confirm that things are a little more complicated. In his well-written analysis of the impact of the software industry on the EU economy, he points out the clear inter-connectedness of the European economy with the rest of the world. It’s a timely contribution that puts the DSM strategy into a wider international trade context, and makes clear that if “digital” is really to generate, as the Commission claims, “up to EUR 250 billion of additional growth in Europe,” then it will need to maintain a global mindset.

Van der Marel reminds us that an economy is like a machine, with inputs and outputs. In an era of global supply chains all economic actors big and small need access to software and a policy framework that enables them to use it if they are to increase productivity and add economic value. “Policy rigidities slow down the endorsement and therefore the use of new technologies of ICT in the wider downstream economy.” He cites a number of complementary policies that can hinder use of technology and, by extension, European competitiveness: labour market policies, IPR protection, product market regulations, and restrictions on the free international flow of data. The entire DSM programme and related policies – from geoblocking and digital signatures to copyright reform and data protection – can be linked to one of those broad categories. But, as the grueling debates over data protection and Safe Harbour have shown, that sense of inter-connectedness is often in short supply.

Will the DSM Strategy help the EU address these important challenges of international competitiveness? We are about to find out. The first formal legislative proposals were published just before the Christmas break, and will enable us to begin to take the real measure of the DSM strategy. Another 14 new pieces of legislation are expected by the end of this year. It’s our hope that in attempting to remove barriers within an EU internal market – a very worthwhile objective – it doesn’t create new policy rigidities, or lose sight of the inherent interconnectedness of the global economy. We’ll be looking at some of those proposals in future blog posts, starting with the Commission’s proposed new contractual regime for the supply of digital content.