Transcript NOKIA EU REPRESENTATIVE OFFICE rue de la - EVP

Europe needs a Digital Single Market now
• Adds at least 500 billion Euros or 4% and to EU GDP by 2020.
• Solution for key European challenges: economic recovery, better
labour markets and public services and a smarter, greener economy.
• Key driver for productivity and competitiveness, promoting growth
and innovation.
• Benefits consumers through low prices, better quality and more
choices.
How large could the impact of the digital economy
be?
Digital economy related GDP growth (EU27) 2010 - 2020 (Cummulative)
Total Impact
+12%
GDP (EU27), index 2010 = 100
114
112
+ 4%
110
(DSM)
108
106
+ 8%
104
(Current)
102
100
98
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Figure 5.2 shows GDP growth contribution from the expansion of the digital economy in EU Over the next ten
years. In the best case, the effect is almost 8 percent and the net impact of an accelerated digital economy is 4
percent.
Europe falling behind the US in creating digital
companies of scale
Excluding telecommunications, the digital economy in Europe has a handful
of companies of scale.
By contrast there are 66 digital companies within the 500 largest
companies in the US.
Where will needed growth come from?
These are the conclusions of a study carried out by Richard Marsh of Verso Economics for the DSM project
The Digital Single Market as the next step in
European Integration
1992
• Single market programme
• Free movement of goods, people and capital
2002
• Monetary Union
• Common currency (virtual in 1999 and notes and coins in
2002)
2007
• Service Directive
• Free movement of services, right of foreign establishment
and posting of foreign workers
201?
• Digital Single Market (DSM)
• Free movement of information and free movement of
knowledge online
Factors influencing the economic impact of the
digital economy
Digital Readiness
e-skills, e-awareness, ICT equipment
Digital Infrastructure
Digital Content & Services
Penetration, coverage, bandwidth
Harmonisation, large markets, innovation
Use of digital services
e-government, e-commerce, ERP, e-health,
e-learning, …
Source:
Copenhagen Economics (2010),
”The Economic Impact of a European
Digital Single Market”,
report prepared for the European
Policy Centre (EPC), March 2010
ECONOMIC IMPACT
Market size is good for innovation
To illustrate this further we need to look at what characterises firms which
deliver digital innovations. They can generally be characterised as:
• Knowledge intensive
• Large R&D investments
• Very low marginal costs
• Substantial network effects (value increases with number of users)
• Substantial regulatory costs (each new market add a cost)
Illustration of business model for
innovative
firm
in
US
€
Earnings pr.
additional consumer
Average cost pr.
additional consumer in the US
US
Source:
Number of
consumers
Copenhagen Economics (2010), ”The Economic Impact of a European Digital Single Market”,
report prepared for the European Policy Centre (EPC), March 2010
A fragmented market discourages innovation
Illustration of business model for innovative firm in the EU
€
Earnings pr.
additional consumer
Average cost pr.
additional consumer in EU
Germany
Source:
France
UK
Italy
Number of
consumers
Copenhagen Economics (2010), ”The Economic Impact of a European Digital Single Market”,
report prepared for the European Policy Centre (EPC), March 2010