by Richard Sykes

Britain and Europe – The Digital Single Market?

May 11, 20154 mins
IT Leadership

Friday 8 May – David Cameron is off to see the Queen at the start of his second administration, with a small Conservative working majority and an end to coalition government. One major issue on his desk will now be the promised European re-negotiation and subsequent 2017 referendum on membership of the EU. Faced with his small majority, the reality of the Conservative parliamentary party as an internal coalition (with a now potentially very influential Eurosceptic minority) will now come into play.

Wednesday 6 May – Almost un-noticed in an election-focused UK press (the FT and some technology press reported it) the new EU Commission launched its detertmined plan of action to speed delivery of a Digital Single Market across Europe.

A little context. Back in 2012, the EU launched a well thought through Cloud Computing Strategy for Europe. The logic was clear – if barriers to an open market in Cloud Computing across Europe could be removed, there would be very significant extra economic growth and wealth creation in a globally more competitive economy. Consider the North American market in cloud computing services where investment can target clients anywhere within US and Canadian markets. Now consider Europe, where even certain German state require government data to be held inside state borders. Imagine how Volkswagen would have grown its business if Yorkshire, for example, had been able to require that all cars sold in Yorkshire had to be manufactured in the White Rose county!

And this is not so fanciful. Consider yourself as a fast growing East London ‘flat white economy’ venture. Success dictates breaking out of the UK economy into wider markets to feed your growth (and your potential share valuation!) You look to continental Europe – and find that you face complex and different regulatory requirements country by country. You look to the USA – and one single investment there opens up a whole continent-wide free market.

An interesting statistic. Existing European Digital Markets are served 42% by national online services, 54% by US-based online services and only 4% by EU cross-border services. You see the picture. Our young ‘flat white economy’ venture heads for the USA – and are you surprised?

The 2012 EU Cloud Computing Strategy identified three areas for action: what it called ‘the jungle of standards’, what it identified as the need for standard pan-European sourcing terms and conditions/SLAs, and an initative to help the public sector develop common underlying services that could speed productivity growth.

And in the three years since, the key elements of this strategy have been effectively progressed. One example: ETSI (the European Telecommunications Insitute) reviewed ‘the jungle’ in detail, demonstrated that it is not really a jungle, but a range of relevant standards combined with aspects of cloud computing where constructive new standards are required (security being one).

Fast forward to February 24 this year, when EU Commission VP Andrus Ansip, at the #Digital4EU Stakeholder Forum, spoke against “discrimination of consumers based on their nationality and unjustified geo-blocking of digital content”, and in favour of “a single contract law for online transactions, a single data protection regime, a clear system for data access and full portability of users’ data over platforms and systems across the EU, together with full interoperability of public and private e-services”.

“‘In a time in which data equals power,” Ansip said, “Europe needs a ‘Digital Union’, a completed Digital Single Market, in order to prevail against international (and in particular US) competition.”

And so returning to May 6 and the EU Commission’s detailed Digital Single Market (DSM) initiative. This represents a shift of focus from enabling Cloud Computing across Europe to ‘making it (i.e. the Digital Single Market) happen’. A framework of 16 key actions, grouped under three pillars, “which the Commission will deliver by the end of 2016”.

Pillar 1.“Better access for consumer and businesses to digital goods and services across Europe” (i.e. simplified VAT regulations). Pillar 2. “Shaping the right environment for digital networks and services to flourish” (i.e. strong pan-European data protection). Pillar 3. “Creating a European Digital Economy and society with growth potential” (i.e. digital skilling across the European economy).

As a UK CIO should you care? I would argue strongly that you should. Open digital borders across Europe will feed the competitiveness of the ICT vendors you procure from. They will encourage new UK tech ventures to grow their businesses here in Europe (rather than move to the USA), giving you speedier access to the first fruits of their innovations.

So the UK General Election 2015 is now history. The political battle over the future of the UK and Europe will now move centre stage. Ensure that you are well informed on the issues around the EU Commission’s drive for a Digital Single Market. It could be very important for the future competitiveness of your business.