Europe has all the resources necessary to create the next Internet champion. The only ingredients missing are political vision and bold policies.
Silicon Valley is replete with stories of young, bright, focused engineering students, many from Stanford University, who have turned smart ideas into multi-billion businesses in less than a decade. Google is the best known, but the story has been echoed since by Facebook, and then again by Twitter.
The ‘next big thing’ has undoubtedly already been thought of by a start-up somewhere in the world. Europe must stop hoping it will be European, and develop policies to ensure that it is.
So what would it take? Europe’s 2020 plan must deliver a knowledge economy that taps into the power of the Internet and its economic dynamic to deliver sustainable growth. We need a seasoned mix of bold and visionary policies that embrace Internet innovation and entrepreneurship, and peg our economy to the growth of the Internet.
Some of the main elements are already in place in Europe:
– Talent: Europe has a highly educated and increasingly internet savvy workforce,
– Enthusiasm: Europe’s consumers, and particularly our younger generation, are embracing the opportunities of the digital world.
– Entrepreneurial spirit: Europe already has billion-euro businesses, run purely online, that did not exist 10 years ago.
– Broadband penetration: Sweden, Denmark and the Netherlands are world leaders in broadband, with take up of over 75% of the population. They lead, along with Finland, the UK, Luxembourg, Belgium, Germany and France. All ahead of the US.
– Legal framework: The eCommerce directive (2000) has enabled Internet services to thrive in Europe and underpinned the development of online platforms.
However, ten years after the launch of the Lisbon Agenda, many problems remain.
Digital Agenda
Europe’s 500 million consumers are active online, but the development of new markets and services are hindered by fragmented national rules. The Digital Agenda will need to be highly ambitious.
If the next Google is to be European and if we are to deliver on the EU2020 strategy, empty political declarations must be replaced by concrete reforms.
We must encourage entrepreneurialism and secure agreement that SMEs can operate all over Europe by granting them better access to markets and reducing red tape. Businesses and entrepreneurs must be able to scale up and sell services/products to Europe’s 500 million consumers.
We need a fully implemented and extended Services Directive, harmonised consumer ecommerce legislation and a ’one-stop-shop’ for VAT.
We must learn from the US content industry. The US’s strong intellectual property rules support a large, successful content sector and its copyright exceptions enable strong economic activity in adjacent sectors (more than 50% greater in value than the content industry itself!).
European rules that today are hampering new digital services should be harmonised, high-speed broadband investment must continue, and the digital dividend should support both new mobile services and applications. Better access to Public Sector Information will bring substantial economic value to our content industry and to society.
Knowledge economy
We must transform our society into a knowledge economy. Like Stanford University, European universities need to attract and stimulate students from all over the world.
There should be more competition between European universities, and we should intensify collaboration between research institutions via a voucher scheme that allows funding to follow individual researchers between Member States and encourages new, independent centres of excellence.
Innovation must be at the forefront of the EU’s agenda and R&D budgets should be tripled at the expense of subsidies to the agricultural industry (within the 8th research framework programme).
In today’s global world, markets such as China and India, which offer economies of scale and rapid innovation, are securing jobs and sustainable growth with new investments and capital. If Europe is to keep up, we must focus our energies on looking ahead and creating policies that enable more bright entrepreneurs to turn their ideas into multi-billion euro businesses.
Only then will Europe stand a chance of being home to the next Google.
The writer is Member of the European Parliament and Vice-Chairman of the EPP Group