Opinion & Analysis

Helping Europe’s digital economy take off: an agenda for the next Commission

The EU has huge potential to unlock a thriving digital economy. Since the pandemic, the number of successful European start-ups has grown rapidly, European businesses are increasingly adopting new technologies, and Europe is catching up with the US in deploying digital infrastructure.

But there remain significant weaknesses that need to be urgently addressed to capitalise on these promising signs. European start-ups are growing in number – but they still struggle to scale up in Europe. Smaller businesses are falling behind in digitalisation. The EU’s efforts to build a data economy are not yet delivering results. And there remain large gaps in Europe’s digital infrastructure.

As the EU heads to the polls in June, the next European Commission must tackle these challenges to help Europe’s digital economy take off. Some of the solutions, like building digital skills in Europe and developing an EU-wide capital market, will take time to achieve results. But the Commission should take several steps to accelerate digital growth.

First, after the recent swathe of digital laws addressing everything from artificial intelligence to digital competition to chips manufacturing, the next Commission’s focus should be on ensuring these laws are properly implemented and enforced. To ensure that regulation does not overwhelm firms’ and regulators’ resources and detract from business efforts to adapt to and incorporate new technologies, the Commission should ensure recent digital laws form a predictable, coherent rulebook which is applied consistently across the EU, and which is future-proofed, principles-based and proportionate. The Commission should ensure tech laws build on the EU’s strengths: its single market and open trading links with the rest of the world.

Second, the current Commission has understood that European firms have a huge, and mostly untapped, opportunity to exploit data in a privacy-friendly way. But the Commission’s many efforts to help firms exploit non-personal data have not yet delivered results. A significant problem is that firms often cannot easily isolate non-personal data from personal data. Regulators have not done enough to help firms understand how to commercialise data without harming individuals’ fundamental rights. The Commission should also pursue targeted improvements to the EU’s General Data Protection Regulation (GDPR) to ensure it is applied consistently and proportionately across the EU.

Third, the EU needs to boost investment in connectivity and digital infrastructure. Without sufficient resilient infrastructure, European customers will not be able to take advantage of new innovations, and European tech firms will not see local demand for their services. Member-states must do a better job of removing regulatory barriers to infrastructure deployment across Europe and support a true single market for telecoms.

Read the full policy brief at the original link.

About the author

Zach Meyers is the Assistant Director at CER – Centre for Europe Reform.

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