THE NEW EUROPE IN THE GLOBAL DIGITAL ERA Current Rule-Maker, Future - PowerPoint PPT Presentation

THE NEW EUROPE IN THE GLOBAL DIGITAL ERA Current Rule-Maker, Future Investor? Wednesday 6 th November, 17:30 – 19:30 Brussels, European Parliament, room ASP3H1

DIGITAL SINGLE MARKET

The DESI average score increased by 13.5 points, from 39 to 52.5 DESI, by Member State 80 70 60 50 40 2014 2018 30 20 10 0 Source: Digital Scoreboard

The EU improved the most in connectivity Variation 2014-2018 of EU DESI, by component 6 5 4 3 2 1 0 1 Connectivity 2 Human 3 Use of 4 Integration 5 Digital Public Capital Internet of Digital Services Technology Source: Digital Scoreboard

The digital divide across EU Member States remains too wide and has been worsening in key areas EU digital divide by component 14 12 10 8 6 2014 4 2018 Variation of digital divide (in p.p.) 2 0 -2 -4 1 Connectivity 2 Human Capital 3 Use of Internet 4 Integration of 5 Digital Public Digital Technology Services Source: Digital Scoreboard

The EU still lags behind other world areas I-DESI 80 70 60 50 40 30 20 10 0 South Korea EU Top 4 Japan US EU 28 EU Bottom 4 China I-DESI 2016 I-DESI 2013 Source: Digital Scoreboard

The EU has been improving but too slowly Variation in I-DESI score between 2013 and 2016, by country and component 100 90 80 70 60 50 40 30 20 10 0 Japan South Korea China US EU Top 4 EU 28 -10 Connectivity Human Capital Internet use Business technology integration Digital Public Services Source: Digital Scoreboard

DATA DRIVEN INNOVATION & AI: EUROPE IN THE GLOBAL RACE

Data economy value is expected to grow by 83%, from € 377 bln in 2018 to € 680 bln in 2025 Data economy value in the EU Data economy impact on GDP, by Member State Estonia UK 800.000 Germany Netherlands Denmark 700.000 Sweden Finland 600.000 Austria Malta Ireland 500.000 EU28 Cyprus 400.000 Belgium Spain Lithuania 300.000 Latvia France Portugal 200.000 Italy Bulgaria 100.000 Slovakia Czech… Croatia - Hungary 2018 2025* Romania Slovenia Direct impacts Backward Indirect impacts Poland Luxembourg Forward Indirect impacts Induced impacts Greece 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 10,0% Source: European Data Market Monitoring Tool, IDC (2019) 2025* 2018 * Baseline scenario

However, there is (and there will be) a substantial skills gap Data worker skills gap in the Big Five countries and the EU Data worker skills gap 12% 12.000 12% 10% 10.000 10% 8% 8.000 8% in thousands 6.000 6% 6% 4.000 4% 4% 2.000 2% 2% - 0% 0% 2018 2025 Spain Poland Italy EU 28 Germany France UK Demand (left axis) Supply (left axis) Data workers skill gap (right axis) 2018 2025 Source: European Data Market Monitoring Tool, IDC (2019)

Approximately 80% of the 100 most promising AI startups worldwide are based in the United States The most promising 100 AI startups 1% 1% 1% 1% By country 1% United States 6% United Kingdom 6% Israel 6% China Sweden India Germany 77% Japan Canada Source: I-Com elaboration on CB Insight (2019)

No European state has achieved a real critical mass in terms of AI startups, with the exception of the United Kingdom (245), France (109) and Germany (106) European startups in AI, by country United Kingdom 245 France 109 Germany 106 Sweden 55 Finland 46 Spain 39 Switzerland 28 Netherlands 26 Italy 22 Ireland 14 Poland 12 Denmark 12 Norway 6 Hungary 6 belgium 6 Ukraine 4 Romania 4 Estonia 4 Czech Republic 4 Belarus 4 Lithuania 3 Latvia 3 Slovenia 2 Portugal 2 Malta 2 Austria 2 Slovakia 1 Luxembourg 1 Iceland 1 0 50 100 150 200 250 Source: I-Com elaboration on Asgard and Roland Berger (2018)

The situation could even get worse after Brexit … .. Private equity investments in AI startups based in the EU, 2011 to mid-2018 13% 2% 3% United Kingdom Germany France 13% Spain 55% Ireland Others 14% Source: OECD; EU Commission

European AI initiatives 12.02.19 26.06.19 Resolution on a 25.04.2018 10.04.18 comprehensive Policy and 16.02.17 09.04.19 07.12.18 European European investment Declaration of Resolution of Ethics approach to industrial recommendation Cooperation on Coordinated Plan European Guidelines for artificial policy on s for trustworthy Artificial on AI Parliament Trustworthy AI intelligence artificial Artificial Intelligence intelligence and Intelligence robotics

CONSUMERS IN THE DIGITAL AGE

Central and Northern Europeans purchase online more frequently than those in the Southern and Eastern countries Frequency of online purchases in the last 3 months of 2018 (%) 80 70 60 50 40 30 20 10 0 United Kingdom Denmark Netherlands Sweden Luxembourg France Ireland Austria EU Estonia Finland Belgium Malta Spain Slovakia Slovenia Czechia Poland Latvia Lithuania Greece Hungary Croatia Portugal Italy Cyprus Bulgaria Romania Germany 1 or 2 times 3 to 5 times 6 to 10 times more than 10 times Source: Eurosta t

The use of Online platforms and Digital Comparison Tools is increasing but transparency is a concern Proportion of people that know of and have used digital comparison tools in the UK (2017) Results of EU survey on online platforms (2018) 100% Knowing how the platform ordered the results of the search made me more confident and trusting in 44% 38% the platform 80% All platforms should include information on the way 43% 40% they order the results of a search 60% All platforms should include information on who is actually selling the goods or services presented in 47% 37% the platform 40% Internet platforms should be required by law to include information on who is actually selling the 46% 37% goods of services presented in the platform. 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% Aware of digital comparison tools Have used digital comparison tools Strongly agree Agree Indifferent Disagree Strongly disagree Source: European Commission; Source: CMA, 2017

EU consumer policies on e-commerce and protection Shopping and e- Protection commerce Regulation 2017/2394 Regulation 2018/302 (new Consumer Protection Cooperation Regulation) (geo-blocking) New Deal for Consumers Directive 2019/770 (2 proposals presently ongoing) (contracts for the supply of digital content) Directive 2019/771 (contracts for the sale of goods) Regulation 2018/644 (cross-border parcel delivery services)

POLICY RECOMMENDATIONS 1/3 THE NEXT DIGITAL SINGLE MARKET STRATEGY: - eliminating the gap between EU countries , especially in certain areas such as skills and the integration of digital technology into businesses - adapting data regulation in order to make more room for experimentation and innovation - encouraging public and private partnerships in the quintessential technologies - reshaping and upgrading the E-commerce Directive to include new developments, particularly regarding intermediary platforms and industrial IoT CONNECTIVITY: - ensuring an investment-friendly ecosystem and guaranteeing the harmonization of rules to attract massive capital - addressing the digital divide between and within Member States also with the contribution of EU cohesion funds - encouraging National governments to complete auctions as soon as possible and allow for a fast roll-out of 5G networks - setting specific financial measures to support connectivity demand and so investment returns DATA DRIVEN INNOVATION: - opening datasets and creating a suitable regulatory environment for adopting and fostering innovation - removing barriers to the distribution and use of government data and, at the same time, encouraging private entities to disclose data in order to improve market efficiency or solve fundamental market failures - setting direct incentives (in the form of tax credits or other money-equivalent forms) to encourage companies to take the necessary steps to implement DDI

POLICY RECOMMENDATIONS 2/3 ARTIFICIAL INTELLIGENCE: - fostering competitiveness and innovation while assuring the drawing up and the enforcement of the legal framework - encouraging investments in AI research and production by both public and private entities - boosting cooperation with the industrial sector - tackling european fragmented AI ecosystem and retaining top talents (possibly attracting more from abroad). In this respect, the setting up of a European Institute for AI could play a very significant role - fostering the right talents and skills not only in research but also in adoption CURRENT AND FUTURE JOBS: - encouraging education and training in the field of AI, as well as inter-disciplinarity - promoting re-skilling and up-skilling - encouraging the collaboration between humans and machines CONSUMERS: - about e-commerce, improving price transparency and strengthening the enforcement of consumer rights and guidance to clarify what qualifies as an unfair trading practice in the digital world - ensuring that digital comparison tools work effectively , contributing to lowering transaction costs and delivering better deals, by enabling consumers to conveniently and efficiently compare and choose between offers from across the market - ensuring simple, efficient, fast and low-cost ways of resolving disputes which arise from the sale of goods or the supply of services online