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The urgency of the digitalization of the European economy

[caption id="attachment_8121" align="alignleft" width="300"]Internet of Things Summit2 Source: The TIBCO Blog http://www.tibco.com/blog/2014/05/20/digitalize-dont-just-automate/[/caption]

 

Today, we are involved in a vast process of digitalization that does not differentiate any more between on-line or offline dimensions. The efforts of distinguishing physical or digital processes in an era characterized by a growing ubiquity of mobile technology and internet-connected devices are worthless.

 

Some figures reveal the image of the stand of today:

 

  • Almost 3 billion people are connected to the internet nowadays. That is 43% of the world population.
  • There are over 780 million households connected with fixed broadband and there are 2.8 billion mobile broadband accesses.

 

The estimation of the evolution of the digitalization of our societies is surprising. By 2020 we expect that:

 

  • 90% of the world’s population over 6 years of age will have a mobile phone.
  • 90% of mobile subscriptions will be mobile broadband.
  • LTE coverage will exceed 70% of the world population.
  • Mobile data traffic will multiply by 10.
  • There will be 50 billion “connected things”.

 

It is obvious then that the digital innovation is already changing the way people are in touch, keep up to date, enjoy, buy, share and learn. Accordingly, businesses are also changing to grasp the new opportunities that the digital world provides.

 

This vital issue for European society is occupying spaces of debate at different levels and is involving all sorts of stakeholders. The last annual Internet of Things European Summit gathered in Brussels more than 200 participants, including the key European decision makers and leading industry stakeholders. The dimension of the Internet of things is huge and will definitely change the way we produce, do business and how citizens live, because all sectors will be impacted. However, the Internet of things is a driver of the Digital Economy. Thereby, in a comprehensive approach, we should focus on building an appropriate policy framework to achieve the full potential of the Digital Economy in Europe.

 

In our view, there are different issues to be considered. First and foremost, we urgently need a level playing field along all the Internet value chain, eliminating regulatory asymmetries that exist today between Telecom operators and OTTs.

 

Secondly, we must create an investment-friendly environment by removing cost-orientation from European Telecom Regulation. And at the same time, we cannot forget the fiscal perspective because Europeans need a fiscal program to attract new ICT initiatives, and guarantee tax fairness by agreeing on the proper control of the profits generated in Europe by non-European companies.

 

From our perspective there are other dimensions that have to be part of a comprehensive policy program:

 

 

  • the allocation of the spectrum needed to foster a truly digitalisation of the economy;
  • the support to the creation of more efficient market structures through the consolidation process of operators;
  • the empowerment of society, which implies consistent training and skill programs and plans for digital entrepreneurship.

 

Lastly, we have to mention privacy and cyber security. Both are vital for the sustainability of the digital ecosystem. The challenge is enormous. A fast moving technology environment modifies the scenarios in which a framework has to guarantee privacy and security while leaving room for innovation and entrepreneurship.

 

The next 20 years start tomorrow. Therefore, enabling the digitalization of European economy is an urgent issue.

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Chema Alonso

Chief Data Officer, Telefonica.