Three Ideas on Digitalisation for Thierry Breton to Win Over the Parliament

1. Europe’s industrial policy is the tool to achieve a Digital Europe

From agriculture to manufacturing; from textiles to IT; from bricks and mortar to ones and zeroes: industrial policy can be thought as a set of policies supporting countries towards a more productive economy. Thanks to digitalisation, businesses can experiment with their products much more efficiently, and the data they generate can be used as knowledge for continuous innovation. It is this constant innovation, which powers economic growth and makes us all better off. 

However, for digitalisation to be a successful industrial policy, it needs to spread beyond IT and telecoms. It has to be embedded in every sector of the economy: from manufacturing and construction to transportation and professional services. Therefore, a new European industrial policy should encourage the vision of Digital Europe by breaking down the barriers that stop businesses from investing in digital transformation. 

2. Digitalisation isn’t a free lunch 

Digitalisation cost money. If companies have to buy new software, sensors, and more importantly reorganise the way they work, Europe must make these investments profitable. Since scale-at-low-cost is a proven benefit of digitalisation, Europe needs to roll out the red carpet for companies willing to invest in digital business models so they can sell their products across the EU without a hassle, making digitalisation an attractive proposition. 

Lack of adoption of digital technologies results in growing productivity inequality. Businesses at the technological frontier coexist with a large number of low productivity companies using outdated technology. By revitalising competition, digitalisation has the potential to encourage low-productivity companies to invest in new technologies. Moreover, to reduce the cost of digitalisation across the board, Europe should continue investing in digital infrastructure and education.  

3. Europe must trade services like it trades goods 

Digitalisation has made services more tradable. This means that trading in services is, more and more, like trading in goods. Digital services can be stored, downloaded and consumed like other commodities. Moreover, as these services are delivered cross-border, policymakers can tackle digital trade barriers without having to address the issue of posted workers. The EU policymakers could gain inspiration from what their predecessors made for the EU single market in goods. If a digital service can be offered in a member state, it is safe to be sold across Europe.