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SPEECH/01/46
Erkki LIIKANEN
Member of the European Commission responsible for Enterprise
and the Information Society
"eEurope: An information society for
all"
Conference "From Business to e-Business"
Copenhagen, 1 February 2001
eEUROPE AFTER THE NEW ECONOMY’S SLUMP
Ladies and gentlemen,
I came here today to present you the European Union’s strategy for the information
society. This strategy was given fresh momentum in July last year with the adoption
by EU leaders of the eEurope Action Plan.
Where do we stand today? A question was recently put to me by a reporter from
Wired Magazine: “What is the impact of the new economy’s slump on eEurope?".
I will answer this question. But let me first make a couple of comments about this
so-called “slump”:
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The current stock market readjustment had been predicted by many already a
year ago, for instance in Anthony Perkins’ “Internet bubble”. There was a lot of
evidence in support of this view. It had become clear that many “dot-coms” were
increasingly over-evaluated, especially those which didn’t build on significant
technological innovation. A readjustment was inevitable.
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The consolidation of the “dot-coms” is a sign of maturity. A year ago, almost
anybody with an idea would start a new Web business and find sources of
financing. This frenzy is over. What are we seeing today? Only the good and
soundly managed are prospering. That’s “back to basics”. It is also part of a
learning curve for many dynamic, yet inexperienced young entrepreneurs.
Investors have become more selective in funding start-ups, but good projects
will find money. We have moved into a period of “search for quality”.
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Yet the current trend also bears some risks. After a period of intense euphoria, it
would be unfortunate to fall into the opposite extreme. Gloom would be as
unjustified as last year’s frenzy. Truth is, economic fundamentals remain very
favourable, especially in Europe.
Let’s come back to eEurope. To understand the impact of the new economy’s
“readjustment” – rather than slump – on eEurope, I think we have to come back to
our fundamental goals. Our aim is to create an information society for all in Europe.
To achieve this vision of an inclusive information society, eEurope sets a detailed
roadmap until the end of 2002: concrete objectives, in association with clear
measures and deadlines. Let me summarise them:
1. A cheaper, faster and secure Internet.
2. Invest in people and skills.
3. Accelerate electronic commerce.
4. Promote new applications in key areas, such as public administration, health and
transport, and promote European content on the Internet.
These goals retain all their validity. And so do the measures to reach them. Let me
explain why.
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1. CHEAPER, FASTER, SECURE INTERNET
The first key objective of eEurope is a cheaper, faster and secure Internet. This
mainly rests on the completion of the EU telecoms liberalisation process, and the
adaptation of the legal framework to the Internet and convergence. A reform
package for electronic communications was tabled to this end.
There is clear evidence that telecoms competition has resulted in lower prices,
greater choice, and better quality of service. Liberalisation has also resulted in
important net job creations. Therefore, this objective is untouched by the
readjustment of the stock markets.
Although telecoms are liberalised in the Union, local communications are still
dominated by incumbent operators. It remains too expensive for new entrants to
move into local communications because they have to build their own local network.
As a result, lack of competition keeps local tariffs too high. This includes Internet
access tariffs.
A regulation to unbundle the local loop already came into force on 1 January 2001.
This means that new entrants no longer have to duplicate the incumbent’s local
network: they can get access to it under fair conditions. This will have considerable
impact on the market.
Unbundling will drive local communication tariffs down. More important, it will
encourage innovation in Internet access. New entrants can now offer flat-rate, highspeed Internet access over the existing copper network using ADSL technology, in
competition with incumbents. And competition forces the incumbent operators to
innovate.
We need now a major effort at practical level by regulators, incumbents and new
entrants to see the emergence of a truly competitive market early this year.
The emphasis placed by eEurope on security and privacy retains all its validity:
these are complementary enablers for Internet and electronic commerce take-up.
Technologies exist that can secure a high level of security and privacy. To promote
their dissemination and use, the EU has created a favourable legal framework:
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In 2000, the trade of encryption technologies – which aim at securing
confidentiality and privacy on the Net – was liberalised in the EU and facilitated
with our major trading partners.
-
As for the lawfulness and mutual recognition between EU countries of electronic
signatures – which secure the integrity and authentication of electronic data –, it
will be secured by next Summer.
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2. INVEST IN PEOPLE AND SKILLS
The second key objective of eEurope is to invest in people and skills. Our main
targets are the following:
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First, we need to give all Europeans the skills to live and work in the information
society. Digital literacy is becoming a basic requirement in a world where the
Internet will be present in all aspects of human activities: social, professional,
private. This calls for a radical overhaul of education and training systems to
respond to new needs.
This concerns, in particular an extensive use of new technologies in the learning
process and the adaptation of curricula. In parallel, greater emphasis must be
placed on high-level scientific and technical education. As for life-long learning
for all, it is a must.
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Second, we need to make sure that we create an information society for
everybody. This means avoiding at all cost that some groups of people are
excluded, whether they are the socially disadvantaged or people whose
professional skills are outdated, or sick, elderly or disabled.
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These two targets come down to consolidating the twin pillars of inclusiveness in
the information society: social integration and employability. These are societal
goals, but they are also competitive assets. They are in no way affected by the
dot-com consolidation.
3. ACCELERATE E-COMMERCE
The third key objective of eEurope is to accelerate electronic commerce. This is
clearly the area where one would expect to see the main impact of the new
economy’s readjustment. E-commerce is a key manifestation of the new economy.
One has to be careful to avoid any confusion when talking about e-commerce. A
distinction between business-to-business e-commerce (B2B) and pure business-toconsumer (B2C) e-commerce is important.
B2B is a economic revolution. It can lead to the optimal use and exploitation by
businesses of the Internet and digital technologies. B2B allows to reengineer
corporate structures: purchases, logistics, manufacturing, marketing, distribution,
communications. The potential benefits are huge: reduced purchasing and
procurement costs, reduced time-to-market, improved product and service quality,
greater competitiveness. This is leading to integrated e-business solutions.
Some high-tech companies are the forerunners in the adoption of B2B. But a
growing number of companies, of all sizes and in all sectors, are following suite.
Ultimately, there will no longer be a distinction between the new and the old
economy.
This process is unlikely to be affected by the new economy’s readjustment. The
dissemination of digital technologies and the Internet will continue throughout the
economy, as it does throughout all human activities. The emergence of new
business models is still firmly on the agenda.
In contrast to the B2B revolution, B2C is an evolution of consumer purchasing
habits. One may buy on-line, but the act of buying remains unchanged.
Furthermore, B2C is a lot smaller that B2B: it represents less then 20% of total ecommerce.
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B2C is also much more affected by the new economy’s readjustment. If there’s a
slump, it is in B2C: 4 out 5 US dot-com bankruptcies concern B2C start-ups. This
doesn’t mean that we can bury B2C and forget about it. Sure enough, the hype that
surrounded B2C in the USA is not present in the same way in Europe. B2C may not
develop as fast as expected. But this doesn’t mean that B2C hasn’t got a future.
Even in the short term, there are some promising areas in B2C: For example,
Europe is doing well in retail e-banking. And its advance in mobile communications
still sets the base for the rapid development of mobile e-commerce. As mobile
networks get upgraded with GPRS, and as more user-friendly terminals hit the
market, conditions are becoming much better. What will be needed now are mobile
commerce services that meet customer expectations.
In sum, my key message remains unchanged:
- B2B retains its strategic importance, new economy slump or not. While 2000 was
the year of the dot-coms, 2001 is likely to be a year of consolidation, of deeper
penetration of the Internet and digital technologies into the entire economic
fabric.
- As for B2C, it may be slowed down, but it isn’t by no means dead. It therefore
remains a priority for the EU to facilitate and encourage its take-off. This
depends on the rapid completion of the Internal Market for e-commerce. The aim
is to consolidate trust and confidence in e-commerce, both amongst consumers
and businesses. This will rests on a mix of legal and self-regulatory measures,
including the creation of a “dot-eu” top-level domain name.
4. PROMOTE NEW APPLICATIONS AND EUROPEAN CONTENT
A further priority of eEurope is to promote new applications in key areas of public
interest:
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Regarding the use of the Internet by governments, much progress has already
been done to put on-line information and basic public services. What is still
missing is real interaction, which is the essence of the Net. Being able to find
administrative forms on-line, and then having to print them out and send them
by regular mail is not my idea of e-Government. The EU has adopted an esignature directive. It must be put to use.
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We also have to maximise the potential of digital technologies and the Internet
for health. Why cannot one have, for instance, remote access to a patient’s
medical history with his consent when this patient travels to another EU country;
or the capacity to get real-time medical advise from specialists in small or
remote hospitals.
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Another priority is the development of intelligent transport systems, for instance
remote traffic management, real-time traffic or weather information, satellite
tracking, etc. This concerns all means of transportation: car, train, aircraft, boat.
The stakes are paramount: greater safety, less congestion and lower pollution.
And better logistics.
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Finally, the Union must promote the development of European content for the
Internet. At stake are commercial interests as well as the worldwide promotion
of Europe’s languages and cultures. And of course, all Europeans should find
contents in their own language on the Net. This will be a precondition for
successful m-commerce.
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As the previous priorities, the latter isn’t affected by the new economy’s
readjustment. But the time has come to move from pilot projects to real applications
that bring real added value to the citizens, and which truly improve the productivity
of public services.
To conclude, here is my reply to the reporter of Wired Magazine: eEurope’s
objectives remain as valid as one year ago.
But where are we today in the implementation of eEurope? An early assessment of
eEurope will tell us more about that.
6. ASSESSMENT OF eEUROPE
Lately, the Union has made tremendous progress on key indicators:
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The amount of EU homes connected the Internet has increased by over a third
over 6 months, reaching over 28% in October 2000. In spite of positive
evolution, an important North-South divide continues to exist.
Compared to the US, the percentage of EU homes that have Internet access
remains lower. But the EU is closing the gap. The rate is equivalent to that of
the USA 18 months ago.
-
The number of mobile phone users has increased by a half last year, reaching
60% in December 2000. This compares to a 40% penetration rate in the USA,
up 9% from last year.
The gap between the EU countries with the highest and the lowest mobile
penetration levels shrunk. And there is no sign of a North-South divide as is still
the case for Internet take-up.
Of course, this is not only due to eEurope.
But eEurope did make a difference in two respects.
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For the first time, last March in Lisbon, EU leaders devoted an entire Summit to
the information society. This has radically changed the general atmosphere: the
Internet and digital technologies are now high in the agenda. Their contribution
to socio-economic progress is now recognised.
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Also for the first time, ambitious common targets for all EU Member States were
agreed at the highest political level. Member States have also agreed on key
indicators to benchmark their respective progress towards achieving eEurope’s
targets.
As a result, the political, legislative, economic and societal mobilisation in Europe is
unprecedented. This has led to concrete result in key areas:
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First, the EU law-making process was accelerated: this concerns, for instance,
local loop unbundling, the legal framework for Internet security and privacy, and
the Internal Market for e-commerce.
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Second, faster progress was achieved on important specific issues: The
upgrade of the trans-European research network is underway and will contribute
to the emergence a true Europe of research. Progress was made on the EUwide development and interoperability of smart-cards, which are key to ensuring
the security and authentication of electronic transactions. The adoption of the
eContent programme will support the development of European content for the
Internet.
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Many measures of the eEurope Action Plan have yet to be implemented. The
Stockholm summit of the EU leaders in mid-March will be a very important event to
maintain the eEurope momentum. Of course, new challenges will arise as we move
ahead. But eEurope is not a static instrument: it will be constantly reviewed and new
actions launched where needed.
Europe is now on the right tracks to rapidly become an “e-Europe”. But we have not
yet won this game.
Thank you for your attention.
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