Why the EU needs to seize this make-or-break moment with digital

#CriticalThinking

Digital & Data Governance

Picture of Ben Wreschner
Ben Wreschner

Chief Economist at Vodafone

“Digital is the make-or-break issue.” These are the words of Ursula von der Leyen, the European Commission President, spoken during her State of the Union address on 15 September.

Speaking to the European Parliament in Strasbourg, Mrs von der Leyen underlined what the European Union needs to do to build back from the coronavirus crisis. Digital issues are at the heart of the EU’s efforts to make sure the recovery is sustained and beneficial to everyone. Digital spending in the Next Generation EU recovery package is set to exceed its 20% target, Mrs von der Leyen said. “In an unprecedented manner, we will invest in 5G and fibre. But equally important is the investment in digital skills. This task needs leaders’ attention and a structured dialogue at top-level,” she added.

All this is welcome, and she was applauded by the MEPs in Strasbourg. Digital connectivity will not only drive Europe’s recovery but will help shape Europe’s future. However, the real test is whether Mrs von der Leyen and the EU can deliver on this conviction.

The EU has set clear connectivity targets for 2030 to work towards throughout its so-called Digital Decade, one of which includes ensuring that at least 80% of the European population has basic digital skills. Although the Digital Decade was only launched six months ago, the EU looks set to miss its targets. Vodafone’s special Gap Analysis report, commissioned from Deloitte, reveals that Europe is already falling behind on vital indicators.

Mrs von der Leyen and the Commission are moving in the right direction, but critical questions remain

There are moves to correct the course of action. In her address to MEPs, Mrs von der Leyen also announced the ‘Path to the Digital Decade’, a plan to translate the EUʼs digital ambitions for 2030 into a concrete delivery mechanism. It will set up a new governance framework for monitoring the digital transition. Shared among member states, the monitoring system will be based on the Digital Economy and Society Index (DESI) to measure progress towards each of the 2030 targets.

The Commission says the proposal aims to identify and implement large-scale, multi-country digital projects, filling a “gap in the EU toolbox to combine funding from member states, the EU budget and private investment”.

In addition, Mrs von der Leyen announced a plan for semi-conductors. “There is no digital without chips”, she said, warning that Europe’s share across the entire value chain has shrunk, making the bloc worryingly reliant on state-of-the-art chips manufactured elsewhere, notably Asia. This is not just about competitiveness, Mrs von der Leyen said, but also about tech sovereignty and shaping the digital transformation according to the EU’s rules and values. Hence, her plan for a new European Chips Act will seek to link together our world-class research and create a state-of-the-art European chip ecosystem, including production.

Again, all this shows that Mrs von der Leyen and the Commission are moving in the right direction, but critical questions remain whether national governments have the will to follow through with their pledges and whether the Commission can really enforce the measures outlined in the ‘Path to the Digital Decade’.

The make-or-break challenge is to ensure that this recovery is built on digital foundations

Vodafone believes that this is a pivotal moment. The EU needs to leverage every asset in order to bring about the digital transformation. Indeed, Vodafone is ready to play its part as an enabler, partnering with policymakers and governments to make the most of high-speed connectivity and digital platforms.

This is also an issue addressed by the Connected Europe initiative, launched by a partnership between Vodafone and Friends of Europe, which aims to foster a successful, green and resilient digital transformation. The final ‘Connected Europe’ report, set to be published in October, argues that there can be no distinction between the digital and green transitions, which are inextricably linked. It will call on public, private and civil society sectors to come together through strong partnerships to deliver a paradigm shift for the planet.

The involvement of civil society is especially important in these collaborations. It’s why engaging with and listening to citizens has been an essential aspect of Connected Europe’s work. Initially, this was something of an experiment. However, the combination of citizen focus groups and online debates has provided insights that would otherwise have been missed. Crucially, citizen involvement means the guidance in the final report should better serve all aspects of society. This experience of citizen involvement also bodes well for the EU’s experiment with participatory democracy through the Conference on the Future of Europe.

In her speech, Mrs von der Leyen repeated the importance of staying true to the EU’s values and talked about the soul of the Union. The EU has done a lot of soul searching in recent years, but now is the time to turn to action. As Mrs von der Leyen said, we now have a mission: recovery. The make-or-break challenge is to ensure that this recovery is built on digital foundations.

This article is part of a series published around our annual flagship event, State of Europe – the festival of politics and ideas: a new Renaissance, held on 14 October 2021.

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