Europe's plans for information economy come under scrutiny

It comes as little surprise that Europe's IT strategy will come under the microscope at a high-level gathering in the Netherlands later this month.

The EU's aim is to be the most competitive knowledge-based economy in the world by 2010 - the so-called Lisbon strategy.

But even the new European Commission president-designate, Jose Manuel Barrosso, has admitted the plan has suffered an 'implementation deficit'.

The focus of the Netherlands meeting, drawing together director-generals from across EU member states, is a PricewaterhouseCoopers (PWC) report titled 'Rethinking the European ICT Agenda; 10 ICT breakthroughs for reaching Lisbon goals'.

Commissioned by the Dutch ministry of economic affairs and released in late August, the report is both 'tentative' and 'provocative' in its suggestions for a rethink of the European IT arena. The implication however is clear - ignore these 10 breakthroughs at your peril. Certainly the IT agenda will need to be taken seriously if Europe is to have any chance of achieving the Lisbon goal.

Europe must play catch up

To date, Europe's greatest triumph in the world of IT has been the mobile GSM standard; so successful that even the US had to adopt it. But this oft-sung mantra is beginning to wear a little thin. The bare facts are that Europe is now lagging seriously behind, says Ewan Sutherland, executive director of the International Telecommunications Users Group (Intug).

'We don't have data services. We don't have a pan-European service. We are badly behind with 3G. Korea has 11 million broadband lines and the leading operator has 23,000 hotspots. Where is the so called e-Europe in all this?'

Sutherland is just one of many observers who believe that e-Europe will never be anything more than a political lever used by member states to raise objection to issues that matter to voters - such as spam or the slow roll out of broadband lines. The cynics will need to be won over, however, if Europe is to catch up with progress in the rest of the world.

Can Europe follow Asia's example?

The PWC report, a culmination of interviews with IT thought leaders across the world, says making up lost ground is possible but it is necessary for Europe to make some clear policy choices. It looks to the policy initiatives of countries such as India, China (the Chinese IT sector has grown by 20 per cent since 2001 and is now the third largest telecommunications sector in the world) and South Korea, which have facilitated explosive IT growth and holds these up as a beacon for Europe. While social, political and geographical factors may be different, Europe has somehow come off the IT tracks and some interesting questions are raised and solutions posed for how this can be rectified.

Among the recommendations it makes is to accelerate the roll out of disruptive technologies such as voice-over-IP (VoIP) and Radio Frequency Identification (RFID) smart tags. With RFID, privacy concerns might arise and the involvement of governments is crucial if the interests of all stakeholders, including the public, are to be met. This liberal approach to new technologies is likely to be met with opposition from lobby groups. In a similar vein, consumer confidence requires some major work. How far is the EU prepared to go in giving priority to law enforcement in the world of cybercrime?

The report also calls for faster market analysis which many claim has been holding progress back and encourages the early review of the application of the new EU electronic communications regulatory framework. A pan-European interoperable solution for electronic authentication and payments is also suggested.

Spectrum allocation and management is also identified as a key issue. Earlier in the year another team of consultants, Analysys, dotEcon and Hogan & Hartson, recommended that the Commission mandates spectrum trading with flexibility of use across Europe. In other words, it calls for greater intervention in the spectrum management activity of national regulatory authorities. PWC has more questions than answers to the problem of spectrum but stresses the importance of modernising spectrum policies in the light of the Lisbon goals.

Optimal use of the spectrum creates mega-opportunities for innovation as developments such as WiMax demonstrate. The EU must urgently make its rigid allocation model more flexible.

With respect to universal service obligations, the focus on access should be replaced with attention to skills. Japanese and US companies spend far more on skills development than those in Europe. The need for skills development is strongly highlighted by an argument that says: 'Industry improving the usage of IT is probably the most effective contribution to the Lisbon goals that is available'.

Significantly, the report also puts the call for a European regulator back on the agenda. Because of the border issue, international coordination is necessary which makes EU involvement appropriate.

Light touch regulation

But will anybody in Europe take any notice? European economies have invested less and later in IT than US counterparts and have also been slower to adopt new technologies. For the cynics this points to a more insidious problem. The same anti-competitive behaviour to be found in places such as South Africa is happening in Europe. In South Africa, the incumbent operator, Telkom, has a monopoly resulting in 'outrageous' pricing tactics for technologies such as broadband. In Europe this is cloaked in a more sophisticated guise but similar practices are holding e-Europe back and until the shortcomings of this project are seriously addressed, 'there is no chance that the Lisbon goals will be achieved', says one observer.

Michael Bartholomew director of European Telecommunications Network Operators (ETNO) believes that e-Europe is capable of achieving its objectives for the Lisbon agenda, but what is needed is a much lighter hand on regulation and it needs to be promoted in a very different way. He'd also like to see businesses defining a vision that extends more than 12 to 18 months down the line. 'Very few European companies have a long-term vision and this is a great handicap,' he says.

New focus for strategy

By appointing himself chair of the group of Commissioners on the Lisbon strategy, Barrosso shows that he is taking this policy seriously. Together with Viviane Reding, the new Information Society (IS) Commissioner, they will be closely watched. Reding is not giving interviews to the press until the autumn when she will have made her pitch to the European Parliament, but there is already activity in her portfolio. In September, a high-level independent team of experts was appointed to review the progress being made on the e-Europe front. It will report to the Commission on 1 November.

Of course business will play a role in the future of Europe's IT industry. But ultimately the buck rests with the new IS Commissioner and it is on this political platform that her mettle will be tested.

The report's recommendations

Shift the ebusiness and egovernment policy from connectivity to taking up complex IT applications

Standardise IT environments in Europe to trigger and enable new business

Accelerate the introduction of disruptive technologies

Realise the vision of 'any content, anytime, anywhere, any platform'

Go for global platform leadership in the IT industry

Develop a strategic response to job migration to low wage countries

Remove barriers for the development of an innovating European electronic communications sector

Move to a new and flexible model of spectrum allocation

Enforce real solutions for consumer confidence and security

Shift e-inclusion policy from 'access to all' to 'skills for all'.

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