To compete with the USA and China, Europe requires a single Digital Single Market

© Gui Yong Nian/Fotolia

Europe's digital weaknesses, but also its enormous potentials became apparent during the Covid-19 crisis. Therefore, Europe needs a strong Digital Single Market. This entails strengthening its capacities in areas such as cloud computing, 5G, and the secure use of data. In order to keep pace with the global players USA and China, it is necessary to invest in a strong digital Europe.

Predictive maintenance, digital platforms and quantum computing are just three examples of how digital technologies will have a significant impact on the digitalization of the European economy. While the digital transformation entails significant opportunities for companies across the EU, many enterprises face a huge degree of legal uncertainty at the same time. In order to overcome these uncertainties and to increase Europe's competitiveness, the focus must be on creating a European Digital Single Market. The benefits of a completed Digital Single Market in the EU are estimated to contribute 415 billion euros annually to the EU's economic output.

Roll-out of 5G infrastructure

Within the framework of Horizon 2020, the European Union has funded various 5G projects with 258 million euros. The current President of the EU Commission, Ursula von der Leyen, also favours an increased roll-out of the 5G network infrastructure during her term of office. Therefore, investments in research on 5G and 6G are expected to be continued in Horizon Europe. In fact, 5G is a key factor for European industry to remain competitive. The technological characteristics of 5G – e.g. up to 10 Gbps data rate and low latency – will allow companies to fully exploit the economic growth potential of AI, for example through the Internet of Things and autonomous driving. If the European Union wants to keep up with global players such as the USA and China, a reliable 5G network as well as investment incentives for the roll-out of 5G are indispensable, as they form the basis for a Digital Single Market.

A European 5G-roll-out requires a harmonised and coordinated allocation of frequencies by the EU Commission. Furthermore, the success of 5G will also depend on the security of the networks. In order to strengthen a European digital market and digital sovereignty, it is necessary to prevent unauthorised access to data transmitted via critical infrastructure components in the 5G network. Therefore, both producers of 5G network components and telecom operators urgently require producer-independent security requirements for network components. Crucially, regional security certifications must be based on international standards and be compatible with international regulations on mutual recognition.

Strengthening digital sovereignty: Working towards a European cloud architecture

The strengthening of European cloud competence – based on already existing initiatives such as the GAIA-X project, initiated by France and Germany – is a central element of European sovereignty. Against this background, Europe must build up its own capacities in the cloud-based processing of data at a rapid pace in order to strengthen its competitiveness and to make sure that data is processed on the basis of European values. However, the aim cannot be to build a European hyperscaler along the lines of existing US and Chinese models. Rather, the EU should create an open platform for cloud solutions that is compatible with future technologies, which brings together existing cloud offerings with user requirements and is based on open interfaces. Based on a strong European cloud architecture and a secure and performant 5G network, the data traffic will rise significantly and will lead to the long-term economic viability of Europe.

Utilising personal and non-personal data in the EU

The EU data economy is growing by almost 5 percent each year. Hence, it could generate 769 billion euros for the EU27 by 2025, which would correspond to 5.4 percent of European economic output. In order to be able to exploit the value creation potential, the legal framework conditions must be created. Free movement of "non-personal data" must be included in the European Single Market. This will allow companies – especially SMEs – to use and to share more data, which will strengthen the competitiveness of European companies in international competition. The European Data Protection Regulation (GDPR) does not create sufficient legal certainty, especially since violations of data protection are related to enormous fines. As a result, companies are confronted with barriers and tend to act cautiously regarding innovative business models.

Europe-wide standardised cyber security requirements

All the previous propositions cannot work without a standardised European cyber security concept that ensures sufficient data protection without imposing barriers for economic growth and innovation. Current estimates assume that the worldwide number of networked objects will probably increase to 125 billion by 2030 – many of them will be operated in Europe. Currently, however, each EU member state is adopting its own uncoordinated approach to strengthen its country’s cyber-resilience. Therefore, to fully exploit the potential of a European Digital Single Market, a coherent approach to ensure a common level of cyber-security is required. A European-wide harmonised strategy would bring benefits for all EU-Members and especially companies with business activities across the EU. Henceforth, a European regulatory framework is required, which introduces cyber security standards and clear responsibilities along the entire supply chain. The EU Commission should make use of the review of the NIS Directive in conjunction with implementation of the EU Cybersecurity Act to foster the cyber-resilience of products, services, infrastructures and people across Europe.