Is Europe’s digital future threatened over Brexit?

As we all know, a possible Brexit will, and has already influenced the functioning of Europe. Some have said that Europe’s digital future is also threatened over Brexit. What if we didn’t overestimate UK’s role here, and emphasised that each Member State can be and should be a driving force in building Europe’s digital future?

Many have said, that the post-Brexit UK as a valuable overseas market for the U.S. companies, will probably introduce its own regulations for e-commerce and the remaining EU countries are then more likely to take a protectionist line. However, it is important to bear in mind that building a digital single market is not summed up by being protectionist or not against U.S companies, and even less are we dealing with a big online shopping mall.

Although it is true, that the UK has been a liberal pro-reform, and a pro-digital voice, but when it comes to the specific rules that form the building blocks of the digital single market, from copyright reform, 5G, coordinated spectrum policy to contract law, they are just as reluctant as many other Member States. But these things, in order to be harmonised, need further coordination between EU Member States.

If we look at the digital scoreboards, then we see that Member States differ significantly when it comes to digitalisation. From broadband and human capital to digital public services, we all have our strengths and we need to further build on this. The liberal voices are not going anywhere and the EU with its Member States will keep striving for a common goal.

If we look at the substance of Europe’s digital future, it turns out there are quite a lot of things that policymakers from each Member State can do to support the digitalisation process and, for example, heap creating an innovation friendly atmosphere for start-ups that are the main players in it.

Access to capital

First of all, one of the main obstacles to the development of start-ups is the difficulty of accessing capital. If we keep asking for extensive guarantees, then start-ups, of course, will not be able to offer them. In order to enliven the capital market, the rules for accessing capital must be greatly facilitated. The paradox is that in Europe, there is actually enough money, but it just doesn’t reach those who need it. Presently, it is easier to find funding from America than to deal with the rules in Europe. If we want to stimulate the markets, then we should reform both sides, demand and supply.

Public procurement

Secondly, countries and policy-makers themselves can serve as a role model by selecting and developing innovative ideas. Namely, the public procurement rules currently in place make it obligatory to take innovation criteria into account when selecting between different offers. A study by the European Commission showed, unfortunately, that many of the least developed countries (including Estonia) usually take the easy way out and simply choose the cheapest offer, not least because the consideration of innovation criteria requires subjectivity which itself gives ground for further debate.

In addition to the implementation of the innovation criteria, it is also important to allocate public contracts into lots, because SMEs, that are the base of European economy, have no capacity to participate in large-scale public procurement.

Open data

Thirdly, given that we live in the information age, data is the resource used to create new solutions and develop services that make people’s lives easier. It is therefore important that the data collected by governments and the solutions proposed by them take the form of open data and open solutions on which start-ups can build new ideas.

 

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Big Data’s Potential. Source: European Commission

Secure environment

Fourthly, policymakers have an obligation to create an appropriate set of rules as well as a safe environment for digital services. Europe’s digital single market includes a plan for e-government, but it’s not the EU that starts building them in a local level. It is essential for the Member States to create digital identities. In Estonia, the Digital Signature Act was adopted already in 2000. Many European Union countries have a form of e-identity, but the security level of other systems is not comparable to the one created in Estonia and the systems elsewhere are not widely used.

The main reason here is that the e-identity is not widely recognised – thus, the creation of an electronic identity has to go hand in hand with the e-services provided by the state. That way, the people have the initiative and the need to use e-identity. In this respect, Estonia can be taken as a great example for creating digital services like e-Tax Board, e-elections, digital prescriptions etc.

As the biggest problem with digital transactions seems to be adequate identification (since e-mail addresses are hackable etc), then the best thing a country itself can do is to create secure e-identification systems. Entrepreneurs can then build new innovative services on the systems the state has already created.

Mentality

Finally, another important step is shaping the right mentality that supports innovation and entrepreneurship. This is probably something that can’t be done by the state or policymakers alone, nor can it be done by force. A mindset that doesn’t see entrepreneurs as criminals, but as creators of jobs, a mentality that looks behind failure and sees an attempt to do something and learn from it. It is the pro-innovation and business-friendly mentality that separates America from Europe and attracts developers. We all have a role to play in shaping this positive spirit!