Digital Economy and Society – Europe lags behind Asia
This week, Sia Partners participated in the World Economic Forum discussion on ‘Digital Europe’ and shaping the future of the European Digital Economy and Society. The article below outlines my personal views and opinions.
The US and China are leading the way in creating, nurturing and managing their digital ecosystems, regulatory frameworks and societal responses. The US are leading through their natural competitiveness and their incredible presence in ’ Tech’ with their first mover advantage. The Chinese have formidable companies in this arena too and have deployed more authoritarian tech as well as their own more closed version of the internet with supporting national champion Apps. So we asked ourselves the question – is there a European way (a third way) to proceed? For the private sector, digital platforms come with the possibility of exponential growth because they allow so much more participation among fellow travellers on your chosen platform. Amazon, Uber, Ebay and even a blockchain are the obvious examples here. All the research points to emerging digital ecosystems accounting for more than 30% of global corporate revenue by 2025. Yet only 3% of established European companies have adopted an active platform strategy. For the public sector too, digital platforms and ecosystems are being designed as core strategic elements for smart cities. Still – few European cities can claim to have a policy on this with many not even thinking about it. Future government policies will have a significant impact on how quickly platforms can grow and start creating economic (and of course social) value. Right now though Europe is lagging behind.
What we need is for Private and Public bodies to have strong collaboration in order to maximise the potential for enterprises, states and society. This is what we need to do:
- The State needs to legislate more – to enable Growth and Innovation. The legislation in some sectors has to be tech neutral to encourage diversity of ideas.
- The State needs to legislate less on some areas and step out of dictating various area of public sector – energy provision for instance. Less protection and support for sectors will encourage competition. Competition is always a good thing that leads to Growth and Innovation
- Governments in Europe could open APIs to each other – for instance on road users. By doing this and creating new processes they would create Trust. Trust is a very efficient vehicle of change.
- Corporates that turn their business models on their heads will flourish. An example is an Insurance company that moves from product sales to a platform play that collaborates and trades in a well defined and attractive digital eco system.
- The Corporate and Digital strategy of companies need to align and work together. Spin out the digital strategy too far outside the Corporate and you may lose it and never integrate it. Have it too close and it may never reach its full ambition
While the Asian economies may be driven by fear (fear of falling behind), in Europe we are currently driven by ‘fear of participating and collaborating’. We need to overcome this fear and change the way both State and Corporates in Europe behave if we are to really develop and find the ‘third way’ to enable Europe to succeed in the world of Digital ecosystems.