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Sweden at head of pack on digital research funding

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mac-keyboardWhile Sweden may be a global leader in R&D investment, the EU as a whole is still lagging behind the Japan and the US: new data shows that 6.6% of the total R&D government support is invested in ICT in the EU, compared to 9.1% in Japan and 7.9% in the US.

Figures from the Digital Scorecard show that more efforts are necessary to meet the goal set by the Digital Agenda for Europe: to reach €11 billion of annual total public spending on ICT R&D by 2020.

Vice-President of the European Commission Neelie Kroes, responsible for the Digital Agenda, says: "Public funding in digital research and development is behind many of the great technologies we take for granted. Helping researchers develop their best ideas translates into new products and services, and into jobs. Over the next seven years, through Horizon 2020 we will invest more than €13bn in ICT. I encourage member states to step up their efforts to secure our jobs of the future".

EU research leaders

Total public spending: Germany spends €1.2bn annually on ICT R&D

The 5 biggest public funders of R&D in ICT in 2012: Germany takes by far the lead with €1.2bn followed by the UK (€0.69bn - €11 per person), Spain (€0.6bn- €13 per person). Sweden is next on €0.55bn.

Relative public spending: Sweden spends most per person

Sweden spends far more than any other EU country on a per capita basis, at €58 per person. Sweden spends more than Italy (€0.52bn), yet Italy has 6 times the population (60 million to 9.5 million).

Most ICT–intensive spending – Swedish and European Commission

Sweden and Belgium are investing the most heavily in ICT (15% and 11% of total spend respectively). The European Commission spends 16% of its research budget on ICT research. Around €13bn of the Commission’s Horizon 2020 research programme (2014-2020) #Horizon2020 will go to ICT projects over a seven-year period.

Most EU funding: Germany and United Kingdom

Universities, companies and researchers in Germany (€1.6bn), the UK (€1bn), Italy (€0.8bn), France (€0.7bn) and Spain (€0.6bn) receive 60% of the total EU funding and account for 57% of participations during the period 2007-2013.

Examples of projects with GermanBritishItalianFrenchSpanish partners.

Highest EU funding relative to ICT sector: Cyprus and Greece

Cyprus (€24 million) and Greece (€339 million) have relatively small ICT sectors which are growing thanks to relatively high EU funding levels. Examples of projects with CypriotGreek partners.

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Business

Commission proposes measures to boost data sharing and support European data spaces

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Today (25 November), the Commission is presenting the Data Governance Act, the first deliverable under the data strategy adopted in February. The Regulation will facilitate data sharing across the EU and between sectors to create wealth for society, increase control and trust of both citizens and companies regarding their data, and offer an alternative European model to data handling practice of major tech platforms.

The amount of data generated by public bodies, businesses and citizens is constantly growing. It is expected to multiply by five between 2018 and 2025. These new rules will allow this data to be harnessed and will pave the way for sectoral European data spaces to benefit society, citizens and companies. In the Commission’s data strategy of February this year, nine such data spaces have been proposed, ranging from industry to energy, and from health to the European Green Deal. They will, for example, contribute to the green transition by improving the management of energy consumption, make delivery of personalized medicine a reality, and facilitate access to public services.

Follow the press conference by Executive Vice President Vestager and Commissioner Breton live on EbS.

More information is available online

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Business

Education and training in the digital age: Digital skills essential for learning and for life

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The Commission has published its annual Education and Training Monitor, this year with a special focus on teaching and learning in EU member states in the digital age. The coronavirus crisis demonstrated the importance of digital solutions for teaching and learning, and highlighted the existing weaknesses. The report shows that, despite member state investment in digital infrastructure for education and training in recent years, large disparities persist, both between and within countries.

Contrary to the assumption that today's young people are a generation of ‘digital natives', survey results indicate that over 15% of the pupil population in surveyed countries have insufficient digital skills. In addition, teachers report a strong need for professional development in the use of ICT skills for teaching. The report will be presented during today's Digital Education Hackathon.

Innovation, Research, Culture, Education and Youth Commissioner Mariya Gabriel, said: "I am delighted that digital education is the lead theme of this year's Education and Training Monitor, the Commission's flagship report on education in Europe. We believe it is necessary to bring about deep changes in digital education and we are committed to increasing digital literacy in Europe. Just recently the Commission proposed a package of initiatives, including the new Digital Education Action Plan 2021-2027, which will strengthen the contribution of education and training to the EU's recovery from the coronavirus crisis, and help build a green and digital Europe.”

The Education and Training Monitor analyses the main challenges for European education systems and presents policies that can make them more responsive to societal and labour market needs. The report comprises a cross-country comparison, with 27 in-depth country reports. More information in the press release and factsheet.

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Digital economy

Economic regulation of major digital platforms : The best way to kill the European digital economy

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As European leaders applaud the success of Airbus, an aerospace giant in a duopoly with Boeing, they are about to prevent any possibility of similar success in the digital sector, writes Pierre Bentata (pictured, below).

A Franco-Dutch proposal, now gaining European attention, aims at imposing specific regulations on the major digital platforms, in order to limit their market power. The target of such a regulation is pretty obvious: the big American “tech” companies, and in particular the so-called GAFAM - Google, Apple, Facebook, Amazon and Microsoft - and NATU - Netflix, Airbnb, Twitter and Uber.

Pierre Bentata

Pierre Bentata

According to several reports, these companies enjoy a monopolistic position that ultimately harms European users. More precisely, these companies of accused of controlling the markets on which they operate, based on their important market shares. Yet, the same reports concede being enable to define those markets. In this context, it is argued that a specific regulation should be introduced for platforms deemed too large: a true regulation by size, based on criteria such as turnover, market share and diversity of the services offered, which never takes into consideration consumers’ satisfaction or the economic benefits for the society as a whole.

In practice, once define as a "structuring" digital platform, the company will be required, among other things, to provide information on its algorithms (as we would ask a chef to reveal the secret of the recipes), to share its data with its competitors, and even more important, to present their business development strategies in advance to a European regulator who will decide whether the strategy is prohibited or not, depending on its likeliness to significantly increase the companies’ market share. (This last proposal has been defined as the introduction of a new “abuse of monopolization” specifically designed for large platforms). In short, although they deny it, the promoters of such regulations only have one goal: regulating the large platforms because they are large, regardless of the reason for their success and the existence of competitors.

Besides the legal risk of total arbitrariness on the part of the regulator - how to objectively assess the impact of a company on its consumers based solely on its size ? -, and the political risk of a tit-for-tat escalation in trade protectionism - as was the case with the "GAFA tax" - what will be the obvious consequences of this new regulation?

From a purely economic point of view, it will maintain status quo instead of promoting competition. This is due to the fact that no nascent platform will be willing to grow and take the risk of ending up on the "black list". In addition, the concept of “abuse of monopolization” implies that any potentially effective strategy, which would therefore result in an increase in market share, could be prohibited: in other words, only clearly ineffective strategies would be authorized, i.e. those that no one will take!

In this status quo, or rather this slump, the big losers will be the European citizens, deprived of the current dynamic of innovations and developments in the services provided by the platforms. Indeed, what the promoters of regulatory solutions forget is that the reason why major platforms keep innovating and investing in new solutions lies on the fact that they all compete to satisfy consumers who have the choice between dozens of competitors. While most of the people do their research on Google Search, it is not due to the lack of alternatives - Qwant, DuckDuckGo, Ecosia, Yandex, Yahoo - but to the efficiency of the former. Likewise, those who don't like Amazon can easily turn to Walmart, Otto, JD.com or eBay, to name only the most famous. And the same reality prevails in all areas: browsers, "cloud" services, streaming platforms or social networks. In fact, there are hundreds of competitors, and these "giants" themselves are in fierce competition with each other.

With a regulation aiming at limiting the size of the platforms, all of this will end. Platforms will no longer have the possibility to innovate and will no longer have the right to improve their services, since this would increase their attractiveness. This will also slow down the emergence of new digital solutions that could improve teleworking and strengthen individual autonomy.

Instead of promoting the rise of major European digital platform, this regulation will deprive Europeans of the platforms they value and use every day. And to benefit from innovations and new services, they will have to take a plane and go to the United States and China. Hopefully, they’ll take an Airbus to do so.

Pierre Bentata is professor of economics and president of Rinzen Conseil. He holds a Ph.D in economics and an LL.M is civil law. He is a specialist of the economic analysis of regulation and has published several reports on the digital economy and digital platforms.

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