The future iss burning bright for the ICT manufacturing and services across the European Union as the continent enjoys a "broadband revolution" and takes up global leadership in the mobile sector.
This upbeat assessment came from the European Network of Training Organisations Conference 2003 in Brussels this week. At the event, Erkki Liikanen, member of the European Commission responsible for enterprise and the information society, said: "Growth in the broadband market certainly entitles us to talk about a broadband revolution. I expect growth to continue along the S curve, and I look at broadband as a key enabling technology for the delivery of those services that will help increasing the performance of companies and public administrations."
According to Liikanen, the rapid growth of broadband connections over the last year is encouraging, and ADSL is the fastest growing way of accessing broadband. He pointed out that there are now close to a total of 20 million connections in the European Union and "several European countries are now ahead of the US".
However, he admitted that there was still much work to be done across Europe to roll out broadband to rural areas and promised that Brussels will continue its policy of intervention to force telcos to expand their coverage beyond urban centers.
"Our concern is that the recent rapid growth of broadband is mainly taking place in urban areas. Without public intervention, the digital divide may aggravate. This is why the Growth Initiative that the Commission will propose to the European Summit next week includes a quick-start project aiming to facilitate extension of broadband coverage in under-served areas."
"Europe on its turn has achieved very high productivity growth, surpassing the US, in communication services, and in particular in the mobile sector," Liikanen added.
In his presentation, Broadband and the Renewal of Europe's Economy Liikanen cited a recent McKinsey analysis which found that intense competition and superior scale of operators, enabled by favorable regulation, have benefited this mobile communications sector in Europe.
"Liberalisation of the telecommunications sector in Europe has taken place within the right legal environment, while technological evolution was taking shape through convergence. We could add to this the important role of the single mobile standard, GSM," he said.
Liikanen acknowledged that "there are various reasons why" Europe has not yet seized similar benefits to the US from ICT investment. Besides differences in measurement, he said that Europe is often blamed for its delay in introducing structural reforms. "Recent economic literature also shows that European economies have invested less in ICT than the US, although a catching-up seems to be happening"
"European countries also embraced ICT later than the US. The diffusion of new technologies is often slow. Firms can take a long time to adopt them, changing organisational arrangements, implementing effective business processes. But Europe can benefit as much from ICT as the US and perhaps even more, provided that we reduce barriers to the internal market at the same time." ®