Good morning, in this session we are going to make an
introduction to Digital Economics in the European Union, the
session is framed within the activities and contents of the
Jean Monnet chair on Digital economy in the European Union
that the European Commission has granted to UNED, in
which we are going to teach, generate knowledge and
research on digital businesses in the European Union.
In this presentation, after a short introduction,
we will talk about the concept of digital economy and
we will see its impact in the European Union and in the
world. Later we will see some strategies and policies
that the European Union is introducing to promote
digital economy. We will finish with some conclusions.
The digital economy has changed our lives, as we know
digitization is now part of our
professional and personal life, and is also among the
priorities established by the European Commission for the next
period of the mandate of the President von der Leyen,
who considers that digitization is one of the driving factors
of innovation, competitiveness and employment.
Furthermore, there are more than 25 million of small and medium enterprises in the EU.
Europe has to progress in the
digital transformation. We have to think that more than 99% of
European companies are SMEs and that 66% of employment is in
these companies. Therefore the impulse to digitization is
a primary objective to boost the European economy.
In addition, there are sectors who are already working on this
line, especially informational sectors. Intangibles are per se
more susceptible to be digital; we have seen the
changes that have arisen in the audiovisual world, music,
digital content or also
in the press. On the contrary, in primary sectors
that are more tangible, such as the agriculture, this process of
digital transformation is more
slow. It is important, therefore, to know better which are
the fundamentals of the economics of that digitization and
digital transformation of companies, because we depend
a lot on it and Europe is still delayed. In this context,
this initiative, this UNED chair, is relevant to promote the
Research, knowledge and teaching on this
topic so important to everyone.
The first thing would be to understand what is the digital economy.
It can be defined as:
A economy simply based in digital technologies, in
the technologies of information and
Communications; these technologies have changed
our lives and, above all, the availability that
we have to use them through much more advanced networks of
5G, broadband, allowing stay connected too.
We are connected, but also more and more objects,
in what is called the internet of things; numerous sensors
around us catch that digital information and allows
get relevant information through other technologies such as
Artificial intelligence to better understand
what is happening around us and make decisions based
on data, for example business based on these
new data emerging from applications, but also
new business models that are changing the economy.
Initially the digital economy at first it seemed
simply related to internet business, around
the internet sector itself, and now it is extended to other sectors
The telecommunications, and internet
are already an integral part of the business world economy at
all levels. We're speaking therefore
about digitization and
digital transformation. What in principle are considered
equivalents, but we could specify that digitization
would be the incorporation of technologies to the daily task of
the companies, for example vs digital transformation, which
would already be a step further, a internalization of those
communication technologies, in the digitization in the
procedures and processes of the company. Let's think that
there has to be a deep change
in culture organization, resources,
training and skills that transcends the whole
company, the whole organization on that road
towards the digital world.
In addition, network effects appear in the
digital world. The more users, the more customers
are connected; a network externality generates a
added value for those customers simply by the number of
users, and we are seeing it in social networks or whatsapp.
The more we are in the digital field, more value added is
generated and more business opportunities; as we said
before, we are talking about intangibility, we are talking
about digital content that don't have any physical correlate.
That is why, as
we have seen, it cost more the way to digitization
There are important changes
in the business world and also in the labour market,
due to digitization. In some cases changes are perceived
as an opportunity or a potential threat, for example,
robotization as a threat in the workplace
and in the professional market, but at the same time it is a
opportunity because digital competences suppose
a training to face these changes and it is very
important to put a priority on providing all of us with those
digital skills; in every case, when talking about
digital economy, every time.
Traditional economy now is not different to digital economy.
In the traditional economy already everything is digital, actually,
soon we will not able to make
Differences between both terms.
There are many technologies within this digital field that are
driving this change, for example, the blockchain,
artificial intelligence 3D printing or
internet of things. As we said, those solutions
capture information from our environment to be analyzed and
to generate opportunities through apps
for example, smart cities.
Automation and robotics or computing
on the cloud
are some of the technologies that are also changing the
world, in a data-driven economy
We are taking data from those sensors or generating the data
that will be analyzed in the cloud and what will be
interpreted through these algorithms
of artificial intelligence, to take business decisions
Digital economy has also a transversal impact on
The Sustainable Development Goals
And it's a change that it is reaching the whole world.
Let´s consider that in 1992 the data traffic was
still very limited, we were speaking of 100 gigabits of
traffic per day in 1992 and in 2017, more
than 46,000 gigabits per second; by 2022 it is expected to
exceed 150,000 gigabits per
second. That gives us a idea of the tremendous
potential that the digitization has.
In any case, there are differences at world level: Europe is behind
United States and China.
They have a predominant role in in this digital world. Let us consider
than 75% of patents related to blockchain
are registered in the United States and
China, or 50% of world spending in
internet of things,
Or 75% of the cloud Computing market, computing in the
public cloud. The paper of Europe is still limited and
it must be promoted. Let us consider that more than 90% of the
market capitalization of the largest digital platforms
is in these countries and the role of Europe
is still restricted; we are talking about companies like
Amazon, like Google, like Facebook, which they are typically
American or Chinese like
Ali Baba. They are still significant digital gaps,
there are inequalities that we have to solve: half of the
world is still without connectivity to internet, and in the
less developed countries, the 50 countries with
lower GDP, only 1 in 5 people is
connected to the internet. This gap, in addition, is especially
important in the poor economies., when
we are talking about the gender gap.
That is why the European Union has taken a
strong commitment to promote the digital economy and
this is stated by the strategy proposed by
president von der Leyen. In fact, she has designated a
executive vice president Margaret Vestager
for A Europe Fit for the Digital Age. Looking for digitalization
In the business environment, driving the market,
and competitiveness of companies.
Giving better solutions to consumers, but also from
the citizen's point of view, with a very ethical environment in the EU
determined to be characterized by a human and ethical approach: it is very
important that the ethical and human principles of the European Union
are maintained in this digital transformation. Further,
the European Commission has already issued a White Paper
on artificial intelligence and
another on SMEs to drive the way to
digitization of small and medium
companies in a Europe making them sustainable and digital.
In fact, as we see, the digitization is still limited
in Europe; there is still a long way to go. The European Commission
calculates an index named DESI:
An index of digital economy and society with different factors
that gives us a measure of the European digital transformation
There are factors that include connectivity, that is, how
how good are our networks to connect us all
digitally, human capital, the use of the internet,
digital technology integration and digital public services.
We see that although there are improvements: (on the slide
we are seeing it),
the evolution from 2018 to 2020 is still very limited; there is a
greater electronic exchange of information, increased use of social networks
Big Data analysis or Cloud.
I mean cloud computing, but we still see very limited
the commercial exchange in the digital field,
Only 18% of the sales is online.
The billing of the e-commerce is also
just over 10% and international online sales
Is arround 10% of transactions in
a digital united Europe. There must be more commercial exchange
and a greater interaction of our companies
in a digital single market as Europe is.
In fact, the differences are also observed within the
European state members. If we talk about digitization of
business and e-commerce, there are inequalities between countries
Malta, for example, is very advanced in Big Data or
Finland, in cloud computing, and countries like Ireland, Finland,
or the Netherlands (Holland) lead the
digitization of the economy, the digital economic transactions
On the contrary, Eastern European countries
are still lagging behind in that digital transformation.
In this scenario, the European Commission promotes that
digital transformation. In February 2020 exhibited its
vision for everyone to promote, share and
design together a digital Europe of the future. There are three
basic pillars very focused on the persons. on the citizen
We are talking about boosting technologies at the service of
people and we talk about generating
and spreading the digital skills so that everyone
have access to
the digital world. avoiding discrimination in that
digital virtual world and, as I said, we are talking about
enabling technologies such as intelligence artificial,
blockchain, or the Cloud Computing.
the 5G, as a mobile network, is already present
The internet of things, cybersecurity,
photonics and electronics. Of course, the impulse to
digital inclusion of all
European citizens. Besides, the Commission wants a
open, democratic and digital partnership to fight against
misinformation, the fake news,
digital culture from the media,
digital trust for everyone
Privacy in electronic media
digital health and e-government, digital cities
I mean smart cities.
Avoiding gender gaps As we said, it exists in
the world, in Europe, in terms of women, in the digital field
In addition, it is posed as third pillar: a digital economy
fair and competitive. We are talking about the impulse to
the data economy.
From the platform economy, that is, where there is exchange,
greater exchange and increasing
Digital trade transactions
Copyright, Industry digitization
who has to reinforce the transformation of
industry in Europe, which is an urgent need: it can
be enabled by the digital transformation. The
Commission also wants to boost entrepreneurship and make a
tracking through DESI index to observe
effectively that improvement continues in the digital realm
Besides. as a basis to all this, Europe wants to be a
leading actor in the global digital economy
In that sense, even beyond the medium and long-term strategy
proposed by the Commission The EU has already taken
concrete decisions and actions, in particular for the period
2021-22 through a Digital Europe program, proposed
by the European Commission in June 2018:
To boost that digitization within the financial framework
2021-2027. And among the priorities for these years,
first of all.
The Commission plans
To make Europe one of the main regions of
supercomputing. Boost the artificial intelligence. Particularly
in areas also very priority, such as the
health, environment, climate, mobility or also the
manufacturing, so that the artificial intelligence facilitates
the industrial transition so necessary in Europe.
Improve cybersecurity.
Promote the empowerment of digital experts; we need
more knowledge, knowledge in the digital field
and to really have experts to help
companies to carry out that
transformation. Facilitate SMEs and public administrations
still lagging behind in the access to technologies
to change to digital and, above all, also
within public administrations those related to
health and
smart cities. The Commission wants them to be
sustainable projects open
and reliable projects.
As a conclusion in view of all the above, we observe that
the European Commission, our European leaders are
aware of the necessary change and strategic importance
that has the
digital economy. And, in fact, there is a commitment at the highest
level, as we have seen, at level of presidency of the Commission
for promoting it, but we have also seen that United States
and China depart with advantage and have a greater
presence in the digital world.
The good news is that European commitment.
We are in a moment that can come true, there has been a
change in Commission´s approach And the working period
2020-2027 can be a opportune space to carry out that
transformation; in addition, weaknesses and shortcomings are
perfectly identified: we have seen which areas
need a bigger boost in Europe, that require
a great agility and
coordination. So that all the actors, institutions,
public and private actors, and citizens participate in
that change. What is very important is to observe the
emphasis that the European Commission has put in
the role of the digital citizen.
To involve it, to protect rights and also to
be able to perform in the digital world, that's why
is putting a lot of emphasis on the digital skills training
It is also very important the deep
ethical and social commitment that the Commission gives to this
digital transformation. The importance to respect the
founding principles and fundamental values ​​that govern
the European Union; and thus we will succeed in making Europe
be, for all of us. European citizens, a space
of more sustainable coexistence, civic and livable.
Not only in the physical world that we inhabit, but also in the
digital world. Thanks a lot.