2019 - 2024 - MANIFESTO FOR EUROPE’S DIGITAL FUTURE - European Digital SME Alliance

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WHY THIS MANIFESTO?

The world we live in today is radically different from our reality only ten years ago. Our social and economic activities are shifting towards the net and advancements in technology are only speeding up this process. Europe has been the birthplace of world changing revolutions, such as the first industrialisation, and it has been a centre of innovation for centuries to follow. While Europe is still at the forefront of innovation and inventions, many European digital players seem to have difficulties scaling up to the same extent as their foreign competitors. The most valuable global companies of today are digital - and are born either in the US or China.

Yet, the US and China follow very different economic and social models. While the US focuses on the freedom of the individual and the market, China combines state control with capitalism. In competition with those two models, Europe finds itself “in between” without a clear definition of its role. This applies not only to global politics, but also to European policies related to the competitiveness of the European digital economy.

Growing a strong and independent digital industry is thus fundamental to ensuring Europe’s economic prosperity in the future. Even more, digital autonomy and sovereignty are key elements to maintain and protect our free and democratic societies.

REDEFINING EUROPE’S STRENGTH

The European Union is the economically most prosperous union of states in the world. Europe is home to innovative companies, to outstanding basic research and has a strong industrial base. We are also home to a well-educated workforce who benefits from the highest standards of living worldwide. Furthermore, Europe is the continent which guarantees most freedom, equal opportunities and security to its citizens – while following a sustainable approach and environmental consciousness. A pillar of Europe’s success is small and medium sized companies (SMEs): They make up 99% of all businesses in the European Union. From 2013 until today, SMEs provided approximately 85% of new jobs and accounted for over two thirds of the total employment on the continent. SMEs are integrated in local communities and active on global markets at the same time.

MOVING AHEAD IN THE DIGITAL CENTURY

We should have the confidence to build on the potential of innovation, creativity and autonomy of our citizens and companies. DIGITAL SME believes that Europe needs to apply strategic thought to use the opportunities of the digital revolution to the fullest. It is time to understand our strengths, to build on them and to create the right conditions for our companies to flourish. Only a thriving digital industry with solid small and medium sized companies can help Europe maintain its digital autonomy and take full advantage of the digital revolution.

TEN PRIORITIES FOR EUROPE’S DIGITAL FUTURE:

The ten priorities for policy and decision-makers define a way forward to Europe’s Digital Future during the mandate of the European Parliament and Commission 2019-2024.

1 Ending tax inequalities & unfair competition

2 Starting up Europe-led innovation

3 Building Europe’s digital single market

4 Unleashing the potential of the data economy

5 Building a sustainable digital Europe

6 Paving the way for Europe-led Artificial Intelligence

7 Closing the digital skills gap

8 Unlocking standards for SMEs

9 Towards Europe’s digital autonomy

10 Building an inclusive digital Europe and social model

1) ENDING TAX INEQUALITIES & UNFAIR COMPETITION

Europe must advocate a level playing field for all businesses. The competition rules of the European Union are among the strictest in the world. However, digitalisation has posed novel challenges as new services and technologies have emerged, which may enhance domination of the market by a few players. These unfamiliar forms of market dominance seem to be enforced by network effects and access to large amounts of user data. In addition, tech giants recurrently benefit from existing loopholes of the EU tax system to avoid paying their fair share. In practice, it leads to a direct competitive disadvantage for SMEs. Europe needs to make sure that the market dominance of multinationals does not prevent new players from accessing these markets. Big tech companies must be prevented from erecting barriers to new players, while competition authorities should preserve the interests of consumers. Europe’s public procurement market is open to all actors, also in areas of strategic interest. Europe should seek reciprocity in order to maintain a level-playing field. Foreign take-overs in strategic areas should be subject to greater scrutiny.

HOW TO ACHIEVE THIS GOAL:

• Support the introduction of a digital tax, which creates a level-playing field in taxation between large and small

players, while not placing any additional burden on smaller players.

• Modernise the competition framework and provide tools to tackle new forms of dominance, enhanced by

network effects and access to data.

• Prevent platforms from using their dominance or “gate-keeper” function to discriminate against competitors’

products or services and to impose unfair business contracts.

• Provide SMEs with the means to file complaints against unfair practices adopted by multinationals and ensure

that the decision-making authorities in such cases are well-positioned and competent to assess complex and highly technical cases.

• Introduce reciprocity in access to public procurement markets, specifically in areas of strategic interest.

2) STARTING UP EUROPE-LED INNOVATION

Europe needs to combine an open innovation eco-system with strategic thought and investment allowing us to succeed in digital technologies and to become a leader in the digital economy. This environment must allow failure when engaging in cutting-edge research – thus, funding should not always be tied to specific results. Policies and regulations should aim not to limit but to expand the potential development of new technologies, especially in the starting up and testing phase. When proposing new laws, the legislator has to act with the clear aim of maintaining a level playing field for SMEs. After all, small companies lack the resources that big companies have to follow and/or influence the decision-making process. To fuel innovation there’s a need to invest in capital-intensive future technologies such as quantum computing and the necessary infrastructure. Supporting innovation and the competitiveness of European businesses must be the primary focus of EU financial frameworks and programmes. While many companies still depend on traditional bank lending, innovation cannot flourish. New technologies, such as e.g. blockchain, can provide innovative funding solutions which should be further explored. Other world regions have led by example in creating favourable conditions – related to financial or legal aspects as well as with regards to attracting skills & talent - to foster an innovation-friendly eco-system. In Europe, we need to follow suit.

HOW TO ACHIEVE THIS GOAL:

• Create geographic areas with a “sandbox environment”, e.g.

start-up capital like Paris, Stockholm or Berlin, which will provide an environment with favourable conditions where future technologies can be tested. These should be linked to existing research hubs and similar structures.

• Explore ways to make sure legislation considers the limited

resources of small companies and does not overburden them. There are different ways to achieve this, e.g. by allowing them to operate in a testing environment, integrating general exemptions in legislation or other means, as e.g. limited liability regimes.

• Establish European and national digital hubs and/or

competence centres with a twofold role: 1) Legally support and provide market expertise for SMEs to form consortia to respond, e.g. to large public tenders, and to provide integrated solutions to larger customers. 2) Boosting the digitalisation: Provide basic infrastructure and support to help companies digitalise their business. Making sure that Digital Innovation Hubs are industry-driven and do not duplicate services that could be offered by industry itself.

• Introduce and support financial instruments which focus on

innovation. Funding instruments, such as Horizon Europe, should also fund risk-prone projects.

• Provide investment and funding to build up the infrastructure

and further the development of cutting-edge technologies, such as quantum computing, blockchain, biotechnology applications, virtual reality, etc.

• Set incentives for high risk capital

investments and support alternative forms of funding, such as, e.g. crowd-investment platforms and so-called Initial Coin Offerings (ICO), a technology based on blockchain, where traditional bank-lending is not available.

• Encourage SME participation in public

procurement by lowering administrative burdens and eliminating structural barriers for smaller players. Make sure that SMEs have equal access to European research and innovation programmes and funding schemes.

3) BUILDING EUROPE’S DIGITAL SINGLE MARKET

Internet access rates in Europe vary strongly from country to country and region to region. Some of the most economically developed countries, such as Germany, lack basic internet services in rural areas. If we want to strengthen our SMEs we need to provide affordable fast internet access to all businesses and citizens wherever these might be. Often these companies are not located in urban centres but integrated into local rural communities across Europe. This requires investment in basic digital infrastructure by the member states, also in border regions. At the same time, we should uphold the net neutrality principle when implementing new internet standards. This principle should not be given up for the benefit of certain service or telecommunication providers. Moreover, Europe’s public administrations need to step up digital services for their citizens. Some European countries are leading the way, and others need to follow suit. eGovernment services that are in line with strong European data protection rules and cybersecurity standards should be implemented on a much broader scale. Barriers to achieving a fully functioning digital single market continue to persist. New legislation sometimes risks producing fragmentation when implemented differently across countries (see, e.g., the Copyright Directive). Therefore, particular attention needs to be paid to making sure that new legislation is conducive to the overall aim of achieving a digital single market. Traditional obstacles remain and need to be tackled: For SMEs, different tax regimes on VAT are a central problem when operating across borders. This may discourage companies to do business abroad and prevents their integration in the internal market.

HOW TO ACHIEVE THIS GOAL:

• Ensure that all countries and most regions have

reliable and fast broadband access. Invest in the deployment of secure mobile internet standards of the newest standard (5G).

• Further competition among telecommunication

providers Europe-wide to ensure low prices. Ensure a single market in telecommunication.

• Create an SME-friendly business environment

and harmonised rules that allow business to easily engage in cross-border business activities. Tackle persisting obstacles in traditional areas such as VAT, contract law etc. and make sure new legislation keeps in mind the overall goal of achieving a digital single market while limiting the regulatory burden on small players.

• Ensure that new internet standards are

deployed in line with the net neutrality principle. Keep a fair balance between the technologic benefits of new mobile internet standards and the net neutrality principle.

• Promote eGovernment: Digitalise and

standardise public administration in order to reach, for instance, a “One-Stop-Access”: This principle implies that citizens can enter their data once and that the data is stored in compliance with existing data protection regulations and forwarded to the respective authorities (e.g. implemented in Estonia).

4) UNLEASHING THE POTENTIAL OF THE DATA ECONOMY

Data is the basis for automated analysis and machine learning. Access to data is crucial for innovation and economic success, and therefore needs to be guaranteed to smaller players. For the moment, Europe is not home to any of the large data platforms as they exist in the US or China. We therefore need to strengthen the access of European players to data and create opportunities for data sharing. At the same time, Europe needs to make use of its leadership in privacy regulation to create an integrated rule-based system that fosters trust and transparency. Users and customers should have the final say and ownership over their personal data, while service providers need to ensure high security standards. Ideally, this will lead to an accessible and open data market & economy, where large data players share user data with other players. As a consequence, innovation can flourish as data is made available for different purposes in an anonymised, accessible, secure and fair way. Collaboration among data players could take place across industries by relying on data platforms or open data sharing standards and interfaces.

HOW TO ACHIEVE THIS GOAL:

• Create a legislative framework that enhances user trust

and allows customers to transfer their personal data to other service providers, thus creating a true data economy. In this environment, personal data can be shared for different purposes, but control over personal data ultimately lies in the hands of the consumer. This could be supported by a public-private partnership on data.

• Ensure that the manufacturers of data-producing

machines provide the open (or openly documented) interfaces which enable SMEs to read and use non personal data.

• Create clusters and pilot projects of data sharing

between research organisations/academia and companies. Foster an open access to re-usable public sector data.

• Secure stronger privacy in electronic communications

in line with GDPR while opening new business opportunities which strongly respect privacy.

5) BUILDING A SUSTAINABLE DIGITAL EUROPE

Alarge share of waste worldwide is associated with technological appliances - phones, computers and other hardware. At the same time, the resources to produce these appliances are becoming more and more scarce. The environmental footprint of buying a new phone every other year is significant. Considering the environmental challenges, Europe is taking a step in the right direction by introducing circular economy rules and models. Circular and sustainable thinking needs to be integrated in manufacturing and technology as well as business management – to the benefit of the industry, the customers and the environment. While Europe’s cities and regions differ widely in their size, demographic composition and administrative structures, we need use the enormous potential that smart city solutions can bring to improve our daily lives. Such innovative solutions hold vast potential for energy savings and could thus benefit greatly the environment. Other world regions, especially in Asia, are deploying smart city solutions to enhance efficiencies related to traffic management, electricity smart grids and water and security. However, these technologies also bear the potential for mass surveillance and control. Such features stand in contradiction to the core values of our democratic societies. Therefore, we need to enhance the possibilities for smaller local players to scale up and provide secure, sustainable solutions which safeguard our basic European values.

HOW TO ACHIEVE THIS GOAL:

• Promote circular economy rules and standards, while

making sure that this does not put additional burden on small companies.

• Enhance cooperation between smart city and smart

home solutions. In particular, smaller businesses togetherwith local communities to develop tailored joint solutions for European cities and regions. This can be supported by open standards for data sharing.

• Encourage cross-industry collaboration to scale up

innovative solutions in other areas.

• Further the positive impact of efficiency gains in ICT

appliances and data analysis for sustainability and environmental protection.

• Explore other suggestions such as “the right to

repair” which could potentially open new markets to SMEs.

6) PAVING THE WAY FOR EUROPE-LED ARTIFICIAL INTELLIGENCE

Artificial Intelligence (AI) and deep learning will be at the centre of technological advancement and innovation but will also bring major societal changes. The automatised analysis of data with AI tools allows us to improve day-to day services, to analyse complex social interactions and to improve the efficiency of industrial production processes. Its benefits in the fields of healthcare diagnostics, supply chain management, and others, should not be underestimated. The use of AI tools can bring major business opportunities, e.g. by offering tailor-made goods and services. Europe is already lagging behind its main competitors (the US and China) in the uptake and development of AI technologies, at least in some sectors. Therefore, sufficient financial investment and an encouraging legislative framework should be created. Further, Europe needs to step up its capacity in researching and developing technical know how to compete in behavioural data analytics relying on AI. On the backdrop of the Cambridge Analytical scandal and the potential for misuse, e.g. in the context of elections, Europe needs to set clear rules as regards their application.

HOW TO ACHIEVE THIS GOAL:

• Encourage investment in the development of AI

technologies and necessary infrastructure.

• Provide funding for and access to high performance

computers.

• Ensure access to data (especially for SMEs) which is a

core requirement for machine learning and automated data analysis.

• Allow and encourage the use of modern data analytics

tools, such as text and data mining.

• Explore a sustainable regulatory framework

of AI with fundamental rights and the rule of law at its centrepiece. This framework must be complemented by ethics and a human centred approach to AI.

• Limit manipulation possibilities offered by

behavioural analytics and the exploitation of psychological weaknesses. Enable users to make informed choices (e.g. by ethical-by design algorithms). Step up European capacity in this area.

• Preserve the European Social Model by

continuously upskilling European citizens. Develop new and flexible working, social security and learning models to alleviate potential labour market tension that may arise from automation.

7) CLOSING THE DIGITAL SKILLS GAP

The current European labour market is short of more than 750,000 ICT professionals due to a growing digital skills gap. European SMEs are sometimes losing the competition over the most talented ICT graduates to multinational companies as they can offer more competitive salaries and benefit packages to attract qualified professionals. Not only does this prevent European companies from advancing the digitalisation and innovation, but this may also lead to a brain-drain from Europe. A European-wide strategy is needed to attract, train, upskill and retain ICT professionals. As technologies change rapidly, so do the competences and skills necessary to fulfil certain job roles. A common skills reference is needed to help companies identify the skills gap for specific profiles and to ensure a true digital single market, where people can easily move between EU countries. To bridge the skills shortage in the short to medium term, barriers to hire ICT employees also from outside the EU should be lowered.

HOW TO ACHIEVE THIS GOAL:

• Build and further develop public-private partnerships

on ICT skills and jobs, including industry and trade associations, national, regional and local governments, companies, education providers and ICT professionals.

• Promote a more strategic and evidence-based

approach in skills development, which considers market needs, thus laying the basis for innovation in Europe.

• Leverage on the growing network of Digital Innovation

Hubs and existing local structures when implementing digital skills initiatives and ensure that the hubs are industry-driven.

• Encourage the choice for ICT careers, especially among

female school-graduates or other less represented groups. Enable more flexible ways of working that would allow to attract more female ICT professionals.

• Promote and encourage the use of a common language

for skills and ICT competences (e.g. building on initiatives as the e-CF).

• Promote basic competences such as critical

thinking & logic, STEM, self-learning in education instead of solely deploying digital tools and material for learning.

• Further open access and online education and

affordable certification, e.g. for cybersecurity.

• Reform the application for the BlueCard: Currently,

the annual salary required to obtain such a blue card is set too high even for ICT professionals.

8) UNLOCKING STANDARDS FOR SMES

ICT standardisation is necessary for digital companies to achieve interoperability of new technologies. Standards can open up closed proprietary ecosystems and enhance competition. This can bring significant benefits to both industry and consumers. Standardisation can facilitate market access and integration of new players into supply chains. It ensures product safety, reliability and environmental care. SMEs can develop innovative products and services on the basis of standardised technologies, which would not be accessible to them in a closed proprietary eco-system. Therefore, SMEs should be made aware of the benefits of standards by active promotional campaigns. Also, SMEs must be given the opportunity to have an active voice to defend their interests in the creation and the access to standards. Further, standards can increase the level of cybersecurity if accessible and available to smaller players.

HOW TO ACHIEVE THIS GOAL:

• Support standards-based innovation: facilitate the development of industry ecosystems based on key standardised

technologies (e.g. IoT, Intelligent Transport, smart homes, etc.), which companies of all sizes can access and use as a basis to innovate.

• Support the representation of SMEs in the standardisation processes.

• Encourage open and inclusive standardisation processes, allowing the effective participation of SMEs.

• Foster collaboration between the European Commission and industry to facilitate the development of strategic

standards, which are crucial for the competitiveness of European companies.

• Invest in educating and training standardisation experts that can help European companies, especially

SMEs, benefit from involvement in ICT standardisation.

9) TOWARDS EUROPE’S DIGITAL SOVEREIGNTY

Cybersecurity is a horizonal requirement, which is crucial for all companies going digital. Ensuring secure networks, software and transactions will be a precondition for emerging future technologies such as AI, smart city application, etc., to thrive. A strong cybersecurity framework will allow the economy and industrial applications to move to the next level. Therefore, sufficient investment in innovation, certification and horizontal application of security standards is needed. Europe needs to develop its own capacity to autonomously secure its digital assets and to compete on global cybersecurity markets. With cybersecurity being at the heart of sovereignty and autonomy, it is crucial to recognise the importance of this domain and for it to be dealt on a European level. Member States alone cannot provide the level of coordination and the harmonised rules needed to safeguard European citizens and businesses in the digital realm. Digital SMEs can be a strong building block to develop European digital autonomy in cybersecurity: SMEs are the major ingredient for securing the supply chains of ICT products and services. As cybersecurity technology is changing rapidly, digital SMEs, due to their agility, can provide the cutting-edge solutions needed to remain competitive. Creating an inter-connected, Europe-wide cybersecurity industrial and research ecosystem is only possible by generating a stimulating environment for digital SMEs.

HOW TO ACHIEVE THIS GOAL:

• Build on the existing ecosystem of SME cybersecurity vendors, aiming to create the best conditions for European

cyber SME champions to compete on global cybersecurity markets.

• Support access of SMEs to funding for cybersecurity solutions under the Digital Europe Programme and Horizon

Europe Programme.

• Create a trusted label for IT security solutions developed in the EU, allowing companies to rely on products of the

highest European data protection and security standards.

• Increase SME access to certification schemes by lowering financial and administrative burdens.

• Develop a long-term industrial strategy for strengthening Europe’s cybersecurity sector.

10) BUILDING AN INCLUSIVE DIGITAL EUROPE

A minority of the population is responsible for the most important technological advancements changing our societies. Most programming, app developing and other ICT roles are carried out by men. At the same time, the algorithms and technical rules developed by this minority shape how our world of tomorrow will function. Therefore, we need to ensure either strong oversight or a more balanced representation of different societal groups. This is key to ensuring that technologies of tomorrow guarantee accessibility and reduce bias. We would like to see an inclusive society ready for the digital century, granting equal opportunities for all. Automation and artificial intelligence might lead to disruptions in the labour markets as some job profiles or certain tasks could be replaced by AI.

In the medium to long term, we will feel consequences of growing inequalities and resulting pressures on the current European Social Model. If Europe wants to maintain and improve its successful social models, we need to be ready to adapt and enhance efficiency of such models. Our governments need to create new flexible ways of social support that allow for citizens to continuously develop their skills to be ready for the challenges of the digital century.

HOW TO ACHIEVE THIS GOAL:

• Test and introduce innovative ideas to reform the social systems such as, e.g. a general basic income.

• Promote gender equality in ICT jobs by providing mentoring programmes and role models starting in early

education.

• Enhance life-long learning opportunities.

• Promote a core set of skills and knowledge which ranges from critical thinking, creativity, logic to the bases of European values and Europe’s founding principles.

ABOUT THE EUROPEAN DIGITAL SME ALLIANCE

DIGITAL SME is the largest network ICT small and medium sized enterprises in Europe, representing about 20, 000 digital SMEs across the EU. The alliance is the joint effort of national and regional SME associations from EU member states and neighboring countries to put digital SME at the center of the EU agenda.

DIGITAL SME MEMBERS:

NATIONAL SME ASSOCIATIONS AND CLUSTERS

BULGARIA, BASSCOM – Bulgarian Association of Software Companies,

BELARUS, INFOPARK

BELGIUM, Agoria

DENMARK, it-forum midtjylland

FRANCE, Digital SME France (EBEN – Fédération des Entreprises du Bureau et du Numérique and ACEDISE –

Association des Constructeurs Editeurs Distributeurs Installateurs de Systèmes d’Encaissement)

GERMANY, BITMi – Bundesverband IT-Mittelstand,

IRELAND, SkillNet Ireland

ITALY, CNA - Comunicazione e Terziario Avanzato, Confederazione Nazionale dell’Artigianato e della Piccola e Media impresa,

Italian Digital SME Alliance (ASSINTEL Associazione Nazionale Imprese ICT, Blockchain Italia, CNA Milano,

CONFIMI Industria Digitale, Digital Building Blocks, Unione Artigiani della Provincia di Milano, ANACAM).

CLUSIT – Italian Association of Information Security

SPAIN, CONETIC – Confederación Española de Empresas de Tecnologias de la Información, Communicaciones y Electrónica,

LATVIA, GREECE, ROMANIA, ALBANIA, BOSNIA AND HERZEGOVINA, BULGARIA, MONTENEGRO, SERBIA,

KOSOVO, REPUBLIC OF MACEDONIA, Balkan – Black Sea & Baltic ICT Clusters Network

UK, UKITA, United Kingdom IT Association

Enlaces

URL: https://www.digitalsme.eu/manifesto/

Wayback Machine: http://web.archive.org/web/20220125073343/https://www.digitalsme.eu/manifesto/