Computer & Communication Industry Association
PublishedOctober 15, 2014

The Internet and the Rising Tide

The data on how successful European Internet firms are often surprises people. Between 2000 and 2013 there were 30 technology startups in Europe that achieved a valuation of more than 1 billion USD; in the United States there were 39. Also, there are 29 countries in the world that have at least 1 Internet company worth more than 1 billion USD. Unsurprisingly, the US tops that list and China is second. But news to many is that 15 of the 29 countries are European.

This data should inform how the new European leadership develops policy towards the Internet, something that CCIA Europe has addressed in its ‘manifesto’, and considers how European businesses, citizens and consumers can get even more out of the Internet.

There are 2 possible approaches to achieving 2 key objectives.

The first possible approach policy makers could adopt is the ‘Canute’ strategy. This involves trying to turn back the tide. King Canute, a Danish prince who went on to become king of Denmark, England, Norway and parts of Sweden from about 1016, is most often remembered for trying to turn back a rising tide. He sought to illustrate to his courtiers that even a king could not turn back the sea: when he commanded the tide to turn back he promptly got his feet and robes wet.  This wisdom has often (wrongly) been remembered over the years as arrogance, but one thousand years later continues to illustrate the folly of rulers believing they can exert control of forces outside of their control. As we know, leaders can influence events, not control them.

Practical examples of such approaches would be to try to build ‘European’ champions by handicapping non-European firms or to break the Internet into bits by demanding information be stored in a particular country. This approach would not only be unsuccessful in a free society, it is unnecessary.

This brings us to the second, preferred, approach: embracing the Internet opportunity. European Internet firms, and traditional businesses, need an enabling policy environment to succeed, not to have their competitors handicapped. To grow bigger European firms need a more integrated Digital Single Market so that more of these become multi-billion dollar success stories. Such a market would ensure there were fewer barriers to companies selling across border and to consumers consuming across borders.

But policy towards the Internet is not primarily about Internet companies. Rather, it is about the new helping the old, about new technologies and companies securing the place of well established industries, such as automobile, energy, agriculture and retail and of Europe’s social model. For Europe to thrive, policymakers need to help push use of the Internet into many more areas of our commercial and public sectors. Industrial policy for the Internet means helping industry use the Internet, helping businesses large and small to move beyond simply using email and having a website to carrying our more complex functions online, including using data.

Success in the Internet era is a complex recipe with many different ingredients. For the full recipe you can consult CCIA Europe’s ‘manifesto’ which makes suggestions to the new European leadership. I will not list each idea.

But in summary, embracing the open, global, Internet is key to preserving and modernising Europe’s industrial, social and democratic fabric. Embracing the Internet will deliver competitiveness and productivity gains for European business, allow citizens to access a vast range of information, products and services and the means to preserve the European social model of high quality public services and a modernised welfare state.