Speech: Digital capital for a connected continent

European Commission

[Check Against Delivery]

Neelie KROES

Vice-President of the European Commission responsible for the Digital Agenda

Digital capital for a connected continent

CISCO CIO's event

Amsterdam, 27 February 2014

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It's a pleasure to address you today.

We both see the same challenge from different perspectives. This is a market in transition, a world changing fast. We must adapt to digital opportunities.

You want to use ICT to do better business. I want to make digital tools work for Europe and the world. For a more competitive continent and a job-rich recovery.

One thing is absolutely clear: to me and I hope to you.

Every company in every sector is going digital. They are relying on new tools and technology - you just can't avoid it. Not that you'd want to.

Cloud computing, big data, social networking: all ways you can boost your business. Not just to save a few euros here or there, but to develop and expand and rethink.

Not just new apps and services, not just new platforms, but entirely new opportunities, entirely new business models.

These aren't the opportunities of the future. They are already here: the future starts today. And we must be in a position to take advantage.

So what do those services all need? They need digital capital. Fast broadband, secure systems, digital skills.

So having the right telecoms framework doesn't just concern the telcos. If you can benefit from those innovations — you should care about it too. That means all of you. From logistics to retail, from automotive to audiovisual, you all rely on digital tools; and you struggle if they are not available.

It's no longer just about the telecoms sector; it's no longer just about the ICT sector. It's about Europe´s growth and global position. Yet Europe lags behind while others take the digital dividend.

Why? Because of fragmentation: 28 different markets, 28 rulebooks, 28 referees, 28 mindsets. Broadband that stops at borders. And this matters to you.

It matters if you have to negotiate 28 contracts with 28 different suppliers to trade across the single market.

It matters if you can't get the connections for the cloud to work properly across the continent.

It matters if your employees travel, and their roaming bill costs more than their flight.

It matters if you aren't offered competition, choice and services tailored to your needs.

It matters if your supplier cannot assure the broadband quality or the security you need.

It matters if you can't be assured that the systems are secure.

It matters if you can't find the right people with the right skills.

We've heard those concerns. We are concerned too. And we've acted.

First, by giving the telecoms sector the single market boost.

Our proposed law for a connected continent takes the most urgent issues to fix.

So it would be easier to offer pan-European services: with single suppliers capable of connecting companies across the continent.

Services that don't cut out at the border, but allow guaranteed quality from end to end, one office to another.

More competition, more choice, better tailored service.

New possibilities for specialised services to underpin data-intensive services like cloud computing or videoconferencing. A balanced approach that safeguards the open internet, and allows all to benefit from innovative new services.

And an end to roaming surcharges in Europe.

The single market is Europe´s crown jewel. Every day, businesses and citizens take advantage of it, without borders, without barriers: sometimes even without noticing. Now they need the telecoms networks to complete the jigsaw. That is what we are trying to deliver you, European businesses and European citizens. I hope legislators can agree to achieve that boost.

But, second, it's not just about having networks and services.

The more you rely on ICT for your business - the more you rely on it to be secure. Only with the right framework can we build trust online - and ensure your sensitive data doesn't go further than it should.

How?

It doesn't all need new laws. For example, standard contractual clauses or proper certification can help you trust your cloud computing service.

But sometimes we need legislation. Because ultimately, this open network can only be as strong as the weakest link in the chain. Every user: business, government, critical infrastructure provider - each one has responsibilities, and it's time they took them. A voluntary approach is not enough. Not any more.

Look at the facts. In just one year, over three quarters of small businesses, and 93% of large ones suffered cyber breaches.

Each one could cost up to €50 million: not to mention the reputational damage.

Protecting these assets is sound business sense.

And every day, every European business relies on critical infrastructure.

As more of it goes online, from energy to banking - a large-scale incident might not just be costly, but catastrophic.

Those who operate it need to manage cyber risks properly.

So we have proposed legislation: a Directive on network and information security. To safeguard this critical asset. It's no longer just optional - it's an economic essential.

And hers' the third thing you need. It's no good having fancy systems on fancy networks without the people to implement and use them. So we need to address the huge digital skills gap.

This a critical issue for you, and for all of us. And not just in the EU either.

The fact is: demand for new high-end ICT jobs is booming. Jobs that didn't exist 10 years ago are becoming fundamental to our economy. But supply is not rising to match. Soon there could be nearly one million unfilled vacancies.

If that continues, it could have catastrophic consequences for competitiveness.

But from that challenge, let´s make an opportunity. Today many face unemployment, especially the younger generation. The right skills can give them better opportunities.

We need to join forces to make this happen. It isn't just an issue for the ICT sector, nor for the EU Institutions - it's about opening up education, training, grassroots activity. It concerns every industry that depends on digital skills. Let´s work together, take it local, on the ground, and beyond one single sector.

So we launched a Grand Coalition for digital skills and jobs. With many organisations pledging to make a difference. From offering more traineeships - to teaching kids to code.

I am delighted so many organisations have been such active players. Including Cisco. And many national and regional initiatives too.

Most recently they endorsed the Davos Declaration on digital jobs.

This could mean hundreds of thousands more people trained, and thousands more jobs filled.

But now we need more. We must turn commitments into action. And you can be part of it.

If you agree this is a problem - and you know how you can help - then commit, deliver, and take your responsibility!

Here's my final point to you today. Brussels can sometimes seem complex or distant. But it shouldn't!

Give us your input, take part, and we can create a better Europe together.

European lawmakers are accountable: elected members of the European Parliament , accountable ministers from your national government. They decide on issues from building online security, to taking down single market barriers.

And let me assure you of two things.

First, not everyone gets this. I realise how much digital tools matter: and so do you. The EU's national leaders have started to realise it too. But it has not sunk through to everyone. Only the other week, I spoke with one MEP, and he was amazed - he thought this was just an issue for telecoms; only now does he see it's about connected cars, better industrial processes , better retail and logistics, and much much more. They realise it about, say, energy or transport networks - but the message has not got through about digital.

Second: when you take the trouble to point this out, it makes a difference. I've seen that in so many areas. People need to understand the wider impact their decisions have - on businesses of every kind and colour.

This week we've already seen some big steps forward - with new EU legislation agreed on e-ID, to build trust and convenience online. And on cutting the cost of rolling out broadband networks. But there's far still to go.

So ask yourself: does this issue matter for you? Do you care about better broadband, fast seamless connectivity, secure networks, better digital capital in a connected continent?

If you do, make sure the right people know about it. Make sure they hear from you: not just from the usual suspects. Then all of us - you and they and I - can achieve what we all want: European competitiveness, growth and jobs.

The digital economy matters and digital tools can transform our world. Helping every European citizen, government and business. I think you agree with it too. So let's start making that case.

Thank you.