Earlier this month the European Commission released its plan for the Single Digital Market. A very important step in fact for the EU’s competitiveness and in particular the boost to innovation is needed, and yet its contents are a disappointment.
At first glance two things stand out in the plans for the Single DigitalMarket. Firstly, the approach taken to the topic is analogue and web 1.0 rather than web 4.0. And secondly this concept has no vision. There is not a single measure supporting the advantages of the European Union, its diversity, its regions. Quite the opposite: regional protection is dropped, and instead we get Geo-blocking as it’s known.
Geo-blocking watch out
For many users this is at first view a positive development. For the economy a prospect which is not exactly non-threatening. In the Commission’s view, it is clear: the digital union should become the backbone of the forthcoming union of the capital markets. Once again the strength of standardisation takes priority over protection of individualisation.
The regional banks provide a concrete example. Their regional know-how and knowledge of their particular business location, region and community area makes them strong. They understand the needs and requirements of the local economy. This is a valuable asset – using an economically successful region to make the country strong and subsequently the European Union strong as well. The regions are the driver of growth and the strength of the EU. And nevertheless everything is done not to utilise this strength.
Green Paper casts its shadow
Geo-blocking in the strategy of the Digital Union is already casting its first shadows on the proposed green paper on retail financing. One of the focus points will be cross-border financing of loans or perhaps opening current accounts and savings accounts (if they are not in any case already history by then because of Draghi’s low interest rate policy). The consequences are already clear: only large, financially sound institutions will be able to afford cross-border activities. These are not necessarily to be found among the ranks of the regional banks. Even more so, given that some regional banks such as the German savings banks adhere to the regional principle. This means that they are permitted to operate only in their region. One can imagine the competition which will erupt in a financial group, and that in the end only the strong are left. However, the “strong” will have achieved their strength not only through their bread and butter business. The conclusion will probably be the end of a business model that is nearly two centuries old.
Where is Europe’s digital response?
At the same time it would have been so easy to enact measures to digitalise and support the regional strength of Europe. Fibre-optic expansion, free WLAN, support programmes for digitalisation of SMEs. Digital upgrade. Instead of this a kind of digital Schengen is being created. With no concept behind it. And above all no vision.
On the subject of vision: this is nowhere to be found in the paper. No initiatives on creating a European Google, Facebook or Twitter, as other economic regions have (China, Russia). Instead of that, more bureaucracy to prevent the dominant position of the American companies. No attempts to create a European Silicon Valley and thus to prevent the digital brain drain to the USA. The concept of the Digital Union is lacking in every socio-political approach. No mention of social data, the key issue and strength of every digital society.
Digitalisation is a far-reaching development, which creates new socio-political phenomena, makes entire industry sectors disappear or creates new ones. The EU ultimately needs a strategy so that it doesn’t suffer any harm and or disadvantage because of digitalisation, but becomes strong and competitive. The Digital Single Market presented here will not find any followers.
“Technical rationality is the rationality of domination itself.” Max Horkheimer and Theodor W. Adorno: Dialektik der Aufklärung (Dialectic of Enlightenment).