Time to end EU's digital borders

Digital markets are fragmented and full of “invisible borders” that block the free flow of online services and commerce.

The V4 countries – the Czech Republic, Hungary, Poland and Slovakia – are fully aware of the need to build the 21st century economy around innovations.

We have already signalled our determination to pursue this path when floating the idea of the Visegrad House, a joint representation of the V4 start-ups in Silicon Valley. Digital agenda is among top priorities of the current Slovak Presidency of the V4.

The V4 region, therefore, strongly endorses the idea of a connected digital single market, listed among the European Commission’s top ten priorities, too. We see the challenge as multi-folded.

Start-ups, e-commerce, e-government, data-driven economy, data protection, the digital infrastructure and e-skills are, in our view, areas up for grasp.

Moreover, we advocate the principle of ‘digital by default’ that would see a digital form of every public service that appears on the “map” for the first time.

The principle should also be incorporated in all EU initiatives, with the aim to reduce the paperwork burden on our businesses and citizens and to compete in the digital era.

It is also important that the digital single market is of benefit to all member states. We should, therefore, pay attention to geographical consequences and cohesion aspects of actions taken.

A proper nudge for start-ups and e-commerce

Start-ups are a vital part of digital economy. To make Europe a relevant global player in this respect, it requires creating fertile conditions for sectors with a strong digital uptake as well as digitising traditional industries, for instance, the energy and automotive sector.

This would not only improve the existing business environment in the EU, while unlocking entrepreneurs’ creativity, but would also motivate enthusiasts from abroad to start their business here.

Start-up firms AVG and AVAST in the Czech Republic and ESET in Slovakia have become leaders in the field of antivirus technologies. Hungary is home to Prezi, a cloud-based presentation platform. DICE+ invented by a Polish start-up Game Technologies is an example of Poland's vibrant computer games sector. Such companies need a true digital single market for their products. If approved in one EU state, they should be free to expand across all 28 markets.

On top of it, a number of things are required. An internationally competitive venture capital environment is one of them so that vital entrepreneurial ideas can turn into start-ups and subsequently, vital start-ups can turn into strong entities capable of expanding beyond national borders.

In addition, laws in the areas of taxation, corporate governance and insolvency should respond to current needs of entrepreneurs.

E-commerce also needs a proper nudge as more and more trade is set to be conducted in ‘bits and bytes’, flowing over the Internet. If designed in a balanced fashion, clear EU-wide rules for businesses (e.g. on delivery and payment) as well as consumers (e.g. in terms of their rights) would boost trust fundamental for the expansion in this area.

The recently adopted VAT mini one-stop shop, i.e. the one-time registration scheme, is a step in the right direction.

Big data’s power to transform

Big data also has tremendous potential to transform variety of sectors, including healthcare, transport or energy, as they, for instance, generate new business insights, improve decision-making and optimize processes.

The challenge now is to find the right approach to data processing, storage and distribution, with cloud computing seen as the best facilitator of big data projects.

Another task is to facilitate data interoperability and security. It is clear that without customers’ trust in innovative technologies, the establishment of the digital single market cannot succeed. Some existing rules, therefore, need to undergo a “lifting”, while new ones enhancing trust and security should be introduced.

We must have users on board if innovative technologies are to be accepted.

There is a need to modernise the European data protection law, for instance. Europe should also push forward a common strategic vision in the field of cyber security so it is not fragmented along national lines. A timely adoption of Network and Information Security Directive is also required.

EU copyright rules should be revised so that we move from existing geographical barriers, so-called geoblocking, to multi-territorial licensing, for instance to be able to watch a favourite TV programme abroad.

Zooming in on e-skills

We realise that none of the above can be achieved, unless we also invest in our citizens. In other words, an emphasis on digital literacy, e-skills as well as early entrepreneurship education is a must.

We also suggest that the European Commission publishes a list of e-skills that rank high among businesses, and that steps are taken to bring high-speed broadband infrastructure to every corner of the EU.

The European Fund for Strategic Investments can be a useful tool for attracting private investment into the area of digital infrastructure, in our opinion.

All in all, the V4 region believes that the digital single market can unleash innovative potential in both, business and the public sector, and also increase the availability of services, their quality as well as price competition.

Therefore, our ‘club’ throws its weight behind the initiative and is ready to shape it, while advocating EU-wide cooperation. In life, we cannot pedal backwards and digital agenda certainly is the way forward.

Peter Javorcik (State Secretary of the Slovak Ministry of Foreign and European Affairs), Szabolcs Takacs (State Secretary of the Hungarian Ministry of Foreign Affairs), Rafał Trzaskowski (State Secretary of the Polish Ministry of Foreign Affairs), and Tomas Prouza (State Secretaty for European Affairs in the Czech Government Office)