Thu, Mar 19, 2015 - Page 9 News List

The digital transformation of Europe can reshape the economy

By John Chambers

Europe is on the cusp of an unprecedented technological transformation. Call it the Internet of Everything: the penetration of the World Wide Web into the everyday aspects of life. Wearable technology will tell users how well they are sleeping and whether they need to exercise. Sensors in the street will help drivers avoid traffic jams and find parking. Telemedicine applications will allow physicians to treat patients who are hundreds of kilometers away.

This massive transition will transform how citizens interact with their governments, revolutionize entire industries and change the way people engage with one another. In Europe, the Internet of Everything is emerging as the single most promising way to revive a moribund economy and tackle the continent’s stubborn unemployment problem, with companies, cities and even countries positioning themselves as leaders in innovation, growth and the creation of jobs.

The most recent example is France. Last month, French Prime Minister Manuel Valls and I announced an ambitious partnership to promote a digital transformation of the entire nation. The collaboration, which includes a US$100 million investment from Cisco in French startups, could transform energy management, health care and education — boosting France’s economic competitiveness, job creation, dynamism and growth in the process.

VANGUARD

France’s program is a major step toward a digital Europe, following German Chancellor Angela Merkel’s Industrie 4.0 initiative and the UK’s planned expansion of innovation centers to foster technological breakthroughs and pioneer solutions in energy, transport, health care and education.

Cities too are embracing digitization. Barcelona has installed in-ground parking sensors and launched connected public transportation as part of its Smart City strategy. Nice has constructed a “connected boulevard,” including smart lighting and environmental monitoring. And the Port of Hamburg has a digital system to reduce water, rail and road traffic congestion.

Projects like these are being replicated across the continent, generating billions of dollars in value in terms of reduced costs, productivity gains and increased revenues. As a result, Europe’s leaders see not only opportunities for growth, but also the need to avoid being left behind.

To create a truly digital Europe will require a foundation of high-speed, high-quality broadband, both wired and wireless. As part of Europe’s Digital Agenda, policymakers have set out to connect 50 percent of European households to superfast broadband (100mbps or greater) by 2020. They also aim to connect all residences to broadband (at least 30mbps) by this time. These targets must be fully embraced and policymakers must encourage major investments in broadband, as well as in the infrastructure needed to support the wireless devices on which societies have come to depend.

CASHING IN

Of course, Europe will also have to encourage entrepreneurship, which requires fostering a culture of risk-taking, facilitating access to venture capital, and investing in strong educational institutions. Many countries are doing just that, implying that the next game-changing technology might not come from Silicon Valley; it could just as easily be developed in a lab in Paris, London or Berlin.

Over the longer term, Europe will need a workforce trained for careers in the new digitized economy. It is estimated that Europe will have an e-skills gap that, if filled, could lead to 850,000 potential jobs this year, rising to twice that by 2020. On a continent where youth unemployment exceeds 50 percent in some nations, there should be no problem finding young and eager people able to do these jobs, provided they receive the proper training.

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