• On Wednesday, the Commission presented its Digital Strategy, including a communication on “Shaping Europe’s Digital Future”, a white paper on artificial intelligence (AI), and a European strategy for data.
• While DIGITAL SME welcomes the Commission’s vision on digital, it needs to be supported by investment and concrete action and by making sure that SMEs are at the heart of the digital strategy.
• DIGITAL SME President Oliver Grün, together with members of the Brussels secretariat, visited Commission Vice President Margrethe Vestager and her cabinet after the publication of the strategic documents.

Brussels, 21 February 2020 (DIGITAL SME). On Friday morning, DIGITAL SME President Dr Oliver Grün met Commission Executive Vice President Margrethe Vestager. In the meeting, Dr Oliver Grün emphasised the role of ICT SMEs for the economy: “SMEs are owner-driven and bring innovation to the market. They have a different DNA than big tech.” Market conditions and taxation must be fair for companies to compete on a level playing field. “While my business provides similar services as large companies, I pay 30 per cent in taxes and my multinational competitors effectively pay around 3 per cent”.

It was important for DIGITAL SME to emphasise the role of digital SMEs in transforming the European economy. “Digital SMEs provide tailored software solutions to other SMEs or develop new and innovative business models based on digital tools. They are the technological frontrunners and ‘digital enablers’ that Europe needs to rely on for the digital transformation of our economy”, DrGrün added.

 Business-driven digital hubs could provide a great blueprint for European policy aimed at supporting the digital transformation. Many of DIGITAL SME’s members run hubs or ICT clusters. The digital HUB Aachen, for instance, brings together digital and traditional SMEs with financial support from the local government of North Rhine-Westphalia. Half of the hub’s budget was raised through crowdfunding by local SMEs, making sure it was driven by business interests. “The traditional SMEs in and around Aachen had realised that they need to act in order to modernise their business models. ICT SMEs are the ones who can support them in doing so by providing tailored solutions and advice”, said President Grün.

On data & artificial intelligence (AI)

The “European Strategy for Data” correctly identified salient issues, but the proposed measures are not bold enough. There are still no shared European data spaces. “Ambitious AI policy will not work with restrictive data policy, AI without data is like a forest without trees”, said Dr Grün. And while it is important to be careful when developing regulatory obligations for data sharing, inequalities between larger companies and SMEs in access to data need to be adequately addressed. Furthermore, the issues of interoperability, technical specifications, and standards are not included in any concrete regulatory measures. For instance, big digital companies have access to large amounts of data, which is the basis for AI-based innovation. If this data is kept in a closed ecosystem and within the control of one single company, it provides competitive advantages to that company alone. This limits the overall innovation potential of other businesses—especially SMEs—and society as a whole.

Talking about the White Paper on AI,, Dr Grün welcomed the Commission’s risk-based approach. While some areas certainly need strict and precise rules, e.g. when it comes to risks to individuals and fundamental rights, other areas like industrial AI may not need such regulation. DIGITAL SME is launching an SME Focus Group on AI together with the European Commission to monitor the impact of regulation on SMEs. We hope to be able to provide feedback when a proposed regulatory measure is likely to hinder innovation.

On digital skills

DIGITAL SME encouraged the Commission to be ambitious when it comes to supporting the development of digital skills. Much has been done already. And yet, there is currently no coordinated plan to develop European leadership in supporting SME skills development. A public-private “Pact for Skills” would be needed to connect the entire ecosystem and provide leadership and foresight. The ecosystem consists of industry (SMEs and large companies), intermediaries (clusters, business associations, chambers of commerce, accountants, insurances, etc.), education providers, and public administrations.

Read our Digital Skills for SMEs strategy here.

Oliver Grün and members of the Brussels secretariat were happy about the opportunity to meet with Executive Vice President Margrethe Vestager and to discuss the issues laid out in  DIGITAL SME’s Priorities for Europe’s Digital Future. As a representative of digital SMEs, we look forward to engaging further with policymakers to ensure that Europe’s successful digital transformation leaves no SME behind. 

 

 

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Read on: More Comments on the Commission’s Digital Strategy

The new Commission’s Digital Strategy has been delivered within 100 days, as promised by President von der Leyen. And while it outlines a comprehensive vision and agenda for Europe’s digital future, it needs to be supported with concrete action and initiatives both at EU and national level. President Grün summed it up this way: “The measures outlined in the Commission’s Digital Strategy are a step in the right direction. But they aren’t bold enough, and more efforts must be made to put European SMEs front and centre.”

Investment in digital capacities

Published on Wednesday, the Commission’s Digital Strategy mentions the need for investment and initiatives in digital. But will SMEs benefit? Statistics show that only a small percentage of companies in EU-funded programmes are SMEs. “We need to make sure that EU funding programmes are well designed and accessible for SMEs. SMEs usually have fewer resources than mid-caps or large companies. They are the ones that usually do not have enough capacity to invest in R&D. Thus, they should also be the ones that benefit most from funding programmes—but in reality, they do not”, commented President Grün.

The document mentions that the new EU Multiannual Financial Framework will contribute to achieving more and better strategic capacity-building and to deploying cutting-edge joint digital programmes in AI, cyber, super- and quantum computing, quantum communication and blockchain. These actions will be supported through targeted funding programmes such as the Digital Europe Programme (DEP), the Connecting Europe Facility (CEF 2), and Horizon Europe. When it comes to the European Digital Innovation Hubs under the DEP, DIGITAL SME appreciates the programme itself but wants to make sure that these hubs connect to local SMEs and their intermediaries such as SME associations and chambers of commerce. It is useful to have universities or research centres involved, but what’s often missing in Europe is the step from research to business; from developing the knowledge and innovation to bringing a product to the market. 

“While Europe is strong in research and innovation, we lack an environment which allows our innovative digital companies to thrive”, said President Grün. “However, growing a strong and independent digital industry is fundamental to ensuring Europe’s economic prosperity in the future”.