Technology will be the foundation on which economic growth is built. The ICT sector is only responsible for five per cent of European GDP, but contributes a staggering 50 per cent to overall productivity growth (Europe’s Digital Competitive Report, European Commission, 2010).
Although substantial gains can be obtained by efficiency-driven initiatives, we have the prospect of fewer people in the workforce, which means that sustainable productivity growth and economic prosperity can only be achieved by wise investment in the ICT sector and our digital infrastructure.
Broadband leadership is strongly associated with competitiveness, knowledge economies and innovation and we must continue to invest in a quality broadband infrastructure. It’s important for countries to take into consideration both the quality and the penetration of broadband.
Cisco’s recent Broadband Quality Study found that while a number of European countries continue to do well in both broadband quality and penetration, many emerging economies are ‘leapfrogging’ by bringing quality broadband to their cities, acknowledging the impact it has on the economy. Quality broadband will be the lifeblood of economic growth in Europe, giving access to global supply chains, making public services more efficient and creating jobs in new internet-based industries.
Advances in technology will also foster a new generation of productive borderless organisations. Collaboration technologies will drive higher levels of productivity by reducing organisational silos, allowing the sharing of knowledge between employees irrespective of their location and offer new ways for organisations to interact with customers and partners globally.
Virtualisation will drive down the complexity of managing IT systems, give organisations a new level of flexibility when deploying systems and help them manage IT costs. The resulting productivity gains, cost savings and change in business models will help them respond quickly to market opportunities, allocate more resources to developing specialised products and offer customers a new level of service.
Government regulation and legislation will also have an important role to play. To date, some regulation has had a positive effect in enabling the majority of citizens to benefit from access to an advanced digital infrastructure, but there is more work to be done. It’s important we find models that do not stifle competition or remove incentives for companies to invest in Europe and allow the maximum number of people to benefit from advances in technology.
Our ability to drive growth and manage costs at the same time is critical for the future prosperity and economic strength of the single market. We need to bring balance to our economies, build an advanced digital infrastructure that all citizens can benefit from and ensure we make Europe an attractive investment proposition.
It’s important we transform our organisations by using technology to drive new business models that will help increase productivity and foster innovation. Throughout history, European nations have learnt to continually adapt, innovate and evolve and we must once again evolve to create a smart and sustainable future.
This is the second and final part of the article.
Mr Dedicoat is senior vice-president of Cisco’s European markets.