REPORT on the Commission communication on the impact of the e‑Economy on european enterprises: economic analysis and policy implications
(COM(2001) 711 – C5‑0285/2002 – 2002/2145(COS))
4 December 2002
Committee on Industry, External Trade, Research and Energy
Rapporteur: Bashir Khanbhai
PROCEDURAL PAGE
By letter of 29 November 2001, the Commission forwarded to Parliament a communication on the impact of the e‑Economy on european enterprises: economic analysis and policy implications (COM(2001) 711 – 2002/2145(COS)).
At the sitting of 1 July 2002 the President of Parliament announced that he had referred the communication to the Committee on Industry, External Trade, Research and Energy as the committee responsible and the Committee on Economic and Monetary Affairs and the Committee on Employment and Social Affairs for their opinions (C5‑0285/2002).
The Committee on Industry, External Trade, Research and Energy appointed Bashir Khanbhai rapporteur at its meeting of 19 February 2002.
It considered the Commission communication and the draft report at its meetings of 28 May 2002, 26 November 2002 and 3 December 2002.
At the last meeting it adopted the motion for a resolution by 32 votes to 0 , with 1 abstention.
The following were present for the vote: Carlos Westendorp y Cabeza chairman; Yves Piétrasanta, vice-chairman; Bashir Khanbhai, rapporteur; Gordon J. Adam (for Eryl Margaret McNally), Sir Robert Atkins, Danielle Auroi (for Nuala Ahern), María del Pilar Ayuso González (for Jaime Valdivielso de Cué), Luis Berenguer Fuster, Guido Bodrato, David Robert Bowe (for Gary Titley), Willy C.E.H. De Clercq, Concepció Ferrer, Norbert Glante, Roger Helmer (for Werner Langen), Hans Karlsson, Caroline Lucas, Erika Mann, Hans-Peter Martin (for Rolf Linkohr), Seán Ó Neachtain, Reino Paasilinna, Samuli Pohjamo (for Nicholas Clegg), John Purvis, Imelda Mary Read, Mechtild Rothe, Christian Foldberg Rovsing, Paul Rübig, Jacques Santer (for Godelieve Quisthoudt-Rowohl), Esko Olavi Seppänen, Claude Turmes, W.G. van Velzen, Alejo Vidal-Quadras Roca, Myrsini Zorba and Olga Zrihen Zaari.
The Committee on Economic and Monetary Affairs and the Committee on Employment and Social Affairs decided on 19 December 2001 and 8 January 2002 not to deliver an opinion.
The report was tabled on 4 December 2002 .
MOTION FOR A RESOLUTION
European Parliament resolution on the Commission communication on the impact of the e‑Economy on european enterprises: economic analysis and policy implications (COM(2001) 711 – C5‑0285/2002 – 2002/2145(COS))
The European Parliament,
– having regard to the Commission’s Communication (COM(2001) 711 – C5‑0285/2002[1]),
– having regard to its resolution of 16 March 2000 on "eEurope - An Information Society For All: a Commission Initiative for the Special European Council of Lisbon, 23 and 24 March 2000"[2],
– having regard to its resolution of 3 October 2001 on "Innovation in a knowledge-driven economy"[3],
– having regard to the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of Regions: "Helping SMEs to Go Digital" (COM(2001)136),
– having regard to the Conclusions of the Lisbon European Council of 23 and 24 March 2000 (SN 100/1/2000),
– having regard to its resolution of 13 June 2002 on "Sustaining the commitments, increasing the pace of the Lisbon strategy and the implementation of the European Charter for Small Enterprises"[4],
– having regard to the Conclusions of the Barcelona European Council of 15 and 16 March 2002 and of the Seville European Council of 21 and 22 June 2002[5],
– having regard to Rule 47(1) of its Rules of Procedure,
– having regard to the report of the Committee on Industry, External Trade, Research and Energy (A5‑0434/2002),
A. whereas the Lisbon European Council set the strategic goal of making the Union “the most competitive and dynamic knowledge-based economy in the world” by 2010, and a strong EU economy will produce wealth, jobs and security for its European citizens,
B. whereas enterprises, particularly small and medium-sized enterprises, are key drivers of economic growth and should be encouraged to actively engage in the New Economy,
C. whereas the e‑Economy is consistent with sustainable development in that it can enable savings to be made in material resources such as transport and paper printouts,
D. whereas EU enterprises are still burdened by excessive red tape and prevented from enjoying the benefits offered by the single market,
E. whereas SMEs are concerned by security threats to their businesses from operating in the eEconomy and are reluctant to engage in online business activities,
F. whereas SMEs need a clear and predictable legal framework for the eEconomy, including easy access to legal advice on applicable law and codes of conduct,
G. whereas EU enterprises experience difficulties in gaining access to risk capital when compared with their US counterparts,
H. whereas Information and Communication Technology (ICT) skills are the foundation of entrepreneurship in the e-Economy, yet 1.7 million jobs will remain unfilled in 2003 due to a shortage of skilled IT workers in the EU, thus causing European companies to miss out on new business opportunities,
I. whereas the skills gap has its greatest impact on SMEs as they fail to match the employment incentives offered by larger competitors in attracting trained IT professionals,
J. whereas the internal market could benefit significantly from the development of e-business, but the limitations of existing legislation at both Community and national level are preventing such advantages from being realised, particularly the differences in regulation of on and offline commercial practices which hinder further integration of the eEconomy,
K. whereas the ongoing development of increasingly productive capital at a diminishing cost has the potential to raise living standards substantially, and therefore failing to recognise the importance of ICT would be costly to EU Member States,
L. whereas the EU is lagging behind the US with regard to ICT investment and is failing to exploit the new technology to its full potential,
M. having regard to the importance to SMEs of being able to operate in the market on equal terms with large-scale enterprises, and to their need to have access to software in order to develop their potential for innovation,
N. whereas further liberalisation of the telecommunications markets will result in improved standards and lower prices as well as promote universal access and bridge the ‘Digital Divide’,
O. whereas standardisation is increasingly challenging in the eEconomy due to blurring boundaries between telecommunication, broadcasting and IT,
P. whereas public funding of research in science and technology is critically important for innovation and long-term economic growth,
Q. whereas exchanges between business and public administrations may provide positive examples of on-line applications acting as catalysts for a wider use of ICT,
1. Welcomes the Commission’s Communication on the “The Impact of the E-Economy on European Enterprises: Economic Analysis and Policy Implications” (COM (2001)711);
2. Reiterates the call for sustainable development to be boosted by way of the e‑Economy;
3. Calls for a change in corporate management in both the private and public sector in order to respond to the challenges presented by a fast moving, global, electronic based commercial and financial economy;
4. Urges the Commission to avoid excessive regulation of e-commerce and to apply a ‘think small first’ approach to formulating legislation to regulate the EU economy, thereby prioritising small businesses;
5. Underlines the need to further reduce the legislative and administrative burdens on enterprises, simplifying data collection for tax collection and reducing unnecessary red tape, especially for self-employed people and small businesses;
6. Urges Member States to build on measures already implemented to tackle online security issues, reinforcing the dependability and reliability of networks and information employed by enterprises by raising awareness and spreading best practices;
7. Suggests reinforcement of the legal certainty of engaging in cross-border e-business and ensuring easy access to the relevant legal advice;
8. Urges Member States to encourage benchmarking in their initiatives to promote SME participation in the eEconomy in order to spread best practices;
9. Calls for improved access to risk capital for EU enterprises and suggests offering tax incentives to venture capitalists to encourage investment in the EU’s growing e-Economy;
10. Calls on the Commission to increase consultation with SMEs, as well as the organisations representing them, to establish the main obstacles to their full participation in the e-Economy;
11. Urges business, the educational sector and government agencies to co-operate fully in closing the IT skills gap;
12. Calls for improved curriculum in education to encourage more students to undertake IT-orientated studies thereby providing a pool of workers with appropriate scientific and technical skills who can make best use of ICT advances that can benefit the e-Economy;
13. Encourages schools and universities to link up with business and industry to sponsor students at an early age so that they can acquire practical skills and adopt an entrepreneurial approach to the economy;
14. Calls for improved ICT training support of employers and employees at all levels with appropriate public and private sector investment, including grants, soft loans and tax incentives to help the link between further education and business;
15. Urges Member States to facilitate the employment of qualified foreign IT professionals on a contractual basis to meet the growing demand for skilled IT personnel to contribute to the expansion of the e‑Economy;
16. Calls for a radical simplification of pensions, national insurance, and personal tax arrangements for cross-border employment to promote the mobility of skilled workers;
17. Regrets that e-commerce is still primarily a business-to-business activity and stresses the importance of establishing self-regulation based on codes of conduct to create trust and confidence between partners operating in both the B2B and B2C sectors in the e-Economy;
18. Calls on the Commission to optimise the use of existing financial resources to build public confidence through dissemination of information about its e-Economy related activities, income, expenditure and communications with the European Parliament and Council;
19. Supports both formal and informal standardisation of hardware, software, verification, security and support services in technical and organisational matters to facilitate IT access for the population at large;
20. Emphasises the need to promote open standards and certification procedures with a particular need to review existing product legislation;
21. Underlines the importance of providing incentives to the private sector to encourage investment in ICT, through tax incentives, the allowance of deductibility of expenses relating to ICT and training and by removing unnecessary restrictions on foreign investment and ownership;
22. Encourages Member States to establish a pro-ICT environment through further liberalisation of the telecommunications markets, promoting competition and supporting capital investments in infrastructure;
23. Supports the commercialisation of publicly funded research through increased collaboration between public and private researchers e.g. government-funded university research laboratories which serve as incubators for start-up IT firms, providing them with a new source of knowledge, as well as access to highly trained scientists and engineers;
24. Urges the public administrations to be at the leading edge of on-line service and offer electronic access to all commercial, government and civil service activities (e‑procurement, e‑tax, e‑registration of companies, website access to government business);
25. Instructs its President to forward this resolution to the Council, the Commission and to the governments and parliaments of the Member States.
EXPLANATORY STATEMENT
Background
The European Council in Lisbon (March 2000) set the goal for the Union to become the most competitive and dynamic knowledge-based economy in the world by 2010. This objective requires the EU to adapt existing policies and legislation to transform ICT into the basis of a global strategy for e-Commerce, including electronic access to all public administration and activities.
The development of the e-Economy has, over the last year, changed expectations and behaviour from all stakeholders. The private sector has driven the transformation of demand and supply transactions from paper to electronic methods, using both the Internet and email. Business and industry have realised that there are substantial savings in input costs, including labour.
During the first semester of 2002, the Commission launched an on line consultation on the e-Economy with all relevant EU stakeholders in order to develop an agenda for maximising the benefits of the e-Economy for all European enterprises, including SMEs. The results of the consultation were presented to the Council of Industry on 6 June 2002.
The Council of Industry's conclusions reflect the specific needs of SMEs in the e-Economy, recognising that:
- a)The finance required for investing in ICT is large in relation to the sales and profits of SMEs.
- b)SMEs have difficulty in identifying the hardware, software and trained personnel required to suit their needs.
- c)SMEs find it difficult to estimate and bear the cost of technical support and maintenance of ICT.
Consequently, it is important for the Council and the Commission to consider appointing a Commissioner for SMEs and to give priority to supporting the needs of SMEs through EU Information Centres and other related institutions.
The Council has asked Member States to formulate and develop EU standards and codes of conduct for practical application in encouraging the establishment of open e-marketplaces, secure e-business solutions, e-procurement (public and private), e-signatures and electronic payment systems.
Content of the Commission's communication
The Communication examines the impact of information and communication technologies (ICT) on the economy, on enterprises and on the main economic policy instruments, and provides an analysis of the current state of play in light of recent developments.
It emphasises the need for structural reform in order to create an environment more favourable to entrepreneurship in the face of the recent deterioration in economic climate, and stresses the need for acceleration of the pace of this reform.
The Commission underlines the importance of decisive action to ensure that EU enterprises can benefit from the potential of the eEconomy. This action should include:
- ∙Accelerating the construction of a clear and predictable framework for e-business
- ∙Fostering full participation by SMEs in the eEconomy
- ∙Improving the availability of risk capital and market-based financing
- ∙Fostering a culture of entrepreneurship and innovation
- ∙Enhancing ICT and e-business professional skills
- ∙Promoting eEconomy-related research
- ∙Promoting market openness and competition
- ∙Enhancing the ability of European enterprises to compete in a global economy
- ∙Further improving and maximising business opportunities in the EU internal market
- ∙Increasing efficiency in government-business relations.
The communication highlights the importance of a clearly defined enterprise policy strategy. All Member States should be encouraged to adopt these measures to promote ICT as the EU can only have an effective e-Economy if it can guarantee interoperability.
Rapporteur's Position
The rapporteur welcomes the Commission’s proposals. He believes that the EU can only compete globally with the USA, Japan and others if its economy is based on ICT. ICT helps to lower input costs, including labour as well as speed of delivery, which is vital for EU businesses to remain competitive on the world market.
Access to ICT for all EU citizens is essential. The Rapporteur would like to see the future personal computer (PC) and mobile phone, like a watch, on the wrist of every EU citizen. He believes such access will facilitate communication, trade, entertainment and education, and form the basis of a successful e-Economy in the EU.