This innovative sector with importance across the whole economy generates already today substantial revenues via the internet and mobile phones, in particular by providing access to news, information, music, books, films, games and other digital content. And Europe's digital economy has tremendous potential: With a mobile penetration rate of 119% (up from 84% in 2004 when the Barroso-Commission took office), there are today more mobile phone subscriptions than citizens in the EU. 60% of households are connected to the internet (up from 41% five years ago). And while in 2004, only 33% of these households had a high speed broadband connection, this has grown to 80% in the five years of this European Commission.
All this is only the starting point. Europe promises to become even more digital in the years to come. A demographic analysis tells us that today, only 35% of the total population in the EU have used advanced internet services in the last 3 months. This is markedly different for people between 16 and 24: 73% of them have recently used the internet for advanced data transmission, in particular for uploads and downloads of content and for social networking. This figure rises to 89% in Denmark, Europe's most competitive telecoms market.
With these young, regular and intensive internet users, there is a whole generation of "digital natives" ready to apply innovations like web 2.0 to business and public life, whether as podcasters, bloggers, social networkers or website owners. It is in this new generation that there is real growth potential for Europe. Very soon, these digital natives will be turning into consumers with important purchasing power. This is one of the reasons why the European Commission believes that the roll out and development of high speed broadband internet – whether via fixed or via wireless connections – could create around one million jobs in Europe, and spur broadband-related growth in economic activity to the tune of €850 billion. Let us not forget that each 10% of additional broadband penetration yields 1.3% extra growth, according to a new World Bank study.
T o seize this potential in our digital economy, Europe will need to create the right framework for ensuring effective competition and sound regulatory conditions in a well-functioning single market as well as incentives for innovation. In view of the commitment to the social market economy, we also need to make sure that, in the end, consumers benefit from the digital economy. This is particularly important if we want to convince the digital natives to become the drivers of our digital economy.
President Barroso has clearly set out our ambitions when he wrote to the Heads of State and Government on 17 June. He said that we now have to bring about “a Europe committed to the radical transformation towards a knowledge-based society.”
To achieve this radical transformation, I have been working with my team in the past weeks on a strategy for a Digital Europe . This plan has two parts: First, action which the EU institutions can take or prepare still this year, under the present Commission, on the basis of work already started. And secondly, action which we believe should become a priority for the next five years.
