The economic

impact of ICT in
Europe
Lucilla Sioli
Head of Unit
DG Information Society and Media
European Commission
 Economic impact of ICT: 3
channels

• Investment in ICT

• Efficiency gains in ICT-producing

sector

• Efficiency gains in ICT-using sectors

 Economic impact of ICT (1995-
2000): ICT drives half of productivity
gains in the EU (and 75% in the US)

Aggregate Labour Productivity Growth

and its sources (1995-2000)
Efficiency gains in
the rest of the
2.5 econom y
Non-ICT related
inves tm ent
Annual growth, in per cent

17%
2
9% Efficiency gains in
ICT producing s ector
1.5 25%
30% Inves tm ent in ICTs
25%
1
14%
0.5 44%
36%
0
EU-15 US
 Economic impact of ICT
(2000-2004): ICT drive half of
productivity gains in the EU (and
efficiency gains in the US)
Aggre gate Labour Productiv ity G rowth
and its source s (2000-2004)
E ffic ienc y gains in the
rest of the ec onom y
3
Non-ICT related
2.5 inves tm ent
Annual growth, in per cent

50%
2 E ffic ienc y gains in ICT
produc ing s ec tor
1.5 22%
%
18% Inves tm ent in ICTs
1
48% 11%
0.5 20% 21%
ICTqua nti-
30% IC T fie d e ffe ct
0
EU -15 US
The ICT sector alone drives
20% of productivity growth
Size in GDP Contribution to labour
productivity growth 2000-
2005

5% 20%
 ICT sector
Biggest sector in terms of
R&D

Share of ICT in EU total Business Expenditure R&D (2005)

ICT R&D spending in EU and
US
ICT spending on Research & Development
R&D spending in billions €

80

70

60

50
Public
40
Private
30

20

10

0
EU US

3
ICT Segments
 EU Recovery Package on ICT:
(1)Public Private Partnerships

• Factories of the Future

• Energy Efficient Buildings

• Green Cars
 R&D in national recovery
packages

• The size of R&D stimulus

measures is relatively small
• The magnitude of the stimulus
varies across countries
• The crisis may have increased
gaps between countries
(2) Broadband in EU recovery
package

• 1.02 bn € earmarked for

broadband in Rural Development
Programme

• Objective: BB for all by 2013

• Only 1/3rd (35%) was used for

broadband
 Broadband coverage
and take up

100%
Broadband penetration rate
in EU27

25%
Lagging behind on FTTH
deployment
 1/3rd Europeans never
used the internet

• Besides income, age and education play a role

 eCommerce

No EU single market for eCommerce

The eCommerce potential

Online 37%
Purchasing

Cross-border
8%
Online
Purchasing

0% 10% 20% 30% 40%

% of all EU Individuals ages 16-74

Estimated value of online transactions:

around 150 billion € in 2009
2
Source: -

Willingness to pay for

content

% of individuals

80 % NOT having paid

for online audiovisual content
in last 3 months
70 %
16-24
60 %
50 %
All
40 % Having paid for online
individuals audiovisual content
30 %
20 % All 16-24
10 %
individuals
 What can we do to support a
sustainable recovery/what
should our ‘Digital Agenda’ be?
Support R&D
• Provide for adequate competition and regulatory
conditions in telecoms markets

• facilitate the spread of high speed broadband

• Encourage the uptake of ICT– addressing issues

related to inclusion, privacy and security

• Invest in education and ICT skills

• Encourage innovation in content markets – addressing

issues of IPR

• Make the most of ICT for the environment and for

government and public service provision