The role of ICTs in our quest for growth
In the film “Being There”, Mr. Chance -brilliantly portrayed by
Peter Sellers- is a humble gardener whose simplistic comments on political
issues accidently put him in the media spotlight. When queried about his
thoughts on economic growth through temporary incentives by President Bobby
(Jack Warden), Mr. Chance amazes the listening crowd with his audacious reply:
“As long as the roots are not severed, all is well. And all will be well in the
garden.”
In the garden of Europe we are witnessing ferocious yet absurd
debates between the spending-cutting frenzied conservatives, and the
all-you-can-eat progressives, who consider austerity and growth as mutually
exclusive options.
From a true liberal perspective, the problem is that the debate antagonizes
a result (growth), and a strategy (austerity). I am naïve enough to think
everybody wants things to go well, and economic growth is the ultimate goal for
both Tyrians and Trojans.
If we rationally consider growth as an output from the decision-making
processes to reshape Europe’s economic structure and to make it more efficient
and competitive, the focus should be on how we raise our performance
indicators.
Growth is the consequence of the rational fulfillment of
individuals’ expectations to live better. Growth is, or should be, the
aggregated life improvement of millions of workers, entrepreneurs, students,
taxpayers, senior citizens, politicians (yes, them too) etc.
In an increasingly globalized economic eco-system, ICT is playing a
crucial role for companies, citizens and institutions in raising
competitiveness and fueling growth. We could easily be tempted to compare the
impact of ICT on the economy, with the impact of steam engines in the 18th
century, which unleashed not just the industrial revolution, but an enhancement
of life conditions for humans everywhere.
The main difference resides in the fact that the industrial
revolution was capital intensive and required large amounts of money to
investment in equipment, whereas ICT is much more accessible. Digital
businesses, and processes can be a lot more affordable than the technologies
required for building a steel mill or a turbine factory. This is allowing developing countries to
leapfrog waves of technological development, thus placing them in a much more
competitive position in virtually no time.
If we convene that growth is fueled by expectations, it is easy to
infer that ICT will play an enabling role in their fulfillment. Our children,
Europe’s digital natives, expect everything they see to be interactive,
immediate and accessible. Today, many 2 year olds get disappointed when they
touch a picture on a paper book and a video will not play. By the time they get
their first paycheck they will not be keen to have to step into a tax or bank office,
or to have to go to the doctor because of a cold or a seasonal health check.
They will not be spending precious minutes of their lives opening letters from
banks, insurance companies or relatives. They will not be wasting fuel to go
and cast their vote on elections or even to publicly demonstrate against
Government measures. They will reject the idea of having to fill out forms or
to enter their personal data, every time they feel attracted by a promotional
campaign of their favorite whiskey brand.
We can visualize the expectations of the future. We see great
avenues for growth and opportunities to seize. But how can we get there? How
does ICT spur growth? How can we raise the ICT profile in Europe? Should the EU
institutions allocate millions of euros to politically designed ICT initiatives?
Last June, Neelie Kroes,
Vice-President of the European Commission responsible for the Digital Agenda,
gave a speech at the Digital Agenda Assembly, where she highlighted the five
main priorities which will most likely be the backbone of all EU-backed
initiatives: the Cloud, broadband, security, innovation, and public services.
I would like to highlight three main streams where those ICT initiatives
could play a pivotal role in the overall improvement of our economy: leading
innovation through successful new start-ups, improvement of competitiveness of
incumbent businesses, and increase of efficiency in public administration,.
In the particular case of start-ups, there are today hundreds of
thousands of projects inside the minds of brilliant students and researchers at
our schools and universities. These talented individuals could welcome some
improvement in the conditions to start up, and additional support to transform
their ideas into successful companies. If the state of the economy reflects the
entrepreneurship-friendly eco-system of any given country, it doesn’t come as a
surprise the bad position Spain occupies in all rankings, when its regulations
and incentives to new entrepreneurs are compared with the rest of the world.
The EU should consider initiatives designed to build a new breed of
European Entrepreneurs. These initiatives could include a European registry for
start-ups. Those start-ups could be regulated directly, and exclusively by the
EU. Taxes (when applicable) paid by those start-ups should be paid directly to
the EU. And the EU could very well encourage the creation of a truly European
“NASDAQ” stock exchange.
In a free economy, incumbent businesses should have the necessary
means to identify the ICT assets that suit them best to remain competitive.
SMEs may have more trouble to remain vigilant, and responsive to technological
breakthroughs that could challenge their leading positions in their respective
markets. That notwithstanding, should not justify the policy of subsidies we
have been taxed to support in recent years. It is preferable to pay less taxes,
which are sure, and recurrent expenses for all companies, than to give them the
option to win the lottery of the subsidies whose beneficiaries are only few,
and often the same.
Most EU countries face a similar problem: public deficit. In other
words, we basically spend more than we earn.
How can governments be more efficient? There are only three options:
Either they increase revenues, or they reduce spending, or, they do both.
We need our governments to be bold and decisive in the difficult
times ahead. We need governments to increase efficiency, reduce spending and
diminish their financial needs. This has not only a colossal economic impact
allowing companies and citizens to improve their marginal propensity to invest
or consume, their lives will be a lot easier as red tape is reduced, response
times from the administrations are shortened, and public services become
completely accessible for everyone. We need governments to be “smart” and lead
by example in being more competitive by using ICTs.
We need lean administrations, in lieu of, slow, overstaffed, inefficient
government bodies, that we have today. A reduction of taxes would encourage
investors and entrepreneurs, and it also paves the way for the creation of new
jobs in much better conditions for everyone.
In the house of Europe, we have a garden with more gardeners than
trees. And the gardeners appointed to water the dying trees are using the
scarce water to clean the façade instead.
Our common roots are strong and deep. It’s time to get a high tech
irrigation system, which will save water, will revitalize the trees, and will make
things to really be well in our garden.
