Feedback from EIF Study Visits in the USA ‘ICT Innovation & Venture Capital’

01 August 2012 Author: EIFonline

From 19 to 25 July 2012 a delegation comprising 11 EIF Political members (MEPs)* took part in the EIF program of study visits and meetings on the East and West Coasts of the United States.

Under the main theme of ‘ICT Innovation & Venture Capital’, this initiative offered an extraordinary hands-on experience of today’s state-of-the-art digital technologies and research & development sites, as well as a deeper understanding of the potential of the ongoing digital revolution, with a reflection on the role of policy-makers.  

The dense program included visits and meetings with experts and executives at well-established American companies such as TimeWarner, AT&T, Alcatel-Lucent (Bell Labs), PayPal, Intel, Apple, Symantec, Facebook, Google, Oracle and Yahoo!, but also at European companies such as Ericsson, Telefonica Ventures, Vodafone (Xone Lab) and SAP. Moreover, a seminar at Stanford University provided the delegation with valuable insights drawing on the lessons from ‘Silicon Valley’. The unique innovation eco-system of Silicon Valley, which attracts talents from around the globe and facilitates their mobility, is an inspiration for Europe and the rest of the world. Such a dynamic environment, so densely populated by ICT companies, with a risk-taking philosophy and an overwhelming optimism, fosters innovation and entrepreneurial drive. The motto is, ‘There are no failures, only experiments.’ Universities are closely involved with local businesses, and start-up companies - oftentimes initiated by university students - can easily find venture capital and incubators. Innovation and entrepreneurship are encouraged by a collaborative approach in R&D activities while copyright laws can reduce risks and help investments.

During the EIF visits, some important points of reflection on current and future trends in the ICT sector were offered by executives and experts to policy-makers.

The use of mobile devices is driving a significant global change, people are increasingly connected via mobile networks and the use of video, cloud-based services, the internet and machine-to-machine connectivity are key drivers in this evolution. Today 85% of people have voice and text coverage and by 2017 85% of people will be covered by 3G networks (with 50% expected to have 4G coverage). With an increased number of subscriptions, affordable smart devices and non-stop connectivity, global mobile data traffic is expected to grow 15 times by the end of 2017, with video representing the largest data traffic volume. Availability of spectrum and infrastructures are therefore seen as crucial.

The mobile evolution improves people’s daily lives through the use of new and existing services and has an impact on the economy and job creation. The market for mobile applications (‘app economy’) generated about 500.000 jobs in the US mobile applications industry. The Internet economy generates 2.6 new jobs for every job lost. 

Internet-driven technologies can help create productivity growth in the private sector as well as in the public sector. It seems that the adoption of the Cloud alone could lead to 0.1-0.4% of GDP growth in the EU. Those SMEs using web technology experience a sharper increase in productivity and grow and export more than the others. This adoption seems to be easier in the US business scenario compared to the EU and leads to a gap between the two markets.

Cloud computing will continue to evolve, with increasing concerns on cybercrime and the need to adapt and find new ways to protect end users and corporate systems. Cooperation between EU and US on the front of cyber-security is welcomed. 

Data protection is also seen as a key issue at stake, with an important impact on companies’ transparency and accountability. On the other side of the Atlantic, Europe is regarded as setting the baseline in privacy law globally. The need for a single European regulator for data protection and a common regime across the EU were highlighted. 

Consumers’ data protection will be also a crucial aspect of the development of e-healthcare systems and ‘m-health’. Once again mobile devices can play an important role, with the use of health and fitness applications and connected sensors for diagnosis or to monitor patients. m-Health is proving valuable to optimize healthcare delivery to reduce healthcare costs in emerging markets and in countries with an ageing population.

Environment is another key-sector where ICT is seen as an important driver for innovation and change. Going green can be the next revolution of this century. Sustainability and energy efficiency are primary concerns for future network growth. Energy Consumption of ICT equals the aviation sector and 50 million cars. Communication networks could be 10.000 times more energy-efficient than they are today, when a massive increase of data traffic goes together with a slow-down of energy-efficiency. With implementation of new technologies a 15% reduction in global CO2 emissions can be enabled by 2020. ICT and research communities are preparing to address such challenges.

Overall, digital transformation, mass collaboration and sustainability are seen as the key mega trends together with the mobile evolution. Developments on the EU scene such as Horizon 2020 and the Digital Agenda for Europe are perceived as promising, although obstacles to innovation in Europe such as institutional structures are seen as persisting.

An essential part of the ongoing digital transformation is the evolution of the Digital Market. The development of its transatlantic dimension is widely seen as crucial and EIF delegation members expressed their commitment to it.

*EIF Delegation Political members:

- Bill Newton Dunn MEP

- Edit Herczog MEP

- Ivailo Kalfin MEP

- James Elles MEP and EIF co-founder

- Lambert van Nistelrooij MEP

- Malcolm Harbour MEP (US visits program coordinator)

- Maria Badia i Cutchet MEP

- Peter Skinner MEP

- Pilar del Castillo MEP and EIF Chair

- Sabine Verheyen MEP

- Teresa Riera Madurell MEP

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