Communication from the Commission to the Council, the European Parliament, the European Economic and Social committee and the Committee of the Regions - Challenges for the European Information Society beyond 2005
Date: 2004-11-19
Institutions: European Commission
Subjects: EU policy, information policy, information society, information technology

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.11.2004 
COM(2004) 757 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

Challenges for the European Information Society beyond 2005 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

Introduction .................................................................................................................. 3 

The contribution of ICT to the Lisbon Goals............................................................... 3 

The continued need for Information Society policies .................................................. 4 

Issues for an Information Society policy beyond 2005................................................ 6 

Conclusions ................................................................................................................ 10 

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1. 

INTRODUCTION 

At  the  European  Council  in  Lisbon  in  March  2000,  Heads  of  State  and  Government  of  the 
European Union launched a strategy to prepare the EU for the challenges of the new century. 
This  has  become  known  as  the  “Lisbon  strategy”.  The  objectives  set  at  Lisbon  –  higher 
growth, more and better jobs and greater social inclusion – were ambitious. Information and 
communication  technologies  (ICT)  were  identified  as  playing  a  key  role  in  achieving  them. 
This key role of the ‘Information Society for all’ was confirmed at the Spring Council 20041 
and by the recent Kok report2. 

In  response  to  this,  the  European  Commission  launched  the  eEurope  initiative  to  give  a 
political impulse to the development of the Information Society. Overall the eEurope initiative 
has  been  a  success.  It  addressed  the  right  issues  at  the  right  time  and  in  so  doing  catalysed 
Information  Society  policy  debate  across  Europe  and  beyond.  The  current  eEurope  Action 
Plan runs until the end of 2005, and the recent mid-term review has confirmed that its main 
targets are valid until then. 

In this context it is now appropriate to take stock of the achievements, consider the coming 
challenges and identify policies to address them. This communication aims to launch a broad 
policy debate on an EU Information Society strategy beyond 20053. It gives an indication of 
the main areas where EU level policy on ICT can make a difference. 

2. 

THE CONTRIBUTION OF ICT TO THE LISBON GOALS 

ICT  are  a  key  component  of  the  Lisbon  strategy.  Their  importance  stems  both  from  the 
contribution  which  they  make  to  overall  economic  performance,  and  also  from  the  benefits 
which they offer to society at large. The importance of ICT can be summarised as follows: 

•  First, the ICT equipment and services sector is an important sector in its own right. It has 
grown from 4 per cent of EU GDP in the early ‘90s to around 8 per cent, and accounted for 
6  per  cent  of  employment  in  the  EU  in  20004.  It  is  one  of  the  most  innovative  sectors, 
accounting for 18 per cent of overall EU spending in Research and Development (R&D)5. 
It  is  also  one  of  the  most  productive,  with  annual  productivity  growth  of  9  per  cent  on 
average over the period 1996-20006. 

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“Report  from  the  Commission  to  the  Spring  European  Council.  Delivering  Lisbon.  Reforms  for  an 
Enlarged Union”, COM(2004) 29. 
“Facing the Challenge. The Lisbon strategy for growth and employment”, report from the High Level 
Group chaired by Wim Kok, November 2004. 
It  also  draws  upon  the  recent  Dutch  Presidency  Conference,  Amsterdam  29-30  September  2004, 
www.ICTstrategy-eu2004.nl and upon input from the eEurope Advisory group. 
See  “OECD  Measuring  the  Information  Economy  2002”;  “OECD  Information  Technology  Outlook” 
2004. 
IDATE  Comparaison  de  la  recherche  dans  les  TIC  dans  les  grands  pays  industriels  (Final  Report 
08.04.02). 
Own  calculations  based  on  data  collected  by  GGDC  (Groningen  Growth  and  Development  Centre), 
presented  in  a Economic  Paper  from  ECFIN  (European Economy  -  European  Commission  Economic 
Paper Number 208, July 2004). 

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•  Second,  ICT  are  central  to  boosting  productivity  and  improving  competitiveness.  40  per 
cent  of  the  productivity  growth  in  the  EU  between  1995  and  2000  was  due  to  ICT7. 
Economic  gains  from  ICT  stem  directly  from  growth  and  innovation  in  markets  for  ICT 
goods and services and from the use of ICT in raising the performance of businesses. Also, 
ICT increasingly form an integral part of all industrial and service markets, either through 
the  embedding  of  ICT  components  in  goods  (for  example  in  consumer  devices, 
automobiles, medical devices) or as part of the service offer (tracking of parcel deliveries, 
e-banking).  Empirical  evidence  suggests  Europe’s  productivity  gap  with  the  US  is  to  a 
large extent explained by its weaker investment in ICT. 

•  Finally, ICT provide a boost to citizenship and to the quality of life. ICT allow more and 
better services to be provided to larger numbers of people. New information tools help to 
improve transparency and openness as well as government relations with citizens. ICT are 
also  a  powerful  tool  for  preserving  and  promoting  the  European  diversity  and  cultural 
heritage by making content widely available. 

Several EU countries stand out in adopting and making gains from innovations in ICT8. But 
the average European performance in realising the potential of ICT needs to be substantially 
improved. In a context where Europe is falling short of the Lisbon goals it is essential that the 
opportunities of ICT are fully exploited9. 

3. 

THE CONTINUED NEED FOR INFORMATION SOCIETY POLICIES 

The  exploitation  of  the  potential  offered  by  ICT  will  require  the  implementation  of  ICT 
specific  policies  for  many  more  years.  We  are  still  at  an  early  phase  in  the  deployment  of 
these technologies. Promoting wider take up depends on our capacity to address many issues 
to  which  the  use  of  these  technologies  gives  rise.  In  general,  ICT  accelerate  the  pace  of 
technological progress, modernisation and structural adjustment of our economies.  

•  Much has been achieved through the development and application of ICT. There is much 
more  to  come.  For  example,  in  the  EU15  in  July  2004  roughly  80  per  cent  of  the 
population  could  be  reached  by  broadband,  but  only  7.7  per  cent  on  average  were 
subscribers10.  Along  with  the  recent  growth  in  third  generation  mobile  services,  this 
indicates considerable potential for future growth in the years to come. In addition, there 
may  be  new  disruptive  technologies  in  the  pipeline11.  Current  policies,  such  as  for 
regulation or spectrum policies, will therefore need to adjust to new developments. 

•  Important  developments  are  taking  place  at  the  global  level.  The  world  ICT  market  is 
expanding  rapidly.  It  is  increasingly  competitive  with  new  players  entering  the  market. 
Between  1992  and  2001,  ICT  expenditures  in  China,  India  and  Brazil  showed  rapid 

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“The EU Economy: 2003 Review”, COM(2003) 729. 
There  are  routinely  at  least  three  European  countries  in  the  top  five  of  the  various  attempts  to  rank 
global performance on factors such e-readiness, information technology indices or digital access. See: 
for example WEF Global IT report; ITU digital access index. 
“Report  from  the  Commission  to  the  Spring  European  Council.  Delivering  Lisbon.  Reforms  for  an 
Enlarged Union”, COM (2004) 29. 
Source: Communications Committee. 
The  recent  study  commissioned  by  the  Dutch  Presidency  “Rethinking  the  ICT-agenda”  (Price 
Waterhouse Coopers, August 2004) mentions radio-frequency based identification (RFID) as possible 
example of such disruptive technologies. 

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growth, averaging between 20 per cent and 35 per cent a year over the period12. The EU 
must follow closely the developments in these countries to understand their implications. It 
will also be important for the EU to participate in decisions on the global structure and the 
management of networks. 

•  A strong presence in research and development is essential for the general strength of the 
ICT sector and for their take-up in the economy at large. Governments and the European 
Union are encouraging and supporting the research effort of European companies through 
the  creation  of  a  favourable  scientific,  financial  and  entrepreneurial  environment.  On  a 
European level the Framework programme has played an important role. But the need for 
R&D  in  ICT  increases  continuously  and  research  should  be  complemented  by  efforts  to 
promote ICT driven innovations as foreseen in the proposed framework for innovation and 
competitiveness13.  Similarly,  there  is  an  increasing  need  for  research  on  the  socio-
economic  impact  of  applying  ICT  in  the  various  sectors,  including  stronger  multi-
stakeholder  and  public/private  partnerships  and  a  better  coordination  of  national  and 
regional initiatives. 

•  Regulation  of  ICT  activities  and  in  particular  of  electronic  communications  will  remain 
crucial to the creation of an environment conducive to more investment, more innovation, 
newer  services  and  lower  prices.  A  new  EU  regulatory  framework  for  electronic 
communications has been in place since 2003. There is a need to ensure that it is fully and 
effectively  implemented,  and  that  it  remains  appropriate  in  an  environment  where 
technologies evolve rapidly. 

•  There  are  many  other  regulatory  issues  which  have  important  implications  for  the 
development  of  ICT.  These  include  the  protection  of  copyright,  the  rules  applying  to 
mobile  and  micro  payments,  the  protection  of  privacy  and  the  needs  of  law  enforcement 
agencies.  A  concerted  effort  is  needed  to  identify  and  implement  solutions  that  will 
safeguard the legitimate concerns which appropriate business and regulatory environments 
must address, while allowing the full exploitation of the benefits of ICT. 

•  There  is  also  a  need  to  link  up  the  different  EU  Information  Society  initiatives.  A 
networked economy will only reach its full potential if sectoral boundaries are dismantled 
and  an  even  take-up  of  ICT  in  society  is  ensured.  For  instance,  the  take-up  of  eBusiness 
will  be  greatly  encouraged  by  an  enhanced  ability  for  businesses  and  administrations  to 
communicate and conduct transactions with one another online. 

•  Considering  today’s  growing  dependency  towards  open  networks  and  IT  systems, 
weaknesses  and  vulnerabilities  of  these  systems  are  posing  serious  threats.  Close 
international co-operation across market sectors is needed to address security threats and to 
prevent cyber crime. Internet security will remain high on the agenda requiring activities to 
support Internet stability and robustness, such as risk preparedness and compliance, and it 
is used and governed. 

•  Governments themselves are important suppliers and users of ICT. Thus they influence the 
take  up  of  ICT  when  using  their  own  procurement  policies  to  support  state  of  the  art 
products  and  services  and  by  increasing  their  offer  of  on-line  services  (eGovernment, 

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See “OECD Information Technology Outlook 2004”. 
See "Financial perspectives 2007-2013" COM(2004) 487. 

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eHealth, eLearning, etc.). They need to develop a comprehensive approach to exploit the 
potential of ICT to promote greater efficiency and effectiveness in the public sector, while 
tailoring on-line services to the needs of businesses and citizens. 

•  The  effective  use  of  ICT  has  become  more  and  more  complex  over  time.  The  quickly 
changing  standards  and  tools  and  their  interoperability  require  constant  specialised 
attention.  Thus,  in  order  to  make  effective  use  of  the  advances  in  ICT,  small  businesses 
must have access to competent, affordable and targeted support services, tailored to their 
specific needs both for in-house as well as customer-oriented ICT solutions. 

For these reasons, all countries should have coherent ICT related policies. This is the policy 
message  that  the  European  Union  has  been  promoting  in  the  current  work  of  the  World 
Summit on Information Society. 

4. 

ISSUES FOR AN INFORMATION SOCIETY POLICY BEYOND 2005 

The increasing diffusion of ICT promotes changes that are not just about technology. The use 
of ICT entails new ways of communication and interaction between citizens, businesses and 
the state, leading to new social and economic structures and new ways of governance. 

Based  on  recent  experiences  with  EU  Information  Society  policy,  the  Commission  has 
identified a number of issues that it considers relevant for the development of a coherent and 
forward-looking European Information Society policy beyond 200514. 

4.1. 

Content and services 

A  large  number  of  users  now  have  access  to  infrastructure  and  services  which  allow  the 
delivery of many types of digital content. This means that there are huge market opportunities 
in  the  development  of  attractive  content  and  services  that  will  benefit  both  the  user  and  the 
economy. Yet, progress in this area is slow. 

Audiovisual  and  multi-media  content  are  driving  forces  for  the  success  of  the  new 
technologies  in  general  and  broadband  in  particular.  Therefore  it  is  important  for  the 
European  Union  to  play  a  pro  active  role  by  supporting  content  providers  and  fostering  the 
emergence  of  innovative  services.  The  development  of  new  services  and  content  is  being 
slowed  down  by  a  variety  of  obstacles:  Some  are  of  a  regulatory  nature,  such  as  the 
uncertainty surrounding the application of the rules for financial services to mobile payments 
or  the  development  and  acceptability  of  systems  that  allow  the  legitimate  use  of  content 
compatible with existing rules on Intellectual Property Rights. Some are linked to the market 
place,  such  as  the  difficulty  of  establishing  systems  or  problems  of  interoperability,  lack  of 
user  friendliness  and  accessibility  and  situations  where  new  services  compete  with  already 
existing  ones.  Others  still  are  linked  to  situations  of  dominance  in  the  market  place.  The 
growth  of  the  market  for  new  services  and  content  will  depend  on  the  capacity  to  find 
adequate  solutions  to  this  long  list  of  issues,  which  concern  both  the  public  and  the  private 
sectors. 

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“eEurope  Mid-term  Review”  COM(2004)  108,  and  “eEurope  2005  Action  Plan:  An  Update”, 
COM(2004) 380. 

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4.2. 

eInclusion and citizenship 

The policies known as "eInclusion" aim at ensuring equal access to and the availability of ICT 
services  for  all,  at  an  affordable  cost.  The  importance  of  such  polices  increases  as  ICT 
permeate  society.  Citizenship  is  about  the  participation  of  all  in  society,  but  it  faces  new 
challenges  with  the  increasing  use  of  ICT  in  everyday  life.  New  and  complex  technologies 
create the risk that some sectors of society will be unable to deal with them. eInclusion should 
be tackled at national, regional and local level. 

Digital literacy is about ensuring that citizens have the necessary critical skills to be able to 
make  full  and  effective  use  of  ICT.  eInclusion  policies  should  ensure  digital  literacy  for 
everyone in society. They should ensure that technologies are easy to use and provide content 
and services to prevent new digital divides from opening up. The challenge is made greater 
given the societal changes which the EU will face over the coming years. Forecasts indicate 
that in some Member States close to 40 per cent of the population will be older than 65 years 
in 202015. 

These  policies  are  an  absolute  necessity,  yet  they  are  complex  to  implement.  They  also 
require a substantial research effort that is unlikely to be provided by the private sector alone. 
The  public  sector  can  provide  an  important  impetus  for  addressing  these  problems.  The 
European  Union  is  encouraging  and  supporting  the  research  effort  in  this  field  through  the 
Framework  programme.  In  addition,  the  increasing  cultural  diversity,  including  at  regional 
level, augments the urgency to address new digital divides. 

4.3. 

Public services 

The  use  of  ICT  in  this  area  aims  at  improving  the  quality  of  the  services  provided,  and  at 
increasing  democracy  and  transparency.  There  is  currently  strong  political  momentum  for 
public  sector  reform  in  search  of  greater  efficiency  and  effectiveness.  This  is  driven  by  the 
need to face major societal challenges, such as ageing and immigration, while keeping public 
spending under control, particularly in the health and social services sectors, and improving 
the overall level of quality. 

There  are  several  policy  challenges  in  this  area.  First,  investment  in  ICT  is  not  enough.  As 
indicated below, this investment has to be accompanied by re-organisations which are often 
difficult  to  implement.  Second,  there  are  problems  such  as  those  related  to  the  lack  of 
interoperability of many of the services; to the diversity of administrative law and practices 
between countries, to issues of identity management, and to the sometimes insufficient degree 
of reliability and security of the available networks. Furthermore, improvements in this area 
are  particularly  important  for  SMEs,  since  these  are  being  disproportionally  hit  by 
administrative burdens. Businesses, and especially small ones, need to be able to complete as 
many procedures as possible online. In order to achieve this, submission of documents with 
authorised  electronic  signatures  must  be  possible.  Finally,  the  cross-border  dimension  of 
public  services remains a priority16. In particular, company registration and  one-stop  citizen 
mobility are examples of key pan-European services that could be pursued. 

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See  IPTS/ESTO  “eHealth  in  the  context  of  a  European  ageing  society.  A  prospective  study”,  final 
report, April 2004. 
As indicated in trans-European programmes such as eTen or IDABC. 

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4.4. 

Skills and work 

The  analysis  of  the  effects  of  the  use  of  ICT  shows  that  the  best  results  are  obtained  by  a 
combination  of  reorganisation  of  the  processes  and  investment  in  ICT  skills.  This  calls  for 
strengthening  the  ICT  component  during  all  learning  and  training  processes  to  demonstrate 
how working processes are affected and practices must be altered to obtain the full benefit for 
the user. But there is also a need to make ICT skills  available  to all  citizens. This probably 
represents the biggest policy challenge of all. 

At  the  same  time,  ICT  facilitate  the  acquisition  and  updating  of  skills.  They  make  it  more 
economical, less linked to specific locations and times,  and  more  easily customised to meet 
particular needs. 

The  employment  challenge  of  Europe  is  reflected  in  the  discussion  on  the  productivity  gap 
between the US and Europe. The key issue is to apply ICT in the workplace in ways that raise 
efficiency, improve the quality of work and provide better jobs. Part of the Lisbon agenda is 
to increase participation in the workforce. ICT can help in reaching this objective by making 
work more accessible, for instance to part-time workers and home workers, and possibly by 
delaying retirement. 

At  the  same  time,  it  is  necessary  for  the  European  Union  to  respond  to  global  competitive 
pressure by clarifying the strategic implications of global sourcing and focusing on the right 
future  global  positioning.  This  includes  a  thriving  research  and  development  base  and  the 
availability  of  a  breadth  and  depth  of  skilled  labour  performing  well  in  the  latest  ICT 
technologies.  Public  policies  have  to  address  all  these  aspects.  This  must  be  complemented 
with  research  to  develop  services  and  applications  capable  of  doing  this  and  with  the 
implementation of appropriate technical solutions. 

4.5. 

ICT as a key industrial sector 

The  ICT  industry  is  a  major  economic  sector  in  its  own  right,  covering  information 
technology,  electronic  communications  and  audio-visual  markets.  The  EU  has  long 
recognised  that  this  is  a  key  sector  whose  development  is  to  be  encouraged.  Recently,  the 
spectacular  growth  of  other  markets,  particularly  in  Asia  and  Latin  America,  is  pulling 
production, research and standardisation activities towards these regions. 

Therefore, there is a pressing need in general to make Europe a more attractive place to invest 
and  to  create  high  quality  jobs.  A  central  thrust  of  EC  industrial  policy  is  to  create  a  pro-
competitive  enabling  environment  that  is  as  clear  and  simple  as  possible17.  In  2005,  the 
Commission  will  analyse  the  sector’s  competitiveness  and  propose  appropriate  policy 
measures. Beyond this, ICT research plays a key role. The R&D effort is a main determinant 
of  the  contribution  of  ICT  to  productivity  growth.  The  Commission  has  already  presented 
guidelines for future European Union policy to support such research efforts18. 

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To this end the Commission is currently studying ICT sector policies at national and regional level and 
intends  soon  to  launch  a  high  level  stakeholder  debate  with  Member  States  and  Industry,  see  also 
“Fostering structural change: an industrial policy for an enlarged Europe” COM(2004) 274. 
See “Science and technology: the key to Europe’s futures. Guidelines for future European Union policy 
to support research” COM(2004) 353. 

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4.6. 

Interoperability 

As ICT based applications become more available, there is an increasing need to make them 
compatible:  e.g.  the  convergence  between  fixed  and  wireless  networks  and  between 
telecommunications and audiovisual provision. Interoperability has many facets: for network 
operators,  it  means  to  be  able  to  interconnect  with  other  networks;  for  content  or  service 
providers, it means being able to run a service over any suitable platform. For consumers, it 
means  the  ability  to  purchase  a  device  and  use  it  to  access  services  and  download  content 
from different sources. 

In general, interoperability and standards are elaborated and chosen by market operators. It is 
expected that the work of the European standardisation organisations, CEN, CENELEC and 
ETSI under eEurope 2002 and 2005 will continue in relation to the new priorities. In addition, 
governments must follow progress in this area attentively. In some circumstances, they may 
find it necessary to support stakeholders in their search for common solutions. In some areas, 
which have particular public policy relevance, it may be necessary to require the use of open 
standards. 

4.7. 

Trust and dependability 

The use of the internet is beginning to penetrate the daily life of citizens. A precondition for it 
to become more widespread is that it proves worthy of our trust. Security, privacy protection, 
property  protection  and  general  governance  of  the  sector  are  indispensable  for  building 
citizens’  confidence  in  the  Information  Society.  This  is  particularly  relevant  in  terms  of 
consumer  concerns  regarding  loss  of  privacy,  unfair  or  illegal  commercial  practices, 
unsolicited  communications  as  well  as  in  relation  to  illegal  and  harmful  content  and  the 
protection  of  minors.  Many  efforts  are  being  implemented  to  move  the  internet  into  such  a 
position, such as work on making the internet safer for children, systems for risk management 
and  incident  control,  actions  on  spam.  A  further  dimension  relates  to  the  dependability  of 
systems and networks. The infrastructures of modern life, e.g. in banking, finance, healthcare, 
energy, transportation and others heavily rely on ICT and are mutually dependent and failures 
might have far-reaching consequences. 

At  the  same  time,  privacy  and  data  protection  becomes  more  and  more  an  issue  with  the 
powerful capabilities providing for relatively easy access to comprehensive information about 
both private individuals and intellectual property. 

4.8. 

Exploitation of ICT by business 

The efficient use of ICT by companies is recognised as being one of the success factors for 
improving European competitiveness. Yet the effective take up of new business processes and 
the  adoption  of  new  business  models  to  exploit  the  potential  of  ICT  remains  a  challenge, 
especially  for  the  millions  of  European  SMEs.  The  lower  and  slower  investment  in  ICT  in 
Europe is a clear macro-level indicator that Europe is not investing in productivity enhancing 
ICT  as  much  as  the  USA.  In  addition,  European  performance  is  affected  by  the  large 
proportion of SMEs, which are still lagging behind larger enterprises not only in terms of ICT 
infrastructure deployment but also in the level of sophistication of ICT use. 

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5. 

CONCLUSIONS 

This communication argues the case for wider use of ICT, for continued policy attention to 
ICT related issues and presents some of the key policy challenges that the EU faces as it looks 
towards the last five years of the Lisbon Agenda. We must build upon the considerable work 
that  has  already  been  achieved  in  EU  Information  Society  policy.  There  is  a  need  to  make 
explicit the huge positive effects of ICT, and – more generally - of the Information Society to 
overcome fears of new technologies and the concerns about the increase in the digital divide. 
On the economic side the central issue is not only to ensure that ICT are more widely adopted, 
but  also  how  to  make  investment  in  ICT  more  secure  and  effective  and  how  to  build  on 
experience in order to spread the benefits more widely. 

This  communication  launches  a  process  of  reflection  on  a  new  vision  of  the  Information 
Society that should be put into place at the start of 2006. The Commission will consult with 
stakeholders,  including  the  European  Parliament,  the  European  Economic  and  Social 
Committee and the Committee of the Regions as well as the eEurope Advisory Group, over 
the coming year, and will bring forward a new policy agenda. 

The  Commission  invites  the  Member  States  to  play  an  active  role  in  elaborating  the  new 
Information Society policy for the coming years and to respond to the issues identified in this 
document. 

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