A decade since the global financial crisis, its effect continues to hang over the European investment landscape.
With growth across the continent having been at best weak and at worst non-existent, the European Commission has been working to coax a cautious private sector into supporting an investment drive.
So attention is beginning to shift to another Commission initiative – the so-called ‘digital single market’ or DSM – as a way of boosting economic growth and plugging the investment gap.
Playing catch up
There’s no hiding from the fact that Europe needs to dramatically improve its investment performance if it’s going to compete with the US and China.
Addressing delegates at the European Business Summit in Brussels, Lowri Evans, Director General of Internal Market, Industry, Entrepreneurship and SMEs at the European Commission, was unequivocal regarding investment. “If there’s one thing that needs to improve, it’s Europe’s performance in terms of its investment relative to the other competing regions of the world.”
But catching up with the leading economies won’t come cheap.
Source: European Commission
Digital infrastructure investment
A key part of Europe’s investment plan is making sure that digital infrastructure schemes, such as high-speed broadband, are properly funded.
Calculations by the European Investment Bank have shown that such projects will cost around $73 billion per year.
In total, it’s been suggested that Europe will need to pump $800 billion into digital infrastructure in order to compete with the US.
Speaking at the same Summit, Harald Gruber, Head of Digital at the EIB, said: “These are sizable amounts but they’re not completely unrealistic. The EIB is the key-partner in EFSI. It supports investments that have a policy goal and innovation is a key policy goal. Last year we spent more than [$14.6 billion] on innovation projects.”
Making investment more appealing
Persuading private investors to part with capital is often a struggle.
However, making the EU single market fit for the digital age could encourage businesses to start loosening the purse strings.
A DSM will enable companies to cut through the red tape that entangles the EU’s member states by effectively uniting 28 national digital markets as one.
The Commission has said this could contribute $467 billion per year to the economy and create hundreds of thousands of jobs.
There’s still some way to go before this becomes a reality of course, but the hope is that increased investment delivered via a DSM will help enable European businesses to better compete both at home and in the global market.