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Recovery Plan: an opportunity for Europe's digital transformation

| COVID-19 / News | Litigation

Vicente Moret analyses the plan which aims to strengthen Europe's competitiveness, resilience and position as a global player

The COVID-19 pandemic has shaken Europe and the world, testing health care systems, societies, economies, and our way of living and working in general. As a result, the accelerated digital transformation has disrupted our lives. New technologies have kept many businesses and public services running. They have helped to keep us connected, to work remotely and have enabled, among other things, the continuation of training activities at all levels of education. This leap will mean permanent and structural changes in social and economic life and that is why the European Commission, which is obliged to act quickly to maintain the European project, considers that now is the time to move forward to repair the damage and prepare a better future for the next generation. Therefore, on 28th May, it launched the Recovery Plan, which aims to strengthen Europe's competitiveness, resilience and position as a global player.

This Plan identifies two challenges: the green transition and the digital transformation, since both, the Commission points out, are even more important now than before the crisis began. The European Recovery Plan will provide EUR 1.85bn to help boost the economy. Part of that effort will be included in a new EUR 750 billion recovery instrument called Next Generation EU.

The Commission understands that the digital transformation will have to be articulated along priority axes. The first is to invest in more and better connectivity, which is necessary to meet the challenges of 5G, IoT and Industry 4.0. Another key challenge is to ensure reliable and common digital identity systems, which are essential in a digital single market context.

Furthermore, it is understood that now is the time for the European Union to make a decisive commitment to increasing its level of digital sovereignty, with a greater industrial and technological presence in strategic parts of the supply chain. To achieve this, a number of priority lines of investment are identified, including artificial intelligence, cyber security, data and cloud infrastructure, 5G and 6G networks, Blockchain, and quantum computing, the future playing field for global digital supremacy.

The Plan also points to another essential line of action, which is data economics. Data is a driver of innovation and job creation, and therefore common European data spaces will be created in key sectors and areas, in support of European industry, the implementation of the Green Deal, health, mobility and public administration. Particularly relevant will be the new data regulation; it will establish the conditions for better access and control of industrial data, and the provision of high-value public administration data.

In addition, it is considered essential to generate a simpler and more balanced business environment. Internet shopping has been boosted and the trend will accelerate in the coming months. In this respect, the Commission notes the need to regulate the activity of large online platforms to allow small European enterprises to participate also on fairer terms in the digital single market. In this sense, the new European regulation of digital services will be key to redefining the rules of the game and limiting the power of digital platforms.

Moreover, the Commission is aware that public administrations must also be digitally transformed to better fulfil their raison d'être, which is to serve society. The aim is for digital technology to reduce the administrative burden and make it easier for businesses, especially SMEs, and citizens to do business, by making intensive use of digital tools.

Increasing the cybersecurity of networks and systems becomes another pillar of action for the Recovery Plan. A new EU-level Cybersecurity Strategy is expected to be adopted. Industrial capacities in this field will also be strengthened and the creation of SMEs will be promoted. Regulatory action in this area will be intense, as existing regulations on network and information systems (NIS) security will be reviewed and additional regulatory measures on critical infrastructure protection will be adopted. In short, in view of the growing threat, the aim is to increase cybersecurity capabilities as part of the collective effort to create the EU Security Union.

In this sense, the Plan contemplates a change in the regulatory framework for the protection of strategic assets, infrastructure, and technologies with respect to direct foreign investment that could threaten public safety or order. For this reason, a reinforced mechanism for detecting Foreign Direct Investment will be created to restrict it under certain circumstances.

Finally, the Plan aims to address the most immediate challenges of disinformation related to the pandemic and by increasing disinformation in general. It will do so by using the European Action Plan for Democracy to draw out information and future action to strengthen the resilience of our societies.

In short, the European Commission has decided to bet on the digital transformation as a lever for recovery, with the need not to be left behind by China and the USA on the horizon. Time will tell if the large amount of resources to be allocated to this process in the coming years will bear fruit, taking into account the current European position with very few companies in the top 50 of companies included in the digital economy worldwide. Therefore, this Plan can be a catalyst to change a situation that was certainly not favourable for Europe in terms of taking advantage of the opportunities that digital disruption offers. It will not succeed unless it is accompanied by measures on training or on reducing the burden on all companies that want to be at the forefront of the digital field.

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