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eIdentity: The master key to the European Single Market

November 4th, 2016

The analogous world was nice, but it’s gone. Today, digital technologies are part of almost every appliance or product. At the same time, life cycles are getting ever shorter: In ten years, 40 percent of today’s top 500 companies worldwide will no longer be of importance, says Peter Diamandis, CEO of Singularity University in Silicon Valley.

We need to take care that our society does not turn into the way a bagel looks like: having a hole in the middle. MIT professor Andrew McAfee warns of the decline of the middle classes if we allow the benefits of technology to destroy our jobs instead of create new ones. He is advocating a rise in entrepreneurship to counter this danger.

Wise words from two Americans. Does Europe lack smart, digital visions? Certainly not! However, we do lag behind the United States and Asia with regard to implementation. We need to change this rapidly.

A construction kit for a better Europe

The implementation of the digital European Single Market is in full progress. The construction kit for a better Europe is made up of three solid pillars: First, existing barriers need to be abolished. This includes the necessity to simplify the contractual laws for cross-border trade and to strengthen consumer protection. For example, consumers could then finally watch videos provided on online platforms from other member states without being kicked out of the digital movie theatre. Deliveries to any European country must no longer be a problem, and pricing needs to be more transparent.

The second pillar deals with the improvement of the digital infrastructure. Broadband internet is an absolute necessity, but unfortunately it is still unavailable in many rural areas throughout Europe. Only 25 percent of all Europeans have access to 4G, the fourth generation Internet. In rural areas, it is a meagre four percent. By contrast, 90 percent of US citizens are using the current Internet standard.

The third pillar is concentrating on digital economy and society. Start-ups need to be supported decisively in order to avoid a further downturn of our economy, securing jobs as well as innovation. In an effort to advance the deployment of important services in areas such as transportation, energy and healthcare, guidelines for standardisation need to be strengthened. Finally, eGovernement needs to modernise public administration and design public services between the member states in a way as to allow for an utmost level of seamless cooperation.

More output, more work - without any barriers

The European Union is currently working on three tremendous targets: A 415 billion euro increase in economic performance per year, more jobs, a true Europe without barriers.

In addition, Europe needs an even stronger shared commitment to the establishment of IT intelligence and marketable solutions for the future, allowing us to implement a European IT value-added chain. In 2015, some 3,500 start-ups worldwide were active in the area of finance. They are known as FinTechs. The venture capital available for this purpose has increased by almost twenty times since 2010. Only a very small part of it has been invested in Europe.

However, this is not the fault of European know-how. Half of the most promising start-ups are currently coming from Europe. But our best ideas, developed on our tax money, are being bought up by US Americans. What is the best way to protect ourselves from this brain drain? What I have in mind is a European IT foundation. Similar to the model of the European Bank for Reconstruction and Development (EBRD) or the European Investment Bank (EIB), it can be positioned on the basis of government stakeholders such as the national ministries of finance.

The idea behind this is that an organisation of that kind will be supported financially by the IT giants of the European Union as well as by users and beneficiaries of advanced solutions in IT-dependent areas such as traffic (for example the automotive industry), healthcare, mechanical engineering or environmental engineering, by a proportion according to their respective market size. Accordingly, creative start-ups can be supported financially.

A European IT foundation like this requires a stable, European core shareholder structure which is in a position to protect our interests and pool the value-added potential of this future-oriented industry. An IT foundation can furthermore direct the necessary development strategies towards mega trends and focus development activities on the requirements of our European Industry 4.0 society.

The key: A homogeneous eldentity

In my opinion, the main aspect of a digital Europe is the electronic identity. An identity linked to a person and to the civil registration service, a homogeneous eldentity opening all doors. Ideally, the eID is implanted under the skin via a chip. Being inseparable from its holder, it can neither be stolen nor lost. But most importantly, these data cannot be transferred unless the holder agrees. Using online services is only possible after a reciprocal and highly encrypted proof of identity.
Smartphones could also serve as carriers of our eIDs. However, they can get lost or be stolen. And despite the ever-increasing sales rates of information and communications technology, some people deliberately refrain from using them. Their reasons are either a lack of financial means or their wish to flee from the constant connection with a digital parallel world, preferring to stay with internet-free telephony. Finally, the density of the broadband network needs to be increased significantly to allow for the smartphone as a universal key.

The eldentity is meant to be the connection to the educational and the healthcare systems and to make shopping on the Internet a matter of fact. Today’s barriers in trade and administration are to be abolished by the eID.
With eIDs and eSignatures it will finally be possible to standardise procedures and documents across Europe. Documents can then be received and stored in a digital safe. This can for example be an insurance policy that has been signed with the eSignature and can be sent directly to the personal electronic safe, independently of the insurance company.

Every citizen is managing her or his own digital safe. No outsider may access the stored documents, except if the owner is authorising somebody on a temporary basis - for example a public authority requesting a document.

Throughout Europe, the standards need to be identical. This concerns documents – in particular official documents – as well as civil status documents and certificates of competence. It equally applies to electronic records with the aim of being able to formally transmit them digitally throughout Europe if requested.

Urgent: Advancing cryptography

Applying the highest standards of security requires additional advances in cryptography in Europe. This pertains to maximum security storage of key material and to encryption algorithms as open source components. Unless we apply proper encryption, access to our data is too easy for criminals. In 2014 alone, the damage done by cyber criminals was at an estimated total of 575 billion dollars.

And what is going to happen once all milestones for the digital European Single Market have been implemented? What’s behind the finishing line? The majority of European online data will then be stored on servers of the “United Clouds of Europe”, a common data cloud “Made in Europe”. The industry has thus clearly surpassed the initial forecast for the year 2020, and has generated savings of over 500 billion euro. Finally, the European economy can take a deep breath: With an economic growth of 1.9 percent, growth has increased by 206 billion euro!Ultimately, the digital European Single Market could achieve in passing what we have only been dreaming about so far: Raising the faltering European self-esteem.

November 4th, 2016
2016-11-09