Gold Magazine November - December 2013, Issue 32 | Page 34

OPINION

Competing
in a Changing World
The Conclusions of the last European Council
are an important step to achieve growth.

A

s long as most European economies are stagnant, our most
pressing challenge in the EU
is to compete in the world and
find drivers of growth and jobs
for the future. The Conclusions of the last European Council may seem a
long way away from the concerns of Cypriots in
the cities and villages, worried about how to get
through the current economic difficulties. But
they contain some important decisions which can
not only help put Cyprus on the road to recovery
now, but also help the whole EU to strengthen its
ability to compete in what will be a very different world economy over the next decades. And
Cyprus will have some natural advantages in that
EU-wide effort.
Short-term, the measures to promote youth
employment will make a difference, in Cyprus
and in other Member States. So will the measures
to support innovation, and thereby contribute to
both GDP growth and employment; and the help
targeted at SMEs, which includes almost all companies in Cyprus.
The leaders also agreed to look further at how
to reduce the burden of regulation on EU companies, as proposed in papers presented to them by
the Commission and by the British Prime Minister. Too much regulation works against growth;
for small businesses in particular, more time spent
filling in forms means less time developing a new
product, sealing a new contact or hiring the next
young recruit. The UK’s proposals are included
in the business taskforce report, prepared by six
representatives of small and large businesses of
the UK who consulted business partners from
across Europe and worked through more than
250 suggestions for reform which will cut the EU
red-tape. Their findings support the conclusion
that freeing business from some of these burdens
could be one of the fastest-acting ways available to
get Europe’s economies back up to speed. (See the
Foreword and Executive Summary of the report on
pages 86-87)
The greatest long-term impact, though, will
come from the measures which can help promote
the EU’s competitiveness into the next decades.

The EU’s
GDP can be
increased by
4% between
now and 2020 if
we make good
use of digital
opportunities

By
Matthew
Kidd

A key part of this is to establish a single market
for the digital economy and boost cross-border
e-commerce. We are all increasingly used to using
the Internet to access information, communicate
and share. The increasing demand for broadband
access shows there is appetite to go further. But
we are only at the beginning of seizing the economic benefit that’s available, if we take the right
steps. Online buying and selling can increase the
market overall and therefore GDP (but at the
moment only 8% of consumers EU-wide buy
goods online across EU borders). There may be
new methods of bartering goods and services
which can help assets be used more productively.
E-processes can reduce all sorts of administrative
overheads. Overall, the EU’s GDP can be increased by 4% between now and 2020 if we make
good use of digital opportunities and deal with
some of the obstacles on the way. That’s a prize
worth seizing. The Council Conclusions were an
important step forward.
Naturally there are many policy issues that
we need to consider as the digital single market
initiative progresses. We have to strike the right
balance between protecting intellectual property
while allowing appropriate commercial exploitation, and between protecting the privacy of
citizens while allowing the appropriate use of personal data. Commercially, we need to create the
conditions that enable innovative new entrants to
the market to develop new business models, while
not undermining the continued success of established market players. For the UK, the priority
areas are modernising the EU intellectual property framework; improving e-commerce by securing
a modern legal framework on data protection and
improving infrastructure and extending the reach
of broadband.  
Thriving in the Internet world will not depend
on size or closeness to your market but on a
skilled workforce, able to develop and implement
new ideas quickly. The supporting infrastructure
will not be of heavy industrial capacity or railway
networks but broadband and intellectual skills.
That’s just the sort of economic environment in
which a country like Cyprus ought to have the
best chances to compete successfully.

info: Matthew Kidd is the British High Commissioner to Cyprus.

34 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES

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07/11/2013 18:53