The EU Aims to Narrow Digital Divide
A North-South digital divide prevents the EU from becoming a global leader in ICT (Information and Communications Technologies) development. Whilst Scandinavia, the Netherlands, Germany and the UK lead EU ICT penetration, the Mediterranean countries are affected by significant entry costs and usage prices. However, the Digital Agenda for Europe aims to change this by 2015, benefitting consumers and businesses.
- The EU had 350 million Internet users in 2010, which places it after China (419 million) but before the USA (248 million) in world rankings;
- In 2010, Scandinavian countries and the Netherlands boasted close to 80% of households with a broadband Internet enabled computer – amongst the highest in the world. In Greece, Romania and Bulgaria this was only 39.9%, 32.9% and 30.5% respectively, the lowest in the EU;
- Older, less educated and rural populations are most often excluded from the digital world. Countries with higher GDP and annual disposable incomes per capita have better penetration rates due to good ICT infrastructure, lower Internet usage costs as a share of disposable income and good ICT competency amongst the population.
Annual Disposable Income per Capita and Possession of Internet Enabled Computer by Households in Selected Countries: 2010
euro per capita and % of households
The EU is still to tap into the full potential of ICT for economic growth and social inclusion. With large numbers of Internet users, Internet retailing offers many opportunities:
- Internet commerce will provide consumers with more choice as well as benefitting businesses. According to Eurostat, 40.4% of the EU population had ordered goods and services online in 2010, as compared to 23.8% in 2005, marking this an area of future growth;
- The total value of Internet retailing in Western Europe jumped from US$42.0 billion in 2005 to US$104.4 billion in 2010. The EU’s largest Internet retailing market in value terms in 2010 was the United Kingdom at US$35.8 billion, followed by Germany at US$20.4 billion and France at US$20.3 billion.
Retail Value of Internet Retailing in Selected Countries: 2005-2010
Source: Euromonitor International from trade sources/national statistics
Note: Data from Passport Retailing – retail value excludes sales tax
In addition to reaching more consumers, businesses can also benefit from cutting costs by outsourcing and saving time through e-commerce and e-government:
- In 2010, 89.4% of basic public services for enterprises in the EU were available online according to Eurostat;
- The Internet can revolutionise business landscapes, creating innovative new products although threatening others (eg print media or traditional retail stores).
The Internet can also improve social inclusion by connecting remote areas, broadening access to information and offering distance learning:
- However, 82.5% of the EU rural population had fixed broadband coverage in 2010, as compared to 95.3% of the total population, according to Eurostat. Fast broadband networks are often concentrated in a few high-density zones with significant entry costs and high prices discouraging investment elsewhere. WiMAX and mobile Internet could fill the gaps.
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