By the year 2011, we were supposed to all be zipping around in flying cars, dedicated to lives of leisure as our robot servants do all the work. At the very least, the ICT revolution was supposed to see us working in “paperless offices” with much of our admin automated. Indeed, we had a question from Javier from Spain, who asks: “It is said the ‘information revolution’ has not yet streamlined European business as it should: So has the time come for a determined modernisation drive?” Should the European Union invest in hover cars for us? At the very least, should there be greater long-term investment in ICT technologies? We put this question to Philippe Maystadt, president of the European Investment Bank, to answer.
The European economy has indeed made smaller investments in Information and Communication Technologies (ICT) than the US economy, for example. The ICT boost to growth and jobs has been correspondingly smaller in Europe. However, the full economic impact of the ICT revolution takes many years to materialise. Since the investment wave took off later in Europe than in the US, part of the productivity effects are still to come.
So, the flying cars are hovering just around the corner? Maystadt continues:
Moreover, how much we spend on new technologies is one thing, how effectively we use them is another. Reaping the full benefits of the ICT revolution is paramount for sustained prosperity in Europe. This requires a computer-literate workforce and often radical reorganisation of business processes. The latter tends to come forward relatively slowly in Europe. But European businesses will eventually exploit their productivity potential when forced to modernise by cost pressures and client demand for better services. Accomplishing the Single European Market for business services and removing barriers to market entry of new firms would greatly help to streamline European business. Under no circumstances should modernisation be held back in an illusionary attempt to protect existing jobs. Doing so would cost many more jobs in the long run owing to anaemic growth and loss of world market shares.
Maystadt’s answer, then, is that modernisation is coming. The best way to achieve this is to finish the Single Market and increase competition between European companies, that way forcing them to modernise.
Oh, and we do have flying cars. They’re called airplanes.