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Overview of the EU Data Market
I can see that over the last years, data have become a key factor of production across the economy. It has become a tradable good with major socio-economic value. We have commissioned a study to set up a European Data Market Monitoring Tool which provides some key figures. Let me share some of them with you: The European data market amounted to more than EUR 47 billion in 2013, raising to EUR 50.4 billion in 2014, at a growth rate of 6.3%. This represents a share of total ICT spending
in the EU28 of 8.7% in 2014, which is significant for an emerging market.
The overall value of the data economy in the EU is estimated at about EUR 255 billion in 2014, representing a contribution to
the EU GDP of approximately 1.8%. The value of the data economy includes the estimates of all the economic impacts produced by the adoption of data-driven innovation and data technologies in the EU: this comprises direct impacts of the data industry and its suppliers, indirect impacts on user industries, and induced impacts created by the additional growth and spending generated by data-driven innovation across the whole of the European economy.
In 2014, the European data industry comprised approximately 243,000 companies with a share of 14% of the 1.7 million enterprises populating the ICT and professional services sectors. This includes start-ups, innovative SMEs, and many existing enterprises that are moving to exploit the emerging business opportunities of the data market. Data companies’ revenues amounted to almost EUR 48 billion in 2013 and EUR 51 billion in 2014, thus registering a considerable growth rate of 7.1%
year-on-year. I should underline the fact that we see in 2014 a dynamic data Industry, but with a still immature data
I strongly invite you to have a look at the website developed in the framework of this study on EU Data markets (click here)
Are there national disparities in the European landscape?
We see that Germany, the U.K., France, Italy, Poland, and Spain («the Big Six») accounted for more than 70% of all data workers in the European Union in 2014.
In terms of employment share, though, the discrepancy between large economies and smaller economies tends
to lose importance and appears to be more correlated
to other variables such as the overall ICT penetration rate
by country: this is why Member States like Luxembourg and Lithuania, for example, have data worker shares well above the EU average. On the other hand, countries like Slovakia and Romania still face great challenges from
the point of view of data worker share.
How is France positioning itself in this global EU Data Market?
Looking at data companies share of total companies
by Member States in 2014, we see that France has a sizable number of data companies but a large proportion of small, traditional companies that may take time before they take up data technologies.
With its Loi du Numérique, but also with a number
of actions under its industrial policy «Nouvelle France Industrielle - Industrie du Futur», France is setting
the standard on a number of issues important for
the on-going digital revolution. The innovative thinking of the Conseil National du Numérique, Teralab and Etalab in the area
of open data and big data underline the commitment of France to drive the agenda on data-driven innovation in Europe.
The milestones of the Commission’s actions for a European Data economy
As you might remember, the October 2013 European Council concluded that: «EU action should provide the right framework conditions for a single market for big data». In response, in July 2014, the Commission outlined a new strategy on data-driven innovation, supporting and accelerating the transition towards a data-driven economy in Europe.
Framework conditions can be improved with better legal certainty around the data concept. Therefore, the Commission also announced in the Digital Single Market Communication that it will propose in 2016 a European «Free flow of data» initiative
that tackles restrictions on the free movement of data for reasons other than the protection of personal data within the EU
and unjustified restrictions on the location of data for storage or processing purposes. It will address the emerging issues
of ownership, interoperability, usability and access to data in situations such as business-to-business, business-to-consumer, machine generated and machine-to-machine data. We will encourage access to public data to help drive innovation. We see big benefits in opening up governmental data for re-use for citizens, businesses, and society and for the governments themselves.
In this context, the Commission has launched a fully-fledged pan-European infrastructure to federate content published
on European public open data portals through one single interface. The European Data portal is operational since November 2015, currently providing a unique access to more than 400 000 datasets from all over Europe.
In order to boost investment and foster community building the Big Data value, a contractual Public-Private Partnership on data was created in October 2014 with the concrete objective to fund “game-changing” data innovation ideas, building on a Strategic Research and Innovation Agenda. European Industry is represented by the Big Data Value Association (grouping over 130 members). Investments into Research and Innovation are expected to reach around EUR 2.5 billion over 2016-2020 (of which approximately EUR 500 million from Horizon 2020 programme). Evaluation of the first round of proposals is now under way.
In terms of support to collaborative research and innovation actions, you must have come across - maybe without knowing it is actually supported by the EU - some of the more than 100 projects funded by EU research and innovation programs like FP7,
CIP and H2020 addressing different data intensive sectors such as energy, transport and health.
The objectives of the Startup Program Horizon 2020
Startup Europe is indeed a key program that aims at strengthening the business environment for web and ICT entrepreneurs
so that their ideas and business can start and grow in the EU. Since 2011, it has developed a portfolio of actions focused on developing a connected continent of startup ecosystems. We believe in the importance of a developed ecosystem to nurture startups from early stage up to growth and expansion stages. I invite you to have a look at the One Stop Shop (click here),
that has been developed to ease the access to all the services provided to startups and ecosystem builders.
What are the priorities for 2017?
Important proposals will come in 2016 and 2017 as part of the Digital Single Market which is as you know among the top priority of our Commission. There are still many challenges to address. We need to facilitate access to digital computing infrastructures: for industry, especially for SMEs, and for research centres. We need new approaches supporting the emerging data economy ensuring access to good quality data, e.g. exchange of data as commercial objects. We also need a skilled workforce able
to contribute to and benefit from the digital transformation.
Legal certainty is a very important element. This is why, as we already mentionned, we are going to address the issues of data «ownership», interoperability, (re)usability and access to data, and liability. These emerging issues (including data «ownership») still require substantial work and are still subject to consultations and assessment; no decisions have been taken about the nature of any proposals, but they will keep us busy this year and the next.
I also think it is high time we tackled restrictions on the free movement of data for reasons other than the protection of personal data within the EU and unjustified restrictions on the location of data for storage or processing purposes.
In the coming months and years, we will continue our cooperation with the European industry, since only if the business community joins forces then digitisation of industry can unleash its full potential.
The support to innovation is paramount and remains our focus. As an example, I would like to mention the Open Data Incubator called ODInE, a EUR 7.8 million project (Horizon 2020 funding) that became operational in spring 2015. It is supporting up to 50 start-ups to experiment with small grants allowing them to create sustainable commercial applications built on open data.
As an example of the already achieved results of this action, CommoPrices, a French startup supported by ODInE, enables users to easily track the price of any commodity, on a single portal. In this context, ODInE contributed to the validation and the acceleration of the business, the improvement and broadening of the data, and the company’s expansion into other countries. This is the kind of support needed by rising small businesses in Europe.
What is your opinion on the Skills Shortage for Data Specialists?
Skills shortage can be explained by the complexity of the different skills needed to understand data, sectors and decisions related to it. We don’t only see new disciplines appearing, but also professionals in companies needing to enlarge their skills
in the field.
The European Union had 5.7 million data workers in 2013 and 6.1 million data workers in 2014, representing more than 3%
of the total employment in the EU. The number of data workers therefore increased by almost 6% year-on-year in 2014, which is well over the 2.2% growth rate for employment in the EU registered in 2014. This shows that data workers are actually more than usually thought! Still, the main potential gap is for data scientists and «hard» technology skills. And I see the shortage of skills in the field of data as one of the major threats to the development of this sector in Europe. The right skillset is essential
to properly process data and create new businesses.
With the DSM Strategy, the Commission has committed
to address digital skills and expertise as a key component of its future initiatives on skills and training. Last year, we set up
the European Data Science Academy (EDSA). This is a structure that develops learning materials based on an analysis of the need for skilled data workers and the professionals’ needs in terms of trainings. As you may know, the Commission published
on the 10th of June 2016 a new Skills Agenda for Europe, working together to strengthen human capital, employability
and competitiveness. It covers a number of actions and initiatives with the ambition to tackle the digital skills deficit
in Europe by improving the quality and relevance of skills formation, making skills and qualifications more visible and comparable, and advancing skills intelligence, documentation and informed career choices. Finally, through the European Research and Innovation Programme Horizon 2020,
the Commission will continue to promote data skills by supporting activities like the alignment of curricula and training programmes to industry needs, the establishment of national centres of excellence in all Member states, and exchanges
of students and data professionals across Member States.
How will companies best benefit from a European Data Economy?
Based on a continuous growth scenario, the sector is expected to show a healthy growth, with a European data market reaching EUR 83 billion. It is also expected to bring an improved efficiency in various sectors, with new and more targeted services,
the reuse of data in a cross-sectorial way, and the development of platforms (for instance, industrial data spaces).
The potential is more than big. We see that data-driven innovation is taking place in many contexts, in manufacturing
and the services industry, but will soon also encompass every aspect of our life. Just generating the data, however, will not ensure that the data can always be used in a way that is efficient in economic and societal terms.
Let me give you some examples: The connected car of the future is not only a consumer of data, but also a producer of data, e.g. on weather and road conditions. The raw data collected by the car can be fed back and can be used in order to enhance weather prediction, ever more granular and in real-time. It goes the same for airplane engines, wind turbines and smart meters.
In the near future, an increasing number of intelligent devices and components that are part of our daily lives will be data users and data producers.
This creation of value chains is key to keep our industries competitive. Competitiveness will come from the ability of industries
to provide additional data services on top of the products they sell. This happens in the machine tool business already,
where leading companies do not sell you the machine only; they sell you a service that uses this machine and monitors it
to optimise run-time, to eliminate break-downs and to reduce overall costs of use.
What impact of the 14 April 2016 Regulation and Directive adopted by the European Parliament?
Clearly, the EU Data Protection Reform is an enabler for data-driven services in Europe. Consumers need to trust companies
in order to take up the services they offer. So in this respect, privacy-friendly companies have a competitive edge, and I believe the privacy-friendly environment in Europe is one of the incentives that can bring innovative technology companies to set up shop in the EU. This is illustrated by big companies investing in European Data centres to develop cloud solutions. I would say the GDPR reflects a certain societal consensus in Europe on what should be possible with personal information and is thus crucial for the acceptance of data analytics. It also decreases compliance costs overall by setting one single legal framework
for the entire EU and streamlining administrative decision-making for data processing under the «one-stop-shop» principle.
[The views expressed in the article are the sole responsibility of the author and in no way represent the view of the European Commission and its services.]
Marta Nagy-Rothengass has a broad working experience Europe wide in business and public environment, and gathered her interest on ICT while establishing «New Media» by a traditional German manufacturing company. In 2005, she joined the EC as the Head of Unit of «ICT for the Environment», further developed as «ICT for Sustainable Growth». After moving to Luxembourg in 2008, she served as Head of Unit «Technologies for Information Management». Since July 2012, she is in charge of the Data Policy and Innovation Unit (formerly known as Data Value Chain Unit) and implements a strategy
to extract the maximum value from data by building on the intelligent use of data sources across Europe and beyond.