Openness is a key world for cultural heritage too. The digital transformation of europe’s culture is the key factor.
Openness is the organising principle of the digital world, from the open standards that underpin the internet itself and the open-source software that powers the web to the collaborative knowledge hive of Wikipedia and the trust-based sharing-economy apps in which strangers exchange everything from car spaces and spare rooms to pets and power tools.
In turn, the openness of the internet allows organisations and institutions to be more open themselves. This allows businesses to be more innovative, but also more accountable. And it allows governments to be more transparent and democratic decision-making to be more participatory. By reducing barriers to knowledge, innovation, data and communication, digital openness is thus building stronger societies and more competitive economies.
But it also brings challenges. How can openness be harnessed without impinging on citizens’ privacy? How can security be maintained amid an open flow of information? And how can digital public services be designed and funded to promote participation?
As the OECD, a body representing high-income countries, notes: “To be absolutely open—if such a state is even possible—would require the end of arrangements that are critical for economic and social reasons.” Nevertheless, it adds, “openness is vital for reaping the internet’s potential benefits.”1
Europe’s economies and societies, as those of the rest of the world, are being transformed by digital technology. In this series of research and analysis, sponsored by Android™, The Economist Intelligence Unit will explore the role of openness in this transformation. It will investigate the transformational potential of digital openness, the challenges it faces, and the limitations that must be applied.
The digital economy
European countries are increasingly reliant on the digital economy. In the UK, France and Germany the digital economy’s contribution to GDP growth is above the global average. Accenture, a consultancy, expects Italy’s digital sector to grow at 8.5 times the speed of rest of the economy between 2015 and 2020, with Germany’s sector set to grow eight times faster than the rest.2
Openness has allowed many European companies to thrive in this digital economy. Despite its small size, Estonia has spawned two of Europe’s greatest digital success stories, Skype and TransferWise. It also boasts one of the most open economies in the world.
Sharing-economy companies, such as French ride-sharing app BlaBlaCar, have built their success by acting as an open platform on which others can participate and prosper. In the sharing economy, set to be a US$335bn industry by 2025, it is users’ ability to review their experience openly that gives others the trust and confidence to make bookings.
Even investment in the digital economy has been transformed by openness. Equity funding used to be the preserve of the wealthy, but online crowdfunding platforms such as Germany’s Companisto or Sweden’s FundedByMe have opened the field to smaller-scale investors. In doing so, they have also made the allocation of capital to innovation more democratic.
Digital openness not only provides economic opportunities, it also helps to promote better governance of economic activity. The UK, for example, makes key data about companies freely available to the public, unlike most other countries, which charge fees or do not share the information all. This “Companies House” database is a useful tool for transparency advocates, who can use the data to map the complex networks of registered companies that are often used to evade scrutiny.3
Greater transparency can also improve governance within organisations. Lunar Logic, a Polish web development agency, opened its salaries (on an opt-in basis) back in 2015 in order to promote internal discussion on how and when pay rises should be awarded. According to CEO Pawel Brodzinski, the move has encouraged more peer-to-peer feedback among employees and made the allocation of pay rises fairer.4
The benefits of digital openness are not confined to business. Digital technologies have the potential to expose social challenges to greater scrutiny, greater civic participation and greater innovation. An increasing number of governments, local and national, are using online platforms to include citizens in public spending decisions. Open-data schemes allow citizens and advocacy groups to use their governments’ rich data sets to analyse social issues and pursue fact-based advocacy. Open data and open platforms enable social innovation by entrepreneurs, non-governmental organisations, citizen groups and other interested parties.
Openness not only allows social challenges to be identified and quantified, it also allows solutions to be shared. MeshPoint, for example, is an open-source networking platform designed for use during humanitarian crises. Its open-source nature means its equipment can be built with standard components anywhere in the world.5
Digital single market
The benefits of digital openness are by no means guaranteed. The digital market for goods and services between European countries is a case in point. E-commerce is increasing across Europe. But despite the harmonising efforts of the EU, the complexity of regulation across member states, combined with factors such as linguistic diversity, means that just 7% of European small and medium-sized enterprises sell online across national borders.6
As a remedy, the European Commission proposed a Digital Single Market strategy in 2015, which outlined a future in which “the free movement of goods, persons, services and capital is ensured and where citizens, individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or native residence”.7
The potential benefits are huge. “An open and liberalised EU digital single market would provide consumers a wider choice of better-value products from online retailers across the EU, and tech start-ups with immediate access to a market of 500m Europeans,” says Philippe Legrain, founder of OPEN, an international think-tank, and senior visiting fellow at the London School of Economics (LSE) European Institute.
There are many good reasons why digital openness should be subject to checks and balances. Security is one: there are valid concerns that open access to certain data sets would provide tactical advantages to cyber-criminals and terrorist organisations. Nevertheless, as the OECD warns: “It is impossible to create a ‘safe and secure’ digital environment where risk is entirely avoided other than by eliminating digital openness, interconnectedness and dynamism, and giving up the economic and social benefits these properties can unleash.”8 It therefore advises that security measures are designed to protect the economic and social activities that rely on the digital environment, not just the systems and networks that support them. Digital openness must also be bounded by rules protecting individuals’ privacy.
There are political challenges too. The departure of the UK, a pioneer of digital openness, from the EU will require careful negotiation if the flow of digital data is to be maintained. The UK’s Department for Exiting the European Union says that an agreement to preserve such data flows is “essential”, but the country’s technology industry body, techUK, has warned that negotiations could take 18 months or more.
Nevertheless, Europe’s appetite for digital openness, exhibited by the Digital Single Market strategy, should extend beyond consumer markets. Greater openness in government, enabled by digital platforms, can make citizens more engaged and empowered. Greater openness in the exchange of ideas, data, technology and funding could supercharge Europe’s innovation engine. And more transparent institutions could foster greater trust amid growing scepticism about the establishment. With the right checks and balances in place, digital openness should be at the heart of Europe’s digital transformation.
Source: The Economist