• The European Commission’s “Next Generation EU” package is a much-needed boost for the digital sector’s recovery

• DIGITAL SME emphasises the importance of spending the money on sustainable digital transformation instead of only “buying Zoom subscriptions”
• Europe’s recovery strategy must also avoid the “over-regulation trap” and ensure SMEs receive a fair share of the innovation budget

Brussels, 28 May 2020 (DIGITAL SME). The European Commission has proposed an additional 750€ billion “Next Generation EU” package to revive the economy after COVID-19. The additional budget is to be embedded within the long-term EU budget (Multi-annual financial framework) 2021-2027.

The recovery plan focuses on “strengthening the Single Market and adapting it to the digital age”, which includes “investing in more and better connectivity”, “stronger industrial and technological presence in strategic sectors, including artificial intelligence, cybersecurity, supercomputing and cloud” and building a “real data economy” as well as increasing cyber resilience.

DIGITAL SME welcomes the Commission’s plan but emphasises importance of “sustainable digitalisation”

“We welcome the plan announced by the European Commission. It is a bold initiative that will strengthen Europe’s digital transformation”, said President Dr. Oliver Grün in a first reaction to the publication of the Commission’s recovery plan. At the same time, DIGITAL SME maintains that it is important to focus on sustainable digital transformation. DIGITAL SME Vice-President George Brashnarov stressed this point during a meeting with Members of the European Parliament on Monday: “We need to support a sustainable digital transformation as a response to the current crisis. What we mean by that: Companies, but also society as a whole, need to understand that ‘going digital’ does not stop with a Zoom subscription”. A sustainable digital transformation means to rethink business models in line with the opportunities that emerging technologies have to offer.

This extends to the digitalisation of industrial production processes and of all other sectors, including services and public administration. “There are many areas where we are not yet at the stage where we should be, e.g. education or health. We need to think further and set the grounds for a deeper digitalisation after COVID-19”, President Grün emphasised in a recent press release.

European recovery necessitates avoiding “over-regulation trap”

Vice President Brashnarov also stressed that we shouldn’t forget about the biggest burden on companies: regulation and bureaucracy. Policymakers should make sure that regulation does not put additional burdens on companies, especially smaller ones. “If we want to innovate in new technologies, we need to create the right framework for companies to do so”.

This includes making sure that SMEs also receive a larger share of funding for digital innovation. In a good first step, the recovery plan states that it will “provide additional means for emerging and breakthrough innovations by small and medium-sized enterprises, start-ups, and midcaps” via Horizon Europe. However, we need to make sure that SMEs are at the heart of these programmes as they form the backbone of Europe’s economy.

Want to learn more? You can read our previous positions on Covid-19 recovery and a joint letter on the MFF budget here.