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Digital Confidence Securing the Next Wave of Digital Growth

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Digital Confidence Securing the Next Wave of Digital Growth Digital Confidence Securing the Next Wave of Digital Growth POLICY SERIE S Digital Confidence Securing the Next Wave of Digital Growth übersetzt aus dem Englischen DIGITAL CONFIDENCE: KEY TAKEAWAYS 4 I. EXECUTIVE SUMMARY 7 II. THE NEXT GROWTH WAVE IN DIGITAL LIFE: USAGE, 15 NOT THE NUMBER OF USERS, DRIVES GROWTH 1. Digital Life: Introduction ................................................................................................................................................................... 15 2. Digital Life: A Defining Force in Today’s Economy, Politics, Society, and Education .............................. 16 3. Revenue and Growth Drivers: Content and Advertising, Not Access ................................................................. 23 III. DIGITAL CONFIDENCE: SECURING THE FUTURE GROWTH OF DIGITAL LIFE 27 1. Threats to Digital Life .......................................................................................................................................................................... 27 2. Digital Confidence: Concept and Overview .......................................................................................................................... 28 3. Network Integrity and Quality of Service .............................................................................................................................. 30 4. Privacy and Data Protection ............................................................................................................................................................ 36 5. Minors’ Protection .................................................................................................................................................................................. 38 6. Piracy and Theft Avoidance .............................................................................................................................................................. 39 7. Summary ........................................................................................................................................................................................................ 41 IV. TODAY’S APPROACH TO DIGITAL CONFIDENCE: SIGNIFICANT 45 ROOM FOR IMPROVEMENT 1. Case Studies: How to Get Digital Confidence Right—Or Wrong .......................................................................... 4 5 2. The Regulators’ Agenda ...................................................................................................................................................................... 70 V. RISK/BENEFIT ANALYSIS: DIGITAL CONFIDENCE PAYS OFF 75 1. Financial Summary: Downside Risks of Digital Confidence Outweigh Potential Benefits ................... 76 2. Digital Confidence Scenarios—From Divergence to Convergence ........................................................................ 77 3. Key Financial Drivers: Advertising and Content Are Most Exposed to Digital Confidence.................... 78 4. Conclusion .................................................................................................................................................................................................... 79 VI. FRAMEWORK FOR AcTION 81 1. Industry Needs to Develop Leadership in Digital Confidence .................................................................................. 81 2. Network Operators and ISPs Need to Take a Clear Position on Digital Confidence ............................... 82 3. Network Operator Call for Action: The Five Key Initiatives for Digital Confidence............................... 83 4. Implications for Other Stakeholders .......................................................................................................................................... 85 5. Priorities for Regulators ...................................................................................................................................................................... 86 Booz & Company 3 DIGITAL CONFIDENCE – KEY TAKEAWAYS • The digital economy in Europe is expected top of the €436 billion base case. However, of these different areas converge in practice • Digital Confidence policies and practices to grow by 18 percent per annum until 2012 the downside of a failure to enhance Digital and have shown to produce contradictory need to be embedded within the respective to a volume of €436 billion from €236 billion Confidence is greater: 18 percent (or €78 reactions from stakeholders. organisations by establishing internal in 2008. billion) could be lost or significantly delayed. protocols and governance structures to guide • Key lessons drawn from case studies around product and service roadmaps; choice and • Until recently, growth in the digital economy • All players in the industry agree on the the world show that a “can-do” vision is deployment of network-based technologies was largely driven by infrastructure rollout importance of building up Digital Confidence realistic: With regard to enhancing Digital and security solutions; and communication and technology development, such as digital credentials and have launched a wide array of Confidence, network operators can go beyond to customers and other stakeholders (e.g., TV (DTV) migration and next-generation activities accordingly—yet, to date, there is a their traditional roles of “mere conduit” and industry peers, content owners, regulators). broadband technologies. clear lack of coherence and common focus, as educator/teacher whilst observing guidelines most actions are ad hoc, having been triggered for acceptable consumer practices and • Going forward, there will be a very by high-profile incidents of trust or security safeguarding legal safe harbours. significant shift in value from access—though breaches and political pressure. still profitable and growing, albeit at single- • Based on the cases analysed, best practices digit rates—to electronic commerce, online • Legislation alone cannot keep up with the from a consumer acceptance point of view and digital content offers, and online speed and scope of challenges in this market. take shape: advertising. Hence, successful companies do more than just comply with legislation; they stay ahead of • Consumers accept practices that are • Increased usage and spend per user will fuel the curve by adopting proactive policies and transparent and unobtrusive—network strong growth in the next 5 years: Specifically, practices to drive Digital Confidence. operators and content and platform content and advertising businesses will show players, jointly with the regulator, are double-digit growth. e-Commerce will remain • Digital Confidence is built on four pillars, required to drive such communication the biggest market in absolute terms. which, taken together, address the most vital forward. areas of consumer and industry concern: • However, these growth drivers will have • Consumers are concerned about how to prevail over major disruptive forces in the 1. Network Integrity and Quality of Service network operators manage and safeguard European Information Society such as Web (QoS). Focuses on providing secure and consumers’ digital data—clear statements 2.0 services converging across platforms (i.e., resilient enabling technology platforms for and a consistent, reliable regulatory online, DTV, mobile) and a new “born digital” digital life and providing an optimal customer framework are key priorities. consumer generation that is hyperconnected experience and participative but also highly assertive, 2. Privacy and Data Protection. Addresses the • Consumers require control over the feeding into press and political action. security concerns of individuals with respect to risks to which they’re exposed—they seek their digital data access to the appropriate tools, opt-in/ • With the growth and success of digital life 3. Minors’ Protection. Seeks to defend the well- opt-out mechanisms, and education. have come many concerns for consumers being of minors in the online world and enterprises relating to the security and 4. Piracy and Theft Avoidance. Seeks to provide • Consumers accept measures that integrity of the digital environment. a secure digital business environment for all guarantee quality of service—if this stakeholders. requires active traffic management, they • Therefore, enhancing Digital Confidence, are open to it, provided there are clearly as a measure of how much consumers and • As owners of the client relationship, communicated terms of service. suppliers trust in digital and online services, network operators are challenged to put is becoming a key growth enabler—or in place policies and practices that find • To ensure proportional levels of intervention, inhibitor—for the digital economy. €124 general user acceptance, which goes beyond and to find general user acceptance, when billion in market volume (2012) could be compliance with legal requirements or serving adopting more pro-active policies and at risk, approximately 1 percent of GDP the interests of particular stakeholders. practices, network operators should use a for the EU-27, with market value related to graded approach following the E3 paradigm: content and advertising being most exposed. • Therefore, policies and practices should Educate first; Empower second; Enforce The economic upside of being successful in not be driven by single issues (e.g., piracy) selectively where required. increasing confidence and trust amounts to an but should reflect a holistic view of all Digital
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