THE FUTURE OF COHESION POLICY

DIGITALEUROPE appreciates the opportunity to share below its comments on the future of cohesion policy as per the questionnaire kindly prepared by the Commission. o How could the Europe 2020 Strategy and cohesion policy be brought closer together at EU, national and sub-national levels? The basic precondition for effectiveness of any policy intervention is that they are based on and fit the economic and societal context. What is the context for the Cohesion Policy today?  We live in times when Europe has experienced its worst recession since the 1930s. Countries face public budgets challenges and fragile recovery without accompanying employment gains.  There is profound societal transformation going on across the globe. Advances in ever more capable network-based technologies are reshaping the way we do business, spend our free time, communicate, socialise, work and collaborate. A new economic and employment landscape is emerging and the transition period needs to be actively managed.  Furthermore, long-term challenges of scarcity of resource, environmental degradation, an ageing population, rising health costs and the financial viability of existing public services models are compounded by security and energy threats. As EU 2020 states: either the EU faces up to the immediate and long-term challenges and regains competitiveness, boosts productivity and assures its long term prosperity, or it will have to address permanent lower levels of wealth, sluggish growth, high levels of unemployment, social distress, and a diminished role in world affairs. As explained above, the landscape of the cohesion has changed and the Cohesion Policy must adequately reflect new reality through a much closer alignment with the longer term growth and competitiveness agenda. Therefore to align it better with EU 2020 at all levels, new framework for cohesion policy should ensure that:  National-level policies re-orient cohesion policies frameworks toward delivering the more tangible and growth-related objectives.  Cohesion Policy ensures that it maximizes the extent to which specific initiatives, which are its part, fully leverage technological advances  Cohesion policy takes account of the key trends that impact and affect its effectiveness. These are trends relating to technological advancements and the pervasiveness of ICT in society, demographic trends, and the increasingly urban nature of the country.  Cohesion Policy ensures protection and enhancement of the open communications networks and expression and communications within the context of the new economy.  Job creation in changed environment is a core objective not only economically, but also socially, as it is having a direct impact on Cohesion Policy objectives. The challenge of job creation must be addressed by fostering more open, transparent and competitive markets

DIGITALEUROPE Rue Joseph II, 20 >> B-1000 Brussels [Belgium] T. +32 2 609 53 10 >> F. +32 2 609 53 39 www.digitaleurope.org >> 1 of 6

and facilitating access for European firms to global markets and foreign investors to the EU (which is in accordance with EU2020 strategy).  Cohesion Policy should be simultaneously aligned with the realities of the changing nature of unemployment. The European Social Fund must play a decisive role in such an alignment. o Should the scope of the development and investment partnership contract go beyond cohesion policy and, if so, what should it be? The Commission proposal to ensure better alignment with Europe 2020 and linkage to „concrete investment priorities accompanied by clear and measurable targets‟ is welcomed. Member States must be given a greater role and responsibility in addressing competitiveness and productivity lags within their own nation. Cohesion Policy should not be seen as a perpetual or permanent subsidy that rewards slow growth and failure to invest wisely. Regions must plan in advance for the withdrawal of Cohesion Funds and submit development and partnership plans that reflect this reality. The investment partnership contract is a key tool to be used to drive attainment of economic and social objectives if adequate metrics and measurement is used in the 3-year reviews. The programme and its administration is not the objective in itself but economic growth, social inclusion and skilling of the population to enable them to deal effectively with economic and societal changes. These target outcomes needs to be reflected in the contract. Additionally, the same “development and investment partnership contract” could also be used as a reference to frame and prioritise a region‟s engagement in wider EU programmes such as the RTD framework. This holistic approach to key development objectives and would support industry, government, academic and SME identification with the targets defined in the contract It is also very important that the scope for “development and investment partnership contracts” helps to create environment that spurs innovation and growth. Therefore, contract should be accompanied by additional national-level incentives structures, such as more flexible tax incentives at the enterprise and individual levels should be supported to increase both the levels of private investment in growth and cohesion supporting systems. The role of the EU policy here should be to allow such flexibility at the national level and monitoring and communicating the benefits of specific policies deployed across various states. An aligned set of policies – fostered at the EU level and deployed to the member states levels – should aim to develop a functional, integrated, single market for public procurement across the EU. Once again, such a market can act as a focal point for enhancing territorial cohesion and delivering on the Europe 2020 objectives. A number of publicly-financed sectors across Europe – e.g. health, education, public transport etc – remain largely closed to inter-EU competition, with exception to the direct asset procurement and, less often, asset management. o How could stronger thematic concentration on the Europe 2020 priorities be achieved? Measures and interventions of Cohesion Policy should be aimed at support of the competitiveness, growth, innovations and development of infrastructure and services necessary for the digital/knowledge-based society. New ICT-enabled networks such as smart grids and ultra-fast broadband are the backbone for a networked society. Moreover, they will help drive the creation of a sustainable tax base built on skills, industry, science and innovation. Financial means should not be any more available for simple re-building/repair of physical infrastructure in individual Member States or non-systemic/ad hoc actions. Specifically, funding that is directed at a substantial improvement in the quality of services provided by Member States and that lead to an improvement in the management of infrastructure will have a more beneficial impact and help to achieve the priorities set out in Europe 2020. There should be thus thematic alignment with country‟s Digital Agendas.

>> 2 of 6

o How could conditionalities, incentives and results-based management make cohesion policy more effective? Cohesion policy is an important tool through which to drive significant social and economic progress across member states and to achieve the EU 2020 objectives. In turn, the cohesion policy should make use of conditionality provisions and incentives to accelerate and entrench key policy reforms required to reach these objectives. However, it is necessary to bear in mind that conditionality can in certain pose certain risks too: some conditionality will be linked to major national reform policies (e.g. cutting budget deficit or implementation of pension reforms), but the investments in many cases will be carried out at local and regional levels. The risk is that local and regional stakeholders could be penalized for the failure of the national governments to comply with their reform plans. We believe that requirement for an effective performance management system should become an essential part of the cohesion policy guidelines. Such systems should employ clearly defined objectives, targets, baselines and milestones. On such a basis it would be able clearly identifiable which projects are hitting its targets and which are not. This would open the possibility of allocating resources towards more productive initiatives, while also helping to better understand and address troubled projects. Further, such a performance management system will enable the European Union Member States as well as individual stakeholders clearly articulate the benefits and returns on the investment it is making through the cohesion policy. o How could cohesion policy be made more results-oriented? Which priorities should be obligatory? Cohesion Policy must become one of enablers of economic and societal transformation and to address effectively the main challenges of EU society. Therefore, Cohesion Policy should be focused on interventions that  can solve the most acute challenges of EU society e.g. productivity gaps, employment levels, an ageing population, high social and healthcare costs, innovation, competitiveness agenda and security threats.  are financially sustainable and introduce innovative models to support lower cost of quality public services e.g. via adopting intelligent technologies such as business process revision and development of shared services and cloud technologies) and/or are enhance risk analytics capabilities at various levels of governments and sectors e.g via data-based risk management.  are delivered through through wider deployment and more effective use of intelligent/digital technologies. By harnessing major technological shifts and adopting best business practices, governments/NGOs/businesses/public sector can not only make EU society function far more productively, but also foster greater innovation in all areas and generate thus smart, sustainable growth together with job and wealth creation o How can cohesion policy take better account of the key role of urban areas and of territories with particular geographical features in development processes and of the emergence of macro-regional strategies? The implementation of technology based on intelligent solutions presents great potential for urban regeneration and development, greater efficiencies and savings, and quality and equality in provision of local services. The information and communication technologies (ICT) sector is the most important supplier of growth and jobs in the EU economy, contributing 50 % to productivity growth. Development of the digital economy, together with communications and information revolution, has significant implications for all the areas of operations of European cities. Cohesion Policy thus should

>> 3 of 6

 Pay more attention to the cities and their agglomerations in order to help them to become smarter in all areas of public life. These include city governance, energy, water management, transport, tourism, housing, education, health and social care, public safety etc.  Support the idea of ICT-enabled “smart, sustainable and inclusive growth” in cities as a system of systems, incorporating city economy, mobility, use of resources, environment, people quality of life, services and SMEs, continued education and training, living and governance.  Introduce a strengthened legal framework for the urban dimension. Such a framework should encompass a stronger emphasis on integrated planning, simplified delivery system, better and more frequent utilization of global grants, sub-delegations as well as a stronger local involvement and contribution in the design and delivery of all Operational Programs.  Public services, health care and further education should be accessible in an equitable manner irrespective of geographic or territorial specificity. This can be achieved through building ICT infrastructure and adoption of innovative service models. This ICT investment supports economic development in remote and peripheral regions and maintains population bases and should not be subject to any specific limitation in OP budget lines. o How can the partnership principle and involvement of local and regional stakeholders, social partners and civil society be improved? Public consultation and active public participation needs to be considered in the development of cohesion projects. The perceived democratic deficit needs to be addressed in all levels of EU action. The Cohesion Funds are a very visible and positive expression of European Union actions in a regional and local setting. Tools either off-the-shelf or by the EU (DG Internal Markt) for interactive policy management (IPM) and should be used to ensure that local stakeholder engagement is sought. This may be opinion on alternative projects or elements within an OP line. The EU must encourage adoption of public consultation in relation to “Common Strategic Framework”. This may include some allocation for financial support for the stakeholder animation. Within the Commission, its own processes should be adapted to respect and value the outcome of any local stakeholder consultation. Partnership principle and involvement of stakeholders can be supported via the technology such as Web 2.0 and social networking tools. Web 2.0 is providing citizens and businesses across the European Union with an increasingly significant avenue for direct impact on how civil society, local and regional stakeholders and social partners operate. For example, the number of internet users in Europe has increased by 352% between 2000 and 2010. This in turn can be harnessed by the EU to increasing the degree of partnership through E-participation initiatives. For example, by publishing information on items under consideration relating to Cohesion policy, ensuring that there are ways for the public to engage in consultations with stakeholders and one another. o How can financial discipline be ensured, while providing enough flexibility to design and implement complex programmes and projects?

The Programme targets and metrics need to be defined based upon publicly verifiable outcomes.

>> 4 of 6

o How can it be ensured that the architecture of cohesion policy takes into account the specificity of each Fund and in particular the need to provide greater visibility and predictable funding volumes for the ESF and to focus it on securing the 2020 objectives?

Regarding ESF and its greater visibility: ESF interventions should be interlinked EU 2020 objectives and Cohesion Policy through facilitation of skills development and training needed for sucessful transformation of the EU society toward knowledge based/digital economy. ESF interventions should be focused on skills that Europeans need to build smart, sustainable and inclusive society. As stated in Flagship Digital Agenda - the internet has accelerated competition for investments, jobs and economic influence at a global level but Europe is not equiping itself adequately. Despite the fact that more and more daily tasks are carried out online, some 30% Europeans - have never used the internet. Therefore:  digital literacy and competency should become one of priorities for the European Social Fund regulation in order to educate European citizens to use ICT and digital media and particularly to people to ICT education.  Service processes, both online and traditional, need to be streamlined. Not all citizens will choose to adapt to the ICT revolution. Incentives and „push policies‟ need to be used to drive-up usage and attain the productivity potential which justified large scale ICT investment in government. Government should consider whether all government interaction should move to ICT enabled structures backed-up by better backoffice processes. The role of skills in supporting competitiveness in EU economy is undisputed. Therefore, ESF intervention should also address changing skill demand and the growing skills gaps that are emerging in transfroming EU economy. Now, as governments and businesses scramble to cut costs, the ability to grow in-demand skills is under threat. Without sustained focus on investments in education and learning, the outcomes of EU reform agenda could be under the risk. ESF intervention should be thus focused on:  Re-designing education and training to better accommodate life-long learning.  Ensure ICT training is a core competence in all teacher training.  Bringing a more multi-disciplinary and student-centric focus to learning, linking schools, tertiary institutions and workforce training.  Supporting the creation of adaptive learning programs, using collaborative technologies and digital learning resources for both teachers and students.  Improving availability of online learning resources and investment on attaining benefit from social networks.  Build further and higher education markets through adoption of remote learning tools to build upon ultra-fast broadband investments.  Championing curricula for new, multi-disciplinary qualifications that would address emerging technology trends as well as developing “soft” skills e.g. Service Science education and research.  Encouraging cooperation among businesses, public authorities and education providers to identify emerging skills needs.  Leverage the available technology that would facilitate the delivery of higher quality, „smarter‟ education services to support the delivery of the above initiatives.

>> 5 of 6

ABOUT DIGITALEUROPE

DIGITALEUROPE is the voice of the European digital economy including information and communication technologies and consumer electronics. DIGITALEUROPE is dedicated to improving the business environment for the European digital technology industry and to promoting our sector‟s contribution to economic growth and social progress in the European Union. DIGITALEUROPE ensures industry participation in the development and implementation of EU policies. DIGITALEUROPE‟s members include 57 global corporations and 37 national trade associations from across Europe. In total, 10,000 companies employing two million citizens and generating €1 trillion in revenues. Our website provides further information on our recent news and activities: http://www.digitaleurope.org

THE MEMBERSHIP OF DIGITALEUROPE

COMPANY MEMBERS: Acer, Agilent, Alcatel-Lucent, AMD, APC by , Apple, Bang & Olufsen, Bose, Brother, Buffalo, Canon, Cassidian, Cisco, Corning, Dassault Systems, , , , , , HP, IBM, Ingram Micro, , JVC, Kenwood, Kodak, , , LG, Loewe, , Mitsubishi, Motorola, NEC, , Nokia Networks, Océ, Oki, Oracle, , , Pioneer, , Research In Motion, International, , Sanyo, SAP, Sharp, Siemens, , Sony Ericsson, Technicolor, , , .

NATIONAL TRADE ASSOCIATIONS: Austria: FEEI; Belgium: AGORIA; Bulgaria: BAIT; Cyprus: CITEA; Czech Republic: ASE; Denmark: DI ITEK, IT-BRANCHEN; Estonia: ITL; Finland: FFTI; France: SIMAVELEC; Germany: BITKOM, ZVEI; Greece: SEPE; Hungary: IVSZ; Ireland: ICT IRELAND; Lithuania: INFOBALT; Netherlands: ICT OFFICE, FIAR; Poland: KIGEIT, PIIT; Portugal: AGEFE, APDC; Romania: APDETIC; Slovakia: ITAS; Slovenia: GZS; Spain: AETIC, ASIMELEC; Sweden: IT&TELEKOMFÖRETAGEN; United Kingdom: INTELLECT; Belarus: INFOPARK; Norway: ABELIA, IKT NORGE; Switzerland: SWICO; Turkey: ECID, TESID, TÜBISAD; Ukraine: IT UKRAINE

>> 6 of 6