Europe has to work harder to catch up with U.S. Web business. Recently,
delegates at an Internet conference in Madrid said delays in speeding the
technological revolution would not only deny Europeans
state-of-the-art media services, but they also would get in the way of a
fundamental overhaul of the region’s economy.
“In Europe we are being left behind; we have not been capable of Quote
Snapshot reproducing the successes achieved on the other side of the
Atlantic,” Spanish Prime Minister Jose Maria Aznar told the “Europe in the
Internet Economy” seminar.
“Our problem is not the lack of a scientific or technical base,” he said.
“Our problem is the lack of stimulus for business initiatives, which is key
to North America’s success.” Speakers said the roughly $160 billion merger
of AOL with Time Warner represents just the kind of bold, deal-doing spirit
that is still difficult to pull off in Europe.
“This shows the way we will have to go in Europe,” said Spanish Industry
Minister Josep Pique. He noted that the combined market worth of AOL Time
Warner–estimated at $350 billion–is equivalent to about 60 percent of
Spanish gross domestic product.
Just 12 percent of homes in the European Union are hooked up to the Web,
compared with around 50 percent in the United States, and while European
e-commerce revenues soared to 17 billion euros ($17.42 billion) in 1999,
they were less than a third of similar income in the United States, European
Commission figures show.
The ability of the U.S. economy to grow without stoking inflation has been
widely attributed to technological progress. The Commission unveiled an
“eEurope” plan last December with the aim of giving all Europeans access to
the Internet over the next few years. But some delegates at the Madrid
meeting said it would take too long to implement, given the pace of
Erkki Liikanen, EU commissioner for enterprise and information society, said
Spain has awakened to the need for greater Internet literacy by pledging to
spend around $3 billion in three years to provide wide access to the Web.
“But we need a wake-up and a shake-up at the European level,” he said.
European Net entrepreneurs have complained they are challenged not only by
Europe’s linguistic and cultural differences, but also by varying
regulations across the region and by politics.
Most European governments also have yet to begin deregulating “local
loops”–the last sections of cable into homes–which is a key step in
providing competitive prices for the bandwidth on which advanced Internet
However, delegates to the conference said there is at least one area in
which Europe has advantages over the United States. Esther Dyson, chief
executive of U.S. risk capital fund EDventure Holdings, said she is
encouraged by plans of new European entrepreneurs to take advantage of the
region’s far higher level of mobile phone use than in the United States.
“I think they are going to be well ahead of what we have in the U.S.,” she
A new generation of mobile phones capable of accessing the Internet for
simple operations has recently been introduced in European markets.