Digital economy

• Author: Directorate-General for Parliamentary Research Services (European Parliament)
• Pages: 55-69

Europe’s two trillion euro dividend: Mapping the Cost of Non-Europe, 2019-24

55

DIGITAL ECONOMY

7. Completing the digital single market

Potential efficiency gain: €110 billion per year

Key proposition

The digitalisation of the economy and society is progressing rapidly, generating tremendous

changes in many aspects of people’s lives. Whether in communications, sho pping or manufacturing,

the digital revolution is a driver of transformation, offering significant potential for the European

economy. Based on different macroeconomic simulations undertaken by the European

Commission, the potential gain from a completed digital single market (DSM) could range, in the

long run, after full implementation, between €85 billion per year (0.6 per cent of EU GDP)149 and

€256 billion per year (1.7 per cent of EU GDP)150, depending on the study considered. For the

purposes of this analysis, a figure of €110 billion (or 0.72 per cent of EU GDP) is used, being the more

ambitious estimate of the study we consider to represent a lo wer bound.

Since 2015, serious effort has been made to put in place a framework to realise a digital single market

within the EU, but there is still considerable potential for further action to draw on the potential of

the digitalisation. In 2015, the Juncker Commission introduced a comprehensive Digital Single

Market Strategy for Europe151, reinforced by a European Parliament resolution the following year152.

However, changes in this field are far from static, and major on-going innovations point to the

continuing need for both in-depth analysis of the challenge and innovative policy responses to it.

More detailed analysis of potential benefit

A recent study by the European Commission’s Joint Research Centre (JRC) in 2018, using the

RHOMOLO model153, estimates a potential increase of EU GDP over the baseline between €60 billion

and €110 billion per year, after full implementation of the relevant policies.

The main policy dimensions of the DSM considered are e-commerce, e-procurement, e-invoicing

and cloud computing. Taken one by one, these areas have direct impacts in terms of cost-saving

149 Christensen, M., Conte, A., Di Pietro, F., Lecca, P., Mandras, G., and Salotti, S (2018). The third pillar of the Investment

Plan for Europe: An impact assessment using the RHOMOLO model. JRC Working Papers on Territorial Modelling and

Analysis No. 02/2018, Europ ean Commission, Seville, 2018, JRC113746.

150 European Commission, The Economic Impact of Digital Structural Reforms, September 2014. The percentage share of

GDP is based on the EU economy in 2013.

151 European Commission, 'A Digital Single Market Strategy for Europe', COM(2015) 192, May 2015.

152 European Parliament Resolution of 19 January 2016 'Towards a Digital Single Market Act', 2015/2147(INI ).

153 Christensen, M., Conte, A., Di Pietro, F., Lecca, P., Mandras, G., and Salotti, S (2018). ibid, The third pillar of the

Investment Plan for Europe: an impact assessment using the RHOMOLO model, JRC Working Papers on Territorial

Modelling and Analysis No. 02/2018, European Commission2018, JRC113746.