Trends in the European Digital Economy: the dynamics of the new ecosystem

About

Drastic changes took place, over the last decade, in the telecom services and equipment sub-sector. They have been driven by the entry of some players from other sectors of the ICT (e.g., Apple, Microsoft, Google or Yahoo) and, to a lesser extent, from the media and content industries. The blurring of previously distinct sectors has been described under “the new ICT ecosystem” (Fransman, 2010).

Wireless-mobile technology became a major driver of economic value in the world economy (EU: ≈250bn €or 2-3% of GDP and rising). ITU (2013) counted, in 2013, almost as many mobile-cellular subscriptions as people in the world, with more than half in the Asia-Pacific region (3.5 billion out of 6.8 billion total subscriptions). The number of smartphones in use worldwide has topped 1 billion in 2012.

The smartphones phenomenon not only contributed to the upgrading of devices. It also changed the way customers are using their mobile phone, among others by shifting the patterns of use toward the Internet world and allowing access to all kind of contents. The phenomenon is only the most visible indication of the changes taking place in the ICT ecosystem. It paved the way for the creation of an array of new applications whose number has skyrocketed. Mobile became a significant way to distribute news, music and is certainly of one the fastest growing platforms to provide such contents and assorted services. The mobile revolution is changing the lives of millions of people in the developing world (UNCTAD, 2010).

The growth of traffic is now mainly driven by consumer (as opposed to business before) with consumers becoming more and more active as “prosumers”. Looking at the composition of the traffic growth, the growth is mainly driven by media, with video being the driver (over 50% of the traffic) (Cisco, 2013). Indeed, the shift to digital information is scaling up by several orders of magnitude in data volume every couple of years. To be noted, China and India are the fastest growing mobile markets in the world.

Digitization has had different impacts on firms in different parts of the value chains. These developments have imposed a need for restructuring on modern businesses which is reflected in their adaptation to the terms of doing business in the digital segment of the market and also through the development of new business models which can bypass the traditional obstacles.

The presentation is an attempt to give an overview of the dynamics of this global ecosystem of telecom, media and technology with a focus on the European digital economy (media markets). The economic dynamics at work appear designing a multicentre world, organised along numerous gravity centres (terminal, networks, contents and intermediation among others). The presentation will bring some elements about how the new ecosystem and value chains are being restructured in a global market with rising regions like Asia.