Why is Europe struggling to create its own digital giants?

Why is Europe struggling to create its own digital giants? This is the million-euro question that obsesses the European Commission. In an op-ed published last July in Le Figaro, the European Commissioner for the Internal Market Thierry Breton warned of the urgent need to “ensure Europe’s digital sovereignty” in a context where the rivalry between the major powers is intensifying.  

The budget granted to the policy of sovereignty by the European Union has increased by “20% compared to the previous budget, and even 30% after the departure of the United Kingdom”, Thierry Breton was pleased to report in Les Echos. The new DigitalEurope programme, he continues, “will allow additional investments of more than 20 billion”. The initiative aims to ‘encourage’ and ‘support’ digital technology industries-as can be read on the official website.  

At the same time, the European Commission is continuing its war against the GAFA (Google, Apple, Facebook and Amazon) and is considering taxing the American digital giants to finance its recovery plan. To justify this new tax, which will inevitably reduce consumers’ purchasing power, the EU argues that GAFA pay “half as much” tax in Europe as other companies. However, as the Institut Economique Molinari has shown in a recent study, GAFA pay as much tax as large European companies. In the light of this fact, the GAFA tax appears most unfair. 

Subsidising domestic companies on the one hand and taxing international competitors on the other: the European Commission’s approach seems to be inspired by the doctrine of infant industries advocated by the 19th century economist Friedrich List. However, this strategy does not address the fundamental problem of the European digital market-as well as being extremely costly. 

As Luca Bertoletti and Ryan Khurana, authors of a policy note on the subject for the Consumer Choice Center (CCC), point out, if the European Union is at a disadvantage compared to the United States or China it is because it does not have a true single digital market. Only 15% of Europeans, for example, shop online on a site based in another EU country. 63% of websites don’t even let consumers buy a product from another EU country.

So Europe’s digital market is far from being a single market as it is in the US and China. This is problematic because it limits competition on a national scale and prevents Europe’s most successful firms from gaining market share and achieving significant economies of scale. The authors of the note for the Consumer Choice Center therefore recommend removing the remaining barriers to competition in the European digital market.

The fragmentation of the telecommunications sector is particularly striking. While Romanian and Finnish operators are among the best in the world, both in terms of quality and price competitiveness, telecommunications services in Spain and Ireland are often of poor quality and excessively expensive. 

Spanish and Irish consumers would greatly benefit from increased competition in this sector. In order to allow the best services to gain market share, the European Union should encourage the cross-border provision of telecommunications services and remove protections for incumbent operators. Competition law should also be adapted to allow the merger of different national telephone operators and to ensure that small countries are not put at a disadvantage. Shareholder states should partially withdraw from the merger to encourage private investment and thus promote competition. 

In a true digital single market, users should also not be discriminated against on the basis of their IP address or the location of their bank account. We should, therefore, introduce cross-border licensing of digital media and freeing the purchase of digital content from geographical constraints. Such measures would allow consumers to have access to a wider choice and thus intensify competition between providers.

We should also note that the regulatory environment is still too unfavourable to experimentation and innovation in Europe. This is one of the reasons why the most disruptive technologies are often imported from abroad and rarely developed in Europe. To remedy this, we should increase the number of “regulatory sandboxes” that allow companies to derogate from regulations in order to test new products in a controlled environment.

We should also draw attention to the European Commission’s decision to use Wifi as an infrastructure to accommodate autonomous cars. While it is true that Wifi is faster to implement and less expensive, 5G technology is much more promising. Car manufacturers have already expressed their concern on this subject. To choose 5G rather than Wifi is to fall behind a technology which will surely be the basis of the fourth industrial revolution to come.

The challenge for Europe today is to avoid making the same mistakes as in the past. If Europe wants to play in the same league as the United States and China, it will certainly have to make the necessary investments in the infrastructures of the future, but also – and above all – harmonise and liberalise its digital market. 

Originally published here.

Estesa al 2 febbraio la consultazione pubblica del governo. Oltre il 98% delle risposte contro la misura restrittiva. In campo associazioni, medici e scienziati.

Di Barbara Mennitti| SIGMAGAZINE

È stata posticipata al 2 febbraio la chiusura della consultazione pubblica sulla proposta del Ministro della salute olandese Paul Blockhuis di vietare la vendita di liquidi per sigarette elettroniche con gusti diversi dal tabacco. La data per cessare la raccolta delle opinioni era fissata per ieri, ma è stato necessario concedere una proroga “a causa della richiesta popolare”, si legge sul sito del Governo. Mai, infatti, in Olanda un quesito in materia sanitaria aveva raccolto un numero così grande di partecipanti.

Read the full article here.

The EU’s stimulus package isn’t the right way to go.

On July 21, 2020, the twenty-seven member states of the European Union agreed on a “historic” stimulus plan. In total, 750 billion euros will be injected into the European economy. For the first time in the history of the European Union, member states have agreed to collectively take on debt to the tune of €390 billion. Borrowed on the bond markets, this sum will be paid to the States most affected by the crisis, unconditionally.

While Angela Merkel said in June 2012 that she would not agree to Eurobonds, the Covid-19 has acted as an accelerator to the political will to implement them.

European Commissioner for the Internal Market Thierry Breton welcomed with a tweet that the European recovery plan will in no way result in the creation of new taxes to be paid by European citizens before specifying that “it is only at the borders of our internal market that we will impose taxes”! As if it were not European consumers who were going to see their purchasing power cut by the amount of these taxes.

The only tax officially enacted so far is the one on non-recycled plastic. Applicable from January 1, 2021, this tax will take the form of national contributions. While it is the Member States that will be responsible for making these contributions to Europe, they could come from several sources, including a contribution from market players. In such a case, the cost will likely be passed on to consumers. The risk is also to reduce the capacity for investment and innovation of the industries concerned.

The other funding avenues considered are those of the GAFA tax – still under discussion – and the European carbon tax – which would come into force no later than January 2023. President Emmanuel Macron announced on French television that these new taxes, in addition to financing the recovery plan, will penalise “large companies and international players who do not play our policy game”. This is a very naive view of how the market economy works. In reality, it does not matter whether the tax is imposed on the consumer or the producer, the financial result remains the same: the cost is higher for the consumers and the profits lower for the producer.

While stimulus packages are prevalent, their return on investment is never guaranteed. Historically, the performance of stimulus packages has often turned out to be disappointing.

Harvard economist Alberto Alesina has spent the end of his career analysing thousands of budget adjustments in hundreds of countries. In 2010, when the debate was in full swing following the turmoil of the subprime crisis, the expert on budgetary policies explained in an opinion piece to the Wall Street Journal that the stimulus based on increased public spending was turning out to be positive. Indeed, while market players react positively to a lasting and credible drop in the level of taxation, the increase in public spending sends the opposite signal.

Another advantage attributed to the liberalisation shock is that this method allows power to be distributed to consumers instead of concentrating it in a few administrations which will make choices for others.

It is, therefore, possible to revive the economy without placing an additional tax burden on consumers. It would even be an opportunity for the “bad students” of the euro area to consolidate their public finances — the crisis has shown that countries which are already heavily indebted are the most vulnerable to an exogenous shock.

Unfortunately, it is in the opposite direction that the European Union seems to be heading: towards the increasing disempowerment of the laxest economies. How long can such an arrangement last?

Originally published here.

As we approach the year’s end, it’s time to reflect and predict. What a long strange trip it’s been. I think I can say that given that I’m entering my 13th year of focusing exclusively on the cannabis industry. They say this industry ages you in dog years.

It all began to go warp speed in December of 2009, when we prevailed on the groundbreaking Cannamart v. Centennial case in Colorado. For the first time, a court enjoined a local government from shutting down a marijuana dispensary. 

This time last year when planning for 2020 I’d gathered market data, analyzed trends, and closely scrutinized industry behavior across the board. Given the Hoban Law Group’s positioning, it’s somewhat “easy” to accumulate perspective because of the vast cannabis industry network our firm services. We have an inside joke at HLG: we like to say we sit at the center of the pizza pie. 

We predicted 2020 would be a flat year in terms of revenue and growth at our firm.  Overall, this was going to be a time of regrouping for the cannabis industry – not a rebuild per se, but a retool. Our attorneys and advisors had discussed the same with many of our clients as they prepared for the year ahead.  

The time had come for cannabis industry operators to ensure a buttoned-down business plan, a focus on the fundamentals, and the requirement of wise corporate governance. There was a growing need for increased emphasis on business integrity and ethics, operational efficiencies, regulatory compliance, and production quality for any industrial hemp farm or cannabusiness to see success in 2020 and beyond.  It was no secret that raising capital investment would be tough, and more than likely we’d see an uptick in consolidation.

While that may have been somewhat accurate, no one could have foreseen what this year threw at us —- a pandemic, tremendous social unrest across the U.S and around the world, global economic decline, and a political divide so increasingly deep that most people cannot even see across it to begin to acknowledge, let alone understand, the other side. 

For some context, 2019 was not a cakewalk for the cannabis industry, either. We’d seen a tremendous movement toward the growth of an interconnected global cannabis economy and the nascent stages of an international supply chain.  

Cannabis stocks gained early in 2019, encouraging a false sense of continued growth. By late spring, we began to see major fractures in many of the Canadian funders and operators. Of course, cash began to wane. Then, regulatory troubles for several of these companies revealed even greater inadequacies surrounding their structure and function, leading to illegal marijuana production facilities and FDA warning letters surrounding CBD products.  These developments bogged down the entire sector. Cannabis stocks took a major hit, causing substantial leadership changes for many cannabis companies – CannTrust, Canopy Growth, etc. However, as we’ve explored, this is natural in an emerging industry. 

The supply chain servicing many of these companies was ineffective or nonexistent. We also saw the Vape Crisis, as vape-related health issues seem to be never-ending. 2019 brought unprecedented registered acres of hemp, but also diminishing reliable distribution outlets, increased regulatory uncertainty, and a corresponding glut in the hemp and hemp-derivative market. Overall, the year was a mixed bag. 

In retrospect, 2020 rolled out surprisingly well. In January, Illinois affected the legalization of marijuana. The state remains a very promising marketplace and set the table for many others that moved forward with commercial cannabis regulations of their own. That same month I traveled to Davos, Switzerland, for the World Economic Forum — thanks in large part to Saul Kaye’s foundation and his annual CannaTech events series, as well as events sponsored by the European-based Consumer Choice Center. We discussed and debated how cannabis, and particularly industrial hemp, were consistent with the goals set forth during the 2020 Forum: think sustainability, carbon-capture in farming, plant-based economies, and the medicinal applications of cannabis. This was perhaps the largest world stage ever where cannabis was so prominently displayed. 

At the time, COVID-19 was just a blip on the radar. I returned from Switzerland on January 27, 2020, and witnessed hundreds of people wearing masks at the Zurich airport. I’d never seen this before outside of Southeast Asia; COVID was becoming real. Within weeks, international travel was restricted and I had to “retrieve” my daughter who was studying in the Netherlands after her academic program was abruptly shut down. Economic uncertainty loomed as lockdowns and stay-at-home mandates became the global norm.  

The cannabis industry has faced uncertainty before and has, by-and-large, continued to thrive despite all the challenges of this year. The demand from patients and adult-use cannabis consumers has risen to unprecedented levels during the pandemic. Sales have increased dramatically, and Colorado saw its largest cannabis revenue numbers on record. 

Cannabis was deemed an essential business in numerous jurisdictions around the United States and the world. Consider this — from gateway to essential in the relative blink of an eye. Cannabis was even touted as a viable therapeutic for COVID. By the summer, governments around the world began to view cannabis legalization and regulation as a tool for economic recovery. Many even speculated that cannabis may be recession proof, leading public policy makers, investors, and the like to pay even closer attention to the industry.       

It turns out that this has been a landmark year for the cannabis industry, if not the most successful ever. What does 2021 hold? For now, we’ll just have to pack it up and see what tomorrow brings. The future looks bright as we continue to move toward that light at the end of the tunnel.

Originally published here.

Pandemi COVID-19 yang masih terjadi hingga saat ini merupakan salah satu pandemi terbesar yang pernah dialami umat manusia, setidaknya dalam 100 tahun terakhir. Pandemi ini, yang melanda seluruh negara-negara di dunia, telah menimbulkan korban jiwa hingga lebih dari 1 juta jiwa di seluruh dunia, dan menginfeksi setidaknya lebih dari 70 juta penduduk dunia.

Dampak dari pandemi ini tidak hanya terjadi pada kesehatan publik, namun juga pada kegiatan ekonomi. Resesi dan penurunan pertumbuhan ekonomi terjadi di banyak negara. Hal ini disebabkan banyak sektor ekonomi, khususnya yang bergerak di bidang jasa seperti rumah makan dan perhotelan, tidak bisa beroperasi akibat dari berbagai restriksi yang diberlakukan oleh berbagai pemerintah sebagai upaya untuk menanggulangi dampak dan penyebaran dari virus Corona.

Selain itu, banyak konsumen yang memutuskan untuk menyimpan uangnya dan tidak melakukan konsumsi seperti tahun-tahun sebelumnya sebagai upaya untuk mempersiapkan dampak yang tidak menentu dari pandemi ini. Hal ini menyebabkan banyak kegiatan usaha di seluruh dunia terpaksa harus mengalami kebangkrutan dan menutup usahanya.
Dampak dari banyaknya berbagai usaha yang gulung tikar ini tentu juga menyebabkan peningkatan angka pengangguran yang luar biasa. Berbagai pekerja menemukan dirinya kehilangan pekerjaan karena tempat mereka bekerja terpaksa harus tutup karena pandemi ini.Tidak bisa dipungkiri, menyelesaikan pandemi COVID-19 merupakan tugas terbesar yang saat ini harus bisa kita lakukan untuk menyelamatkan banyak jiwa dan memulihkan kembali roda perekonomian. Di akhir tahun 2020 ini, akhirnya kita menemukan secercah harapan untuk melakukan hal tersebut, yakni melalui vaksin yang efektif, sudah berhasil ditemukan oleh beberapa perusahaan farmasi besar dunia.

Adanya vaksin ini merupakan hal yang sangat penting agar kita bisa menyelesaikan pandemi yang telah menginfeksi puluhan juta orang di seluruh dunia ini. Tanpa adanya vaksin, maka segala upaya yang dilakukan oleh berbagai pemerintah untk menanggulangi dampak persebaran virus Corona tentu tidak dapat optimal, dan bukan tidak mungkin justru akan membawa ekonomi ke jurang resesi dan krisis yang lebih dalam karena berbagai kegiatan usaha tidak bisa beroperasi.

Setelah vaksin berhasil ditemukan, tugas besar lain yang harus mampu kita lakukan adalah mendistribusikan vaksin tersebut kepada miliaran penduduk dunia. Bila aspek kesehatan sudah bisa kita atasi melalui imunitas, maka langkah penting selanjutnya yang harus kita lakukan adalah memulihkan kembali roda perekonomian untuk membuka jutaan lapangan kerja dan meningkatkan kesejahteraan.

Memulihkan ekonomi yang diporak-porandakan oleh pandemi COVID-19 tentu bukan sesuatu yang mudah. Kita harus dapat memaksimalkan seluruh potensi dan sumber daya ekonomi yang kita miliki untuk membangun kembali ekonomi kita, dan agar orang-orang yang menjadi korban kehancuran ekonomi akibat dari pandemi ini dapat kembali bekerja dan melakukan kegiatan sehari- hari seperti sedia kala.

Salah satu pilar yang sangat penting untuk memaksimalkan seluruh potensi dan sumber daya ekonomi yang kita miliki adalah perlindungan hak kekayaan intelektual. Perlindungan hak kekayaan intelektual merupakan aspek yang sangat penting untuk inovasi yang akan meningkatkan pertumbuhan ekonomi, yang merupakan hal yang tidak bisa dipisahkan dari pemulihan ekonomi.

Pandemi COVID-19 yang saat ini terjadi memberi kita pelajaran menganai pentingnya inovasi, terutama di bidang teknologi informasi. Berkat adanya berbagai inovasi di bidang teknologi informasi, seperti video call melalui internet misalnya, jutaan orang di seluruh dunia masih bisa melakukan pekerjaan dan kegiatan belajar mereka di tempat tinggal kita masing-masing. Dengan demikian, mereka tidak harus datang ke kantor atau sekolah dan membahayakan diri mereka denan bertemu banyak orang di ruangan tertutup (USA Today, 7/9/2020).

Perkembangan yang didorong oleh inovasi di bidang teknologi ini, di masa pandemi, bukan hanya telah membantu pekerjaan kita, namun juga membantu kita meluapkan kerinduan kita kepada keluarga, teman-teman, dan orang-orang yang kita kasihi. Jutaan orang di seluruh dunia tidak bisa bertemu dengan orang tua, saudara, dan sahabat-sahabat mereka secara personal karena pandemi ini. Berkomunikasi secara virtual dengan orang-orang yang kita kasihi tentu bukan cara komunikasi yang ideal. Namun, sedikit banyak, hal tersebut dapat membantu meluapkan kerinduan kita kepada mereka.

Perkembangan teknologi yang didorong oleh invoasi juga bukan merupakan hal yang akan berhenti dan melambat ketika pandemi ini berakhir. Inovasi ini justru menjadi fondasi dari pertumbuhan ekonomi di masa depan. Di Amerika Serikat misalnya, hal ini sudah dibuktikan melalui naiknya berbagai saham perusahaan-perusahaan teknologi besar seperti Amazon, Facebook, dan Google (Financial Times, 30/10/2020). Untuk itu, perlindungan hak kekayaan intelektual, untuk mendukung riset dan pembangunan yang akan mendorong inovasi adalah sesuatu yang sangat penting (Ponsip.com, 8/9/2020).

Ekonomi dunia saat ini bertumpu pada inovasi dan kreativitas di bidang pengembangan berbagai teknologi yang terbarukan. Hal ini tentunya membuat teknologi memainkan peran yang sangat penting untuk mendorong pemulihan ekonomi yang telah hancur sebagai dampak dari pandemi ini. Hal ini diakui oleh Menteri Riset dan Teknologi Republik Indonesia, Bambang Brodjonegoro (Merdeka.com, 10/11/2020).

Sebagai penutup, perlindungan hak kekayaan intelektual merupakan salah satu pilar terpenting untuk mendorong inovasi yang akan meningkatkan pertumbuhan ekonomi. Pentingnya perlindungan hak kekayaan intelektual ini kian penting untuk mendorong inovasi agar ekonomi kita kembali pulih setelah porak-poranda oleh pandemi COVID-19.

Originally published here.