It is true that Belgium hasn’t performed particularly well in the technology rankings.  As a result we have worked really hard to make Belgium the digital heart of Europe.  And I think it is beginning to work.   

 

There are three main axes to the digital plan for Belgium. Firstly, connectivity for all; secondly, improve the existing infrastructure and competitive climate to achieve that goal; and thirdly, create an environment where new services can be developed such as electronic invoicing, e-health and smart electricity networks. By 2015 we aim to score substantially higher in the rankings. Our goals are pretty ambitious: we want 90% of the households connected to broadband internet, up from 64% today; half the pupils above the age of six should have access to a computer at school; half the population must make use of mobile internet; one in three workers should be teleworking on a regular basis; and 50% of all invoices should be electronic. That’s the essence of our digital plan and we have 30 actions planned to achieve those goals.  The plan is in execution and we’re gradually achieving results.

 

For example, one impediment to open competition was the fact that the telecommunications regulator was too weak. It couldn’t stand up to the incumbents with the result that our market wasn’t open to new entrants. We fought a hard battle on this issue but today we have a new board and management team in place—and they’re not politically appointed. They’ve already taken two pretty radical decisions. For one, they forced our mobile termination rates down to the lowest level in Europe and secondly they compelled Belgacom to open up its super fast VDSL2 network to third  party operators.

 

Another action point in the digital plan was the decision to restructure the telecommunications market by auctioning a fourth mobile operator licence.  We want to do this mainly to make mobile internet cheaper because we’re still trailing behind somewhat in this area.  The adoption of mobile internet is low in this country because it is too expensive. But we also need a fourth player to stimulate more innovation.  The mobile offering is still way too limited here; it’s purely an infrastructure story at present.  Where’s the content?!  But things are beginning to happen.  Mobistar is looking at mobile television and we’re going to be auctioning fourth generation LTE licences.  Wewill be amongst the pioneers in Europe with LTE.  

 

E-commerce is another area we are looking at.  E-commerce has shown huge growth in the past year, and that was in the middle of the economic crisis.  Clearly there is an important shift happening here, although we are still catching up to other countries.  This is such an interesting country for e-business!  Think about it; the country is densely populated with the result that 99.9% of our population can have broadband internet access, if they want it or are able to afford it.  Bandwidth is already relatively high and getting much better.  Fibre is being rolled out by Belgacom and Telenet, and  there are no download limits anymore on premium accounts.  Things are clearly moving in the right direction and the government is playing a useful role in this.

The fact that not everybody is connected is a concern.  Approximately 70% of the households have a PC and a similar proportion have broadband internet.  That is too little and that’s why we set up a project where people with limited financial means can buy a PC with internet connection at a reduced price.  

Yes, they do, but they must be accompanied by an information campaign and by free education courses. But what works even more effectively is tied selling (conditional selling).  It took me years to win that battle and for a long time I was politically isolated on this issue. But we got it through.  And the result: Telenet sold 25,000 mobile subscriptions together with a smartphone in one quarter! That’s amazing. It illustrates how a relatively minor simplification of the law, a scrapping of a single rule, can achieve so much more than subsidies. To get things moving in this country, as you know, is no easy task.

Technology is one of the driving forces of productivity. Our economic competitiveness—at a Belgian level but also at a European level—is too low compared to the US and China, and that’s partly because we’re not using enough technology. In government, for example, we’re clearly not investing enough in technology.  In some areas, like the social security sector, there have been important achievements and in others we have big plans, like the health care sector. But in so many other areas it is still a deplorable state of affairs; in justice for example, but even in transport. It’s so illustrative that when it is smog alarm we have to manually turn all the smog boards on our highways.  Across the board we have marginalised technology, in government but also in business. There are two core drivers of economic growth and prosperity: technology and open markets. If you look at the industrial revolution and now the internet revolution—technology lies at the root of these.  It is essential that we create a climate for technological development and adoption.  

 

We have several good initiatives in place to stimulate technological development. For example, R&D staff at Belgian research centres are eligible for a significant reduced tax bill.  Also, people or companies who earn income from patents benefit from a reduced tax rate. We reduced their tax rate from 34% to 6.8%! We’re one of the cheapest countries in the world when it comes to taxing technology. In fact, in some ways we’re a tax heaven. The problem is that not enough companies are familiar with these schemes; hence they don’t use them. That’s why we’ve been organising conferences and communicating about this—every entrepreneur in this country should be aware of these programmes. But we also want to attract more international players. For example, Shenzhen, which is the 4th largest city in China, recently opened a representative office in Brussels. They’re supporting two major Chinese companies, Huawei and ZTE, who are currently investing in Belgium. Huawei is a key supplier of Belgacom and is setting up a new innovation centre here. They’re also a major competitor of Leuven-based Option—but that’s the essence of open markets. 

 

One concern I have is that in Europe we seem to struggle with the creation of really large disruptive technology players. There are a few, like Skype and Netlog, but we don’t have enough of these success stories. I suspect that our continent has closed itself off too much for talent from China and India. When you ask graduates from these countries where they want to go they all say the U.S. In Europe we’re at risk of becoming a footnote in the world’s history; and Belgium is no different. Clearly we need a strong digital plan at a European level too. And a first priority is to create a single telecommunications market. It is absurd that when I call Kortrijk from Lille just across the border, I pay five times as much as when I call Marseille from Lille. We need a single market. But we also need to be more open to other cultures; and we need to stop protectionist policies that favour incumbents. It isn’t only the consumer who ends up paying the price for this; it also stifles innovation in this region.