 | |
| |
TechnologyDaily Mobile
Tech Opportunities In An Expanded Europe
by William NewIn a few weeks, the European Union will add 10 countries to its membership and become a 25-nation powerhouse. The expansion eastward, effective May 1, will add countries that bring higher rates of piracy, corruption and potentially porous borders, but it also will bring in science and technology talent and new markets for goods and services.
The acceding countries have been adopting EU laws for years. But 2004 is a year of uncertainty for the European Union, and it is unclear exactly what impact the additional countries will have.
A Lot Of European 'Cooks in the Kitchen'
The European Union in Brussels, Belgium, has three branches: the council, a body of representatives from each national administration; the Parliament, elected officials from each country; and the commission, the regulatory and administrative body. The council will have 10 new voices May 1 and must agree on a constitution; the Parliament holds elections in June; and the commission will undergo its five-year complete changeover in the fall.
"The dynamic will be very different," said Serge Koperdak, policy adviser for central and eastern Europe at CompTIA. "There will be new players and a new playbook."
"Getting unanimity amongst 15 members is difficult enough, but if you're going to get it with 25, that's even more difficult," one commission official said.
Francisco Mingorance, policy director for Europe at the Business Software Alliance (BSA), said there would be "more cooks in the kitchen" so companies may want to consider bolstering their European teams in response.
Ten of the thirteen countries that applied will join the union May 1: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Bulgaria and Romania hope to join in 2007, while Turkey is on hold.
With accession, the EU population will grow from about 380 million to 455 million people, an increase in the portion of the world's population from 6.1 percent to 7.3 percent, using 2002 EU figures. It will increase the EU gross domestic product from $8.83 billion to $9.58 billion, moving it from 26.7 percent to 28 percent of the world total. The expansion also will give the European Union more weight in international organizations.
Officials from the new member nations are observing EU activities and may take over positions later this year. Jan Figel of Slovakia is learning the job of Enterprise and Information Society Commissioner Erkki Liikanen. Danuta Huebner of Poland, the biggest of the new members, is watching Trade Commissioner Pascal Lamy.
Concerns Over Piracy Abound
Parliament this month cited a continuing "big gap" in the implementation and enforcement of EU legislation in some new member states and "widespread corruption in the public sector," which it called cause for "particularly serious concern." Hungary, Latvia, Poland, Slovakia and Slovenia were cited for corruption, Czech Republic for money laundering, and Lithuania for border security and the fight against illegal trafficking and organized crime.
Piracy is one of the biggest U.S. concerns, despite improvement in addressing the crime. BSA reported that from 1994 to 2002, the eastern European piracy rate dropped 14 points, from 85 percent to 71 percent, the fourth-best improvement of any global region. But by comparison, western Europe averages 35 percent pirated goods.
Stefan Krawczyk, deputy regional director for Europe at the International Federation of the Phonographic Industry (IFPI), said digital piracy is worse in western Europe, while pirated physical discs are much more common in the east. Enforcement of copyright protections is "in a very bad state" in the new countries, he said. With accession, the average EU music-piracy rate will double from 15 percent to nearly 30 percent, Krawczyk said.
"Our number one concern in this region is the organized criminal activity involved in the production of optical material," said Eric Schwartz, vice president and special counsel at the International Intellectual Property Association (IIPA).
IIPA this year recommended that Poland be placed high on a list of problem countries by the Bush administration. IIPA also recommended that Estonia, Hungary, Latvia and Lithuania be monitored closely. Poland last week adopted new regulations on the licensing of manufacturing plants that could help reduce piracy, though the problem of transshipping persists, Schwartz said.
The accession countries are ahead of existing EU members in adopting so-called Internet copyright treaties at the World Intellectual Property Organization because the European Union planned to sign as a whole. One source said new countries such as Estonia were told to slow down on the WIPO treaties so as not to shame countries like Belgium, France, Holland or Sweden for being 15 months late. The new countries also have signed World Trade Organization agreements.
Expansion Means IT Opportunities
On the plus side, the expansion will create opportunities for information-technology procurement as governments and businesses modernize.
The market research firm IDC predicts the cost of updating information technology as a result of the expansion will account for one-fourth of total IT spending in eastern Europe in 2004. It will generate almost $5 billion in information spending in eastern Europe and will drive 11 percent of new IT spending in the overall region of Europe, Middle East and Africa, IDC said.
The proposed 2004 budget for the European Union shows a 6.9 percent increase in spending for "information society," 5.9 percent for research and 2.8 percent for direct research. When the new countries are added, those numbers will rise to 18.5 percent, 18.5 percent and 13.5 percent.
An EU program for "social cohesion" includes modernizing basic infrastructure and improving education and training in the poorest countries. Some IT improvements are being targeted to the eastern borders, which bump against countries that produce large quantities of pirated goods.
New Members Attract Investment
Western countries may find useful practices in the east as well, Koperdak said. For instance, Slovakia has a 19 percent flat-tax system, a simple, more enforceable system that has attracted the investment of foreign firms like Hewlett Packard, he said.
Another opportunity is for "near sourcing" of production in the new countries. And with the strong traditions in applied sciences and mathematics of many acceding and candidate countries, Liikanen said in a recent speech, "It is not unrealistic to expect these countries to become leading lights in [technology] innovation." Liikanen also highlighted progress made in areas such as e-government, e-health and Internet in the schools.
Acceding countries have had to adopt dozens of EU directives related to the information society. For example, Jonathan Band, a partner at the Morrison and Foerster law firm in Washington, said countries must adopt an EU database law that prevents the extraction of a "substantial part" of any database, making it difficult to re-use any fact from a database. That is having a negative impact on database and search tools, he argued.
This year, there has been a push to get legislation through before the parliamentary break in April and to avoid having to get consensus among the larger group. An example is the recently passed harmonization of intellectual property regimes to take full effect in two years. Also, a cyber-crime directive is near final approval.
Some legislation could not get through before the new members arrive, however. For instance, action on a bill on patenting software was bumped until after the elections.
NEW FEATURE
-Advertisement-
-Advertisement-
-Advertisement-
