Europe’s other half lives offline — and that’s everyone’s problem

LONDON — For years, Europe largely ignored warnings of a growing digital divide, a continental rift between the well-connected North and the tech-deprived South.

Now, that gap threatens to derail the European Union’s tech aspirations, hamper its efforts to become the world’s digital enforcer and potentially worsen the region’s existing economic divisions.

The bloc’s policymakers are in a mad dash to unify the Continent’s fractured online world. The aim is to provide the region’s 500 million citizens — arguably the Western world’s largest and wealthiest consumer group — unfettered access to services like movie streaming, cloud computing and online shopping by the end of the decade.

But these goals, known collectively as the digital single market, are based on a flawed assumption: That everyone in Europe has the same online habits — and the same access to the internet.

The truth is that people and companies in Northern Europe are, on average, better prepared for the coming digital tidal wave and enjoy greater access to online services than their Southern counterparts, according to reams of statistics from the EU, national government agencies and a long list of public policy think tanks.

Instead of uniting the region — already on shaky ground following a decade of lackluster economic growth, the rise of extremist politics and the U.K.’s Brexit vote — Europe’s digital single market could have the opposite effect.

The Continent’s digital chasm is deep, despite the EU’s and national governments’ costly attempts to close it.

In Finland, Sweden and other Scandinavian countries (where widespread high-speed broadband and mobile connectivity first took root in the EU), locals enjoy some of the best digital services anywhere in the world.

Almost everyone routinely uses the internet, for shopping online, chatting with friends or — you know who you are — watching cat videos. More important, the cost of getting online on a mobile phone hovers at about 1 percent of the region’s average income, according to EU figures. In other words, the average Scandinavian devotes less than three days of salary a year to pay for internet access.

Contrast that to some of the EU’s most recent — and poorest — members like Bulgaria and Romania, where barely half of the population surfs the web each week. Even the young don’t approach Northern Europe’s levels of internet use, according to Eurostat, the European Commission’s statistics agency.

And the kicker? Locals in Sofia, Bucharest and elsewhere across the South must spend on average 8 percent of their income for even the most basic mobile phone connectivity, according to an EU report on the topic. That’s nearly one month’s salary spent just on internet access that many in the North take for granted.

Southern Europe’s high barrier to entry — coupled with sometimes sluggish rollout of broadband and high-speed mobile networks — can have knock-on effects on participation in the digital economy, a sector that EU and national lawmakers tout as central to Europe’s economic future.

Take online shopping, an industry with several European champions, including Germany’s Zalando and Britain’s ASOS, that are still standing tall despite Amazon’s growing shadow.

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In Germany and the United Kingdom, for instance, roughly four out of five people bought something over the internet last year, according to EU figures. In Italy and Spain, still two of the largest EU economies, less than 1 out of every 2 people shop online. In Romania, it’s just one of eight consumers.

That disparity undermines the EU’s aggressive efforts to dominate the internet — not as tech innovator, but as the West’s largest consumer market. It also gives the Continent less leverage when exporting its online rules around the globe.

The EU, on average, still outperforms large parts of the world on most digital metrics — from availability of high-speed internet networks and computing power to capital for new startups and availability of tech talent. But just 55 percent of Europeans shopped online last year, according to the EU, compared to 79 percent of Americans, according to the Pew Research Center.

Imagine how it would fare if all of its citizens enjoyed Northern levels of internet access.

Europe’s inability to bridge its regional divide (despite decades of forewarning) could curtail its efforts to police the digital world. If Europe can’t get its own house in order, then why should others follow its lead in regulating the web?

To make matters worse, the dynamic threatens to widen economic divisions in the Continent that have only become more entrenched since the 2008 financial crisis.

Policymakers in Madrid, Athens and Rome have tried to keep up with Berlin, Paris and London. But it’s an uphill, and possibly hopeless, battle — one that will only become even more one-sided if Europe doesn’t recognize the compounding effects of the digital disparity.

Already, cities like Helsinki and Stockholm bat far above average when raising venture capital funds or creating new tech companies. The Swedish music streaming service Spotify, for example, is expected to go public later this year, valued at roughly $10 billion.

Faced with the complexities of corralling 28 (soon to be 27) member countries to support a united digital front, it’s not surprising that Europe’s rollout may look a little lumpy. But that should also make EU policymakers second guess — or, at least, reconsider — the growing list of digital single market proposals.

Overhauling the bloc’s digital rules is, in theory, aimed at giving all Europeans — from Stockholm to Sofia — equal access to the online world.

But it may instead worsen existing regional equalities. And that’s not exactly the goal the Continent’s lawmakers had in mind.

Mark Scott is chief technology correspondent at POLITICO.