Europe may not have created any internet giants in recent years, but the situation is anything but catastrophic as a look at the state of play shows.

Google is not the internet and the internet is not Google. The American search engine has become a must and overshadows Europe, but the Old Continent is hardly a digital dwarf. Europe has no reason to be ashamed. The Union has the highest internet penetration rate in the world and the largest number of connected users. There is a real European internet culture, as confirmed by the Networked Readiness Index, a ranking drawn up yearly since 2001 by the World Economic Forum.

The ranking is established by the organisers of the well-known Davos Forum based on the extent to which countries use and benefit from information and communication technologies (ITC). It gives pride of place to Europe: of the 133 participating countries in the 2010 index, Sweden and Denmark held first and third place, respectively, with Singapore second and the United States fourth.

This position is confirmed by Jérémie Zimmermann, co-founder of La Quatradure du Net, an advocacy group that defends citizens’ rights and freedoms on the internet. “We have no cause to be envious of others in terms of networks and programming because the potential for innovation exists,” he notes. Zimmermann mentions open source software, an area where French, German and Spanish project directors are highly sought after. Open source software, as defined by Wikipedia, the collective encyclopaedia launched in America, is computer software that can be used, studied, changed, copied and disseminated anywhere for free.

“Open source is nothing more than a virtuous model at the opposite extreme from the capitalist model,” according to Fabrice Epelboin, main author and publisher of the French version of the blog ReadWrite Web, elected best high-tech blog of 2009 by the French magazine Challenge.

In other words, Europeans are excellent at developing software but less talented at exploiting this in terms of services, as seen in the example of the open source software WordPress. This well-known application is used to develop websites based on the principle of a blog. WordPress was launched in the United States in 2003, but in fact it is an evolution of the ‘b2’ software developed a year earlier by French national Michel Valdrighi.

FRAGMENTATIO

The problem does not, however, boil down to a mere lack of entrepreneurial initiative on the part of European players. In addition to the serious shortage of highly qualified professionals in the sector, Europeans are also victims of ongoing legal and economic fragmentation in the internal market. These barriers hinder the development of projects that go beyond national borders and reduce competitiveness, which in this sector more than others should be boosted by massive investment. In publishing, for example, Europe has powerful operators, but lacks competitive online platforms. Another example is the European public sector, which spends less than €5.5 billion a year on ICT research and development, considerably less than other economies.

Daniel Kaplan, who is closely involved in the development of the internet in Europe and contributed to the creation of the ICANN (the web’s international regulatory authority), wonders whether, when all is said and done, the best course of action would be to accept and focus on Europe’s specific identity, giving it every chance to succeed: “Rather than naively duplicating Google, why not lead in other areas?” In other words, should Europe continue to compare itself with the Americans or create its own areas of expertise by accepting the specific cultural identities of a Union of 27 member states? Success stories along these lines already exist, moreover: Europe created leaders like Skype, developed in Estonia, the planet’s number one internet telephony firm, and SAP, an integrated business management software solution developed in Germany. Though not as well known by the public, SAP is seen by the business world as the planet’s number one business software application.

For most experts, although no new internet giants have sprung up in Europe in recent years, the situation is not catastrophic. The scales tip clearly in favour of the Americans for now. The proportion of total R&D spending in ICT is 17% in the European Union, compared with 29% in the United States. One thing is certain in any case: Europe needs to step up its investment and recruitment.