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Romanian market is a huge opportunity for British retailers

Opening remarks by Esther Blythe, the UK Embassy Chargé d’Affaires, at the Mediafax Talks about Digital Europe conference

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Charge D'Affairs Esther Blythe

Ladies and Gentlemen, Mr Minister, Distinguished Guests,

Good morning. I’m Esther Blythe, the Chargé d’Affaires at the British Embassy in Bucharest. It’s a great pleasure to welcome you to today’s Mediafax Talks about Digital Europe.

This is an event we’ve been awaiting eagerly, ever since the British Foreign Secretary William Hague and Foreign Minister Titus Corlatean made a pledge last October that we would work together to promote the expansion of e-commerce between the UK and Romania.

We’re extremely pleased that this discussion has attracted such a superb line-up of speakers – including His Excellence Mr Razvan Cotovelea, the Minister of Information Technology, his esteemed predecessor Mr Dan Nica, and our own Mr Peter Stephens, the Director for European Reform at the UK’s Department for Business, Innovation and Skills. There are many more contributors ready to speak after them – the list of highly expert and influential opinion-formers and business leaders on today’s conference programme goes on. I wish I could thank you each individually and personally, but that would detract from the time we have available to listen to you, so I’ll limit myself to saying how much we appreciate your engagement in today’s conversation.

I’d like to explain why the British Government is so keenly committed to this agenda, why we think it holds so much promise for the UK, for Romania and for our flourishing commercial relationship, as well as being a big part of the answer to the strategic economic challenge that confronts the European Union today. I’ll briefly touch on the three elements of today’s discussion: the need for forward-looking EU policy to break down barriers in the European digital economy, the huge business opportunity of e-commerce (which we see as a great chance for British companies interested in the Romanian market), and the need to underpin this with effective cyber security solutions – another area where British companies can make a very serious contribution.

So why is Digital Europe so important? The answer is rooted in what is probably the biggest long-term challenge facing the EU: the need to secure Europe’s growth in a ruthlessly competitive global economy. At the moment, there are four EU countries in the global top ten economies. If we continue on our current trajectory of competitiveness, there will be three by 2020 and only two by 2050. Other EU members will be similarly challenged in the global rankings. That long-term decrease in global competitiveness has enormous implications for the living standards and life chances of EU citizens, as well as for the EU’s influence as a global actor. The EU needs to change to confront this problem.

The Single Market has been the foundation of our economic success so far – now we need to take it further. It’s a pleasure for a British diplomat to talk about the Single Market, because it’s one area where Britain is among the most European of European countries. We’re thoroughly committed to it, and we believe there’s an urgent need to develop it further in some critical areas – for example in the energy sector, in services, and absolutely in the digital economy.

Prime Minister David Cameron made a speech in January last year about the European Union. Most Europe watchers remember it for something he said about a referendum. But in that speech, while he was putting the argument as to why Britain’s EU membership is so important to it, he also warned that unless the EU completes the construction of its Single Market, it risks being only half the success it could be. And he remarked that: “It is nonsense that people shopping online in some parts of Europe are unable to access the best deals because of where they live.”

That nonsense affects Romania very much, as well as the UK. When I’m in the UK, I have access to a vast array of services and products online that, as yet, are not available to me if I’m using my Romanian debit card or want things to delivered to my Romanian address. No doubt the same problem exists in reverse – UK consumers are missing out on services and products from Romania too.

There are Romanian and UK companies currently reaping the rewards for offering consumers cross-border e-commerce opportunities (and some of them will speak about their experiences today). But the overall picture is that we’re way behind where we should be on this. We know that e-commerce is one of the fastest growing markets in Europe and we expect sales to grow by 16 per cent this year in Europe. But while half of the people online in the EU buy goods or services on the internet, only 8 per cent of this online trade is cross-border.

Part of the reason is about capacity. We still lack the capacity adequately to connect consumers to the market. Europe needs to develop its broadband infrastructure and make sure that new advanced technologies, like 4G mobile phone services, are made available to everyone. To harness the true potential of the digital market, consumers from across Europe should be able to access at a moment’s notice what the market provides and feel secure that their transactions are safe. We think that businesses, in turn, should be encouraged to shape those opportunities themselves without the fear of hitting institutional walls.

Today’s European business landscape is changing at an unprecedented pace. We live in an age where technologies unimaginable just a few years ago, such as “Big Data” processing and cloud computing, provide the competitive edge to those daring and insightful enough to employ them. Cloud computing can single-handedly lower the IT costs of businesses by some 10 to 20 per cent. The UK’s case is illustrative: by some accounts, the Internet contributed by 23 per cent to the UK’s growth between 2005 and 2009.

But the truth is that we currently live in a Europe with barriers. High transaction costs imposed by fragmented digital markets at the EU level only serve to deter new businesses from trying to tap the potential of the digital economy, or existing retailers and service providers from selling to a market of more than 500 million consumers. To sustain economic growth and promote new business opportunities for Europe, we need to remove these barriers. This is what the EU’s Digital Agenda now seeks to do, and we welcome the efforts of the European Commission in this regard. The Commission’s figures show that a unified digital market would increase the EU’s GDP by 4.1 per cent between now and 2020. This is a source of growth which our economies desperately need.

We see the Romanian market as a huge opportunity for British retailers willing to sell their products online across Europe. There’s enormous potential here, as increasing numbers of the 9 million internet users here start to use the web for shopping. We’ll hear more from business leaders and analysts about the size and future prospects of that market opportunity.

But we also understand that future growth is highly conditional on consumer and business confidence in online payments and personal privacy, and figures show that an enormous economic potential lies in addressing this issue. So, increasing confidence in online transactions by deploying the latest cost-reducing and protection technologies will help companies to continue enlarging the pool of consumers. This is where the services and products of British companies with a reputation for excellence in the field of cyber security is important. We think British cyber security leaders can help to support the development of the Romanian e-commerce market, providing reassurance and solutions to Romanian and British retailers, banks, consumers and others. We’re looking forward to hearing their perspective today as well.

Before I hand over the floor, I would like once again to thank all of our speakers and guests for their presence here today. I’d also like to thank the distinguished Ministers, here present, who mustered the full force of their institutions in support of this conference and, last but not least, thanks is due to our partners from Mediafax, whose professionalism has made this event possible.

Thank you very much.

Va multumesc.

Published 25 March 2014