As we continue to advocate for a thriving digital ecosystem, we have addressed an open letter to Mario Draghi, with some asks for considerations in his upcoming report on EU competitiveness. Our letter highlights the unique challenges faced by SMEs and underscores the importance of policies that foster innovation and growth. Read the full letter below to see how we advocate for a more supportive environment for SMEs in tech.
To: Professor Mario Draghi, former Prime Minister of Italy and former President of the European Central Bank.
Dear Mr. Draghi,
We are reaching out from ACT | The App Association to provide some input for the finalisation of your report on the future of European competitiveness.
The App Association advocates for small and medium-sized enterprises (SMEs) to create an environment in which they can innovate and create new jobs. Our members include innovative app developers and internet of things (IoT) device makers who are at the forefront of technological advancements. We strive to create a regulatory environment that supports these entrepreneurs, enabling them to drive innovation, create jobs, and contribute significantly to the digital economy. We aim to ensure that policies facilitate growth and competitiveness for SMEs, recognising their vital role in the broader tech ecosystem in Europe. We ask you to consider our key policy points in your report, to support the growth and competitiveness of SMEs operating in digital markets.
- Ensuring a Clear Regulatory Framework for SMEs
A streamlined regulatory environment with reduced bureaucratic hurdles is essential for SMEs to thrive, as it lowers compliance costs and allows them to focus on innovation and growth. Regulatory measures, even when meant to be aimed at larger businesses, often impact SMEs. A balanced approach that takes into account the unique needs of SMEs is therefore crucial for fostering a competitive and inclusive digital economy.
- Advancing Technological Innovation and Supporting Small Business Growth
We advocate for increased funding for research and development, particularly in areas of emerging technology such as artificial intelligence (AI) and machine learning (ML), the metaverse/augmented reality, and quantum computing, among others. These cutting-edge technologies are pivotal for the next generation of tech developments, and enhanced investment in these fields will ensure that Europe remains at the forefront of innovation. Small businesses are champions of innovation due to their flexibility, adaptability, and close community ties, allowing them to quickly identify and respond to market gaps and needs. Therefore, we ask for the implementation of financial support initiatives designed to support small businesses in the tech sector, such as grants, tax incentives, and improved access to venture capital, enabling small businesses to thrive.
- Digital Infrastructure and Connectivity
As committed advocates for innovation and technological advancement, we actively support the expansion of networks and the development of connectivity standards across Europe. This commitment not only drives innovation but also ensures that consumers and businesses alike reap the benefits of a more connected and efficient digital ecosystem. In this context, we wish to highlight two key points that are essential for achieving the intended positive effect and reach of these efforts:
Impact on SMEs: It is essential that any measures taken to expand digital infrastructure take into account any inadvertent negative effects on SMEs. Therefore, we caution against adopting any new measures incorporating network fees.
Standard-Essential Patents (SEPs): While developing new standards is crucial, SMEs often struggle with overcoming anticompetitive SEP licensing abuses. This hinders their ability to adopt new standards, leaving EU SMEs locked out of new markets and opportunities. Ensuring that SMEs can benefit from new standards will foster broader innovation and inclusivity. Therefore, the adoption of the EU SEP Regulation is crucial, as soon as possible, to strengthen Europe’s framework of fair, reasonable, and non-discriminatory (FRAND) SEP licensing, benefitting European innovation and competition.
- Acknowledging Privacy, Cybersecurity, and Disability Access as Competition Parameters
We advocate for the recognition of privacy, security, and disability access as key parameters of competition in digital markets. In today’s digital landscape where data is a valuable asset, ensuring robust privacy and security measures not only protects consumers but also fosters trust and confidence in digital services. By promoting these factors as key competitive differentiators, EU institutions can encourage digital actors to continually innovate and offer users robust privacy measures. This, in turn, results in increased consumer choice, including options which align with privacy-conscious users’ preferences, while driving standards in markets towards a more secure digital ecosystem for all.
Privacy and security protections offered by platforms not only enhance consumer trust but also allow small businesses to benefit from the established consumer trust of larger platforms, levelling the playing field against bigger brands that already enjoy network effects and consumer loyalty. Through access to these trusted platforms, SMEs can compete more effectively and foster innovation in the digital marketplace.
Platforms also offer game-changing features for disability access. Such features historically existed as add-ons for consumers to seek on their own and too often did not present themselves as practical options for integration into an app everyone downloads. Requiring people with disabilities to lean on others to integrate these features for them as aftermarket tools is a costly method of providing accessibility and is not ideal for app companies that want their offerings to be accessible out of the box.
Therefore, we hope that any future measures aiming to promote competitiveness will make a balanced effort to uphold protections for privacy, cybersecurity, and accessibility, or at least not actively worsen these protections and features, nor restrict the ability to compete on these essential parameters. We urge the Commission to follow this approach while implementing recent digital regulations, such as the Digital Markets Act (DMA).
We hope you will consider the perspectives of our SME members as you shape your report on the Future of European Competitiveness. We trust that our contributions will assist in fostering a more inclusive and dynamic digital economy, particularly for SMEs like our members.
Thank you for your attention, and we remain open to further engagement and dialogue.
Sincerely,
Mike Sax
Founder and Chairperson