Master thesis-The Transition of European Digital Economy towards a True Digital Single Market-Introduction


1. Introduction
A strong economy needs a robust and vibrant digital economy. Yet the European digital economy is mired in low growth for years, caused by fragmented market, underinvestment and lack of innovation. This thesis will identify the importance of digital economy and provides a clear policy framework that tackles these problems and creates a true European digital single market, which will benefit consumer, strengthen the industry and bring long-lasting prosperity to the whole society.
1.1 Objectives
Today, the digital economy has become a worldwide phenomenon which is affecting the whole macro-economy. A strong digital economy leads to increased productivity, high economic growth and enhanced ability of existing industries to create more jobs. However, Europe is lagging behind the United States and some Asian countries in developing its digital economy and its market is fragmented. In order to unlock opportunities and improve its competitiveness, the Commission set the digital single market as one of the seven pillars of the Europe 2020 Strategy in 2011(cf. EU 2012, p.28) and as the EU’s second priority in 2014. Since then, a lot of proposals regarding how to better develop the European digital market has been submitted. The objective of this paper is to summarize and evaluate some most critical issues by analyzing the current situation, evaluating proposals and give author’s own recommendations within existing framework and with a focus on the market-oriented policy and regulation which can strengthen the competitiveness of the European digital economy and transform it into a true internal market.
1.2 Framework, Outline and Stakeholders
The following session will illustrate overall framework of the thesis, the outline of each chapter, and the related stakeholders in achieving digital single market.
1.2.1 Framework of the Thesis
With the objective mentioned above, this thesis provides a framework which includes four key categories: how to consolidate the fragmented market, increase the Information and Communications Technology (ICT) investment, balance the competition, and encourage innovation. These four categories are inter-related (See Figure 1.1). Consolidated market and single market approach can drive both investment and competition. Both investment and proper competition will stimulate digital innovation.
Figure 1-1: Framework of the Thesis
Source: Own illustration
1.2.2 Outline of the Thesis
More details of each chapter are outlined below:
• Chapter 2. The importance of the digital single market
In Chapter 2, the author explains the importance of a digital single market for the EU. Huge potential can be exploited in a digital single market by achieving efficiency gains and improving the productivity across industries with the use of the ICT.
• Chapter 3. Current State of the Digital Economy
The Chapter 3 of the thesis discusses the current state and existing challenges of the European digital economy. Since the problems have already seriously impeded the development of the digital economy, the author calls for urgent solutions and their implementations in order to keep pace with the global competition.
• Chapter 4. Evaluations and Recommendations
The Chapter 4 is the main chapter of this thesis. Further discussions regarding the main causes of existing problems are presented. Some debatable topics are also exploited and author’s evaluations and recommendations are provided. The recommendations do not cover all sides of the matters but instead focus on a market-oriented approach that calls for a consolidated market, balance of investment and competition, and promotion of innovation, all of which, from author’s point of view, are crucial for fostering a true European digital single market.
• Chapter 5. Conclusion
The Chapter 5, the main recommendations and suggestions are summarized as a final conclusion of this thesis.

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