Digital Agenda FAQ Digital Agenda FAQ

Frequently Asked Questions (FAQs) on the Digital Growth Potential Stemming from the Digital Agenda for Europe (DAE) and the European Structural and Investment Funds (ESIF)

Member States or regions that are planning to allocate ERDF to investment priorities in ICT and broadband are free to choose how they want to relate digital growth and next generation networks (NGN) to their broader innovation strategies for smart specialisation (S3). They can include Digital Growth policies and references to NGN plans within their broader S3 or they may also decide to develop separate Strategic Policy Frameworks for Digital Growth and NGN plans at national or regional level. What is important is to ensure consistency with their S3 and to align them with other relevant existing documents designed to reinforce the region's or country's competitiveness, improving its social, economic and territorial cohesion while contributing to the objectives set within the DAE and the National Reform Programmes.

If authorities want to develop a separate Strategic Policy Framework for Digital Growth, it should contain i) budgeting and prioritisation of actions through a SWOT or similar analysis consistent with the DAE Scoreboard; ii) an analysis of balancing support for demand and supply of ICT should have been conducted; iii) indicators to measure progress of interventions in areas such as digital literacy, eInclusion, eAccessibility, and progress of eHealth within the limits of Article 168 TFEU  which are aligned, where appropriate, with existing relevant sectoral EU, national or regional strategies; and iv) it should assess and identify needs and chart out the obstacles to affordable, good quality and interoperable ICT-enabled private and public services and to higher ICT uptake by citizens (including vulnerable groups, businesses and public administrations as well as cross-border initiatives).

If an authority wants to invest in broadband, it needs to develop national or regional NGN plans which take account of regional actions in order to reach the EU high-speed Internet access targets, focusing on areas where the market fails to provide an open infrastructure at an affordable cost and of a quality in line with EU competition and state aid rules,  and to provide accessible services to vulnerable groups. The plan should contain  i) an economic analysis taking account of existing private and public infrastructures and planned investments; ii) sustainable investment models that enhance competition and provide  access to open, affordable, quality and future proof infrastructure and services; iii)  measures to stimulate private  investment.

You can integrate ICT in various TOs. However, the most relevant sections are TO1 and TO2. Which thematic objective to choose will depend on what kind of activities and objectives are being considered.

  • TO1 (Research and Innovation): If an authority wants to develop a specific economic activity with ICT components, or integrate ICT as a means to enable innovation activities in different sectors and cross-sectorally.
  • TO2.1 (Digital Growth): The primary area of support from the ERDF for enhancing access to ICT is provided for in the context of investments in infrastructure providing basic services to citizens in the area of ICT (Article 3.1 (c)). For eGovernment, for instance, infrastructure can be funded; applications would fall rather under TO11 (see further below).
  • TO2.2 (High-speed Broadband Roll-out): The possibility to invest in broadband is also covered in Article 3(1)(b) (scope of the ERDF): productive investment, irrespective of the size of the enterprise, which contributes to the investment priorities set out in Article 5.1 and 5.4, and, and where that investment involves cooperation between large enterprises and SMEs, in Article 5.2. This enables cooperation of SMEs with large enterprises to extend broadband deployment and the roll-out of high speed networks. Broadband investments can also be realised according to Article 3(1)(e) i.e. investment in the development of endogenous potential through fixed investment in equipment and small-scale infrastructure, including small-scale cultural and sustainable tourism infrastructure, services to enterprises, support to research and innovation bodies and investment in technology and applied research in enterprises. The ERDF can support investment in broadband deployment in all Member States and regions, but each Member State/region has to assess their concrete development needs and identify the types of investment including in rural areas, with ERDF resources or EAFRD under Article 3 (6) (c).
  • TO3 (Competitiveness of Small and Medium-Sized Enterprises): Developing and implementing new business models for SMEs, in particular for internationalisation, can be supported under this TO. New business models can be for instance based on different customer/supplier relation systems (e.g. ICT-based, crowd-sourcing for product design), different pricing methods (e.g. the closer to delivery, the more expensive, or auctioning via Internet), different process management or logistics methods, different billing/income system (e.g. not user pays, but advertiser or sell of user data), different branding / marketing (e.g. environmental / social responsibility as sales argument), different capital raising (e.g. crowd-funding) or new combination of existing business models/sectors (e.g. construction with leasing with entertainment business).
  • TO4 (Low Carbon Economy): Investments in infrastructure providing basic services to citizens in the areas of energy, environment, transport and ICT can be financed under TO4 especially with a view to urban mobility/smart cities and smart grids.
    • Sustainable Multimodal Urban Mobility: There is a strong interrelation between smart cities and the regional and urban development as well as between smart villages and regional and rural development.  Smart cities solutions require huge amounts of data, which are a valuable tool for developing applications. It is important to ensure that data are accessible and trustworthy. (b) Smart cities mean interconnection of different sectors, such as energy and transport. Systems need to communicate with each other. Therefore inter- and intra-system interoperability is a pre-condition for smart cities. (c) Smart cities cannot afford to think in an ‘old-fashioned' manner regarding their strategic thinking. They must use modern, innovative tools in decision-making processes and for urban planning, based inter-alia on ICT solutions. (d) Finally, data needs to be comparable across cities and regions.
    • Renewable Energy and Smart Grids Investments: Smart grids will be the backbone of the future decarbonised power system. They will enable improved energy efficiency and the integration of vast amounts of renewable energy resources and electric vehicles and provide a platform for traditional energy companies or new market entrants such as ICT companies, including SMEs, to develop new, innovative energy services. Finally, smart grids provide a platform for traditional energy companies or new market entrants such as ICT companies, including SMEs, to develop new, innovative energy services while taking due account of data protection and cyber-security challenges. Close to the citizens, ESIF investments could include stimulating innovative investments in low voltage distribution systems by opening business opportunities to new/local entrants, in both the ICT and energy sectors.
  • TO11: Planning, providing the legal and organisational basis for allowing effective use of eGovernment applications can be funded from the ESF under TO11, as well as digital skills.

Authorities opting for ICT need to carry out a prioritisation of actions through a SWOT or similar analysis consistent with the DAE Scoreboard. They should also outline the indicative budgeting.

There should be evidence that a SWOT or a similar analysis has been conducted in order to establish priorities for investment. There should be a description of the prioritisation/ elimination process that was used to identify investment priorities, including the involvement of stakeholders.

If an authority opts for TO2.1, there should be a needs assessment to reinforce ICT capacity-building, with an analysis of the weaknesses in administrative capacity to identify and deliver ICT interventions arising from existing EU, national or regional strategies. This analysis includes, where appropriate, an adequate description of measures to be taken or already in place to ensure the capacity of intermediate bodies and beneficiaries to identify and deliver those interventions.

Indicators should help to identify areas of market failures, or lags with regard to Digital Agenda objectives. In these cases, indicators for the Digital Agenda Scoreboard are relevant but also indicators and data with relation to ICT skills and capabilities in a region or country. Also, an analysis of value chains or societal areas where there is growth potential within ICT-related economic activities might be appropriate.

There should be evidence that an analysis of balancing support for demand and supply of ICT has been conducted. The analysis should cover the relevant socio-economic issues (such as age structure, education, income, level of ICT training/skills, employment status, affordability of service, productivity, etc.) which characterise the local and regional context to establish the right balance between support for demand (to improve Internet penetration and the use of ICT services and applications in households businesses and public administrations, increase eSkills, etc.) and supply measures (availability of equipment, infrastructures, services and applications, and of ICT professionals/practitioners). Where appropriate, the analysis should also cover ICT as a sector (e.g. a concentration of manufacturing of ICT hardware and equipment, IT service and application providers, R&D in ICT, living labs, etc.).

 

5. What kind of monitoring and evaluation system should be put in place? Are there certain indicators that are required?

Indicators to measure progress of interventions in areas such as digital literacy, eInclusion, eAccessibility, and progress of eHealth within the limits of Article 168 TFEU which are aligned, where appropriate, with existing relevant sectoral EU, national or regional strategies:

  • A monitoring mechanism needs to be set up to measure the progress of ICT use and its impact (e.g. productivity gains) at national or regional level.
  • There is evidence that the monitoring mechanism covers all the areas of ICT interventions arising from existing relevant sectoral EU, national or regional strategies. If the Strategic Policy Framework for Digital Growth is part of a national or regional smart specialisation strategy, its monitoring should be carried out as part of the monitoring of this strategy.
  • Where appropriate, the monitoring mechanism should use the same indicators as those used to track progress towards the achievement of the DAE objectives (Scoreboard) as well as any relevant additional indicators tailored to the specific regional or national context.

Indicators to measure progress of interventions in areas such as digital literacy, eInclusion, eAccessibility, and progress of eHealth within the limits of Article 168 TFEU which are aligned, where appropriate, with existing relevant sectoral EU, national or regional strategies:

  • A monitoring mechanism needs to be set up to measure the progress of ICT use and its impact (e.g. productivity gains) at national or regional level.
  • There is evidence that the monitoring mechanism covers all the areas of ICT interventions arising from existing relevant sectoral EU, national or regional strategies. If the Strategic Policy Framework for Digital Growth is part of a national or regional smart specialisation strategy, its monitoring should be carried out as part of the monitoring of this strategy.
  • Where appropriate, the monitoring mechanism should use the same indicators as those used to track progress towards the achievement of the DAE objectives (Scoreboard) as well as any relevant additional indicators tailored to the specific regional or national context.

It is difficult to give a general rule for the necessary granularity of the specialisation. This will very much depend on the existing R&I and ICT capabilities in the region or Member State. ICT is a cross-cutting element and can as such be used in all sectors from road infrastructure to teaching. Apart from this enabling function, ICT specialisations can range, for instance, from a very broad focus "mobile telecommunication" to "mobile gaming". It is important to be as concrete as possible since this facilitates both the coordination of activities within the respective region or Member State as well as external visibility of their R&I and ICT strengths. Ideally, cross-innovation potentials should also be considered (e.g. 3D visualisation for fashion industry or connected home appliances and new materials for smart homes). 

ICT can enable traditional sectors for which the Digital Agenda Toolbox provides some examples like digitising cultural heritage, using ICT to preserve language resources, eHealth or key enabling technologies like micro-electronics and advanced manufacturing. Other prominent examples include the up-grading of traditional footwear manufacturing,  furniture manufacturing,  agriculture and food processing  and tourism.  Making the right combinations depends both on the kind of traditional industry and on the ICT capabilities present in a region or Member State.

An important aspect for the selection of technical solution is the business model for operation. A series of models is listed below:

  • Bottom-up model: The bottom-up or local community model involves a group of end-users organising themselves in a jointly owned and democratically controlled group (frequently a co-operative) capable of overseeing the contract to build and operate their own local network.
  • Private design, build and operate (DBO) model: The DBO model involves the managing authority issuing funding (often in the form of a grant) to a private sector organisation to assist in its deployment of a new network. The public sector has no specific role in the ownership or running of the network, but may impose obligations in return for the funding.
  • Public outsourcing model: Under a public outsourcing model a single contract is awarded for all aspects of the construction and operation of the network. The major characteristic of this model is that the network is run by the private sector, but the public sector retains ownership and some control of the network.
  • Joint venture model: A joint venture is an agreement under which ownership of the network is split between the public and private sector. Construction and operational functions are likely to be undertaken by the private sector.
  • Public design, build and operate model: A public DBO model involves the public sector owning and operating a network without any private sector assistance. All aspects of network deployment are managed by the public sector. A public sector operating company may operate the entire network, or may operate the wholesale layer only (with private operators offering retail services).