The competitiveness of European companies and public administrations depends more and more on the ability to innovate, as underlined by the Draghi Report on European competitiveness. In this context, the debate on how to balance regulation and innovation is becoming increasingly urgent, especially for the ICT sector. Operators in the sector highlight the growing weight of regulations, which risk increasing direct and indirect costs, slowing down technological development and the dynamism of companies.
Regulation and Innovation: A Delicate Balance
During the event “The Cloud put to the test by Regulation”, attended by Undersecretary for Digital Transition Alessio Butti, experts discussed the impact of compliance policies on innovation processes. “Blaming companies with the costs of regulation, whether compliance or regulatory constraints, can be counterproductive. Innovation is essential to compete on the market,” the speakers stated. Particular attention was paid to Small and Medium Enterprises (SMEs), which often struggle to adapt to burdensome regulatory regimes.
The Commission's challenge: security and growth
La new European Commission faces a complex task: ensuring a safe and competitive digital environment without stifling innovation. The White Paper on Digital Infrastructure, published last February under the leadership of Thierry Breton, has outlined some guidelines, but many Member States seem not to share these proposals.
Il Draghi Report It also highlighted the fragmentation of the European regulatory framework: currently over 100 regulations govern the ICT sector, with 270 supervisory authorities distributed across the various countries. This mosaic, rather than strengthening the single market, risks penalizing European companies compared to global competitors, increasing costs and slowing down competitiveness.
Cloud Computing: A Pillar of Digital Transformation
One of the most discussed topics is the future of cloud computing, a central element for European digitalisation. According to the White Paper, there is a risk that the cloud sector will be regulated using models inherited from other sectors, such as telecommunications or energy, despite the profound differences in market structure and dynamics.
An analysis presented by Analysys Mason (The European Telecom regulatory framework: not a good fit for the public cloud) during the event he underlined how Extending telecom regulations to the cloud could backfire. Ineffective regulation would indeed risk slowing down the European digital agenda, penalising businesses and consumers. The study highlighted the need for a targeted impact analysis to ensure a balanced regulatory approach.
The potential of the cloud is extraordinary: according to research by McKinsey (What is cloud computing? July 31, 2024 ), global cloud adoption could generate up to $3 trillion by 2030. Benefits include new business opportunities, improved IT capabilities, and applications for emerging technologies.
Proposals for the future
Among the solutions proposed by the Draghi Report, the adoption of a regulatory approach based on ex post application stands out, which intervenes only when necessary, avoiding complex and rigid ex ante constraints. Another crucial proposal is that of exclude SMEs from regulations intended for large operators, thus promoting innovation and competitiveness of small businesses.
THEEurope is therefore at a crossroads: choose a regulatory model that stimulates growth, without compromising the innovation potential of the technology sector. Success will depend on the ability to build a secure regulatory framework that looks to the future, combining flexibility and security.
