The Internet - the engine of European economic growth?

We’ve all heard the stories of companies that find a niche product they can sell via the Internet to large numbers of people. Companies that maybe started out around a farmhouse kitchen table or in someone’s bedroom and are now fantastically successful global Internet businesses.

Amazingly, despite more than 10 years of constant growth in ecommerce, neither the EU not a European Government has yet tried to get to the bottom of these stories and work out what the real economic impact of the Internet is.

At a time of global economic uncertainty, establishing the difference that the Internet makes to our local economies seems like a sensible thing to do. So we asked The Boston Consulting Group, a well respected adviser on business strategy, to make a start on the real facts and figures here in the UK.

After many months of data-crunching, their Connected Kingdom report reveals for the first time some surprising and significant facts. Here are some of the headline figures they’ve established:

• In 2009, the Internet contributed £100 billion to the UK economy. That represents 7.2% of GDP.
• The Internet’s contribution to UK GDP is bigger than that of many other industries, for example utilities or transport.
• The UK is the no1 country in the world for e-commerce and is a net exporter of ecommerce goods and services: we export £2.80 for every £1 we import.
• The companies that enable the online economy (ie, provide the infrastructure, access and services that constitute the Internet) employ an estimated 250,000 people in the UK and have revenues of over £50 billion.
• The Internet economy is expected to grow by 10% per year

BCG’s research also highlights the fact that not all economic activity is captured by GDP measures, and so the significance of the Internet to the UK economy is actually greater than £100 billion. For example: consumers benefit from the Internet by purchasing products in the high street which they researched online (valued at around £40 billion per year), by saving money through online shopping (around £18 billion per year) and by consuming free online content (around £5 billion per year).

In truth, the headline numbers are bigger than any of us thought when we first commissioned the report. It’s very exciting to see that UK companies that are becoming global success stories through their innovations on the Internet. From companies exporting tartan to those building online games for kids, these are the home-grown success stories that we need to celebrate and foster here in the UK.

This report is just the start. The tough policy questions have yet to be answered. How do we ensure this 10% growth really happens? What barriers are these UK companies facing in trying to grow their start ups into global businesses? And we know that some of the answers will also have to come from the EU.

The next step has to be a conversation between the UK’s Internet sector and the Government about how to make the online economy a Government priority and a UK success story. In November, we’re running an event with the Oxford Internet Institute to discuss the policy implications of BCG’s report. And if you’d like to get involved yourself, please do have your say about the way forward on www.connectedkingdom.co.uk.

Posted by Sarah Hunter, Senior Policy Manager, Google UK

Redefining innovation policy for big societal change

Europe’s industrial revolution in the 18th and 19th centuries was one of the most intense periods of technological innovation in human history. Agriculture, manufacturing, mining, transportation, civil engineering and many more fields of human endeavour were transformed by scientific and technological advances. Countries were able to drive their economies forward, change standards of living and increase their competitiveness and standing on the world stage.

In 21st century Europe, there is a bigger need than ever to stimulate radical innovation in as many fields as possible. Innovation policy needs to focus on addressing both economic concerns and the big societal challenges of the day. So it was good to read in the Commission’s Communication on the Innovation Union that Commissioner Geoghegan-Quinn intends to push for an innovation policy that addresses “climate change, energy and food security, health and an ageing population”.

Including “business models, design, branding and services and social innovation” in the new broader definition is important too, since this builds on the findings of the OECD. This is a move that Google broadly welcomes, especially since it’s clear that information technology is frequently a critical part of delivering this broader agenda.

There are also some other interesting and exciting new ideas in the Communication:

• The Commission will monitor a second benchmark of innovation (in addition to the target of 3% of GDP being spent on R&D) based on the “share of fast-growing, innovative companies in the economy”. This is good news: recent research from think tank Bruegel (disclosure: Google is a corporate member) shows that Europe has significantly less young firms among its leading innovators than the US. And as we noted on this blog just a few days ago the Internet has created unparalleled opportunities for small companies to go global.

• For the first time in a paper of this prominence, the Commission recognises the particular dynamics of innovation in the tech sector and the importance of openness. This is something that was highlighted in the recent Lisbon Council paper on Wikinomics.

• Similarly, the Commission highlights the importance of free movement of knowledge - and it redefines the Fifth Freedom more broadly. This is a move that we called for last year.

• The pilot project on open access is declared successful and the Commission promises to make "open access to publications the general principle for projects funded by the EU research Framework Programmes". This only seems right given that research is paid for by taxpayers, and that in the internet age, research is done by a much more diffuse community of people who are increasingly willing to share ideas and collaborate.

There are many good points in this Communication, but the challenge for the Commission will be to enable innovation in other policy areas. For example, the UK’s Intellectual Property Office is looking to “assess [...] the role intellectual property plays in the knowledge economy”. The scope of what they want to look at is much broader than the emphasis on patents in the Commission’s paper, and that’s something Google will continue to emphasise in its contacts with the EU institutions.

Wouldn’t it be great if, in ten years’ time, we could look back and describe the second decade of the 21st century as the knowledge revolution - a time when disruptive innovation drove the European economy forward, changed standards of living and increased Europe’s competitiveness and standing on the world stage?

Posted by Simon Hampton, Director of European Public Policy

Creating stronger privacy controls inside Google

(Cross-posted from the Official Google Blog)

In May we announced that we had mistakenly collected unencrypted WiFi payload data (information sent over networks) using our Street View cars. We work hard at Google to earn your trust, and we’re acutely aware that we failed badly here. So we’ve spent the past several months looking at how to strengthen our internal privacy and security practices, as well as talking to external regulators globally about possible improvements to our policies. Here’s a summary of the changes we’re now making.

• First, people: we have appointed Alma Whitten as our director of privacy across both engineering and product management. Her focus will be to ensure that we build effective privacy controls into our products and internal practices. Alma is an internationally recognized expert in the computer science field of privacy and security. She has been our engineering lead on privacy for the last two years, and we will significantly increase the number of engineers and product managers working with her in this new role.
  
  
• Second, training: All our employees already receive orientation training on Google’s privacy principles and are required to sign Google’s Code of Conduct, which includes sections on privacy and the protection of user data. However, to ensure we do an even better job, we’re enhancing our core training for engineers and other important groups (such as product management and legal) with a particular focus on the responsible collection, use and handling of data. In addition, starting in December, all our employees will also be required to undertake a new information security awareness program, which will include clear guidance on both security and privacy.
  
  
• Third, compliance: While we’ve made important changes to our internal compliance procedures in the last few years, we need to make further changes to reflect the fact that we are now a larger company. So we’re adding a new process to our existing review system, in which every engineering project leader will be required to maintain a privacy design document for each initiative they are working on. This document will record how user data is handled and will be reviewed regularly by managers, as well as by an independent internal audit team.

We believe these changes will significantly improve our internal practices (though no system can of course entirely eliminate human error), and we look forward to seeing the innovative new security and privacy features that Alma and her team develop. That said, we’ll be constantly on the lookout for additional improvements to our procedures as Google grows, and as we branch out into new fields of computer science.

Finally, I would like to take this opportunity to update one point in my May blog post. When I wrote it, no one inside Google had analyzed in detail the data we had mistakenly collected, so we did not know for sure what the disks contained. Since then a number of external regulators have inspected the data as part of their investigations (seven of which have now been concluded). It’s clear from those inspections that while most of the data is fragmentary, in some instances entire emails and URLs were captured, as well as passwords. We want to delete this data as soon as possible, and I would like to apologize again for the fact that we collected it in the first place. We are mortified by what happened, but confident that these changes to our processes and structure will significantly improve our internal privacy and security practices for the benefit of all our users.

Posted by Alan Eustace, Senior VP, Engineering & Research

How many German households have opted-out of Street View?

Cross posted from Der Google Produkt-Kompass

Since April 2009, people in Germany have been able to ask for their house to be blurred on Street View ahead of the product being launched. At first they could ‘opt-out’ by writing us a letter and a few months ago we launched a special online tool to make the process easier. We worked closely with the Data Protection Authorities to ensure all the right German privacy standards were met.

We’re now close to launching Street View imagery for the 20 biggest cities in Germany and we’ve counted the number of households in those cities which decided to opt-out. Out of a total of 8,458,084 households we received 244,237 opt-outs, which equals 2.89% of households. Two out of three opt-ots came through our online tool.

Given how complex the process is, there will be some houses that people asked us to blur that will be visible when we launch the imagery in a few weeks time. We’ve worked very hard to keep the numbers as low as possible but in any system like this there will be mistakes. For instance, some people asked us to blur their house, but didn’t give us the precise location. In such cases the household can still ask us to blur the image using the ‘report a problem’ tool on Street View once imagery is published - and we’ll do it as fast as we can. The same is true of faces and car licence plates that our automatic blurring technology may have missed.

It won’t be long before you’ll be able to look at some of the most beautiful images of Germany using Street View. We’ve got a couple of nice surprises as well. We’ll be back with more news soon!

Posted by Andreas Türk, Product Manager for Street View in Germany

Unlocking the Internet’s potential for SMEs

Here’s an unusual question: what do an agricultural exchange, time tracking software and a social radio start-up have in common? The answer is, of course, the Internet. Agroterra (from Spain), Timr (from Austria) and Spreaker (from Italy) are three young companies that use the Internet to create, distribute and market their products and services across Europe and around the world.

Their founders recently outlined their successes and challenges at the Google Brussels office during a seminar organised by PIN-SME, the small business association that represents over 50,000 SMEs in Europe’s ICT sector. The event focused on the importance of the Internet as a driver of innovation and competitiveness in Europe, a theme that the Commission identified earlier this year in its Digital Agenda and more recently in its Europe 2020 Innovation Union Flagship Initiative.

Speaking at the event, Joanna Drake, the European Commission’s SME envoy, highlighted how the Internet is currently underexploited by European small businesses - and emphasised the EU’s target of getting 33% of all SMEs to buy and sell online by 2015. She also outlined the EU’s efforts to promote innovative use of ICT and the Internet by entrepreneurs, and how the Small Business Act aims to help SMEs access global markets - and succeed on them.

Agroterra, Timr and Spreaker had some suggestions that they felt would help European SMEs perform better: better broadband access, especially in rural areas; better information on and harmonization of tax regimes; improved cross-border transactional systems; a single market for music rights; campaigns to build consumer trust in the Internet; and more help in learning to take advantage of the opportunities of the Internet.

At Google, we often hear about these sorts of challenges from the small businesses that use our services - from online advertising to cost-effective online applications such as Gmail, Calendar and Docs. Of course, the companies using our services have already launched themselves into the online world, but many entrepreneurs in Europe have not yet taken advantage of the potential of the Internet. Eurostat figures show that 85% of Danish small businesses already have a website, but in France, Italy, Spain, Portugal, Hungary and elsewhere, less than 55% are already online.

To help European SMEs bridge this digital divide and participate in the global online economy, we’re working with public- and private sector partners in the UK and in Poland. We’re running joint initiatives that make it easier for small businesses to get online for the first time, giving them a simple website and online tools - for free - that boost their sales and their long term growth.

The results speak for themselves: since the start of this year, nearly 90,000 British businesses with no prior online presence now have websites and are generating new opportunities for themselves. In Poland, more than 30,000 businesses have signed up since the campaign launched, and on average, a small business is going online for the first time every 20 minutes.

Posted by Sarah Greenwood, Policy Manager, Google Brussels

Google TechTalk: Tomorrow’s web and why the HTML5 standard matters

First conceived in 1990 by CERN scientist Tim Berners-Lee, HTML is the international standard used to create most of the websites and content that we enjoy online today. HTML has evolved and grown over the years and today, a new iteration - HTML5 - is approaching the final phase of the approvals process.

HTML5 is a radical departure from its predecessors and will enable web designers to create sites and applications that are more interactive and more graphically rich than ever before. It promises an end to websites and applications that only work in a particular browser or on a particular type of computer or cellphone.  And it will enable a whole new generation of innovative services for web users around the world.

At Google, we’ve been focusing heavily on HTML5 in our own research and development, even before the standard is fully approved. We firmly believe HTML5 will drive the web forward, help keep it open and equally accessible for all, and deliver great benefit to individuals, businesses and governments around the world.

Tab Atkins, a member of Google’s HTML5 development team, will talk about the importance of open standards for tomorrow’s web, show some cutting-edge demonstrations of HTML5 web technology, and explain what the new standard might mean for Europe.

When: Friday, 29th October 12.15-13.45 CET
Where: Google Brussels | Chaussée D'Etterbeek 180 | 1040 Brussels
Registration: Please register here
Need another reason to come? There will be a delicious, Googley lunch (!)

About our Tech Talks: Ever wondered how exactly Google is tackling the big technology problems that the online world faces? Want to take a look behind the curtain of our engineering operations and learn from the people who actually work on the Google products and services day-in, day-out? Here's your chance: The Google Brussels TechTalks.


Posted by Angela Steen, Policy Analyst, Google

Eurostat and World Bank data now searchable on Google in 34 languages

Last year we launched a search feature that made it easy to find and visualise statistics and public data. Our data visualisation tools are designed to surface statistical information about a wide range of topics - from energy usage and the environment to health, education and the economy - and make complex datasets more accessible.

In the current economic environment, policymakers, academics and individuals around the world (and particularly in Europe) want to ensure that new rules and regulations are evidence-based. Interactive visualisations such as charts and maps allow raw data to be seen in context and give helpful new insights that can lead to better policies.

The data we made available last year in English was just a first step, and today we’re happy to share that we’re making a lot more public data searchable via Google - across 34 languages and Google domains.

We’ve been working closely with Eurostat to surface some really useful and interesting data about unemployment rates, government debt, minimum wage, and broadband penetration across Europe.

Try searching for [arbeitslosenstatistik deutschland], [smic france] or [deuda publica españa] to see examples of this data visualisation in action.

Clicking through, you can interact with the data and create comparisons among countries.

We’re also excited to share that the subset of the World Bank Development Indicators which we launched last November in English on google.com are also now available in search in 34 different languages and domains.  Try a search for [人口オーストラリア] (population Australia) on  [google.co.jp].  You can also find additional public statistics on a variety of topics in Public Data Explorer.

Eurostat and the World Bank have been making this data available to the public for quite some time and we’re thrilled to work with them to make it more searchable, in multiple languages.  

We believe that public data empowers people all around the world to make better informed, data-driven decisions that have positive effects at a personal and societal level. So it will be no surprise that we welcome the discussions taking place around the world at the moment about the potential of public data re-use.

Today and tomorrow, as part of its annual meeting, the World Bank is running a special online debate about the power of public data in international development.  And here in Europe, it’s great news that Digital Agenda Commissioner Neelie Kroes also sees a lot of opportunity in public data re-use.  She’s currently holding a consultation on the PSI directive (first adopted in 2003) and you can share your views with the Commission until 30th November.

Posted by Mary Himinkool, Public Data Partnerships

Discussing free expression at Internet at Liberty 2010

(Cross-posted from the Official Google Blog)


It’s not often that we get to step out of our everyday jobs and spend extended time engaging in global conversations about one of our fundamental values at Google: ensuring access to information.  For three days last week in the Hungarian capital, Budapest, we had that chance when more than 300 bloggers, activists, academics, government officials and representatives of non-profits and business convened for “Internet at Liberty 2010.” The conference, which we co-hosted with the Central European University, focused on “the promise and peril of online free expression” and the role of individuals, corporations and government in protecting free expression online.

The conference drew participants from 74 countries, including many from places where free expression is constantly under threat—such as Kazakhstan, Tunisia and Zimbabwe.  It drew a large contingent of bloggers and activists from the Middle East and representatives from both the Iranian and Chinese diasporas.  Our liveblog of the conference was followed by more than 3.3 million people around the world.

The issues at the heart of the gathering—and the challenges faced by free expression advocates the world over, were highlighted by our senior vice president, David Drummond, when in his opening remarks to the conference he quoted an email from an activist who could not obtain permission to attend “Internet at Liberty.”  The activist wrote:

Everywhere I turned, I was only talking to a repetition of the same monomaniac mind where all the keywords around the conference were defined as dangerous and forbidden: ‘liberty,’ ‘access,’ ‘Internet,’ ‘Google,’ and even such simple words as ‘university,’ ‘conference’ and ‘Europe.’ Upon a second investigation, I realized that they are not afraid of these things because of their intrinsic identity, but because they can transform me from a passive and obedient member of the mass to a free, critical, creative and active citizen.

Also at the conference, we introduced the Google Transparency Report, an interactive online site that allows users to see where governments are demanding that we remove content and where Google services are being blocked. (Read more in our blog post.) Other sessions included a debate on the question, “Is the potential of the Internet as a force for positive political change being oversold?” and workshops offering practical education and tools for lobbying governments on key issues.

Visit our website for the conference, which we plan to turn into a discussion and action forum for those who attended the conference and—we hope—thousands more.  Our aim is to bring together people who share the common goal of promoting free expression on the Internet.  We want to build constituencies behind key initiatives including helping individuals protect themselves online; promoting corporate and government transparency; finding the right balance between privacy and free expression; and making sure that platforms like Google aren’t held liable for content they host.

We’re committed to reaching far beyond the results of the Budapest conference and the banks of the Danube to help ensure that online free expression, like the Internet itself, knows no borders.

Posted by Bob Boorstin, Director, Public Policy