This article is part of our special report ICT: Fuelling the economy.
Europe's biggest competitive challenges for the future are "the two Ds" – debt levels in many countries and demographics or ageing populations, according to Jan Muehlfeit, Microsoft's chairman for Europe, who believes part of the solution lies in cloud computing.
Based in Prague, Jan Muehlfeit joined Microsoft in 1993 and worked in the company’s Czech and Slovak operations for seven years. He was promoted to vice-president in 2002 and two years later took a leading role in Microsoft's strategy for global emerging markets. In 2006, he was named vice-president for corporate and government strategy for Europe, Middle East and Africa, and a year later was promoted to chairman for Europe.
He was speaking to EURACTIV's Noelle Knox.
How will technology play an increasing role in the future?
Whatever can be automated in the next five years will be automated. And technology will play an even more important role than in the past. The Information Technology and Communication (ITC) industry will enable a lot of other industries.
Today, if you take Mercedes-Benz, the budget for software is higher than the budget for hardware. I've always said [technology] will not change what we will do, it will significantly change how it will be done. That is what Europe needs to capture in this competitive agenda.
In our industry where we see the revolution is in cloud computing. While today customers [and] users of ITC are paying for capacity of your system, [with cloud computing], whether it's application infrastructure, in the future you will pay for the usage. Cloud computing in a nutshell is delivering ITC capacities, software and an infrastructure platform through the Internet, and you pay for the usage.
In fact what cloud computing will [do is] make us more productive and we can do it in a very innovative way. The upfront fixed cost is very low. In the traditional ITC model, to have a fixed system you have to spend a lot of money upfront. Small and medium businesses are having huge disadvantages today. In the future that will not be the case … the most important thing for cloud computing is elastic. It doesn't matter whether you need 1,000 servers for one hour or one server for 1,000 hours, it's the same thing. It is giving [small businesses] a huge advantage.
With cloud computing you are distributing the competitiveness cards again, and if we [are] fast enough, I think Europe can play a leading role there.
What is interesting with cloud computing is small countries, like new EU members, with cloud computing: they can do some leapfrogging because they don't have that many legacy technologies.
Which country has done a good job of leap-frogging technology?
Estonia. They introduced paperless government in the year 2000. Ten years ago, you could pay for parking through your mobile phone. The last two years, they have had high unemployment and GDP was dropping, yes that's true, but they invested a lot in the past on infrastructure and it will pay off when they'll be part of the euro zone.
What are the challenges to the growth of cloud computing?
Technically there are not big challenges. There are very few tech limits, obviously the one you may think about is broadband and broadband is on the [EU's] Digital Agenda.
I'm co-chairing [an] industry association on e-skills. In Europe while we talk about the cloud and are very excited about the technology, almost 40% of Europeans have no e-skills (which means basic computer skills).
Last year, International Data Corp. did a survey of 14 European countries, and the CEOs of large companies and SMEs, those CEOs thought that in five years, 90% of all jobs would require at least basic e-skills. So we need to speed up the way we skill the people. Related to demography and ageing, the issue is still the 50-years-plus generation. That's why, as an industry, we are working hard with the European Commission to change [and] to provide [the] right training.
What's the potential for e-government?
What the government leaders are saying is, 'we would like citizens to be much more involved,' on one side. On the other hand, I don't think all governments are fully enabled, like [processing an] application [for] driving licences, all of those services… it's important for governments to bring those services online.
Three years ago, Europeans were spending four to five days a year handling documents and administration of government issues. Imagine if we can cut that in half: what are the savings and impact on productivity?
What about social media?
If you took Facebook, it would be the third biggest country in the world today, 520 million people or something. You have a social media [yet] government is still done in a very traditional way. But it's still influenced very much by the social media. What social media is doing, it's a bottom-up process, they can really mobilise from the bottom up. We've seen it during the [last US presidential] election. I think it will change the economy and politics.
What is the true value of Twitter?
It can mobilise people in a very fast way. Take what happened after the last elections in Iran. The country, information-wise, was shut down and the world was informed because of Twitter.
You mentioned ageing populations in Europe. How can technology help?
The big issue you have in the future is health care. Today [funds spent on] chronic diseases are 6.8 per cent of European (gross domestic product)
(He explained that one way to help treat people would be to give everyone a “device” that keeps their medical records and can help monitor their medical conditions.) Today that (heath record) information does not travel with you, even in Brussels. Each and every doctor has a different piece of information. If it sits in the cloud, it will travel with you around the world and you will be the owner of your personal records.
What about education?
Cloud computing can make a huge breakthrough. What is wrong with education today? We think each and every child can learn everything and can learn it in the same way. First of all, children are different. You have talents and strengths in very different areas. Future model should be based much more on how you can unlock the human potential of the kids. Much more on the strengths and talents of the kids.
The kids will be able to learn individual learning style … That’s why I think cloud computing will make a huge revolution in education.
How is technology affecting the younger generation?
This generation is very different from our generation. And it can be very interesting when they will start to work … Philosophically, this first time in human history when the young generation understands and uses technology better than the current generation. They will be sooner in decision-making positions — it doesn’t matter if you talk about politics or economy — than my generation because of that.
While we are probably a hierarchical society, the young kids are flat, they use instant messaging as opposed to a lot of emails. And while it looks like it’s not super well organized, they can get things done faster than my generation.
My daughter recently she had an issue in mathematics and suddenly she got 21 kids on four different continents online talking about this issue. I asked her and it took just 4 minutes to get those kids together. Amazing. They are a much more a global aware generation than the Baby Boom generation.