By Anne Bouverot, Director General, GSMA

Europe is at a crossroads in mobile. The region was a pioneer and a leader in mobile and the sector continues to be a key driver for productivity and competitiveness, but it is now lagging behind other regions in the deployment of next generation wireless infrastructures and the advanced services they make possible, particularly in 4G. The economic downturn, strict regulation, a highly fragmented market and delays in spectrum allocation have all played a part in setting Europe back.

However, despite these challenges, the mobile industry can and should play a key role in Europe’s economic recovery, both as an industry in its own right and as an enabling platform for an increasing range of other industries and services. Policy makers and industry members need to join forces to realise a regulatory environment that will support the full potential of mobile and the move to a Connected Life, where nearly everything and everyone are connected.

So, what was the good news last year? According to the GSMA’s Mobile Economy Europe 2013 report, the mobile ecosystem generated around 2.2 per cent of Europe’s GDP in 2012, directly contributing €53 billion to public funding and creating 390,000 jobs. The smartphone market has seen dynamic growth in Europe — nearly half of all mobile phones last year were smartphones.  There are also more active 3G SIMs per capita in Europe than in any other developed region in the world.

Beyond the numbers, mobile solutions have proved to be powerful drivers of sustainable urban transformation and growth. At a time when many European cities have to make considerable budget cuts, it is more important than ever to invest in technologies that drive efficiencies and better services.  Connected devices can optimise our use of energy, tackle transport issues through smart transport management, or improve public safety through the integration of emergency services’ information systems. In early 2013, we estimated that mobile-enabled “smart solutions” were already deployed in more than 50 cities across Europe.

Mobile also offers new, more convenient ways to carry out payments, transfers, ticketing and a range of other transactions. mCommerce can increase consumer convenience, reduce costs and potentially boost sales for businesses and other service providers. For example, European banks are now offering mobile banking services, while mobile ticketing and check-in are now widely used by airlines and the travel industry. mCommerce currently accounts for 1 per cent of total web sales but is forecast to grow to 6.8 per cent over the next five years.

These examples give just a snapshot of the transformative power of mobile technology and its potential to improve the quality of our lives and accelerate the pace of economic recovery. Through smart policy reforms, I believe there will be far greater opportunities to drive growth, create jobs and foster innovation in Europe through mobile in 2014 and beyond.

This year, 4G SIM connections in Europe are set to increase almost threefold in comparison to 2013, from nine to 25 million connections, fuelling a sharp growth in mobile data traffic in the next few years. Although Europe is already one of the most developed mobile markets in the world, the number of individual mobile subscribers will continue to increase, reaching 407 million by the end of this year.

NFC-enabled mobile services will also continue to transform the everyday lives of Europe’s citizens. Some services have already been successfully deployed in my home country, France. In Nice, for example, commuters can buy tickets for public transport and validate them via contactless technology, using their mobile phones to manage their accounts or to access real time information on transport services. In 2014, similar projects will be rolled out in other French cities.

This year and beyond, the reach of mobile will continue to expand into key vertical industry sectors through “Connected Living”. The adoption of mobile technology in industry sectors such as automotive, commerce, education, health, government and utilities, among others will create opportunities for new business models and revenue streams. mHealth services alone have the potential to deliver cost savings in healthcare delivery of up to €99 billion, whilst adding €93 billion to European GDP by 2017, as well as addressing issues around quality of life and mortality rates for millions of people.

Overall, the mobile ecosystem has the potential to contribute €335 billion to Europe’s GDP in 2020. While it is private investment, innovation and enterprise that will boost the sluggish economic recovery and underpin the digital economy, effective regulatory reform can make a significant contribution. The Connected Life presents an important opportunity for Europe to regain its leadership position – one that we cannot afford to miss!

This article originally appeared in New Europe special edition: ‘Our World in 2014‘