European Union states are being slow to deploy new technologies to fuel economic growth, according to EU technology chief Viviane Reding, who added that low investment in IT research and the slow rate of reform in the telecom sector is damaging European competitiveness.

Reding's comments came as the European Commission published a highly critical progress report on the EU's i2010 initiative to develop the digital economy. It said the "EU needs to shift up a gear if we are not to see a slowdown in the transition to the knowledge economy".

The report says some progress had been made with broadband, as subscriptions climbed 60 percent in the last year to 60 million people, or 13 percent of the EU population. But investment in ICT research continued to lag far behind the US and the report argues that EU governments should act quickly to free radio spectrum for new applications, accelerate e-government development, encourage more R&D and better facilitate cross-border circulation of digital content.

In related news, the UK's new Department for Communities and Local Government has announced that Angela Smith MP will be responsible for local e-government issues. She takes over from Jim Fitzpatrick who previously held responsibility for local e-government in the now-defunct Office of the Deputy Prime Minister.