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European Commission: ‘Pace of digital progress in Europe is slowing down’

The European Commission just released the a summary of results from their annual assessement of Europe’s state of digital affairs. (The final report is scheduled to be released next month.)

To no one’s surprise, Germany and the Netherlands are in the group of countries atop the list, ranked by digital prowess. But lesser digital powers such as Austria, Estonia and even Malta are quickly establishing themselves as players. What is surprising is countries we thought were surging ahead, such as France, are part of a group the EC research finds is “falling behind.”

While the full Digital Economy and Society Index report on digital performances won’t come out till mid-March, preliminary results show top EU countries are also top worldwide digital performers. However, the EU as a whole “needs to significantly improve in order to lead on the global stage,” according to the release.

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What’s different this year is that for the first time, the DESI will compare EU countries not just to each other, but to digital behemoths Japan, the United States and South Korea, according to the EC news release.

Though the initial DESI findings are counter to other research we’ve reported, the EC researchers classify some of the countries we thought were pushing the digital envelope as digital laggards, grouped under the report’s “falling behind category” including France and Poland. The 2016 edition of the Digital Economy and Society Index show that member states have made overall progress in areas such as connectivity and digital skills … but certainly some more than others. This should all be of particular interest to techpats, depending on your language skills. Because some digital leaders are notably in neutral, if you believe this report; ie, if you possess strong digital or engineering skills, you should probably be looking at Sweden. Because the DESI states that Sweden – home to Skype and Spotify – are in a bit of a digital-skills rut and might need your talents.

In short, this report is yet another call to action, trying to push Europe to catch up with the United States and China in digital innovation.

From the report:

While highlighting improvements, the results released today also show that the pace of progress is slowing down. Action is needed, both at the EU and national levels, to remove the obstacles which prevent EU Member States from fully benefiting from digital opportunities.

Here’s how they did:

Main findings of the Digital Economy and Society Index:

  • The EU is progressing, but slowly: The EU as a whole attains a score of 0.52 out of 1, an improvement from 0.5 last year. All EU countries but Sweden have improved their score.
  • Denmark, the Netherlands, Sweden and Finland continue to lead the DESI rankings.
  • The Netherlands, Estonia, Germany, Malta, Austria and Portugal are the fastest growing countries and they are running ahead. More information on country performance can be found in country profiles and in this factsheet.

In the DESI, countries are graded on:

  • ConnectivityThe Connectivity dimension measures the deployment of broadband infrastructure and its quality. Access to fast broadband-enabled services is a necessary condition for competitiveness.
  • Human CapitalThe Human Capital dimension measures the skills needed to take advantage of the possibilities offered by a digital society. Such skills go from basic user skills that enable individuals to interact online and consume digital goods and services, to advanced skills that empower the workforce to take advantage of technology for enhanced productivity and economic growth.
  • Use of Internet – The Use of Internet dimension accounts for the variety of activities performed by citizens already online. Such activities range from consumption of online content (videos, music, games, etc.) to modern communication activities or online shopping and banking.
  • Integration of Digital TechnologyThe Integration of Digital Technology dimension measures the digitisation of businesses and their exploitation of the online sales channel. By adopting digital technology businesses can enhance efficiency, reduce costs and better engage customers, collaborators and business partners. Furthermore, the Internet as a sales outlet offers access to wider markets and potential for growth.
  • Digital Public ServicesThe Digital Public Services dimension measures the digitisation of public services, focusing on eGovernment. Modernisation and digitisation of public services can lead to efficiency gains for the public administration, citizens and businesses alike as well as to the delivery of better services for the citizen.

desi-score-vs-speed-15-16_0Countries are divided into four groups, according to scores:

• Running ahead countries are those scoring above the EU average and whose score grew faster than that of the EU over the last year. These are countries that perform well and have been developing at a pace that allows them to further distance themselves from the EU average. Countries in this cluster: Austria, Germany, Estonia, Malta, the Netherlands and Portugal.

Lagging ahead countries are those scoring above the EU average but whose score grew slower than that of the EU over the last year. These countries perform well, but their development is now very slow and, as such, they are lagging in comparison to the progress of the EU as a whole. Countries in this cluster: Belgium, Denmark, Finland, Ireland, Lithuania, Luxemburg, Sweden and the United Kingdom

Catching up countries are those scoring below the EU average but whose score grew faster than that of the EU over the last year. These countries are developing faster than the EU as a whole and are thus catching up with the EU average. Countries in this cluster: Spain, Croatia, Italy, Latvia, Romania and Slovenia.

• Falling behind countries are those scoring below the EU average and whose development over the last year was slower than that of the EU as a whole. These countries are already less developed than the EU average, and by showing anemic growth they are distancing themselves further from the rest of the EU. Countries in this cluster: Bulgaria, Cyprus, Czech Republic, Greece, France, Hungary, Poland and Slovakia.

As you might imagine, EU officials are flummoxed by the findings … but at least they’re saying it out loud, not trying to put lipstick on the pig.

“The EU makes progress, but too slowly,” stated Günther H. Oettinger, Commissioner for the Digital Economy and Society, in the release. “Action is needed if we want to catch up with Japan, the USA and South Korea.”

More and more people, businesses and public services are going digital. But too many of them still face problems such as a lack of high-speed internet coverage or cross-border e-government, as well as difficulties in shopping and selling across borders. We need to fix this,” stated Andrus Ansip, Vice-President for the Digital Single Market. “This is what our Digital Single Market Strategy aims to do. The first proposals under the Strategy will boost e-commerce and connectivity.”

Here are the recommendations from the news release:

  • The EC recommends great connectivity including moving to 5G technology.
  • Digital skills need to improve. While the number of science, technology and mathematics graduates has slightly increased in the EU, almost half of Europeans (45 percent) don’t have basic digital skills (using a mailbox, editing tools or installing new devices). The Commission will address digital skills and training as part of the upcoming EU Skills Agenda later this year.
  • e-Commerce, a missed opportunity for smaller businesses: 65 percent of European internet users shop online, but only 16 percent of small-to-medium-sized enterprises (SMEs) sell online – and just a tiny fraction sell online across borders (7.5 percent). To address this issue, the Commission presented proposals on digital contracts in December (press release) to protect consumers better who shop online and help businesses expand their online sales. The Commission will come with a legislative package in May to further boost e-commerce. It will include measures to address unjustified geo-blocking, to improve the transparency of cross-border parcel markets and to enforce EU consumer rules across borders better.
  • More public services online, but they are under-used: Indicators show that public administrations are providing a wider range of services online (allowing people to use the internet to inform about a new residence, the birth of a child and other important events). However, the number of internet users interacting with their administration online is not increasing (32 percent).
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