Author(s): Raghu Gopal
Last week, the EU released its 2019 Digital Economy and Society Index. This annual "report card" measures the progress of EU member states toward a digital economy and helps them identify areas in need of priority investment and action.
Previously, the EU had agreed on 28 of 30 legislative proposals of the Juncker Commission aimed at bringing barriers down and creating a digital single market for the benefit of European citizens and businesses. To reinforce ongoing investments in essential infrastructures and skills, the commission made targeted budget proposals for 2021 to 2027 that now need to be approved by EU members and the European Parliament.
It's interesting to note that, according to the report, the largest EU economies of Germany, France and Italy aren't among the digital front runners, although they are in the top five countries in terms of GDP. The Nordic countries of Finland, Sweden and Denmark top the list, followed by the Netherlands and the UK.
Thanks to its high rates of mobile connectivity, digital talent pool and many e-government initiatives, Finland takes the top spot for the first time in the history of these rankings. It's a fantastic accomplishment for a country that's still recovering from the fall of Nokia, which for many years led the world in the development in digital mobile communications.
The report includes a detailed analysis of national digital policies, providing an overview of progress and policy implementation by EU nations. To make better comparisons between EU members, the study also develops cross-border analyses in connectivity, skills, use of Internet services, adoption of digital technology by businesses, digital public services, IT research and development and innovation investment.
Commissioner for the Digital Economy and Society, Mariya Gabriel, added that "This year's Digital Economy and Society Index demonstrates that the speed of digital transformation must accelerate for the EU to stay competitive at world level. In order to succeed, we have to continue to work together for an inclusive digital economy and ensure unimpeded access to digital skills for all EU citizens in order to truly thrive and build a more digital Europe".
The 2019 index found that businesses are becoming more digital, but e-commerce is growing slowly. A rising number of companies use cloud services and social media to engage with their customers. It also revealed that there's stronger demand for advanced digital skills throughout the economy, with employment of IT specialists in the EU growing by 2 million over the past five years. But more than one-third of Europeans in the active labour force lack basic digital skills, even though most jobs require at least basic abilities in this area, and only 31% possess advanced Internet user skills.
One of the main conclusions of the report is that countries that have set ambitious targets in line with the EU's digital single market strategy and coupled them with adapted investment achieved a better performance in a relatively short period of time. But if the EU is to remain competitive at a global level, the speed of digital transformation must accelerate.