European Commission publishes data for the Digital Economy and Society Index 2022

The European Commission published on July 28 the data provided by the Digital Economy and Society Index (DESI) for 2022, which aims to measure the progress made in EU member states in the digital field. According to the report, only 54% of Europeans have "basic digital skills" and while most member states are making progress in their digital transformation, the adoption of key digital technologies by businesses, such as AI and megadata, remains low. It is through DESI that the European Community has been able to see the digital progress of EU member states since 2014, with DESI 2022 reports based primarily on 2021 data. They allow us to observe that, although during the COVID-19 pandemic member states made progress in their digitalization efforts, they have not yet closed the gaps in digital skills, digital transformation of SMEs, and deployment of advanced 5G networks. To support digital transformation, €127 billion has been earmarked by the EU for digital-related reforms and investments in national recovery and resilience plans. This investment aims to accelerate digitization, increase the Union's resilience, and reduce external dependencies on both reform and investment. Member States spent an average of 26% of their allocation on the Digital Transformation Recovery and Resilience Facility (DRRF), above the mandatory 20% threshold. Member states that chose to invest more than 30% of their allocation to digital were Austria, Germany, Luxembourg, Ireland, and Lithuania. Margrethe Vestager, executive vice president for a digital-friendly Europe, states:

"The digital transition is accelerating. Most Member States are making progress in building resilient digital societies and economies. Since the beginning of the pandemic, we have made considerable efforts to support Member States in the transition, whether through the recovery and resilience plans, the EU budget or, most recently, the structured dialogue on digital education and skills. Because we need to make the most of the investments and reforms needed to achieve the goals of the 2030 digital decade. So the changes need to happen now."

All EU countries have gaps in key areas

Even Finland, Denmark, the Netherlands, and Sweden, which are at the top of the rankings in terms of digitization, are experiencing gaps in key areas: the adoption rate of advanced digital technologies, such as AI and megadata, is less than 30 percent, far from the 75 percent target set for the digital decade by 2030. Nevertheless, the adoption of digitization has continued and countries that were lagging behind in this area are gradually reducing it like Italy, Greece or Poland.

A lack of skills

On March 9, 2021, the European Commission presented tracks for the digital transformation of Europe and the objectives to 2030 of the EU digital decade in 4 sectors:

• IT skills;
• Secure and sustainable digital infrastructure;
• Digital transformation of businesses;
• Digitalization of public services.

DESI 2022 reveals that only 54% of Europeans aged 16-74 have at least basic digital skills, the Digital Decade target is at least 80% by 2030. As for information and communication technologies, 500,000 specialists have entered the labor market in the last two years. As a result, the EU now has 9 million ICT specialists, far from the 20 Ms target of the digital decade and from being in sufficient numbers to fill the skills shortages that companies are facing. By 2020, 55% of EU companies had reported difficulties in filling ICT specialist vacancies. These shortages are a significant barrier to the recovery and competitiveness of EU businesses.

Very low use of AI

Businesses stepped up their use of digital solutions during the pandemic, with 34% turning to the cloud, but only 14% using megadata and 8% using AI, compared to a target of 75% by 2030. Yet these key technologies offer enormous potential for innovation and efficiency gains, especially for SMEs. Only 55% of them have achieved at least a basic level of digitization, whereas the target is at least 90%.

Connectivity is improving but needs to be improved

By 2021, gigabit connectivity in Europe has increased further: 50% of households have adopted fiber, and overall coverage by very high capacity fixed network has reached 70%, with the target being full coverage. Meanwhile, 5G coverage also increased last year to 66% of populated areas in the EU. Yet, the report points out that"the assignment of 5G spectrum radio frequencies, which is an important prerequisite for the commercial launch of 5G, is still not complete: only 56% of the harmonized 5G spectrum has been assigned in the vast majority of member states (Estonia and Poland are the exceptions)." Furthermore, according to the DESI 2022, some of the very high coverage rates rely on sharing 4G frequencies or low-band 5G spectrum, thus not allowing full deployment of advanced applications.

Digitization of public services in the EU

Online delivery of essential public services is commonplace in most EU member states. In the context of the European Commission's plan to establish a European Digital Identity Portfolio, 25 Member States have implemented at least one eID scheme, but only 18 of them have one or more eID schemes that comply with the EU eIDAS regulation, which is a key element for the security of cross-border digital transactions. Translated from La Commission Européenne publie les données de l'Indice relatif à l'économie et à la société numériques 2022