Brussels: The proportion of businesses using cloud technology must significantly increase in order to meet the European Commission’s Digital Decade 2030 goal, according to a new report published today called ‘The progress towards the EU's Digital Decade ambition’, produced by Deloitte and commissioned by Vodafone. The EU’s Digital Decade, which sets key targets on different digital areas until 2030, is the EU’s vision for Europe’s digital transformation and a critical element in Europe maintaining its global competitiveness in a rapidly changing world.

According to the report, only around a quarter (26%) of all EU companies currently use cloud computing services, which is far short of the 75% target by 2030. This means from now until 2030, the EU needs to make up a gap of 49%.  Cloud services can help increase data security, drive efficiencies, help companies scale, yield insights and reduce costs for businesses, meaning they are critical to their overall success, ability to grow and support Europe’s overall competitiveness.

It is not only EU companies falling short on targets. The proportion of households covered by very high-capacity networks is up 9% in 2021 compared to the previous year, meaning a gap of 41% still exists. Plugging this gap could prove challenging to most, if not all Member States, due to the high costs and operational challenges in deploying these networks in remote areas.

Digital skills also require significant progress

A lack of ICT specialists is also inhibiting progress against the Digital Decade targets, jeopardising Europe’s ability to scale up technologies required to lead globally. Across the EU27, the number of ICT specialists currently stands at 8.43 million. While this number has increased the most in Germany, Ireland and Hungary over the past year, across the EU as a whole this figure needs to more than double in order to meet the 20 million ICT specialists Digital Decade goal.

Progress on digitalising SMEs is decreasing for some Member States, putting overall EU Digital Decade goal at risk

Digital intensity of SMEs has remained relatively flat over the past five years, with the average annual growth rate across the EU between 2016-2021 standing at just 2%. Digital intensity is defined according to the Digital intensity Index which measures the availability of 12 different digital technologies including access to fast broadband (30 Mbps or above) and ICT specialists.  In some instances, Member States are now further behind on their goals than they were five years ago. For example, Czechia was 14 percentage points further behind their 2030 target in 2021 compared to 2019, Portugal 9 percentage points. Germany 5, Ireland 3, France 2. However, Poland showed signs of progress and was 14 percentage points closer to their 2030 target compared to 2019 and Italy 11 percentage points higher.

Joakim Reiter, Chief External Affairs Officer, Vodafone Group, said: “It’s critical for Europe that it closes the gaps on the Digital Decade targets highlighted in this report. Without ICT specialists and SMEs digitalised and fit for the future, it will be difficult for Europe to compete in global markets and to build the digital industrial solutions of tomorrow.”

“All countries must participate in strengthening and enhancing our continent’s digital capabilities. Simply put, progress in only some Member States will not be enough to achieve Europe’s digital ambitions. While these gaps remain, our vision of a competitive, greener and more resilient Europe moves further away.  Indeed, the European Parliament recently estimated that the cost of inaction will stand at €1.3 trillion by 2032.”

Funding and disbursements for Member States will be subject to further changes following falls in GDP during the pandemic

Member States whose GDP fell more than forecast by the Commission will see an increase in their funds and grants available to them. Germany, Portugal and Spain may see the largest relative increases in grants, whereas Ireland, Romania and the Netherlands may see the largest relative decreases in grants due to better than forecast rises in GDP.

Cause for optimism – the report also puts four key policy enablers into focus, that could help realise the Digital Decade goals:

1. Co-ordination Across Governments: Effective collaboration across Member States' governments (national, regional and local authorities) could help to ensure that digital investments are effectively targeted, synchronised and timed. 

2. Connecting Digital Ecosystems: The emergence of new digital ecosystems will depend on a diverse range of organisations working together, with governments helping to facilitate.

3. Data Sharing: Ensuring data is accessible, re-usable and secure will help facilitate sharing and underpin digital ecosystems including smart cities, e-health, smart energy and mobility.

4. Demonstrating Digital Value: Showing the value of digital investments through pilots and effective benefit measurement frameworks can help unlock further public investment and inform decision-making on future investments.