New EC Report Shows the Importance of Digital Resilience in Times of Crisis

The European Commission recently released the results of the 2020 Digital Economy and Society Index (DESI). This year's DESI shows that there is progress in all Member States and all key areas measured in the index.

This becomes all the more important in the context of the coronavirus pandemic, which has demonstrated how essential digital technologies have become, by allowing work to continue, monitoring the spread of the virus, or accelerating the search for cures and vaccines. Furthermore, the DESI indicators relevant for the recovery show that EU Member States should step up their efforts to improve the coverage of Very High Capacity Networks, assign 5G spectrum to enable the commercial launch of 5G services, improve citizens' digital skills and further digitise businesses and the public sector.

Finland, Sweden, Denmark and the Netherlands are the leaders in overall digital performance in the EU. Malta, Ireland and Estonia are following right after. The international index (I-DESI) shows that the best performing EU countries are also worldwide leaders. The largest EU economies are not digital frontrunners, which indicates that the speed of digital transformation must accelerate for the EU to successfully deliver on the twin digital and green transformations. Over the last 5 years, Ireland has made the most significant progress, followed by the Netherlands, Malta and Spain. These countries also perform well above the EU average as measured by the DESI score.

As the pandemic has had a significant impact on each of the five dimensions tracked by DESI, the 2020 findings should be read in conjunction with the numerous measures taken by the Commission and Member States to manage the crisis and support the recovery. DESI tracks the progress made in Member States in 5 principal policy areas, namely connectivity, digital skills, internet usage by individuals, integration of digital technologies by businesses and digital public services.

Connectivity has improved but more needs to be done to address fast-growing needs. Member States are working on the transposition of new EU rules adopted in 2018 into national legislation, with a view to fostering investment in Very High Capacity Networks, both fixed and mobile. 78% of households had a fixed broadband subscription in 2019, up from 70% 5 years ago, and 4G networks cover almost the entire European population. But only 17 Member States have already assigned spectrum in the 5G pioneer bands, (5 countries more than last year). Finland, Germany, Hungary and Italy are the most advanced on 5G readiness. Fixed Very High Capacity broadband networks are available to 44% of EU homes.

More progress in digital skills is needed, especially since the coronavirus crisis has shown that adequate digital skills are crucial for citizens to be able to access information and services. A large part of the EU population, 42%, still lacks at least basic digital skills. In 2018, some 9.1 million people worked as ICT specialists across the EU, 1.6 million more than 4 years ago. 64% of large enterprises and 56% of SMEs that recruited ICT specialists during 2018 reported that vacancies for ICT specialists were hard to fill.

Although the pandemic has seen a sharp increase in internet use, the trend was already present before the crisis, with 85% of people using the internetat least once a week (up from 75% in 2014). The use of video calls has grown the most, from 49% of internet users in 2018 to 60% in 2019. Internet banking and shopping are also more popular than in the past, being used by 66% and 71% of internet users respectively.

Enterprises are becoming more and more digitised, with large companies taking the lead. 38.5% of large companies already rely on advanced cloud services and 32.7% reported that they use big data analytics. However, the vast majority of SMEs do not yet use these digital technologies, as only 17% of them use cloud services and only 12% big data analytics. As for e-commerce, only 17.5% of SMEs sold products or services online in 2019, following a very slight increase of 1.4 percentage points compared to 2016. In contrast, 39% of large enterprises made use of online sales in 2019.

In order to boost e-commerce, the EU has agreed on a series of measures ranging from ending unjustified cross-border barriers and facilitating cheaper cross-border parcel deliveries to ensuring protection of online customer rights and promoting cross-border access to online content. Since December 2018, consumers and companies are entitled to find the best online deals throughout the EU without experiencing discrimination based on their nationality or place of residence.

Finally, there is an increasing trend towards the use of digital public services in the areas of eGovernment and eHealth, which allows for more efficiency and savings for governments and businesses, improved transparency, and the greater participation of citizens in political life. 67% of internet users who submitted forms to their public administration in 2019 now use online channels, up from 57% in 2014, showing the convenience of using ICT-enabled services over paper-based ones. The top performers in this area are Estonia, Spain, Denmark, Finland and Latvia.