Digital Decade – Germany and the EU are lagging behind their own targets
The EU Commission measures the progress of digitalization in EU countries and compares itself with other countries. It recently changed its methodology.
The European Commission uses the "Digital Economy and Society Index" (DESI) to monitor the technical progress and digital development of EU countries. From 2014 to 2022, the index showed the countries where they stand and in which areas they can improve. Since last year, the index has been integrated into the Digital Decade report in order to better coordinate the two. With the Digital Decade, the EU Commission aims to achieve comprehensive and sustainable digital transformations in all sectors of the economy. In this article, we take a look at what has changed and how the EU assesses its own and Germany's progress.
In the face of accelerating technological and geopolitical developments, the EU wants to occupy a leading position in the global economy. To gain a better overview of its progress, but also its setbacks, it has adapted the DESI methodology and revised and added indicators, such as for fiber optics and AI.
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What changes with the Digital Decade report
To achieve the goals of the Digital Decade by 2030, the Member States had to submit national roadmaps to the European Commission in which they formulate their planned measures. Based on the national roadmaps, the Commission can assess the progress made by the countries and weigh up whether the measures are sufficient. The report on the Digital Decade can therefore also serve as a basis for political measures for the member states. The member states have also made 127 billion euros available for "digital reforms and investments in national recovery and resilience plans". This should further accelerate digitalization and reduce external dependencies. The report was prepared by the European Commission's Directorate-General for Communications Networks, Content and Technology.
Until it was integrated into this report, the DESI was more about comparing the performance of EU countries. However, the Digital Decade report focuses on the joint efforts of the countries: each country should "contribute to the best of its ability" – considering their respective starting positions.
The European Commission had already revised the index indicators for 2022. In the digital skills dimension, for example, the provision of fiber to the building was added to better capture the countries' gigabit connectivity. In addition, the indicator for the use of mobile broadband services was updated to reflect internet usage with various mobile devices. The cloud indicator is intended to measure the use of advanced cloud technology more accurately. A new analysis has also been added for the topic of AI.
With its integration into the Digital Decade Report, the DESI 2023 has changed again. Some details stand out: for example, the indicator for women in IT professions has been removed when it comes to surveying society's digital skills. The price index for broadband services is missing for digital infrastructures, and the "environmental sustainability" item is missing for the digital transformation of companies. Instead, several sub-items have been added, most of them in the digitalization of public services. There are now indicators for user support, suitability for mobile devices and access to electronic health records.
Data from various sources
The data for the report comes from various sources, including studies by Capgemini, Omdia, Point Topic, empirica, PredictBy and IHS Markit. Eurostat, e-Government Benchmark and the services of the European Commission via the Communications Committee as well as national statistical offices were also consulted.
The report states that the data must be collected regularly, ideally annually. They must also have been accepted as relevant metrics in the respective areas.
EU compared with the rest of the world
As an equivalent to the DESI report, there is also the iDESI report, which compares the EU with the rest of the world. This comparison is now also part of the Digital Decade report. Among other things, it identifies the technical areas in which the regions are focusing. For example, the EU's greatest efforts, with a share of 23%, are in the area of cloud computing infrastructure.
The study "Analytical insights into the global digital ecosystem (DGTES)", which is consulted in the report, also differentiates the relative efforts made by different geographical areas compared to the global average. The result is that Europe could improve considerably. According to the analysis, the EU's share of global revenue in the IT, telecommunications and consumer electronics market has fallen dramatically over the past ten years - by 10.5 percent in the last nine years. The USA, on the other hand, has grown by 9.2 percent. The EU is therefore called upon to strengthen its technical leadership role again and drive forward the digital transformation. This applies in particular to the areas of critical raw materials, semiconductors, IT software (cloud and edge software) and cybersecurity.
(Image:Â Screenshot, Bericht zur Digitalen Dekade 2023)
The report on the Digital Decade concludes that EU measures must be accelerated, deepened and more closely coordinated to achieve the targets by 2030. To this end, the member states should invest three percent of their gross domestic product, for example, in critical infrastructures and technologies. The success of the Digital Decade is crucial for future prosperity. According to the report, a successful agenda could be worth 2.8 trillion euros - 21% of the EU's economic output.
Conclusion
In the previous texts in the series of articles on the state of digitalization in the EU, we have already looked at how Germany performs in the four categories: Germany has some catching up to do in the digital skills' category. It ranks 23rd out of 28, with only 49% of Germans having basic digital skills, which is below the EU average. Germany tends to train people in the workplace. It remains to be seen whether it can make the transition in the education system to teach children digital skills at an early age.
(Image:Â Bericht zur Digitalen Dekade 2023, Screenshots durch heise online montiert)
Germany's digital infrastructure is also severely lacking. Although Germany has previously invested a considerable budget in communications infrastructure, the country is still only in the midfield in 13th place. Fiber optic expansion is making slow progress, 5G networks in rural areas are patchy and the introduction of 5G faces regulatory hurdles.
The integration of digital technology by companies also stagnated in 2022 and 2023. Although most companies did not stop digitalizing their processes despite the war in Ukraine, they are clearly cutting back in this regard. Most small to medium-sized companies are integrating technology such as ERP or e-commerce. Germany's large companies are slightly above average in their use of big data and AI, while there are deficits in the integration of cloud services and e-invoices.
Germany also ranks 18th when it comes to digital administrative procedures. According to Commission President Ursula von der Leyen, key public services should be online and accessible by 2030. For example, citizens should be able to register their car or apply for a birth certificate. The Online Access Act (OZG) should be decisive for digital services in Germany: The new OZG 2.0 was supposed to iron out previous mistakes, but failed in the Bundesrat. It remains to be seen how quickly the new law will hit the streets.
Election date on June 9
The European elections will take place on June 9. German citizens and citizens of a member State of the Union can cast their vote. In Germany, they must be at least 16 years old and be on the electoral register at their place of residence. Anyone wishing to vote by postal ballot can apply for a polling card by 18:00 on the Friday before election day.
This article concludes our series on the Digital Decade. If you would like to read more about this year's European elections and EU digital policy, we have put together some articles on our topics page.
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