First report on the State of the Digital Decade calls for collective action to shape the digital transition

The first report on the State of the Digital Decade, published today, provides a comprehensive look at progress towards achieving the digital transformation to empower a more digitally sovereign, resilient, and competitive EU. It includes an assessment of the EU’s performance towards Europe’s 2030 objectives and targets focusing on four main pillars: digital skills, digital infrastructure, digitalisation of businesses, including the use of Artificial Intelligence (AI), and digitalisation of public services. It also includes the monitoring of the European Declaration on Digital Rights and Principles, which reflects the EU’s commitment to a secure, safe and sustainable digital transformation, putting people at the centre.

The 2023 report, which is the first of a series of annual reports, is a call to Member States for collective action to address the current investment gaps, accelerate digital transformation in Europe and intensify efforts to reach the objectives of the Digital Decade Policy Programme (DDPP). The DDPP was adopted by the European Parliament and the Council and entered into force on 9 January 2023, and includes a system of collaborative governance between the EU and national authorities.

The 2023 report’s horizontal recommendations and the country-specific recommendations present a clear and operational way forward. The recommendations will be the basis for discussion and collaboration between the Commission and the Member States on how to achieve our common goals. This work will be supported through the implementation of large-scale multi-country projects, including the newly introduced European Digital Infrastructure Consortia (EDICs).

The following are the key findings in the various areas covered in the report.

Digital infrastructure – secure connectivity

Under the current 2030 target, gigabit coverage should be available for everyone and 5G performant networks in all populated areas.

Currently, fibre networks, which are critical for delivering gigabit connectivity, only reach 56% of households, while 5G coverage stands at 81% of the population, dropping to 51% in rural areas. However, the deployment of 5G stand-alone networks is lagging and 5G is still falling short in quality with regards to end-users’ expectations and industry needs. 55% of rural households are still not served by any advanced network and 9% are not yet covered by any fixed network at all.

Additional investment of up to at least €200 billion is needed to ensure full gigabit coverage across the EU as well as 5G coverage in all populated areas. Member States should map their connectivity gaps and explore financing to complement private investment in areas that are not commercially viable, including rural and remote areas, benefitting from the pro-investment EU regulatory framework.

Semiconductors

The current 2030 target is for the EU to double its share in the value of global production of cutting-edge semiconductors, reaching from current 10% to 20% of the global market share in value.

To achieve this target, the European Chips Act, which entered into force on 21 September 2023, aims at developing a thriving semiconductor ecosystem and resilient supply chains. Member States should promote national policies and investments to further stimulate domestic chip design and manufacturing capabilities and to boost local skills in advanced technologies across sectors.

Digitalisation of businesses

The DDPP sets three targets to foster the digitalisation of businesses:

• at least 75% of EU enterprises should adopt in their operations cloud computing services, big data, and/or artificial intelligence (AI);
• more than 90% of small and medium businesses (SMEs) should reach at least a basic level of digital intensity (measuring the use of different digital technologies at enterprise level);
• double the number of unicorns (companies with a valuation over €1 billion).

Without further investment and incentives, the projected baseline trajectory indicates that by 2030 only 66% of businesses will use cloud, 34% big data and 20% AI. Furthermore, based on latest available data only 69% of EU SMEs reach a basic level of digital intensity, with uneven and insufficient progress among Member States. To improve the take-up of technology, Member States should raise awareness about the benefits of digitalising businesses, as well as promote and support the European Digital Innovation Hubs (EDIHs).

The number of EU-based unicorns has increased significantly in the past decade. A continuation of the trend would allow the EU to meet its target before 2030, but is no ground for complacency in volatile markets. Moreover, differences with other advanced economies remain: at the start of 2023 there were 249 unicorns based in the EU, compared to 1,444 in the US and 330 in China.

Digitalisation of public services

The DDPP targets provide for 100% online accessibility of key public services and, where relevant, the possibility for citizens and businesses in the Union to interact online with public administrations, online access to their electronic health records for 100% of Union citizens, and access to secure electronic identification (eID) for 100% of Union citizens.

Many Member States are well positioned to achieve the full digitalisation of public services and health records, as well as the deployment of the eID for their citizens. However, significant investments are needed to improve the cross-border availability and performance of public services. Regarding the European Digital Identity Wallet, its full deployment is under way: it is expected to be completed by 2030 and complemented by the Digital Euro, proposed in June 2023.

Digital skills

The EU is committed to increasing basic digital skills among at least 80% of those aged 16-74, and to reach 20 million ICT specialists by 2030.

However, the report shows that by 2030 and under the current conditions, only 59% of the population will master at least basic digital skills, and the number of ICT specialists may not exceed 12 million. Member States need to prioritise investments in high quality education and skills, and to foster women’s participation in STEM (science, technology, engineering and mathematics) from an early age.

Values and principles for the online society

The report highlights the pioneering role of the EU in creating a secure, safe, and human-centred digital transformation as anchored in the European Declaration on Digital Rights and Principles. The EU has introduced relevant policy and legislative measures, such as the Digital Services Act, the AI Act, the European Media Freedom Act, and the Communication on virtual worlds.

A sustainable digital transition

The report tracks the ongoing efforts to make the digital transition greener. Measures such as the Right to Repair initiative, the Eco-design criteria for mobile phones and tablets, and the EU action plan for digitalisation of energy systems will reduce the environmental impact of digital technologies. Further investments via national Recovery and Resilience Plans or joint investments are also crucial to foster the full transition towards net-zero digital solutions, along with improved monitoring mechanisms to measure the environmental footprint of electronic communications services.

International partnerships

The 2030 Digital Decade programme outlines the importance of international cooperation to promote the EU’s values with like-minded partners. Progress was made towards this goal through digital partnerships with Japan, the Republic of Korea, and Singapore, as well as Trade and Technology Councils with the United States and India. The EU also stepped up to support the digital transformation of Ukraine, bringing the country into the EU free roaming area.

Next steps

The Report includes recommendations on actions, measures, and policies in areas where progress is insufficient. Member States will outline the actions they intend to take to reach the objectives and targets in their national roadmaps to be published by 9th October.

Within two months after the adoption of the report, the Commission and Member States will discuss preliminary observations, with a focus on the recommendations issued by the Commission in its report.

Background

Proposed in September 2021, the Path to the Digital Decade outlines concrete steps to foster innovation and investment in the areas of digital skills, digital infrastructures, digitalisation of businesses and public services. This was complemented in December 2022 by the European Declaration on Digital Rights and Principles.

To track progress on the digital targets and objectives, the Commission has integrated the Digital Economy and Society Index (DESI), the annual monitoring exercise on Europe’s performance in digitalisation, in the report on the state of the Digital Decade.

The Commission’s Joint Research Centre (JRC) significantly contributed to this monitoring exercise, as part of its activities to support and shape the digital transition. It published three reports providing methodologies, findings and data to support the delivery of the 2030’s objectives, both at European and national level: on a methodology to estimate the EU trajectories towards the 2030 targets, on mapping EU funding instruments to Digital Decade objectives, and on international benchmarking of private investments in several thematic areas.