Creating a stronger, digital Europe

By Joakim Reiter, External Affairs Director, Vodafone Group

We are unfortunately again facing the full onslaught of COVID-19 all over Europe. We are in for a long and challenging winter. But rightly, Europe is now setting in place plans for its recovery and its post-Covid future. These plans need to turn the challenges and painful lessons of today into the opportunities of tomorrow.

The Recovery and Resilience Facility offers a once-in-a-generation chance to transform our European economies and societies for the better. The decision to allocate 20% of the funding to digital projects provides the vehicle for an impressive and wide-ranging digital transformation. But to deliver that transformation, Europe will need to set itself clear and ambitious targets, measure its performance and adopt policies that go well beyond business as usual.

Three digital divides: people, businesses and rural communities

Europe is correct to try to use this occasion to create its future engines of growth in a digital age, from 5G to data spaces, AI and quantum computing. Yet, the main learning of COVID-19 was not one of Europe’s lag in high-tech, but one of its unacceptable large gaps in democratising digital technologies. Therefore, the starting point in achieving Europe’s digital transformation must be closing the deep digital divides that have been exposed. We must make sure no citizen is left behind through targeted investment in the right areas, with the determination to – once and for all – tackle Europe’s three main digital divides.

First, there is still a significant digital skills gap in Europe, and a genuine risk this will increase as digitalisation increases. 94 million European workers are expected to need upskilling as technology becomes a growing part of their occupation, while an estimated 21 million workers may need to find completely new jobs. But the education, upskilling and reskilling of people will require a massive investment – perhaps as much as €9 billion a year.

Second, there has been a stark difference in the ability of small and medium-sized enterprises to respond to the pandemic. A report we published last month found that those SMEs that have digitalised have been more likely to have found new business opportunities during the pandemic. In fact, the most digitalised businesses referenced opportunities at more than double the rate of the least digitalised. Given that SMEs create 85% of all new jobs in Europe each year but only 17.5% of them currently sell their products and services online, we must make sure that they are able to grow in a digital age, and through digital means, if they are to maintain their position as the “motor of our economy”.

Lastly, the persistent lack of high-speed internet infrastructure in many rural areas must be tackled. It is simply unacceptable that so many people are unable to work remotely, or access adequate online education, just because they live outside of urban centres. As highlighted by the Digital Economy and Society Index (DESI), broadband coverage of rural areas remains an issue: 10% of European households are not covered by any fixed network and 41% lack any next generation access (NGA) technology at all. Companies like ours have been working to extend coverage as widely as possible, creating innovative partnerships and network-sharing agreements, but more must be done to ensure that the combination of private and public investment has the greatest possible reach.

A Digital Europe for all

Europe’s recovery plans, backed by the Recovery and Resilience Funds, are the opportunity to bridge these digital divides. This should build on the many important initiatives already taking place.

For example, Vodafone has implemented several projects to boost digital inclusion, from our Future Jobs Finder that helps to highlight the range of digital opportunities available to young people, through to our innovative Gigabit Hubs across Ireland that have transformed small rural economies.

And we are far from alone, many governments have led the way. From German rural connectivity subsidies and Italian vouchers supporting SME digitalisation, to Spain devising sectoral digital acceleration programs in everything from tourism to agriculture and Ireland’s recent Connected Communities initiative, Europe is not lacking in programmes, schemes or people determined to find concrete solutions.

For the most part, we know what works. What we need now is the ambitious leadership to unleash the value of the Single Market and ensure these solutions and innovations can be replicated and scaled rapidly across Europe so that the benefits of digitalisation can reach everyone equally and effectively. This, combined with the right enabling policy environment for innovations and investments, will make all the difference for Europe’s digital future.

90 for 27: Building back better by design

Talking about a Digital Europe is important; funding it, even more so. We know our starting point, we know what needs to be done, but we also need to dare to set an ambitious and measurable objective in terms of our destination. Only then will all of us truly stretch ourselves and take the necessary bold steps that avoids incremental progress and instead fully delivers on what European citizens need.

We believe the Digital and Economy Society Index (DESI) is broadly up to the job. We are proposing that Europe sets itself an ambitious “90 for 27” target: every member state scoring 90 on an upgraded DESI index incorporating a strong sustainability element.

A simple analysis of the relationship between DESI scores and economic performance indicates that if all EU-27 countries were to reach a score of 90, EU GDP could increase by 2.5% per annum with 7.5 million extra jobs being created. Even more importantly, the absolute improvement to GDP per capita would be larger in Member States starting from a lower DESI score, thereby contributing to economic convergence across Member States, making whole of Europe less fragmented and stronger.

We share President von der Leyen’s vision to “build back better by design” and deliver Europe’s digital decade. The task ahead for Europe is clear. We must contain the pandemic to enable the recovery to take off. And this recovery must be focused on building a more competitive and sustainable economy, while ensuring that no one is left behind. The ambition should be a carbon-free continent by 2050, backed by the full power of digital. As the Commission prepares to set out its concrete digital ambitions for 2030 next March, it should aim to deliver sustainable, long-lasting, and impactful change that leaves no European citizen behind.