Digitalisation: A Trillion Euro Opportunity
By Joakim Reiter, External Affairs Director, Vodafone Group
COVID-19 has hit Europe hard, and there is still some way to go before we are truly on the road to recovery. However, as the European Commission has acknowledged, governments, industry and civil society needs to use this time to put in place measures to transform our economies and societies for the better. Digital technology has been a lifeline for many over the last year, and there is clear evidence that further digitalisation can unlock significant benefits for our citizens, enabling economic growth, better quality of life and a greener and more inclusive society.
A new report conducted by Deloitte and commissioned by Vodafone summarises the considerable impact of focussed EU investment in digitalisation. The findings demonstrate the value that can be unlocked if industry, policy makers and citizens to come together to make Europe’s digital ambition a reality.
Some of the key highlights from the report include:
A 10% increase in the Digital Economy and Society Index (DESI) score is associated with a 0.65% higher GDP per capita;
If EU investment was directed to ensuring all Member States achieved a DESI score of 90 by 2027, GDP per capita across the EU would be 7.2% higher – equivalent to an overall increase of over €1 trillion;
The relative GDP impact is greater for less digitally developed countries, as increased digitalisation can play a role in driving convergence of economic performance.
The report also notes that the benefits are not just economic; there are significant environmental and social advantages too. We recently showed how greater digitalisation can help reduce greenhouse gas emissions, improve healthcare provision, and foster greater inclusivity by allowing more access to opportunities for young people, women, the elderly and those with disabilities. And, ultimately, as we’ve all seen during the last year, digital can help boost societal and economic resilience.
Realising the benefits of digitalisation
The new report sheds further light on what a digital Europe could offer. It reinforces the Commission’s decision to allocate 20% of the Recovery and Resilience Facility (RRF) in the EU recovery package to digital, and this is a good start. But unless it is spent in ways that truly deliver a next generation EU, this is an opportunity that will be missed.
A third of Europeans have already expressed concerns that the recovery funds will reach the promised areas and instead be diverted to bailout legacy industries or plug other economic gaps. In order to prevent this, it is vital that the fund allocation and compliance with associated policy reforms is closely monitored. The report demonstrates that DESI is a ready-made framework that can show whether governments and industry are investing in initiatives that deliver improved digital outcomes and clear economic progress. If every Member State committed to spending the digital allocation of the RRF on reaching 90 for 27, citizens can be assured that they will enjoy the digital future they deserve.
The Commission has recently set out its roadmap for the Digital Decade. By linking the digital decade targets to the DESI, we will be able to assess progress on an annual basis. In addition, all policy and regulatory decisions should be justified on the basis of being fit for purpose to achieve the Digital Decade ambitions.
Now is the time to act. The EU recovery package and policy initiatives that are underway need to deliver these ambitions. The study by Deloitte shows the size of the prize in economic and social terms. We believe that in the next seven years, if we can harness the true power of digital, we can accelerate economic growth and convergence – and create a stronger, more digital and inclusive future.
- Digital Society
- Public Policy