European small and medium enterprises are facing challenges in achieving a basic level of digital services, with only 58% meeting this benchmark set by the EU Commission for 2030. This is significantly below the goal of 90% digitalisation for small and medium enterprises. In contrast, large enterprises, defined as those with at least 250 employees, have shown more success in reaching a basic level of digitalisation, with 91% meeting this standard.
Among European countries, Romania, Bulgaria, and Greece have the highest percentage of businesses operating at a “very low level of digital intensity,” with Finland, Malta, and the Netherlands leading in terms of a “very high level of digital intensity.” The Digital Intensity Index (DII) is used to determine a business’s level of digitalisation, with a “basic level of digital intensity” defined as using at least four of 12 digital technologies or having e-commerce sales accounting for at least 1% of total turnover. Some of the technologies included in this index are AI, social media, cloud computing, and Customer Relationship Management.
The slow progress of European businesses in adopting digital technologies highlights the urgent need for innovation and digital transformation. With only 58% of small and medium enterprises meeting the basic level of digitalisation, there is a significant gap that needs to be addressed in order to meet the EU’s digitalisation goals by 2030. This challenges businesses to embrace new technologies and adapt to the digital age to remain competitive in the global marketplace.
The disparity between small and medium enterprises and large enterprises in achieving a basic level of digitalisation points to the need for targeted support and resources for smaller businesses. While larger enterprises have shown higher levels of digital readiness, smaller businesses may face barriers such as limited resources and expertise in implementing digital technologies. Governments and industry organizations can play a role in providing assistance and training to help small and medium enterprises overcome these obstacles and drive digital growth.
By understanding the Digital Intensity Index and the factors that contribute to a business’s level of digitalisation, policymakers and business leaders can work towards closing the digital gap in Europe. Investing in digital skills training, promoting digital literacy, and incentivizing the adoption of digital technologies can help accelerate the digital transformation of European businesses. Collaboration between government, industry, and academia will be essential in fostering a culture of innovation and digital excellence across the EU.
In conclusion, while European businesses are facing challenges in achieving digital readiness, there is an opportunity for growth and development through digital transformation. By leveraging the Digital Intensity Index and focusing on key technologies and strategies, businesses can enhance their competitiveness and resilience in the digital economy. With concerted efforts and collaboration, European businesses can bridge the digital gap and realize the full potential of digital innovation for sustainable growth and prosperity.
