European Commission just published his annual update for Digital Economy and Society Index (DESI), a composite index that summarizes relevant indicators on Europe’s digital performance and tracks the evolution of EU member states in digital competitiveness. As main conclusion DESI 2016 stated a certain progress could be observed in connectivity and some public services area, but Europe overall digital transformation is very slow.

DESI index is calculated on five pivotal dimensions: connectivity (broadband infrastructure development), Human Capital (skills needed to use advantages of digital society), Internet Use (online involvement of citizens), Digital Technologies integration (business digitisation and online sales), and Digital Public Services (eGovernment and public services digitisation).

Together to a new Digital Single Market

Replacing major EU program focused on Digital Agenda, the new Digital Single Market program is becoming the main digital focus of EU Commission, granting full access to digital benefits, for citizens, for business and for government. In EU Commission vision it is time now to fit the EU’s single market to the digital age – unifying 28 national markets in a single one. This should create thousands of new jobs and could contribute €415 billion per year to EU economy.

Three main policy directions are sustaining the Digital Single Market strategy:

• Better online access to digital goods and services
• An environment where digital networks and services can prosper
• Digital as a driver for growth

EU countries clusters

The overall Europe index progression is scored at 0.52 in 2016, up from 0.50 last year. Most important drivers for this improvement were Connectivity and Integration of Digital Technology dimensions. Considering average EU index countries were grouped in clusters according to their score:

Running ahead: Austria, Estonia, Germany, Malta, the Netherlands and Portugal – countries with score above the EU average and faster growing

Lagging ahead: Belgium, Denmark, Finland, Ireland, Lithuania, Luxembourg, Sweden and the United Kingdom – countries with score above the EU average but slower growing:

Catching up: Spain, Croatia, Italy, Latvia, Romania and Slovenia – countries with score below the EU average but faster growing:

Falling behind: Bulgaria, Cyprus, Czech Republic, Greece, France, Hungary, Poland and Slovakia – countries with score below the EU average and slower development:

 

Main DESI Findings on 5 Dimensions

Connectivity

• all European citizens have all access to broadband
• 71% of European homes can access high-speed broadband (at least 30 Mbps)
• 7% per year was average growing of high-speed broadband coverage
• 72% of European homes subscribe to fixed broadband
• 30% only of fix connections are high-speed.

Human Capital/Digital skills

• 76% of Europeans go online regularly – once per week
• 45% of Europeans still don’t even have basic digital skills
• 18 of each 1000 people aged 20 to 29 years graduated in 2013 Science, Technology and Mathematics (STEM).

Use of Internet

• 68% of Internet users reading news online
• 37% performing video or audio calls
• 57% using online banking
• 63% using social networks
• 65% shopping online

Integration of Digital Technology

• 31% > 34% was increasing in business software for electronic information sharing
• 14% > 18% was social media increasing with customers and partners
• 7.5% of European SMEs are selling online cross-border (to other EU member states)

Digital Public Services increasing

• from 75 to 81 points for the quality of European online public services
• the number of public services available online
• from 45 to 49 points for using public administration as a way for facilitating the delivery of online services.

 What is the Digital Economy and Society Index?

The Digital Economy and Society Index (DESI) is an online tool to measure the progress of EU Member States towards a digital economy and society. As such, it brings together a set of relevant indicators on Europe’s current digital policy mix.

The DESI is composed of five principal policy areas which represent overall more than 30 indicators:

• Connectivity: how widespread, fast and affordable broadband is,
• Human Capital/Digital Skills: the digital skills of the population and workforce,
• Use of Internet: the use of online activities from news to banking or shopping,
• Integration of Digital Technology: how businesses integrate key digital technologies, such as e-invoices, cloud services, e-commerce, etc. and
• Digital Public Services: such as e-government and e-health.

To calculate a country’s overall score, each set and subset of indicators were given a specific weighting by European Commission experts. Connectivity and digital skills (‘human capital’), considered as foundations of the digital economy and society, each contribute 25% to the total score (maximum digital performance score is 1). Integration of digital technology accounts for 20%, since the use of ICT by the business sector is one of the most important drivers of growth. Finally, online activities (‘use of Internet’) and digital public services each contribute 15%. The DESI online tool is flexible and allows users to experiment with different weightings for each indicator and see how this impacts overall rankings.