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Digital transition in Europe: what is missing to become truly competitive

4 October 2024 | Insights, News

“Analysis shows that we are not on track to meet Europe’s digital transformation goals. We need additional investment in digital skills, high-quality connectivity, and adoption of artificial intelligence “. In these words. Margrethe Vestager, executive vice president of the European Commission, commented on the publication of the second report on the state of the digital decade, which provides a comprehensive overview of the progress made in trying to achieve the goals set for 2030 by the EU.

The report, published by the European Commission in July this year, highlights the progress, but also the challenges, that Europe faces in meeting its 2030 goals. One of the central issues highlighted by the report is the centrality of two aspects: digital infrastructure and skills, both of which are crucial to ensuring the competitiveness of businesses and the economic future of the European Union. In this article, we will analyze how these aspects directly affect companies, especially those located in industrial areas.

Fiber optics: a necessity for business competitiveness

The report points out that fiber infrastructure is one of the essential elements to enable Gigabit connectivity, which is necessary for the adoption of cutting-edge technologies such as artificial intelligence (AI), cloud and Internet of Things (IoT). However, only 64 percent of European civics are currently reached by fiber-optic networks, a number well below target. This scenario has direct implications for businesses, especially SMEs located in less urbanized areas, which risk falling behind in digital transformation.

For companies operating in industrial areas, a high-speed and reliable connection is crucial to support advanced production processes, improve operational efficiency and remain globally competitive. The deployment of fiber optic infrastructure is therefore critical, not only to ensure technological growth, but also to enable the adoption of tools such as cloud and AI, fluid video streaming for calls, all of which offer opportunities for innovation and productivity improvement.

The digital skills shortage: a crucial challenge for digital transformation

Another key issue highlighted in the report concerns the need toclose the digital skills gap, which threatens to hinder the digital transformation of European companies. Currently, only 55.6 percent of the EU population has basic digital skills, a far cry from the goals of the Digital Decade. Moreover, only 64 percent of European companies use the cloud, 50 percent analyze big data and just 17 percent adopt artificial intelligence.

Italy is one of the countries that needs to make the greatest efforts to bridge the digital divide, as the European Commission study reveals a picture of opportunities that have not yet been fully exploited. Despite the strides made in recent years, especially in the field of digital health services, as evidenced by the widespread deployment of the Electronic Health Record (ESF), the country still has room for improvement.

For companies, this means that it is essential to invest not only in digital technologies, but also in training staff to develop the skills needed to take advantage of these technologies. Alongside these investments, however, there must be digital skills enhancement, through specific training programs and initiatives involving both employees and new talent, with a specific focus on STEM disciplines (science, technology, engineering and mathematics) and their teaching in schools.

Fiber optics and digital skills: two pillars for industrial growth

The European Commission calls on member states to step up investment in both digital infrastructure, such as fiber optics, and digital skills training. These two elements are the pillars on which to build a solid foundation for growth and innovation for European companies. Fiber optics enables companies to support advanced technologies such as automated manufacturing through industrial robotics, managing production lines with real-time monitoring systems or implementing IoT sensors for product quality control.

A manufacturing factory located in an industrial area, for example, with the adoption of a fiber optic network would be able to connect its operations to a centralized cloud system, improving inventory management and reducing downtime through predictive maintenance. Without a high-speed connection, these technologies would remain unusable or prone to inefficiencies.

In parallel, digital skills become essential to make the best use of these technologies. Think of the adoption of artificial intelligence (AI) in production planning. A company might implement AI software to optimize production cycles, but without properly trained staff, the adoption of such tools would be useless or risk being ineffective. Ongoing digital training, such as refresher courses on AI, data analytics and cyber security, will enable companies to maximize the return on their technology investments.

For companies operating in industrial areas, the combination of high-speed fiber optic networks and highly skilled personnel will be crucial to meeting future challenges. For example, increased connectivity will be able to enable remote management of production facilities spread across different territories, reducing transportation costs and optimizing resources, while appropriate digital skills will provide staff with the tools to ensure security and resilience against increasingly sophisticated cyber threats.

Together, these two factors enable enterprises to improve not only their operational efficiency but also their ability to innovate and adapt to market changes.

Cooperation between the private sector, government, and educational institutions will be key to creating a dynamic and prosperous digital ecosystem capable of attracting investment and generating new business opportunities throughout Europe.