without reforms, Europe threatened with stalling against the United States

Differences are appearing between countries, threatening to create a real divide on the continent.

Europe is not digitizing fast enough. This is the message sent Thursday by a report published by the European Investment Bank (EIB): “integral part of the survival of companies” since the pandemic, the digital transition of some European companies is too slow and threatens Europe. drop compared to the United States.

Without investment in digitization, “some European firms risk being left by the wayside”, warns the bank in its report.

In the United States, nearly six out of ten companies (58%) have taken advantage of the health crisis to accelerate their digital transition, compared to only 46% of European companies, notes the EIB, which surveyed 13,500 European and American firms between April and July 2021. In Central and Eastern Europe, as well as in France, the percentage even drops to 37%, compared to 48% in the west and north of the Old Continent.

On advanced technologies such as 3D printing or virtual reality, American companies are also a step ahead: two thirds of them use them in their activity, against 61% of European firms.

Consequences on the labor market

“When it comes to digitalisation, the overall gap between the EU and the US is primarily explained by the greater preponderance of small businesses in the European economy,” the report says.

Compared to large groups, “small businesses are less likely to adopt digital technologies”, adds the chief economist of the EIB, Debora Revoltella.

A discrepancy which is explained by “several factors”, such as “the difficulty in finding qualified personnel and financing the transition”, details Désirée Rückert, economist at the EIB. “In addition, small businesses are on average more digitized in the United States,” adds the Luxembourg-based bank. A significant advantage, given the many benefits of digitization highlighted in the report.

“Firms that have taken over digital technologies have better managed the disruption created by the Covid-19 pandemic”, according to the EIB.

Since the start of the health crisis, their sales have also declined less than those of companies less committed to the digital transition. Finally, the leaders of the most advanced companies in digitization are comparatively more optimistic about their one-year outlook.

In addition to waving the carrots of digitization, the EIB is also waving the stick: the delay of certain companies “poses risks for the labor market”.

“In Europe, 31% of employees are linked to firms that do not invest in the digital sphere” (22% in the United States), she says.

However, among these companies resistant to the digital transition, the firms which reduced their workforce after the pandemic are more numerous than those which increased them.

“Numeric fraction”

In an attempt to explain the digital backwardness of certain companies, the EIB identifies several brakes.

Nearly one in six European firms judge, for example, that poor access to digital infrastructure is a “major obstacle” in their digitization process. In addition, “many companies expect robotization to lead” to job destruction, a fear “particularly proven in companies in Central and Eastern Europe”.

Between the Finnish or Maltese digital champions and these hesitant companies, “Europe is experiencing a growing digital divide”, warns the EIB. And this divide could worsen in the coming years, judging by the diverging investment priorities of European companies over the next three years.

The most advanced in the digital transition say they want to develop their activity, while the least committed focus on simply renewing their production tools. To help them catch up, the EIB offers targeted financial support to SMEs in particular.

“We are concerned about SMEs, the European economy is largely based on their dynamism”, insists Christoph Weiss, economist of the EIB. “We need to find the right political instrument” to accelerate their digital transition, he concludes.

Leave a Comment