To achieve the goals of the ‘digital decade’, at least 200 billion euros more are needed

Despite all the progress made so far in digital transformation, the EU needs additional investments of at least 200 billion euros to achieve the goals of the Digital Decade 2030, as highlighted in the first report of the European Commission (EC) on the digital state in the EU.

The goals of the Digital Decade are for each member state to ensure digital infrastructure by 2030 so that households and businesses have access to broadband services at speeds of 1 Gbit/s, either through fixed or wireless connections, and to ensure full gigabit coverage across the EU, as well as 5G coverage in all populated areas.

However, this cannot be achieved without additional investments. Therefore, the EC calls on member states, including Croatia, to accelerate digitalization and increase investments, deeming the current ones insufficient.

The report provides a comprehensive view and assessment of the progress of the EU and individual member states in the digital transformation necessary to strengthen the EU’s resilience and competitiveness, focusing on digital skills and infrastructure, business digitalization including the use of artificial intelligence (AI), and the digitalization of public services.

The report also includes monitoring of the European Declaration on Digital Rights and Principles.

Optical networks reach only 56 percent of households, 5G for 81 percent of the population

Optical networks, which are key to providing gigabit connectivity, reach only 56 percent of households in the EU, while 5G covers about 81 percent of the population, which drops to 51 percent in rural areas,” the EC report states, warning that 5G still lags behind in quality compared to user expectations and industry needs.

Data from the report indicate that 55 percent of rural households in the EU still do not have any advanced network, and nine percent are not covered by any fixed network, leading to what the report describes as a “sobering assessment” of the need for at least an additional 200 billion euros in investments in broadband infrastructure over the next six years.

This assessment comes at a time when telecommunications companies in Europe, and indeed worldwide, are looking to reduce network investments after years of significant capital expenditures in 5G and optical access network infrastructure, and instead seek a return on initial investments.

– Member states should map their connectivity deficiencies and explore financing to complement private investments in areas that are not commercially viable, including rural and remote areas – the EC stated in the report.

Increase global share in semiconductor production and business digitalization

One of the goals is for the EU to double its share of global production of cutting-edge semiconductors from the current 10 to 20 percent by 2030, with member states promoting national policies and investments to further stimulate domestic chip design and manufacturing capabilities.

In business digitalization, the goal is for 75 percent of businesses in the EU to adopt cloud computing services, big data, and/or artificial intelligence (AI) by 2030, and for more than 90 percent of small and medium-sized enterprises (SMEs) to use at least a basic level of digitalization.

The EC report predicts that without further investments, by 2030 only 66 percent of businesses will use cloud services, 34 percent big data, 20 percent AI, and about 70 percent of SMEs in the EU will have a basic level of digital intensity, with uneven and insufficient progress among member states.

Croatia has made some progress

In the chapter of the EC report on the state of digitalization in individual countries, it is noted that the digital transformation of the Croatian economy and society is “significantly progressing,” particularly in the areas of human capital, optical network coverage, and business digitalization, but that there is still much work to be done in this process.

– Since 2018, Croatia has made some progress in developing fixed network infrastructure, especially in optical networks, but with still limited availability of broadband services. It has also improved overall coverage with three 5G networks, from 34 to 82 percent of the population – the report states regarding Croatia, with a recommendation that Croatia should accelerate efforts on gigabit connectivity infrastructure, especially through optical connections in rural areas.

It should also accelerate the processes of business digitalization and enterprises with public support for workshops and training, increasing participation in existing funding programs, especially among small and medium-sized enterprises.

A rare ‘element’ in which Croatia is above the EU average is digital skills, which about 63 percent of the population possesses, compared to 54 percent in the EU overall, but the report recommends that more effort should be invested here as well, especially in increasing the number of ICT professionals, whose share in total employment is still low and below the EU average, at 3.7 percent compared to 4.6 percent.

Therefore, Croatia needs to increase the capacities of the education system and train more ICT professionals, as well as take measures to retain them in the country, as well as attract more students for specialization in ICT skills, especially in cybersecurity.

More details from the EC report on the state of Croatia within the Digital Decade 2030 will be presented next week by representatives of the Central State Office for the Development of the Digital Society (SDURDD).