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The majority of Dutch companies recognize the importance of digitalization. This is evident from a report by the European Investment Bank EIB.
The EIB prepared the report to determine which countries are well equipped to emerge from the corona crisis. The institution states plainly that the pandemic could be the turning point that definitively accelerates digitalization.
The report uses the digitalization index to indicate how digital companies are and how they estimate digital infrastructure and investments. The absolute leaders in Europe in this regard are Denmark, the Netherlands and the Czech Republic and Finland. The US would also be in the top five. Belgium is in the group of 'strong countries', together with Portugal, Luxembourg, Sweden and Austria. The UK, Italy, Poland and Ireland are at the bottom.
European companies lag behind the US in the adoption of digital technologies. Two-thirds of European manufacturing companies say they use at least one digital technology. In the US that is almost eighty percent. However, digital companies perform better and are more dynamic: they have higher labor productivity, grow faster and have excellent management.
No internal market
Size also appears to be important for digitalization. Larger companies have higher rates of digital adoption than smaller firms, while older and smaller firms tend to be primarily non-digital. That is bad news for Europe. There are many small companies in the EU that invest too little in digitalization. A striking example is the construction sector. In the US the share of highly digitalized companies is about sixty percent, in the EU about forty. In the services sector the difference is thirteen percentage points, in infrastructure works eleven.
If European policymakers want to close the gap with the US, they must tackle the structural barriers to investments in digitalization. Awareness of the possible added value of a digital approach is crucial and requires skills. Policy efforts should also be stepped up to remove disincentives and reduce market fragmentation, especially in the services sector. The European Union is still far from an internal market there, according to the EIB.
Source: Computable
