The investments envisaged in the French recovery plan are unlikely to be sufficient to achieve the digital transition ambitions set by the European Commission for 2030, a new study published by auditing firm Deloitte has revealed. EURACTIV France reports.
In March, the Commission presented its Digital Decade vision for 2030. It required that at least 20% of the recovery facility – which each EU country will receive to finance its recovery plan – be devoted to the digital transition, with a focus on skills, infrastructure, the digital transformation of businesses and digitalisation of public services.
“The majority of countries seem to have positioned digital spending exactly at or very close to the 20% minimum threshold,” the Deloitte analysis, seen by EURACTIV, said.
In its national recovery and resilience plan, presented to the European Commission at the end of April, the French government pledged to invest €10.3 billion, or a 25.1% share towards the digital transition.
However, following the Commission’s review and subsequent adoption of the plan, €8.4 billion or 21.32% of the total €39.4 billion will now be allocated to the digital transition.
But this should not be enough for France to reach the digital objectives set by the European Commission for 2030, the Deloitte study – which analysed the national plans of 20 member states without taking into account the possible national reforms that would contribute to these objectives – reads.
Good points and bad points
Of the four areas identified for the Digital Decade by Brussels, only the digitisation of public services, including the target of 100% of key procedures needing to be carried out online, will be achieved by 2030. Some €2 billion will be spent on digital health.
In its study, Deloitte expressed doubts about the goal of high-speed connectivity “for all” by the end of the decade.
The study reveals that while the €240 million ‘France Très Haut Débit’ plan, which aims to cover the whole country with fibre optics cable, could be achieved by the end of the decade, “this trend does not take into account the additional commercial and operational challenges that arise, particularly when rolling out networks to the last 10-20% of homes, which may slow the pace of coverage increase (e.g. higher cost per home).”
The stimulus plan also envisages allocating €300 million to 5G expansion.
Digital skills and maturity were among the greatest concerns for Deloitte. The study pointed to 57% of French people aged 16-74 in 2020 having digital skills and predicted the rate to be below 70% by 2030 – well under the 80% target set by the Commission.
The French national plan will also allocate €385 million to help businesses take a step towards digitalisation. Businesses will also benefit from the many investments in innovation and research, like in the cloud, and the funds allocated to the French Public Investment Bank (BpiFrance), which will naturally have a positive knock-on effect.
The digital maturity of French small and medium-sized enterprises (SMEs) was 57% in 2019, well short of the Digital Decade’s 90% target – meaning that, according to the study, a “significant increase” will be required.
Germany is not doing much better
Germany, for its part, will invest a large part of the €25.6 billion it will receive from the NextGenerationEU fund on digitalisation.
This, according to the European Commission, will translate into around 52% of the funds being invested in projects to accelerate digitalisation in various sectors, with most of the money going to broadband expansion, online public services and the economy’s digitalisation.
Germany is “one of the forerunners in Europe”, Commission President Ursula von der Leyen told Chancellor Angela Merkel at a press conference on 22 June.
Broadband expansion is one of Germany’s biggest headaches, however. According to Deloitte’s analysis, only 33% of households have access to gigabit networks, compared to 44% in the EU.
Though Germany has already identified the problem and has stepped up its efforts in recent years, the Deloitte report points out that Germany could reach the EU target of 100% coverage by 2030 if it continues on this path. In Germany, €1.5 billion will be allocated to the expansion of gigabit broadband.
But when it comes to digital skills and education, Germany is already well ahead of the EU-27 average and will allocate €1.8 billion to close the 10% gap to reach the EU’s digital targets. What Germany still needs to address is its shortage of ICT specialists, as it still needs 1.7 million to reach the 2030 targets.
As for the economy’s digitalisation, expectations are mixed.
While Germany is well ahead of the European average in terms of the business sector’s digitalisation, it lags behind in the use of cloud services, with only 12% of companies currently using them. To reach the EU’s 75% target, Germany would have to step up its efforts considerably, according to the Deloitte report.
The largest share – about 12.4% – of Germany’s investments under the NextGenerationEU fund will be allocated to the digitalisation of online public services. Given that Germany is only 10% away from the EU’s 100% target, achieving this goal seems achievable, the Deloitte study concluded.
[Edited by Zoran Radosavljevic]