Narrowing the digital divide: Economic and social convergence in Europe’s digital transformation

This report assesses upward convergence trends in digitalisation and proposes actionable strategies to ensure that no one is left behind. Upward convergence takes place when EU Member States grow together in the same direction and disparities are reduced.
 

When Ursula von der Leyen, President of the European Commission, launched the twin (digital and green) transition in 2019, the commitment was to ‘leave nobody behind’. In the complex scenario of digital competition on the global stage, the digital divide has both economic and social implications. In terms of economic implications, digitally excluded citizens and firms might be less equipped to engage in economic activities using digital means. This could translate into low productivity, lack of competitiveness and, consequently, low growth. Social implications arise because not having access to government or private services could lead to discontent and erode social cohesion.
 

Applying the lens of convergence to the evolution of digital indicators, this report investigates the digital divide and the long-term trends in digitalisation in Europe. It explores whether Member States, businesses, socioeconomic groups and regions have converged on their paths towards digitalisation.
 

Policy context

While digitalisation has been on the EU policy agenda since 2000 and significant progress has been made in this regard, the digital transformation is not yet complete. It has been reinforced with ambitious targets for 2030 – a ‘Europe fit for the digital age’ is now the priority. The second report on the Digital Decade, published in July 2024, called for additional investments in digital skills, high-quality connectivity and the uptake of artificial intelligence. The ambitious target of equipping 80 % of the EU population with basic digital skills is accompanied by EUR 250 billion in funding through NextGenerationEU and by a EUR 43 billion investment supporting the European Chips Act, which links with the European industrial strategy.
 

The digitalisation strategy is supported by regulations aiming to protect citizens and boost competitiveness in the market, such as:
 

• the Digital Services Act, setting out new standards for the accountability of online platforms regarding illegal content, disinformation and other societal risks;
   
• the Digital Markets Act, establishing a set of objective criteria for qualifying large online platforms as ‘gatekeepers’;
   
• the Artificial Intelligence (AI) Act, assigning applications of AI to three risk categories and prescribing mitigating and control actions;
   
• Directive (EU) 2024/2831 on improving working conditions in platform work;
   
• the European Chips Act, addressing semiconductor shortages and strengthening Europe’s technological leadership;
   
• the European Data Act, establishing clear and fair rules for accessing and using data in the European data economy.
   

26 % of the Recovery and Resilience Facility (EUR 150 billion) is dedicated to digitalisation. The second report on the Digital Decade underlines progress made by Member States on digital key performance indicators in the areas of digital infrastructure, business transformation, skills and public services. It also highlights that progress has been uneven, in particular in the areas of digitalisation of small and medium-sized enterprises and digital skills. This Eurofound report explores these disparities and measures the extent to which convergence has been reached; it identifies socioeconomic groups, regions and businesses still affected by the digital divide.
 

Key findings

Over the past two decades, great strides have been made in digitalisation. According to almost all indicators analysed, historically lower-performing Member States have been catching up with the digital leaders. However, significant regional and socioeconomic inequalities persist.
 

• When charting progress towards digitalisation, three levels of digital inclusion should be considered: access to infrastructure and devices, development of digital skills, and transformation of access and skills into tangible outcomes.
   
• Access is still an issue for vulnerable groups: low-income households, older individuals and those with lower levels of education. They are also more reliant on public services and may struggle in accessing e-government.
   
• Those with higher levels of education, those in the active workforce and those in the 25–44 age cohorts are better positioned, because they generally have access and the skills to harvest the advantages of using the internet and reap tangible benefits (social, economic and/or cultural).
   
• Upward convergence was also recorded in the digitalisation of Europe’s businesses; once again, however, variable progress is being made by Member States.
   
• Larger firms and those located in urban areas have higher levels of digitalisation.
   
• The digital transition has important implications for Europe’s competitiveness, as the use of advanced technologies in the private sector is associated with higher levels of labour productivity.
   
• The digitalisation that has taken place since 2008 has had significant links with the income convergence process across the EU-27.
   
• Across Member States, there are several examples of local initiatives that aim to bridge the digital divide, addressing specific socioeconomic groups and firms that need support.
   

These policies highlight the importance of committing to ‘doing no harm’ in the digital transition process and thus preventing the problem of exclusion.
 

Policy pointers

• Policymakers should adopt a commitment to doing no harm in the digital transition process, meaning that nobody should be excluded from accessing essential goods or services in the move towards a digital Europe. In practice, this may mean that analogue options remain for some public services, to facilitate continued service availability to the digitally excluded, including those who remain offline by choice.
   
• At the micro level, identifying pockets of digital exclusion in cities or neighbourhoods will facilitate a better understanding of the specific barriers to digitalisation, and the design of better targeted policies for inclusion.
   
• Local digital initiatives and local digital training should be customised based on an assessment of needs for the specific local community. Local communities could be involved through the co-creation of learning programmes.
   
• Those designing a digital inclusion initiative should consider the multifaceted needs that beneficiaries might have; this might mean tackling all three levels of digital exclusion: access (providing access and devices), use (providing skills) and outcomes (enabling the possibility of reaching tangible outcomes, be they social, economic or cultural).
   
• Digital upskilling programmes should not be narrowly focused on current technologies, but should foster competencies of learning to learn and be open to all sociodemographic groups.
   
• Training should also focus on helping people to develop critical thinking to deal with the challenges of digitalisation and to understand the processes at work behind generative AI, including the risk of biases and AI ‘hallucinations'.
   
• Policymakers should ensure that smaller firms and those located outside large cities are given the support they need to adopt digital technologies.
   
• A lack of information and communication technology (ICT) skills among the population can pose an obstacle to economic growth. Firms should be supported in their efforts to upskill their workers in this area.