Europe risks falling behind its global competitors as it struggles to fund its digital transformation

The EU institutions and Member States need to understand that there is no alternative to digital transformation, explains Valter Flego.
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By Valter Flego

Valter Flego (HR, RE) is a member of Parliament’s Industry, Research and Energy Committee

11 Nov 2020

Over the years, the digital transformation has played a key role in shaping our communities’ evolution. Digital technologies have introduced new ways of working, interacting and exchanging information.

Today, the relationship between the private and public sectors has never been more important. Throughout the Coronavirus crisis, they have worked together and driven each other forward, sharing a common understanding.

Meanwhile, the impact of the introduction of automation and data exchange into manufacturing technologies, brought about by Industry 4.0, is before our eyes. Now is the time for the EU to seize this unique opportunity. This is particularly true for Europe’s SMEs, start-ups, educational establishments, health facilities, government bodies and others that have grasped the importance of taking part in the digital revolution. This revolution is inextricably linked with our Green Deal objectives.

“Digitalisation must be underpinned by a true digital transformation, a deeper change that tackles internal processes, value propositions, human skills and our culture”

Nevertheless, in this context it is important to differentiate between digitalisation and the digital transformation. Digitalisation, or rather the conversion of information and services into a digital format, is needed but still not enough on its own. Digitalisation must be underpinned by a true digital transformation, a deeper change that tackles internal processes, value propositions, human skills and our culture.

The importance of digital technologies is undeniable. From virtual meetings and remote voting, to supercomputers and AI as well as smart houses and driverless cars. Whether or not we want it, the digital revolution is happening fast and is irrevocable.

As the European Parliament’s rapporteur for the Digital Europe Programme (DEP), as well for the Transport and Tourism Committee report on the ethical aspects of artificial intelligence, I am eager to play my part in the EU’s digital growth.

Negotiations for the Multiannual Financial Framework (MFF) 2021-2027 remain ongoing, and the strength of the DEP will depend on the outcome of these talks. However, the Parliament has taken a strong position when it comes to the financial envelopes dedicated to the 15 flagship programmes, one of which is the DEP.

The top-ups the Parliament is insisting on are crucial to enabling the digital transformation our Union strives for. I am convinced that this is the only way that the DEP will be able to fulfil its objective of becoming the first pan-European investment programme specifically targeting the digital transformation.

First, it aims to build thorough capacities and capabilities that ensure the European Union’s strategic autonomy, particularly in sensitive fields such as high-performance computing, Artificial Intelligence and cybersecurity. This entails the delicate issue of how to truly ensure the European Union’s strategic action and freedom of action at a global level.

Second, the programme aims to spread widely tested technologies using European Digital Innovation Hubs, while ensuring that the development of human capital matches the demand for advanced skills.

At the same time, we have to recognise that other European Union programmes directly tackling digital transformation - in particular Horizon Europe and the digital component of the Connecting Europe Facility – are facing cuts and reductions.

“The digital transformation needs huge investment, and it’s no secret that research and innovation will drive this”

So, with the new MFF there is a risk that we will fail to get the investments needed to stimulate a recovery based on this transformation. The digital transformation needs huge investment, and it’s no secret that research and innovation will drive this.

Therefore, the dedicated ‘Digital, Industry and Space’ cluster, the various partnerships, as well as the European Innovation Council within Horizon Europe, will play an important role in ensuring that Europe remains at the forefront of global research and innovation in the digital field. Unfortunately, the budget envelope proposed by the Council directly contradicts the EU’s digital agenda and the aim of asserting Europe’s technical sovereignty.

It’s as if the EU should remain a follower rather than become the leader. This will also limit our ability to complete the ‘Digital Single Market’. The digital component of the MFF should not be a stumbling block; rather, it should be a crucial step forward for the EU.

The European institutions and Member States should not forget that we are currently losing – convincingly - the digital battle with the other global leaders - the US and China. Let us be aware that, right now, there is no alternative to digital transformation.

The negative consequences of COVID-19 on the EU and its Member States’ economies will be harsh and numerous, yet it is here where digital technologies can play a key role. A prominent digital component in the EU recovery plan is the main tool for increasing EU competitiveness and resilience. Digitalisation is an enabler of significant new sources of revenues based on cutting-edge business models and services that will be relied upon by future generations too.

Facilitating the wide deployment of digital technologies and solutions is crucial to overcoming the investment gap that affects both the public and private sectors. Digitalisation must be our top priority.

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