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Digitalization of the European economies. Time to speed up

Piotr ArakSenior Analyst for Social Affairs19 April 2016, Brussels

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What does digitalization mean?

Digitization – changing the format from analogue to digital, Digitalization – the adaptation and increased use of digital, computer technologies by organizations, sectors of the economy, countries, etc.

We use the latter meaning.

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Digital transformation in actionDigital technologies are spreading rapidly in developing countries

World Bank, 2016, Digital Dividends.

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A typical day in the life of the internet

World Bank, 2016, Digital Dividends.; and Facebook.

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Business cycles in the economy

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Pillars of analysis of digitalization of economies and countries

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Level of digitalization of European economies – Digitalization of Economy Index (points)

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Most rapidly digitalizing economiesPercentage increase in Digitalization of Economy Index, 2008-2014

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Sectors of the Polish economy and their level of digitalization and the European average

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Digital EuropeTHE DIGITAL NORTH These are the best-digitalized countries: Norway, Iceland, Denmark, Finland, the Netherlands and Sweden.

THE DEVELOPING CONTINENT This group comprises the United Kingdom, Luxembourg, Belgium, Austria, Estonia, Malta and Germany – countries in different parts of Europe, which have almost caught up with the leaders.

LITTLE INTERESTED These are countries with a National Digitization Index between 40 and 50 points: Lithuania, France, Spain, Slovenia, the Czech Republic, Portugal, Latvia and Slovakia.

STRAGGLERS IN DIGITALIZATION These are the bottom ranking countries which have, on average, the poorest results (below 40 points). It is here – alongside Italy, Croatia, Hungary, Cyprus, Greece, Bulgaria and Romania – that Poland finds itself.

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Which countries are best prepared for the digital revolution? - National Digitalization Index (points)

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Poland is among a group of countries that are catching up relatively quickly in digitalizationPercentage increase in the value of National Digitalization Index, 2008-2014

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Without digitalization there is no businessRelationship between National Digitalization Index and the Doing Business Index

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Problem with data but also with the economy of scale

Poland EU2890%91%92%93%94%95%96%97%98%99%

100%

250 persons employed or moreFrom 50 to 249 persons employedFrom 20 to 49 persons employedFrom 10 to 19 persons employedFrom 0 to 9 persons employed

Number of enterprises by size class of employment in 2013 (latest)

Eurostat

1. E-economy

16

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What do Europeans think about data protection

FranceNetherlands

GermanySpain

GreeceBelgium

Czech RepublicSwedenPortugalRomania

CyprusBulgaria

EU28Latvia

LuxembourgMalta

EstoniaHungary

ItalySlovenia

AustriaPolandCroatia

SlovakiaFinland

United KingdomDenmarkLithuania

Ireland

0 5 10 15 20 25 30 35 40 45

Trust in internet companies (e.g.Facebook) Trust in government

SpainGreeceCroatia

RomaniaItaly

CyprusPoland

HungarySloveniaPortugal

LithuaniaUnited Kingdom

EU28Slovakia

GermanyLatvia

BulgariaIreland

Czech RepublicFrance

MaltaAustria

BelgiumLuxembourgNetherlands

EstoniaDenmark

SwedenFinland

0 10 20 30 40 50 60 70 80 90 100

Eurobarometer

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How much would the economy benefit from open data policy

Additional increase in GDP level by country 2013-2020 (%)

demosEuropa, 2014, Big and open data in Europe.

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Turnover from e-commerce

Greece

Bulgari

aCypr

us

Roman

iaIta

ly

Lithua

niaPo

land

Netherl

ands

Eston

ia

Croatia

SpainAust

ria

Sloven

ia

Portu

galEU

28

German

yFra

nce

Swed

en

Denmark

Hunga

ry

United

Kingd

om

Slovak

iaFin

land

Czech R

epub

licIre

land

0

5

10

15

20

25

30

35

40

Total electronic sales by enterprises, as a % of their total turnover (2015)

Eurostat

20

Enterprises selling cross-border to other EU countriesEnterprises having done electronic sales to other EU countries in the last calendar year (2015)

Roman

iaGree

ceLat

via Italy

Eston

ia

Luxem

bourg EU

28Fra

nceCroa

tia

Lithua

nia

Swed

en

Netherl

ands

Sloven

ia

Czech R

epub

licIre

land

02468

1012141618

Eurostat

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Lies and statistics

Polan

d

Czech R

epub

lic

Hunga

ryFra

nce

Slova

kia Italy

German

yEU

28Sp

ainAust

ria

Belgium

Swed

en

Denmark

Netherl

ands

Malta

01020304050607080

Enterprises using social media in 2015 (%)

Eurostat

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What can we do to boost e-business?

• Regulate access to personal data, taking into account the interests of all groups.

• Create a system of tax credits for the purchase of innovative technological solutions.

Fire-chat

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2. E-skills

24

25

Persons using cloud computing

Croatia

Lithu

ania

Greece

Slove

nia Italy

Austria

Latvi

a

Roman

iaEU

28

Hunga

ryMalt

a

Finlan

d

Netherl

ands

United

King

dom

Luxe

mbourg

05

101520253035404550

Persons that used internet storage space to save documents, pictures, music, video or other files in 2015 (%)

Eurostat

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Enterprises using cloud computing

Roman

iaPo

land

Bulgari

aCyp

rus

Austria

Luxe

mbourg

Lithu

ania

Eston

ia

Slove

nia EU28

Belgium

United

King

dom

Netherl

ands

Swed

en

Finlan

d0

10

20

30

40

50

60

Enterprises used Cloud Computing services in 2014 (%)

Eurostat

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Familiarity with internet securityIndividuals who know that cookies can be used to trace movements of people on the internet in 2015 (%)

Roman

iaCyp

rus

Slova

kia

Greece

Czech R

epub

lic

Portu

gal

Malta

Croatia

Slove

nia

Eston

ia

Belgium

France

Luxe

mbourg

German

y

Finlan

d0

102030405060708090

Eurostat

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How can we support e-skills acquirement?

• Ensure training in computer literacy at every stage of education.

• Support and develop educational programmes relating to personal data.

Fire-chat

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3. E-infrastructure

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Fixed broadband

Italy

Polan

d

Lithu

ania

Portu

gal

Irelan

d

Greece

Hunga

ryCyp

rusFra

nce EU28

Czech R

epub

lic

Eston

iaMalt

a

United

King

dom

Luxe

mbourg

0102030405060708090

100

Households with fixed broadband connection in 2015

Eurostat

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Share of broadband subscriptions >= 30 Mbps in 2015

Croatia

Cyprus

France

Slove

nia

Eston

iaPo

land

Slova

kia

Czech R

epub

lic

Luxe

mbourg

Hunga

ryIre

land

Portu

gal

Malta

Netherl

ands

Belgium

0102030405060708090

Share of fixed broadband subscriptions >= 30 Mbps - advertised download speed

Eurostat

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Mobile broadband take-upMobile broadband penetration is defined as the number of active mobile broadband SIM cards per 100 people.

Hunga

ry

Portu

gal

Roman

ia

Slova

kia

Lithu

ania

Cyprus

Austria

Bulgari

a

Luxe

mbourg EU

28

Netherl

ands

United

King

dom

Polan

d

Denmark

Finlan

d0

20406080

100120140160

Eurostat

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How can we support development of ICT infrastructure?

• Promote investment in broadband infrastructure to ensure universal, high-quality access to the internet.

• Is there any role for the EU besides funding the investments in infrastructure in CEE countries?

Fire-chat

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4. E-administration

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37

Sending forms to public institutions

Roman

ia

Czech R

epub

lic

Slova

kiaPo

land

Cyprus Malt

a

Greece

Portu

gal

Spain

Austria

Belgium

France

Irelan

d

Norway

Denmark

01020304050607080

Individuals submitting completed forms to public authorities, over the internet, last 12 months (% of citizens)

Eurostat

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UN online service index 2014

To arrive at a set of Online Service Index values, more than 90 researchers –qualified graduate students and volunteers from universities in the field of public administration—assessed each country’s national website in the native language, including the national portal, e-services portal and e-participation portal, as well as the websites of the related ministries of education, labour, social services, health, finance and environment as applicable.

Bulgari

aMalt

a

Roman

iaCyp

rusPo

land

Greece

Portu

gal

Denmark

Belgium La

tvia

Austria

Lithu

ania

Finlan

d

Netherl

ands

France

00.10.20.30.40.50.60.70.80.9

1

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Bad online services are an outcome of overall bad services

0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 120

25

30

35

40

45

50

55

Online service index 2014

Qua

lity

of p

ublic

ser

vice

s 20

12

Relationship between the quality of public services in 2012 (Eurofound) and online service index 2014 (UN)

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How to develop a better e-administration?• Create a single government service to handle

official matters. • Coordinate the processes of ICT procurement by

the administration. • "Whatever works" strategy. The recent 500 plus

programme of a universal family benefit introduced in April 2016 can be acquired filling a form via e-banking. Maybe if the public services do not work, the private ones could be used instead?

• Is there anything that the EU can do to make the quality of e-administration in the member countries better?

Fire chat

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Networking