The digital component of Member States’ RRF

The RRF is an unprecedented EU recovery instrument to mitigate the economic and social damage of the coronavirus pandemic by providing EU MSs with €723.8 bn in grants and loans that will be used to implement reforms and investments. As is known, the regulation of the RRF requires reserving 20% of the total expenditure to the digital transition, a target that has been widely exceeded.

According to the Annual Report on the RRF, a total of almost €130 bn in expenditure is allocated to the digital transformation pillar, more than a third being directed to the digitalisation of public services (36%, €47 bn), while about 20% each (€26 billion) is dedicated to both measures in support of business digitisation and human capital training.

The highest expenditure in the digital pillar in absolute terms involves Italy and Spain (€27 bn and €18 bn, respectively). The highest percentages of GDP to the RRF digital pillar are dedicated to the RRF digital pillar by Romania, Bulgaria, Greece, Portugal and Croatia.

Measures planned by Member States for the Digital Transition

Here, it is particularly interesting to understand what specific measures, within the national Recovery and Resilience Plans, have been envisaged for the digital transition by the Member States.

The study conducted by the Institute for Competitiveness for the European Parliament’s ECON committee tried to answer this question by investigating how the digital transition has been addressed in the national plans of the Member States in terms of reforms and investments, dividing them into five key areas – connectivity, digitalisation of public administrations, artificial intelligence and Industry 4.0, digital skills and cybersecurity.

Although the national RRF plans describe the set of planned measures and their funding, the structuring of this information in the individual plans differs from country to country (sometimes related to the areas, some to specific measures, often following different classifications) making a comparison quite difficult, with some information missing or overlapping.

Notwithstanding these critical issues, the results of the analysis are extremely detailed, and included in a table, available in the full report (p. 55). The most interesting measures are listed below.

Connectivity

In this area, the analysis shows that among the main measures adopted by the Member States appears the definition of financing mechanisms to support fixed infrastructures providing connectivity of at least 100 Mbps (in Italy at least 1 Gbps), while for mobile, the coverage of European 5G corridors is particularly favoured (measures envisaged by Latvia, Belgium, Italy and Bulgaria). Ireland presents interesting measures on 5G in support of ecological sustainability, while Italy and Spain show the most detailed (and best-resourced) plans for 5G infrastructure. Several Member States also plan specific measures for school building connections (Italy, Belgium and Ireland).

Digitalisation of the Public Administration bodies

National plans include measures to improve e-government solutions in order to make processes interoperable and easier to use, simplifying the adoption of online services by citizens and businesses.

Italy has the largest investments in terms of the PA’s move to the cloud, and Germany has also planned a strategy to create a fully interoperable, highly secure, energy-efficient and privacy-compliant infrastructure. Greece focuses on e-Registries, the development of Customer Relationship Management (CRM) systems, a new system for public procurement, and a central data management system. The creation of a single digital contact point or one-stop-shop with the PA is also planned by Cyprus, Latvia and Croatia.

Two areas particularly affected by the digitalisation of the PA are healthcare and justice. For the former, the focus is on cloud and interoperability (Italy), telemedicine (Finland), one-stop shops for digital health services (France), real-time monitoring and improved planning in patient management (Slovenia).

Measures to improve the quality of the judicial system are planned by Bulgaria, Portugal, Greece and  Czechia, focusing on increasing cross-border cooperation between national authorities, interoperability, electronic data management and digital registers, and access to judicial proceedings.

Measures for the digital transformation of business and the adoption of AI solutions by enterprises

Multiple investments have been planned to support businesses in order to foster the adoption of digital technologies. Portugal’s plan envisages the creation of 25 digital business accelerators and a system of financial incentives to boost companies’ business models, including coaching programmes and vouchers. Other measures aim to simplify companies’ access to finance in the case of Cyprus, Croatia and Slovakia. In other cases (Germany and Greece), the aim is to simplify procedures and reduce administrative costs, e.g. through the creation of one-stop shops and digital business registers.

Italy, Austria and Denmark are the most active countries in supporting SMEs in the adoption of digital technologies, while Bulgaria has focused on smart industry with vouchers and financial aid to build the necessary human, scientific and institutional capacities. Other initiatives concern support for R&D activities, provided in different forms in all plans, aiming at improving the research system, strengthening the role of institutes and improving the careers of researchers, strengthening collaboration between public and private funds, as well as facilitating the transformation of scientific results into commercial applications.

Some countries have taken measures to regulate the enabling potential – but also the risks – of digital transformation and AI to ensure a positive impact on the economy and society (notably Spain providing regulatory sandboxes to test new technologies in supervised environments).

Digital skills

All countries envisage measures to increase these skills in the population, in the workforce or in education. Actions addressing the digitalisation of school education are present in all programmes. Some plan to incorporate digital skills into school curricula, such as Cyprus and Croatia, while others (France and Portugal) focus on meeting the needs of the labour market. Most Member States encourage courses and PhDs in STEM fields. Several plans include measures to raise the level of digital skills in the workforce, both to increase the skills of the employed and to retrain the unemployed and support SMEs. These include Portugal, Italy, Luxembourg, Croatia, Malta, Estonia and Spain. Only the latter, however, envisages a measure emphasising the role of women and girls in the digital transformation of citizenship, while other countries focus on other groups such as the elderly, e.g. Italy (with the digital civil service), France and Belgium.

Cybersecurity

The measures to ensure cybersecurity are mainly related to three areas – the protection of public entities, the protection of businesses, and the protection of citizens. The development of cybersecurity for PAs involves increasing the protection for specific administrative apparatuses and in enhancing the infrastructure of public administrations (Malta, Poland and Lithuania). Bulgaria has addressed the issue of cybersecurity in the context of connectivity, while a further strategy has envisaged the creation of new operational structures, as in the case of Estonia and, especially, Italy (by the creation of the new national cybersecurity agency). Estonia and Finland have focused on corporate security. For the protection of citizens, only Finland has planned a specific measure for the development of cybersecurity skills to protect its inhabitants.

Resources dedicated to the 5 key areas by the Member States

The analysis of the resources dedicated to the five main areas of digital transition shows a number of interesting trends. Italy has devoted the largest amount of resources to networks, although this amount (about €6.7 bn) appears much lower than both the digitalisation of public services (€11.7 bn) and, above all, the digitalisation of businesses (a total of about €18.9 bn). Even the smallest item in the Italian plan, i.e., spending on cybersecurity (€623 mn), constitutes by far the largest investment among those set out in the various plans, followed by France (€336 mn) and Poland (€193 mn). The latter devotes a large part of its resources to digital skills (over €1.5 mn), ranking third overall in this field, behind Spain (€4.2 mn) and France (€1783 mn). France itself has allocated €540 mn to networks and over €2.6 bn to the digitalisation of PAs. Germany dedicates to this area its largest share (€6.6 mn), as does Lithuania (€4.2 mn out of a total of less than €5 bn). Spain has earmarked €3.265 mn on the digitalisation of its public bodies, and France just €2.676 mn, slightly more than Romania and Greece (€2 bn each). The latter devotes the largest share of its resources to the digitalisation of businesses (€3.4 bn out of the €7.1 bn for digitalisation), as does Spain (€5.6 bn).

Main takeaways

  • The absence of a common frame of reference – albeit envisaged in the original EU Commission format – could be improved by designing a tool and to track the implementation of the planned stages of reforms and investments (and possibly to define a homogeneous classification).
  • The efficient operation of digitised PA systems also requires that citizens trust the new tools introduced, hence an awareness-raising campaign would be crucial.
  • Cybersecurity training is lacking in most RRPs in education, employment and PAs, putting the security of their IT systems at risk.
  • Basic digital skills training is often included in educational curricula, while the provision of measures to strengthen specialised digital skills in emerging technologies is sometimes lacking.
  • Only a few countries have planned initiatives to balance the digital opportunity gap of specific vulnerable groups and ensure equal access, so further structural reforms, e.g., in favour of people over 65 or to ensure the participation of women, especially in the STEM disciplines, would be essential to ensure equality in the digital world.
  • Although some Member States envisaged multi-country projects, these are the exception. As the EU is committed to promoting digital technological progress and the digital single market, the RRF could be a powerful tool in achieving these objectives, especially in the R&D sphere, taking into account the limited funding of other initiatives (e.g., the Digital Europe programme).

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