EUROPEAN COMMISSION Brussels, 15.9.2021 SWD(2021) 247 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document Proposal for a Decision of the European Parliament and of the Council establishing the 2030 Policy Programme “Path to the Digital Decade” {COM(2021) 574 final}



Table of Contents 1. Introduction 2. The starting point: need for common governance and coordinated investments 3. Targets 3.1. Introduction 3.2. A digitally skilled population and highly skilled digital professionals 3.2.1. Basic digital skills 3.2.2. ICT specialists 3.3. Secure and performant sustainable digital infrastructures 3.3.1. Connectivity 3.3.1.1. Gigabit coverage 3.3.1.2. 5G coverage 3.3.2. Semiconductors 3.3.3. Edge/cloud 3.3.4. Quantum computing 3.4. Digital transformation of business 3.4.1. Take up of digital technologies 3.4.1.1. Cloud computing services 3.4.1.2. Big data

3.4.1.3. Artifical Intelligence 3.4.2. Digital “late adopters” 3.4.3. Innovative businesses/scale-ups 3.5. Digitalisation of public services 3.5.1. Government as a platform 3.5.1.1. Online service provision 3.5.1.2. Access to medical records 3.5.1.3. e-ID adoption 4. Governance: Monitoring and Cooperation Mechanism 4.1. Guidance 4.2. National Digital Decade Strategic Roadmaps 4.3. Annual monitoring and cooperation mechanism between the Commission and the Member States 4.3.1. Monitoring of progress 4.3.2. The report on the “State of the Digital Decade” 4.3.3. Collaboration mechanism 4.3.4. Recommendations 5. Multi-Country Projects 5.1. Identifying Multi-Country Projects 5.2. Implementing Multi-Country Projects 5.3. Need for a new instrument for implementing some Multi-Country Projects

5.4. Case-studies for the new EDIC 6. Spectrum as an essential enabler to reach digital targets Annexes Annex 1: Consultation 1. Overview of consultation activities and participants 2. Results of consultation on roadmap 3. Results of targeted consultation 4. Results of pre-consultation activities Annex 2: Baseline data



List of Figures Figure 1: Key Performance Indicators (KPIs) for measuring progress on digital targets as set out in Article 4 of the Decision Figure 2: Percentage of adults with at least basic digital skills (EU trajectory to 2030) Figure 3: At least basic digital skills (% of those aged 16-74) by Member State, 2019 Figure 4: Number of employed ICT specialists (EU projection to 2030) Figure 5 : ICT specialists (% of individuals in employment aged 15-74) by Member State, 2020

Figure 6: Fixed Very High Capacity Network (VHCN) coverage (% of households) by Member State, 2020 Figure 7: Percentage of households covered by a Gigabit network (EU projection to 2030) Figure 8: 5G coverage (% of populated areas) by Member State, 2020 Figure 9: Percentage of populated areas covered by 5G (EU projection to 2030) Figure 10: EU semiconductor industry market share by subproduct Figure 11: Worldwide semiconductor sales in billion USD, 2010-2032 Figure 12: Percentage of semiconductor production of world market in value (EU projection to 2030) Figure 13: Different types of edge technology deployment and distance of edge data processing capacities from the end-user Figure 14: Number of deployed edge nodes (EU projection to 2030) Figure 15: Cloud uptake (% of enterprises) by Member State, 2030 Figure 16: Percentage of European enterprises using cloud computing services (EU projection to 2030) Figure 17: Big data uptake (% of enterprises) by Member State Figure 18: Percentage of European enterprises using big data (EU projection to 2030) Figure 19: AI uptake (% of enterprises) by Member State, 2020 Figure 20: Percentage of European enterprises using AI (EU projection to 2030) Figure 21: Digital intensity by company size, 2020 Figure 22: Percentage of SMEs with at least a basic level of digital intensity (EU projection to 2030) Figure 23: SMEs with at least a basic level of digital intensity (% of enterprises) by Member State, 2020 Figure 24: Enterprises with at least a basic level of digital intensity by economic sectors, 2020 Figure 25: Number of unicorns (EU projection to 2030)

Figure 26: Digital public services for citizens (score 0-100) by Member State, 2020 Figure 27: Score in online provision of key public services (EU projection to 2030) Figure 28: Initial list of MCPs with corresponding implementation instrument and participating Member States Figure 29: Key features of existing implementation instruments for MCPs 1.Introduction The Commission’s Communication “2030 Digital Compass: the European way for the Digital Decade” of 9 March 2021 (hereinafter “Digital Compass Communication” or “Communication”) laid out the vision for a successful digital transformation of the European Union by 2030. The EU's ambition is to be digitally sovereign in an open and interconnected world, and to pursue digital policies that empower people and businesses to seize a human centred, inclusive, sustainable and more prosperous digital future. This includes addressing vulnerabilities and dependencies as well as accelerating investment. In its conclusions of 25 March 2021, the European Council stressed the importance of the digital transformation for the Union’s recovery, prosperity, security and competitiveness and for the well-being of our societies. It underlined the need to enhance EU’s digital sovereignty in a self-determined and open manner by building on its strengths and reducing its weaknesses and through smart and selective action, preserving open markets and global cooperation. It identified the Digital Compass Communication as a step towards charting Europe’s digital development for the next decade. It invited the Commission to widen the European Union’s policy toolbox, both at the Union and national level, and to use all available instruments from industrial, trade and competition policy; skills and education; research and innovation policy and long-term funding instruments to facilitate the digital transformation. In the light of these ambitions and challenges, the Commission proposes a policy programme in the form of a proposal for a Decision of the European Parliament and of the Council establishing the Policy Programme “Path to the Digital Decade” . To complement the Commission’s proposal, this Staff Working Document (SWD) analyses the current digital situation in the European Union and, in light of this analysis, explains in more detail the rationale for the Digital Decade targets and corresponding KPIs as well as the proposed governance framework, mechanisms to set up Multi-Country Projects, and identified enablers. Chapter 2 introduces the critical factors calling for greater cooperation and the mobilisation of public and private investments within the EU. Chapter 3 explains how the Digital Decade targets were selected and will be monitored. For each target, it indicates the data source, the rationale for the set target value, the baseline and current trends as well as needed actions and, where possible, the deviation from the current growth path to the one required to achieve the target. The following chapters explain why the governance framework introduced in the Policy Programme “Path to the Digital Decade” is needed and how it will be implemented to achieve the targets. Chapter 4 illustrates the stages of the proposed cycle of cooperation and coordination between the Union Institutions and the Member States. Chapter 5 exemplifies how a new, complementary mechanism to implement Multi-Country Projects will help to achieve scaled up, coordinated and targeted investments in critical areas to close persistent capacity gaps. Lastly, Chapter 6 explains why radio spectrum has been identified as a key enabler and how the Commission intends to facilitate spectrum coordination and assignment to meet the connectivity targets. The SWD is based on several inputs, ranging from existing studies to results of an extensive consultation process. To gather feedback on the purpose and scope of the Policy Programme “Path to the Digital Decade”, the Commission published a roadmap for a four week feedback period (between 24 June and 22 July 2021) and launched a six week targeted public consultation (from 22 June to 3 August 2021). In order to ensure the widest possible engagement of representatives from of civil society, industry, business and government, the Commission and the Portuguese Presidency of the Council of the European Union co-organised the high level event Leading the Digital Decade (LDD) on 1-2 June. Moreover, the Commission engaged in inter-institutional discussions including a policy debate in the Transport, Telecommunications and Energy Council (TTE) on 4 June 2021; the 15th meeting of the Digital Single Market Strategic Group (DSM SG) on 24 June 2021; and consultations with the European Economic and Social Committee (EESC) and the European Committee of the Regions. The Commission also took into account position papers from Member States and organisations as well as opinions from the EESC, the Radio Spectrum Policy Group (RSPG) and regional parliaments. A Digital Compass Community on the Futurium platform continues to allow stakeholders to learn more about the specific areas covered by the policy initiative and to share their own ideas for accelerating the EU’s digital transformation. The consultation results are referenced throughout the document and summarized in Annex I. 2.The starting point: need for common governance and coordinated investments The acceleration of the digital transformation together with the impacts of the COVID-19 pandemic are reinforcing the central role of digitalisation for our future prosperity, our innovation capacity, our future standard of living as well as our social mode. The crisis also highlighted the geopolitical dimension of digital technologies, their supply chain, and with it the critical stakes linked to EU’s industry capacity to scale up and capture the markets of the future. The long standing rise of digital technologies in all dimensions of Europeans’ lives is rocketing, as examplified by the value of data produced in Europe alone, which now amounts to EUR 1.5 trillion a year. However, the crisis also exasperated persistent digital divides, not only between well-connected urban areas and rural and remote territories, but also between those who can fully benefit from an enriched, accessible and secure digital space with a full range of services, and those who cannot. A similar divide emerged between those businesses already able to leverage the full potential of the digital environment and those not yet fully digitalised. In this sense, the COVID-19 pandemic has exposed a new ”digital poverty”, making it imperative to ensure that all citizens and businesses in Europe can leverage the digital transformation for a better and more prosperous life. Resilient, secure and trustworthy infrastructures and technologies are indispensable to ensure the respect of European rules and values. The pandemic notably shed a harsh light on the critical drivers for change that the EU needs to mobilise urgently in order to ensure a successful digital transformation anchored it in its own values. Firstly, there is a need to urgently tackle persistent issues that still prevent a successful digital transformation and thereby obstruct the EU’s technological leadership and widen digital divides. This includes, for example, the lack of digital skills, insufficient infrastructure development, and slow digitalisation of the private and public sector. Despite recent efforts, the total annual investment gap for the digital transformation remains significant and is estimated to amount to EUR 125billion (e.g., EUR 42billion in communication networks, EUR 17bn in semiconductors, EUR 11billion in cloud). In 2019, only 56% of adults had at least basic digital skills, reflecting limited progresses since 2015 (i.e., increase of only 2 percentage points). In such a context, the EU needs to step up coordinated efforts across Member States in critical dimensions of the digital transformation. Secondly, Europe is increasingly dependent on other regions for key digital capacities, such as processors computing systems, data infrastructure and web platforms. The position of European players is far below EU’s global economic weight in these key technology areas. For example, 90% of the EU’s data are managed by US companies and less than 4% of the top online platforms are European. European-made microchips represent less than 10 % of the European market today, compared to 40% only 30 years ago. This situation has very concrete and difficult implications: Several automotive production plants have had to stop production in 2021 because of lack of components. Without action, this situation risks deteriorating further. Even though US companies already account for 48% of the world’s chip sales, the US government plans to reinforce its investments with USD 52 billion dedicated to supporting semiconductor manufacturing and research in the US. These investments are taking place in the context of a growing technological confrontation between the US and China. China, which is aiming to become the world leader in the semiconductor field in the next decade, is upgrading further its subsidies and research spending on cutting-edge chips and artificial intelligence. Reversing the above mentioned trend and matching our competitors’ commitment would require a very significant supplementary collective effort from the Union in all critical digital technologies including 5G, cloud and AI. Only for the microprocessor sector, and taking into account the projected market size of USD 1 trillion by 2030, the EU would have to multiply its annual sales by a factor of 4-5 to achieve 20% in value of the world market by 2030. Such effort should address key strategic digital technologies and would be part of the EU’s attempt to reinforce its digital sovereignty, carefully monitoring, assessing and addressing any strategic dependencies weaknesses and vulnerabilities which put at risk the attainment of its digital ambitions as well as its capacity to shape a digital transformation that reflects its values.

Thirdly, a very significant increase of investments is also necessary, notably to allow the EU to develop critical and disruptive technologies in a way that fosters its productivity grow. Currently, the public and private investment gap between the EU and digital frontrunners (e.g., US, China) amounts to EUR 350-400 billion a year. This investment gap is particularly important for the financing of disruptive innovation and start-ups and is far from closing, with potentially important adverse risk on EU’s future prosperity, growth and employment. A pre-COVID analysis highlighted digital disruptive technologies can contribute 1,1 % to annual GDP growth in the period 2017-2030, with a cumulative net effect of 14.1 % higher GDP by 2030. Fourthly, these dependencies and need for investment happen in the context of a lack of convergence across Member States. The digital transformation is not operating at a sufficient pace and remains limited in some areas, preventing EU actors to leverage the full potential of the single market through economies of scale. The Digital Economy and Society Index (DESI), which tracks the evolution of EU Member States in digital competitiveness since 2015, shows that most countries with below average levels of digitisation have not progressed much in the last five years. This situation is linked to a lack of common goals and efforts and to remaining obstacles to the single market. Without a common coordination mechanism the current status will not improve and the Union, as a whole, will not achieve the objectives and targets of the Digital Compass Communication. That is why the Policy Programme “Path to the Digital Decade” is designed not as another reporting process but as a game changer that seeks to improve the level of consensus among Member States and to facilitate action through a fully-fledged new governance system enabling to quickly take concrete actions. However, the coordination mechanism designed in the Policy Programme “Path to the Digital Decade” needs to be flexible and dynamic to adjust to new digital technological developments and recognize different starting points among Member States and their level of specialisation. There may be different efforts needed in different fields addressed by the Policy Programme “Path to the Digital Decade” that require well-coordinated effort sharing between the Member States instead of a of ‘one fits all’ actions. Fifthly, the current situation will not be able to build the necessary synergies between the green and digital transitions enabling the EU to reach its climate target, as digital solutions can help in cutting 15-20% of global greenhouse gas emissions by 2030. Fostering this transition will also request major investment by industry in green digital technologies and start-ups that are focused on developing innovative technology solutions that make an important contribution to reducing greenhouse gas emissions. The investment gap to identify and develop digital solutions for climate mitigation and climate adoption across all sectors of the economy amounts to more than EUR 6 billion a year, targeting digital solutions in reducing GHG emissions in sectors such as transport, smart energy networks (smart grids), manufacturing (industry 4.0), smart cities and sustainable agriculture (precision farming).These baselines and ongoing trends show that without sustained and game-changing actions, the EU will not succeed to shape the digital transformation it aims for - i.e. demonstrating digital leadership to empower businesses and people in a human centred, sustainable and more prosperous digital future - and mobilising the means and processes necessary to deliver it. The above analysis is strongly supported by the views expressed by citizens, Member States and stakeholders from industry, business and civil society in the context of the consultation process. Responses to the targeted consultation further reinforced the need for action. Almost all respondents agree that the pandemic demonstrated a need to accelerate the pace of the digital transformation (95.5%) and ensure that everyone can fully benefit from it (95,5%). This assessment was often backed up by reference to personal experience. Notably, the pandemic altered respondents’ need for and reliance on secure, performant and sustainable digital infrastructures (89.7%), followed by digital public services (86.1%), digital products, tools, and services (85.5%), a digitally skilled population (81.3%), and highly skilled digital professionals (72%). There is broad agreement across stakeholder groups that it is important to have a solid cooperation mechanism in place to drive European progress on all of these fronts. A large majority of respondents to the targeted consultation identified substantially increasing investments (90.7%) and coordinating the digitalisation efforts of Member States (78.8%) as crucial drivers for the EU’s successful digital transformation. Most see strong benefits in the proposed monitoring and cooperation mechanism, finding it extremely or very relevant that it supports the development and implementation of Multi-Country Projects (75.4%), that it sends a clear signal to market actors to incentivise private investments (73.6%), that it ensures the effective delivery of Digital Decade goals on an EU level (70.9%), and that it stimulates cooperation between Member States (68.5%). Many stakeholders also underline the importance of common governance and coordinated investment for ensuring that the digital transformation advances in the interest of a more inclusive, sustainable and prosperous future for all. Civil society stakeholders called for a robust governance framework to stimulate and direct investments in a socially and environmentally responsible way that places citizen’s rights at the center. Industry stakeholders would like to see more coordinated policies to align investment friendly conditions, particularly for the deployment of digital infrastructures, across the EU. Businesses and public administrations emphasized the importance of legal certainty and interoperability for the digitalization of their operations and services. Against this background, the following sections present further detailed evidence to complement and support the Policy Programme “Path to the Digital Decade” . 3.Targets 3.1.Introduction On targets and indicators, the Policy Programme “Path to the Digital Decade” relies on an enhanced Digital Economy and Society Index (DESI) , a composite index that monitors Europe’s digital performance and tracks the evolution of EU Member States in digital competitiveness, including the analysis of national digital policies. DESI indicators are based on Eurostat data and alternative sources such as data collections through multi-annual studies. They will serve as the analytical basis for the Report on the state of the Digital Decade (RSDD). In this regard, Member States expressed strong support for enhancing DESI as a monitoring tool for the Digital Decade, with consistent but adaptable indicators to facilitate comparisons across time and space. When selecting targets, the Commission looked at existing Key Performance Indicators (KPIs), having in mind that targets need to be measurable in order to be monitored. These KPIs are outlined in table below. The choice of lead KPIs was guided by existing KPIs which are currently monitored in the DESI. For the majority of the targets, where a data collection is already in place, the baseline and data source are presented in this Staff Working Document. As explained below, there are also potential KPIs where studies (ongoing or future) or other sources are needed, methodologies still to be developed or relevant data still to be acquired to measure progress towards the 2030 targets. Currently existing Key Performance Indicators (KPIs) 1.A digitally skilled population and highly skilled digital professionals (a)At least basic digital skills (Member State level) This measures the percentage of individuals with ‘basic’ or ‘above basic’ digital skills in each area of the Digital Competence Framework. Data source: Eurostat Community survey on ICT usage in households and by individuals. (b)ICT specialists (Member State level) This measures the percentage of the workforce employed as ICT specialists, using a broad definition based on the ISCO-08 classification and including jobs such as ICT service managers, professionals, technicians, installers and servicers. Data source: Eurostat labour force survey. (c)Female ICT specialists (Member State level) This measures the percentage of ICT specialists who are women. Data source: Eurostat labour force survey. 2.Secure, efficient and sustainable digital infrastructures (a)Gigabit coverage (Member State level) This measures the percentage of households covered by a network capable of gigabit speeds. At the current state of technological development, in line with the principle of technological neutrality, the technologies able to provide gigabit download speeds are fibre to the home, fibre to the building, and cable Docsis 3.1. However each of these technologies is subject to different performance levels for the uplink. Data source: ‘Broadband coverage in Europe’ studies by IHS Markit, Omdia and Point Topic. (b)5G coverage (Member State level) This measures the percentage of populated areas, including the most remote regions, covered by at least one 5G network. Data source: ‘Broadband coverage in Europe’ studies by IHS Markit, Omdia and Point Topic . 3.Digital transformation of businesses (a)SMEs with at least a basic level of digital intensity (Member State level) This measures the percentage of SMEs using at least four of 12 selected digital technologies. Data source: Eurostat Community survey on ICT usage and e‑commerce in enterprises. (b)Cloud computing (Member State level) This measures the percentage of enterprises using at least one of the following cloud computing services: -hosting of the enterprise’s databases; -accounting software applications; -CRM software and computing power. Data source: Eurostat Community survey on ICT usage and e-commerce in enterprises. (c)Big data (Member State level) This measures the percentage of enterprises analysing big data from any data source (internal or external). Data source: Eurostat Community survey on ICT usage and e-commerce in enterprises. (d)Artificial intelligence (Member State level) This measures the percentage of enterprises using at least two artificial intelligence technologies. Data source: European enterprise survey on the use of technologies based on artificial intelligence by IPSOS.. (e)‘Unicorns’ (only at Union level) This measures the sum of realised ‘unicorns’ (i.e. companies founded after 1990 that have had an initial public offering (IPO) or trade sale above USD 1 billion) and unrealised ‘unicorns’ (i.e. companies that were valued at USD 1 billion or more in their last private venture funding round, meaning the valuation has not been confirmed in a secondary transaction). Data source: Dealroom 4.Digitalisation of public services The following services are considered for the below KPIs: -regular business operations; -moving house; -owning and driving a car; -starting a small claims procedure; -a business start‑up; -family life; -losing and finding a job; -studying. (a)Online provision of key public services for citizens (Member State level) This measures the degree to which people can complete major procedures with the public administration completely online. Data source: e-government benchmark studies by Capgemini. (b)Online provision of key public services for businesses (Member State level) This measures the degree to which businesses (i.e. enterprises defined as economic undertakings established in one of the Member States) can carry out various steps in dealing with the public administration completely online. Data source: e-Government benchmark studies by Capgemini. Clearly, not all of the Digital Decade targets require common efforts across all Member States to be reached and not all need to be mirrored at national level. Instead some of the targets require a degree of specialisation of some Member States. In the latter case, the different potential of Member States to contribute to the Union level targets will be taken into account and developed in the future through national strategic roadmaps. When the current baseline data at the level of Member States is available in DESI, they are presented in the analysis below. Building on the current practice and with an enhanced set of indicators, the RSDD will analyse the performance at EU level and of each Member State across the cardinal points of the Policy Programme “Path to the Digital Decade”, based on the DESI index and a description of national policies. Additional indicators will be introduced to capture all KPIs necessary to monitor progress towards the 2030 targets. As KPIs are in constant evolution in the area of digital, some definitions, data sources and methodologies may change over time to improve the quality of statistics. These changes will be reflected in the subsequent reports. Such modifications may also result in a break in series in the statistical data, requiring adjustments or revision of the related trajectories. In consultation with the Member States, and in view of effective monitoring, the Commission will review and update if needed annually key methodological aspects of DESI, including the list and definitions of indicators and the data collection methodologies. The relevant authorities of the Member States are required to contribute to this process. The Commission will implement and if necessary extend its current roadmap in this regard. In addition , in accordance with Article 5, the Commission will adopt via implementing act the KPIs necessary to monitor each target Several Member States explicitly welcomed the concreteness and level of ambition of the proposed targets and KPIs, and found that they are well chosen to address the structural shortages and gaps hampering the ability of EU citizens and businesses to take full advantage of the digital transition today. Others combined their support with additional suggestions to expand or adjust the initial list of targets and corresponding KPIs. This SWD presents the KPIs, baseline and trends available at the time of writing. 3.2.A digitally skilled population and highly skilled digital professionals

3.2.1.Basic digital skills -Target:“80% of those aged 16-74 have at least basic digital skills” -Baseline (2019): 56% -Source: Eurostat -What is the rationale for the set target value? The COVID-19 pandemic has accentuated the necessity of digital skills to be active in society and to participate in the labour market. In an unprecedented and unexpected shift, digital technologies have allowed pupils and students to study remotely, adults to work from home, and the world population to continue socially interacting despite social distancing requirements. A precondition for delivering on the twin transition and for inclusion and participation in the labour market and society is basic digital skills. Therefore all Europeans should have the skills needed to benefit from the digital transformation and no one should be left behind. Achieving the target will require significant reforms and investments at both European and national level in order to support the development of high-performing digital education ecosystems across Europe. There exists a consensus among stakeholders that insufficient digital education and training are the main bottlenecks on the way to a digitally skilled population. Respondents to the targeted consultation frequently referenced digital divides caused by socio-economic factors, such as income, demographic factors, such as age, or geographic factors, such as limited connection opportunities in rural areas, as a barriers to digital education and skills. -What are the baselines and current trends? In 2019, only 56% of adults in the EU had at least basic digital skills. There was only a slight increase (2 percentage points) since 2015. The EU will need more than three times higher growth to reach the target of 80% (the current growth rate is only 0.9%). This past growth trend is expected to accelerate due to (1) an increased use of digital tools during the Covid-19 pandemic; (2) less skilled people moving out from the 16-74 years age bracket and (3) more digitally skilled young people moving into the same age bracket, and (4) significant investments in digital skills by Member States in their Recovery and Resilience Plans (RRPs). Source: Commission services based on data from Eurostat. As the graph below shows, the situation in different Member States varies significantly. The Netherlands, Finland, Sweden and Germany are the most advanced with more than 70% of the adult population having at least basic digital skills, while Romania and Bulgaria are lagging far behind, with only 30% of the adult population having at least basic digital skills. Source: Eurostat - Community survey on ICT usage in Households and by Individuals. -What is needed to achieve the target? In their responses to the targeted consultation, several stakeholders found that Member States’ digital skills initiatives would benefit from more guidance and coordinated investment. For example, business stakeholders see a role for the EU in facilitating the exchange of best practices. Social partners emphasized the importance of not only providing but also coordinating funding for digital skills programmes to avoid risking learning disadvantages as a result of unbalanced investment. The EU already supports Member States with initiatives such as the Digital Education Action Plan 2021-2027, which builds on the lessons learned during the pandemic and focusses on a set of concrete actions to achieve its twin strategic priorities of fostering high-performing digital education ecosystems and enhancing digital skills and competences. The European Skills Agenda is a five-year plan that supports the green and digital transitions with initiatives such as the Pact for Skills. It helps mobilise the private sector and other stakeholders to upskill and reskill Europe’s workforce. The European Pillar of Social Rights Action Plan supports the development of basic digital skills for the workforce. Moreover, the European Industrial and SME strategy, the European Strategy for Data and the Coordinated Action Plan on Artificial Intelligence include actions targeting improving digital skills among the population and workers. The European Social Fund supports action for digital skills development at local level according to the needs of the territories. The Commission has also carried out a number of different actions to support the development of digital skills in the population. In particular, the Digital Skills and Jobs Coalition has reached nearly 16 million people with trainings and awareness raising activities. The EU Code Week initiative has trained 15 million young Europeans in computing and digital literacy skills. The RRPs include significant investment to boost digital skills: According to a preliminary analysis the budget dedicated to digital skills development accounts for 17% of the total digital budget. A number of countries plan investments and reforms to introduce compulsory digital skills training in primary and secondary curricula, revise text books and train teachers with the necessary competences to use and teach with digital technologies. Reforms to improve adult learning and increase the offer and accessibility of digital training, including to the most vulnerable, are also foreseen, for example by setting up proximity centres to help people learn how to use digital services.

In addition, as proposed also by participants to the consultation process, Member States can put in place a number of reforms and investments to encourage digital skills development for different target groups, which may include: ·Empowering the teaching profession to adopt innovative methods and digital technologies, including through more attractive and stable career paths, flexible pathways into teaching, and improved selection procedures and professional development frameworks. ·Fostering high-performing digital education and training systems by strengthening teachers’ initial and continuous training on digital skills, systematic technology integration in pedagogy, updated curricula and assessment approaches, availability of suitable devices, high quality pedagogical content, robust infrastructure, and adequate support to disadvantaged students and those with special needs. ·Integrating computational thinking, computing and digital literacy in the curricula. ·Putting in place funding mechanisms that reduce inequalities in education outcomes between students and schools and allowing schools to respond swiftly to changing needs. ·Investment in digital infrastructure (e.g., high-speed internet connectivity and digital devices). Addressing accessibility and availability of assistive technologies. ·Expanding the availability and accessibility of flexible second chance education programmes tailored to adult learners’ diverse needs. ·Addressing SME’s barriers in providing training to their workers, e.g., through collaborative approaches between businesses and training providers. ·Making financial support to short-time work schemes conditional on providing relevant on-the-job training to workers (in particular for digital skills). ·Putting in place comprehensive, quality and inclusive adult learning systems, or reforming existing ones to address barriers to participation. Introducing new active labour market policy programmes or adjusting existing ones, drawing on best practices and including a plan for continuous monitoring and evaluation. ·Combining investments in the digital infrastructure of schools with free basic education courses for people with formally low qualifications to ensure that no one gets left behind. 3.2.2.ICT specialists -Target: “20 million employed ICT specialists, with convergence between women and men” -Baseline (2020): 8.4 million employed ICT specialists, with 19% being women -Source: Eurostat -What is the rationale for the set target value? The COVID-19 pandemic has further highlighted the need for advanced digital skills, exposed the EU’s dependency on foreign technologies, and emphasised how critical safe and robust networks and technologies are in the digital and information space. For a successful recovery and to be able to develop and innovate with digital technology, Europe needs to rely on digitally empowered and capable citizens, a digitally skilled workforce and substantial increase of digital experts. Throughout the consultation process, business representatives repeatedly pointed to the importance of digital skills for facilitating the digital transformation of SMEs and supporting the creation of innovative companies and unicorns in the EU. Representatives of SMEs placed particular emphasis on the need for a joined approach to upskilling and reskilling of the workforce to cope with the new labour demand. To emerge from the crisis as a digital leader, the EU must rely on ICT specialists who are able to develop, operate, and maintain information and communications technology systems in a digitally accessible way, respecting EU values. ICT specialists are defined as those who have the ability to develop, operate and maintain ICT systems and for whom ICT constitutes the main part of their job. The European Union currently faces a critical shortage of such specialists across all Member States, hampering the development, uptake and use of emerging key digital technologies. Training and education should therefore support a workforce in which women and men can acquire specialised digital skills in areas such as Artificial Intelligence, quantum computing and cybersecurity, while striving to close the gender imbalance in the field. ICT specialization in digital accessibility can also support the inclusion of people with disabilities in the workforce through their involvement in the accessibility testing of digital environments. -What are the baselines and current trends?

As of 2020, there were 8.4 million ICT specialists, up from 6.1 million in 2013, and with an annual growth of 4.7 %. If this growth continues, the EU will have 13.5 million ICT specialists by 2030 under a ‘business as usual’ scenario. This is far from being enough in order to reach the target of 20 million by 2030. The graph below shows the deviation from the current growth trend that is needed to reach the target of 20 million ICT specialists in 2030. Source: Commission services based on data from Eurostat. At EU level, 4.3% of its workforce are ICT specialists, while figures per Member States range from 2% in Greece to 7.6% in Finland. 20 million ICT specialists would correspond to about 10% of the workforce. Source: Eurostat, Labour force survey. The shortage of ICT experts leads to delays in developing new products and services, hampering innovation and growth in all industrial ecosystems, far beyond the ICT sector. The number of vacancies keeps growing as new jobs emerge. For example, according to industry research, 168.000 cybersecurity experts were missing in Europe in 2020. Other sources report that there were 341.000 unfilled jobs for data professionals in Europe in 2020. The European electronics industry, for example, is facing an acute shortage of skills in all tiers of its value chain. The number of open positions for electronics engineers is growing at an alarming rate. More generally, nearly 1.1 million job advertisements for electro engineering workers (overall, not only microelectronics) were placed in the EU between mid-2018 and end-2019. The demand for ICT expertise varies depending on the industry and across regions. For instance, the most demanded ICT skills in Central and Eastern Europe are related to manufacturing and resources, while distribution and services will be most important in Western Europe. More than 77% of businesses report the lack of staff with adequate skills, as an obstacle to investment posing particular problems for innovative and digitalising firms. There is also a severe gender imbalance, with only one in six ICT specialists and one in three STEM (Science, Technology, Engineering, Mathematics) graduates being women. Finally, this is compounded by a lack of capacity in terms of specialised education programmes in areas such as Artificial Intelligence, quantum and cybersecurity and by a low integration of digital topics in other disciplines. -What is needed to achieve the target? The Commission already has several instruments in place to contribute to the attainment of the ICT specialists target, in particular the Digital Europe Programme, which devotes almost EUR 600 million to the development of advanced digital skills in cutting-edge domains. Universities, VET, training providers, research and excellence centres will join forces to deliver high-quality training in areas like cybersecurity, artificial intelligence, cloud or data. Under the Digital Education Action Plan 2021-2027, the Digital Opportunity Traineeships scheme provides trainees with the opportunity to strengthen their ICT-specific skills in fields such as cybersecurity, big data, quantum technology and machine learning, and to boost digital skills for businesses in areas including web design, digital marketing and software development. The Action Plan also includes activities supporting young female students to develop their digital and entrepreneurship competences. The Joint Undertaking on high-performance computing (HPC) is expected to support actions for advanced digital skills development in HPC to train specialists able to design, deploy, operate and exploit the fastest super computers in the world. The Artificial Intelligence Coordinated Plan includes actions to boost the number of AI specialists in the EU, introduce AI and computational thinking in education and also train professionals in non-ICT fields to use and understand AI applications. In the field of microelectronics, a number of CEOs have already committed to upskill and reskill their workforce to reduce shortages in this domain and they have joined the Pact for Skills. Investment for advanced digital skills development appears to be less present in the RRPs compared to basic skills. Measures address notably the strengthening of higher education institutions, both by encouraging cooperation with other organisations, also cross-border, supporting students participation and, in some cases, developing an increased offer in STEM and digital courses, available also to people already in employment. In addition, as proposed also by participants to the consultation process, Member States can put in place a number of reforms and investments to increase the number of ICT specialists, which may include: ·Developing and supporting the offer of shorter courses with flexible modes of study (part-time, distance) in key digital technologies, leading to micro-credentials. ·Introducing performance-oriented funding schemes, setting up competitive programmes for funding of research and educational innovations and independent quality institutions. ·Developing skills projection and graduate tracking mechanisms and using the resulting insights to update the higher education offer. ·Promoting the development of new higher education curricula for engineering, ICT and advanced digital technologies and provide flexibility to hiring non-academic staff proficient in digital technologies, involving employers in curriculum reform.

·Investing in sustainable education and training infrastructure and renovating existing buildings. Investing in courses in advanced digital technologies such as artificial intelligence and cybersecurity as well as in integrated competence centres, industries and universities that can deliver an ecosystem of excellence to attract and retain talent. ·Introducing work-study training programs to reduce the gap between the supply of higher education and the demand of companies. ·Designing a collaborative intelligence programme so that engineers and related professionals around the world can contribute their knowledge. ·Promoting powerful campaigns, starting in primary schools, to encourage young girls in scientific and technological disciplines and spark a broad social dialogue about gender in ICT professions. 3.3.Secure and performant sustainable digital infrastructures 3.3.1.Connectivity -Target: “All European households will be covered by a Gigabit network, with all populated areas covered by 5G” For its prosperity, the European Union needs a digital connectivity infrastructure of top performance, security and sustainability, optimised to leverage the latest optical fibre technologies in fixed networks and to connect innovative wireless systems such as 5G, 6G and Wi-Fi. 3.3.1.1.Gigabit coverage -Target: All European households will be covered by a Gigabit network -Baseline (2020) 59% -Source: Broadband Coverage in Europe studies -What is the rationale for the set target value? Societal needs for upload and download bandwidth are constantly growing. By 2030, networks with gigabit speeds should become available at accessible conditions for all those who need or wish such capacity. A universal Gigabit target is needed to ensure that all EU citizens and businesses are reached by at least one modern, energy efficient and future proof digital connectivity infrastructure wherever they live or work. Similar to electricity, these data transport networks are the precondition for citizens and enterprises to benefit from new digital communications services and capabilities. In particular, the amount of information that light can carry as a data transmission medium on optical networks that reach all end-users’ premises and wireless communications’ base stations can be considered as a reference point to what is the most sustainable and future-proof solution to address the exponential growth of data traffic.Although the cost of reaching remote locations with Gigabit networks may be proportionally high, advanced connectivity will play an essential role to avoid the depopulation of those areas, delivering digital services (both public and commercial) and supporting economic activity. For this reason the proposed target has a universal scope. -What are the baselines and current trends? In 2020, fixed very high capacity networks (fixed VHCN) covered 59% of EU households. In Malta, Luxembourg, Denmark and Spain fixed VHCN is available in at least 90% of households, while in Greece only one in ten households has such coverage. Source: IHS Markit, Omdia and Point Topic, Broadband coverage in Europe studies. Today, the total European Fiber to the Premises (FTTP) take-up rate of approximately 41% is generally lower than in the Asian countries where fibre networks have already been deployed. A relatively low take-up rate can also be observed in Members States and regions where fibre-based Gigabit offers are readily available. The main drivers of such demand are user experiences with Gigabit connectivity at work or at school/university as well as competitive affordability. In order to meet the connectivity demands of its consumers and businesses in Europe, it will be necessary to accelerate investment in such optical fibre networks within the next few years, which will also have long-term operational cost saving potentential for operators.

This is why a relatively high growth rate for Gigabit coverage is assumed in the years to come, followed by a slowdown towards the end of the decade. This is a result of the increasing unit costs when reaching rural areas. Source: Commission services based on data from IHS Markit, Omdia and Point Topic. This preliminary projection is based on currently observed trends and expected future trends. Already before the COVID-19 pandemic, while purchases of broadband services have stabilised, data usage has continued to grow at a significant pace. Cisco and other analysts foresee a gradual migration away from broadcast and “managed” television towards online viewing. For example, 92% of global Internet users watch videos online each month and 58% stream TV content via the Internet. At a global scale, Internet users already spend 6:42 hours per day on the Internet, of which 2:16 are dedicated to social media. The drastic confinement measures taken during the acute phase of the pandemic forced an unprecedented number of people to resort to their home internet access for work, education and leisure. This resulted in a sharp increase of network traffic, driven primarily by video related services. According to ETNO, up to 50% increase in voice traffic, up to 40% increase in mobile data traffic, and up to 70% in fixed data traffic were observed. Thanks to the targeted actions of EU operators there were no major episodes of congestion; however, the limits of the existing network infrastructure became evident. The key facts are that, following the pandemic, more citizens will work or study from home, more companies will use digital communication to reach customers and operate industrial processes remotely and more government institutions will use digital technologies to provide public services to citizens and companies. The availability of Gigabit connectivity services will therefore become an increasingly important factor for the attractiveness of regions, cities and even real estate assets. This will create demand that can accelerate the ongoing trend to modernise digital connectivity networks by replacing copper with fibre cables, thus increasing their capacity and lowering the operational energy consumption per data transmitted . Also the deployment of 5G wireless networks will depend on optical fibre backhaul infrastructures to provide very high quality wireless connectivity. Analysis of household behaviour and upcoming digital use cases suggests that both residential and business consumers will progressively require Gigabit connections to meet their needs, such as use of improved video standards, cloud services, applications based on virtual and augmented reality, artificial intelligence (AI) applications, automated driving, logistics and manufacturing processes. For some of these applications, in particular those relying on real-time, distributed data processing capacities, users will produce and share as much data as they consume, requiring the underlying connectivity infrastructure to support in a reliable manner increased balance of upload and download speeds and low latency. Even though some improvements of existing copper networks can be obtained (e.g., through vectoring technologies over copper networks), ultimately, it is the progressive replacement of copper-based sections of the infrastructure with fibre elements that will drive significant performance gains. Although today some of the connectivity needs of regular businesses still can be met by standard mass products , the connectivity needs of digitally intensive businesses can increasingly only be met with fibre broadband connection reaching closer and closer to the end users, such as Fibre to the Premises (FttP) and upgraded cable connections. Fibre-connections are also key to enabling small and medium-sized enterprises (SMEs) and public sector sites such as schools to drastically reduce own servers, dedicated IT resources and ultimately unnecessary cost. Well before the end of the decade, digitally intensive businesses in all sectors will need Gigabit connections and data infrastructures with reliable, fast in both uplink and downlink directions, and low-latency fibre access greatly facilitating cloud computing and data processing. The high bandwidth and reliability offered by Gigabit connectivity networks will for instance be important in offices, permitting work outside their premises, faster upload and download of files and more reliable access to Software-as-a-Service and cloud-based software. The flexibility offered by fibre networks together with the increased virtualisation of networks allows the dynamic configuration of up- and down-stream bandwidth depending on business requirements, for instance including holographic and AR-based video conferencing. Many use cases within different industry verticals are also related to developing the necessary IoT systems, with the high bandwidth, security and reliability provided by full fibre networks allowing the transfer of large amounts of data: ·In manufacturing, fibre networks will provide support for industrial IoT based on Wi-Fi 6, or local backhaul for use cases based on 5G, for instance serving as the local area network in industrial or campus sites. ·In the public sector, fibre networks will accelerate the development of ‘smart cities’ by enabling the application of IoT technology to utilities and services in public spaces, including street lighting, energy, waste and water management. ·In education, fibre networks will enable enhanced digital learning, allowing the download of large amounts of educational content at the same location, immersive learning environments and virtual field trips. ·In healthcare, the higher bandwidths provided by fibre networks will permit more detailed remote patient monitoring using smart sensors, remote video consultation and surgery and remote AI-supported diagnosis. In addition to the use cases mentioned above, it is probable that other technologies, applications and services will emerge, which will benefit from fibre networks well into the future. High performance computing (HPC) already points at the need for terabit connectivity to allow real-time data processing. All these use cases highlight the importance of reliable Gigabit connectivity offers being available from operators throughout the European Union to support the long-term digital investment of businesses and governments. As businesses will use digital services, the end users will increasingly take up such Gigabit connectivity offers also at their home and on the move in order to use new digital communications features and capabilities such as high-precision, virtual reality, holographic media, and digital-senses over the networks, and to take part in a digitally enabled society. Moreover, the new ways of working brought about by the pandemic are likely to remain and evolve further in the post-COVID world. For instance, virtual or augmented reality technology can be used to enhance the experience of online meetings. Residential demand is therefore likely to also progressively require higher bandwidths and a more balanced distribution of traffic between uplink and downlink speeds. -What is needed to achieve the target? Stakeholders see a role for the EU in ensuring that the regulatory environment encourages operators to invest in rolling out and increasing the capacity of their networks to anticipate growing user demands. Several industry contributions to the targeted consultation call for more harmonization of conditions for the deployment of connectivity infrastructure and services, e.g., through complete implementation of the European Electronic Communications Code. Others identify the timely review of the Broadband Cost Reduction Directive and the Broadband State Aid Guidelines as a way to improve legal certainty and foster a more efficient and fast deployment of very high capacity networks, including fibre and 5G networks. As it is critical that an important part of the networks necessary to achieve those targets is deployed primarily by commercial operators, the EU has already adopted a series of initiatives designed to establish the right conditions for these investments to take place. These consist of a major reform of the regulatory framework for electronic communications, in the form of a European Electronic Communications Code, and of other key regulatory measures. Together, these aim to identify the most efficient measures to support and encourage operators to roll-out fibre and 5G. For example, the Commission adopted on 18 December 2020 a revised Commission Recommendation on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation. This Recommendation is an important regulatory and harmonization tool, which helps to focus regulatory intervention to those product and geographic markets in which significant market failures persist.

The Connectivity Recommendation aims to identify the most efficient measures to support and encourage operators to roll out very high capacity networks, including fibre and 5G. The Recommendation was followed by the publication of a Connectivity Toolbox, agreed by Member States in close cooperation with the Commission, with best practices to reduce network deployment costs and facilitate access to 5G spectrum. The review of the Broadband Cost Reduction Directive will provide an important opportunity to foster a more efficient and fast deployment of very high capacity networks, including fibre and 5G networks. In particular, the review aims at simplifying procedures and reducing further the administrative burden associated with the deployment of such networks, at enhancing transparency, and harnessing the potential of additional assets suitable for network deployments. Moreover, the Commission is currently revising two recommendations issued in the early 2010s in the field of access regulation, with a view to further encourage the deployment of very high capacity networks, in line with the European Electronic Communications Code. Finally, in its 2021 to 2027 budget, the EU has made available funds complementing national and local support through several programmes and is updating the relevant state aid rules in line with the 2030 targets. As a first step, the General Block Exemption Regulation has been amended to include inter alia additional possibilities for Member States to support the deployment of fixed broadband networks, 4G and 5G mobile networks, including with vouchers, and certain trans-European digital connectivity infrastructure projects. The funding linked to 5G and Gigabit networks in the already adopted RRPs is estimated aproximately at over EUR 13 billion. In addition, the digital transition is part of the five policy objectives that will be supported by Cohesion Policy Programmes. The Commission also supports directly a number of connectivity projects, including 5G connectivity, through the new Connecting Europe Facility. In the same period, Invest EU and the European Investment Bank will continue to support connectivity projects through loans and guarantees. Furthermore, the Connecting Europe Broadband Fund (CEBF) will continue to invest in new connectivity projects in underserved areas until June 2023 thanks to private and public investors. 3.3.1.2.5G coverage -Target: All populated areas covered by 5G -Baseline (2020): 14% of populated areas with 5G coverage -Source: Broadband coverage in Europe studies -What is the rationale for the set target value? 5G connectivity is a main driver for digital transformation in virtually all sectors of the economy and society and the actual availability of 5G services will dictate the pace of development of many new services and applications that have a potentially high economic and societal value, in particular vertical industry use cases. As a result, it is expected that access to will be needed in all parts of the territory where people live, work, gather and travel. Several respondents to the targeted consultation indicated the need to aim for a step change in quality in addition to mere 5G population coverage. Mobile coverage is usually measured by regulators and market players (e.g., in the context of spectrum licenses) using “population coverage”, i.e. the percentage of the population covered by at least a mobile network at their homes. In most cases, the availability of the mobile service at a given place is determined on the basis of the declaration of mobile network operators (as it is the case currently in DESI). The Digital Compass target of full 5G coverage in all “populated areas” is also based on the population coverage. In addition, one will also have to monitor closely the progress against the intermediate target set in the 5G Action Plan of “all urban areas and major terrestrial transport paths to have uninterrupted 5G coverage by 2025”. This target is particularly impoprtant to address the emerging demand for uninterrupted coverage along motorways to enable Connected and Automated Mobility, as well as to ensure the availability of very very high quality 5G connectivity in geographically-limited areas to support applications such as industrial campuses, smart agriculture, or ehealth. These applications have a huge socio-economic impact while not adding significantly to the amount of territorial areas to be covered. Moreover, beyond mere coverage criteria, it will be increasingly important to closely monitor the level of service quality provided throughout the relevant territories. This is particularly important in the current context where mobile operators mainly use lower frequency bands (mainly frequencies shared with 4G and the 700 MHz band) and existing sites to add 5G modules, which leads to significantly lower speeds and capacities at the cell edges where only a lower 5G signal is available. In order to achieve a consistent higher quality, low density 5G connectivity throughout the relevant territories significant investments for network densification will be required as well as a more extensive geographical coverage using the 3.5 GHz mid-band (new base stations using mid-band frequencies are rather limited in Europe, whereas other regions such as Korea and China are deploying in the order of 100,000 new base stations). Therefore, the current KPI of ‘5G population coverage’ may have to be complemented in the future with secondary indicators adequately reflecting the actual usability and quality of the 5G service based on Quality of Service levels as well as data concerning specific geographical availability (geographical mapping). The definition of 5G service quality will require a harmonised approach to enable comparative analysis as well as possible in-field measurements to circumvent the shortcomings of theoretical coverage calculations. The ongoing work on this topic within the framework of BEREC’s activities will be instrumental to establish such a common approach to 5G service quality in the EU including for the comparability of measurements and monitoring data. - What are the baselines and trends? In 2020, only 14% of populated areas in the EU were covered by a 5G network. This is also due to the fact that only half of the Member States started commercial 5G network deployments by mid-2020. Highest coverage levels were recorded in the Netherlands and Denmark (80% of populated areas each), followed by Austria (50%), Ireland (30%) and Germany (18%). Source: IHS Markit, Omdia and Point Topic, Broadband coverage in Europe studies. The projected 5G coverage growth is based on an increase of the planned investments in 5G infrastructure (by an approximate factor of 25%) to fill in the estimate investment gap to reach the set deployment target by 2030. The below projection for 5G coverage is based on the historical evolution of 4G coverage (2011-2020) taking into account completed and planned spectrum assignments.

Source: Commission services based on data from IHS Markit, Omdia and Point Topic. -What is needed to achieve the target? The 5G Action Plan for Europe already delivered a common 5G network deployment roadmap and set out ambitious 5G targets for 2020 and 2025, in particular the target of achieving 5G coverage of all urban areas as well as deploying uninterrupted 5G coverage along the main transport paths by 2025. The Commission is closely monitoring the progress of the Plan and took several policy initiatives to support Member States, including: ·Cooperation with Member States to ensure timely availablilty of the 5G pioneer bands. ·The adoption of the implementing regulation on small-area wireless access points. ·A structured exchange of Best Practices concerning national broadband strategies and 5G "path-to-deployment". ·Identification of regulatory best practices as part of the connectivity toolbox (Measures to cut the cost and speed up network rollout and to ensure timely and investment-friendly access to radio spectrum for 5G rollout). ·A joint concept with the European Investment Bank on “Boosting Investments in European digital ventures to unleash the full potential of 5G”. ·The establishment of the European 5G Observatory which provides periodic reports on the progress of the 5G Action Plan. The achievement of the objectives and targets set out in the Decision will depend on a number of key factors to be taken into account by the Commission and Member States in order to enable the swift deployment of secure 5G. Efficient investment in 5G networks: Besides the support of 5G use cases with high societal value, such as connected and automated mobility, for which a broad set of national and European funding programmes is available, including, for instance, the Recovery and Resilience Facility (RRF), CEF Digital, as well as other national funding programmes, it is important to stimulate private investors with a clear policy framework enabling new investment models optimising individual return on investment. Such models include co-investments and network infrastructure sharing. Another way to increase private investment relies on developing new business opportunities from vertical industry users and provide strategic public support to 5G venture financing. Accelerated deployment of secure 5G networks in light of the requirements of the 5G cybersecurity toolbox: The implementation by Member States of the new 5G cybersecurity requirements can act as incentive for operators to invest in modern and more secure network equipment, including accelerating the deployment of fully-fledged (‘stand-alone’) 5G core networks and of 5G radio access networks. It will be beneficial to continue the coordinated approach at EU level on 5G cybersecurity, led by national authorities in the NIS Cooperation Group with the support of the Commission and ENISA, in order to fully implement the EU Toolbox, monitor new technological and market developments and assess potential new risks. The Green Deal and energy efficiency of 5G networks: Mobile networks represent the single largest consumer of energy of all system categories in the telecommunications sector. The issue at stake is therefore the key contribution of 5G and later 6G networks to meeting the objectives of the Green Deal. Therefore, the existing best practices in this domain could be reviewed, in order to assess whether common measures and/or goals are needed. A common approach would contribute to the well-functioning of the single market as well as to secure a level playing field between market players. Societal concerns regarding the deployment of 5G networks: Another key factor is to address societal concerns, e.g. with regard to an alignment of the public communication strategy on health aspects or possible transparency measures concerning rules applicable for the deployment and operation of network elements such as base stations. Public sector stakeholders agree that raising awareness can tackle misinformation and thereby increase public acceptance of the technology. To this end, social partners proposed a comprehensive EU monitoring exercise to adequately inform citizens about rollout plans and health impacts. EU roadmap towards 6G: The commercial deployment of 6G networks is not expected to start before 2028-2030. However, 6G networks will rely on infrastructural elements already deployed in the context of 5G networks. 6G deployment roadmaps need to complement the 6G research agenda, including needs and suitability of 6G spectrum, pro-investment measures, in particular to enable emerging 6G ecosystems taking the synergies between 5G and 6G infrastructures into account. It is important to address how the Joint Undertaking initiative on Smart Networks and Services towards 6G could enable the necessary supply capacities for 6G, thereby fostering digital sovereignty in Europe, strengthening the value chain, and creating an infrastructure and service platform putting Europe in a strong position for 6G infrastructure and services. 3.3.2.Semiconductors -Target: “The production of cutting-edge and sustainable semiconductors in Europe including processors is at least 20% of world production in value.” -Baseline (2020): 10% of world production in value

-Source: SIA/ESIA, World Semiconductor Trade Statistics (WSTS) -What is the rationale for the set target value? Semiconductors are the underpinning technology for a secure and sustainable digital transition. Emerging data processing capabilities, new applications for AI, the shift towards edge-computing and the growing need for cloud and infrastructure to support a distributed workforce, accelerated by the Covid-19 pandemic, all require the computational power, reduced energy consumption and added security offered by cutting-edge semiconductor technologies. The market for AI chips is expected to be a major driver of growth for the whole industry during the Digital Decade. As of 2021, the EU has a small amount of total manufacturing capacity compared to other regions in the semiconductor value chain because of decreasing levels of investment. This creates dependencies in EU industries (e.g., automotive, industrial automation, communications) from third-country chip manufacturers which can result, as happened during the COVID-19 pandemic, in supply shortages that can disrupt entire industrial sectors. The EU wants to reverse this trend, and the Member States have already started with the launch of the first Important Project of Common European Interest (IPCEI) on microelectronics, which resulted in a new advanced 300mm wafer fabrication plant (“fab”) in Germany and will lead to new process lines in fabs in Italy, France, and Austria for analogue and discrete components. Concerning digital processors, Europe is leading in microcontrollers, but misses the necessary design capacity and manufacturing facilities for the more advanced logic components, and is therefore highly dependent on imports and foreign foundries. Over time, leading-edge chips have become more difficult and more costly to produce, resulting in a reduction in the number of manufacturers able to satisfy customers’ needs. In 2020, the only two companies manufacturing chips at 5nm were located in Taiwan (TSMC) and South Korea (Samsung). Geopolitical tensions further undermine a level playing field and harm competition, as countries like China and the US subsidise with large amounts of public resources to minimise strategic dependencies. The US government plans investments of USD 52 billion in semiconductors. The CHIPS Act proposes to invest USD 22 billion to support the reshoring of advanced semiconductor manufacturing firms and the American Foundries Act seeks to support semiconductor manufacturing and research in the US with USD 25 billion in grants. China aims to boost spending and drive research into cutting-edge chips and artificial intelligence in its latest five-year targets. About a trillion dollars of government funding have been set aside under the overall technology initiative, part of which will be used by central and local governments to jointly invest in a series of third-generation chip projects. Europe has no foundries that offer manufacturing of components with feature sizes below 22nm. Consequently, the EU’s semiconductor footprint compared to other regions is small in particular in the digital sector. For example, the EU shares of global revenues for semiconductor chips is only around 6% for the computing and communication segments. This is problematic because the miniaturisation of feature sizes is at the core of both faster and more power-efficient microprocessors used in communications, consumer electronics and computing that will drive demand over the Decade. Therefore, with no additional actions, Europe’s share in chip manufacturing, especially for advanced nodes, is likely to further decrease. As AI proliferates, as computing shifts towards the edge of the network, and as secure chips become a precondition for the security of networks and data infrastructures, the EU needs to step up its capabilities in digital logic where it has only a 9% share today (see chart below), in particular the processor chips that are needed to help make sense of the ever-increasing quantities of data. Source: Semiconductor Industry Association Processing data at the speed needed to capture its benefits will require an important shift in the production of processor chips. Scaling up the computing performance with today’s technologies will make computing one of the biggest energy consuming activities. Future chips should therefore exhibit radically lower energy consumption to be able to harness the benefits of data growth. This is an opportunity for growth in burgeoning markets such as AI and edge-computing, and to make further inroads into the computing and communications markets where EU industry has limited presence today. Investments in manufacturing capacity need to be matched by demand. An EU foundry would predominantly serve European customers, and there are few semiconductor companies in the EU designing chips on 7nm or 5nm nodes today. The EU’s weakness in design, which creates the demand for semiconductor manufacturing companies, was highlighted in the update of the 2020 Industrial Strategy package. The Industrial Strategy update presents a first analysis of dependencies in the semiconductors ecosystem, and in other sensitive ecosystems. This analysis shows a number of European weak points: ·Europe has notable weaknesses in design and design automation tools. These parts of the supply chain are mainly under US proprietary control. ·The EU has no production capacity for the most advanced chips. ·The current shortage of semiconductors is slowing down the recovery of key economic sectors in Europe, including the automotive industry, and in the long-term could affect promising economic strongholds, such as the 5G/6G value chain. ·Packaging, assembly and testing, and chip fabrication are located mostly in Asia. Advanced packaging technologies are increasingly important to address increasing power and energy-efficiency requirements, e.g., by electrical vehicles and edge-computing applications. To reverse the trend of a declining share of total EU semiconductor manufacturing capacity compared to other regions, the EU has set the ambitious political ambition that by 2030 the production of cutting-edge and sustainable semiconductors in Europe including processors is at least 20% of world production in value (meaning manufacturing capacities below 5nm nodes aiming at 2nm and 10 times more energy efficient than today). The EU represents around 15% of the world’s GDP and its output in this key sector should at the very least reflect this position. It is well positioned in a number of areas that should experience significant growth in the coming years, and where micro-electronics will play a crucial part in market development (e.g., security and privacy, sensing, power electronics, Internet of Things, organic-printable electronics and photonics). -What are the baselines and current trends?

The European Semiconductor Industry Association states that the EU’s share in world wafer fab capacity increased in the 1995-2005 time frame and then decreased in the next decade. The market for semiconductors is expected to grow substantially in the next 10 years. Analysts expect a market of roughly a USD 1 trillion by 2030 (see projection below). Source: VLSI Research As of May 2021, the EU share of the worldwide semiconductor market is 8.7%, representing roughly USD 45 billion on an annual basis. Taking into account the projected market size of USD 1 trillion by 2030, the EU would have to multiply its annual sales by a factor of 4-5 to achieve 20% in value of the world market by 2030. The below projection assumes investments in semiconductors manufacturing by EU actors to ramp up in the coming years, leading to an increasing EU market share by the end of the decade. Source: Commission services based on data from SIA/ESIA, World Semiconductor Trade Statistics (WSTS). -What is needed to achieve the target? Ongoing projects under the IPCEI on Microelectronics, approved in December 2018, have already played an important role in stimulating additional private investments in innovation and manufacturing in the EU, in particular for Automotive and IoT markets. Manufacturers of chips at leading-edge nodes (TSMC, Samsung, Intel) rely for their technology development on specific EUV photolithography machines produced by a unique global supplier, notably ASML (NL), which belongs to the European electronic ecosystem. Moreover, the ECSEL Joint Undertaking (JU) set up in 2014, which supported over 90 research projects, has been instrumental in advancing EUV technology towards 2nm. As a follow-up to ECSEL JU, it has been proposed to develop the Key Digital Technologies Joint Undertaking (KDT JU) until 2027, with public support of up to EUR 3.6 billion shared equally between the Union and participating national authorities. The Commission launched the Alliance on Processors and Semiconductor technologies in July 2021 . The Alliance brings together key actors to design and produce microelectronics chips and will identify current gaps in the production of microchips and the technology developments needed. The Alliance will also act as a sounding board to create synergies among related R&D and deployment initiatives. Twenty-two Member States have already signed a declaration (of 7 December 2020) expressing their interest to work together in order to bolster Europe’s electronics and embedded systems value chain with a strong focus on processors and semiconductor chips. The declararion, among other things, calls for the mobilisation of industrial stakeholders through a future industrial alliance. Moreover, it calls for the design of a multi-country and inclusive European Flagship Project through the development of a proposal for an Important Project of Common European Interest (IPCEI). A second IPCEI on processors and semiconductor technologies would stimulate the design and manufacturing capacities of European semiconductor companies. It could take a two-pronged approach with efforts to (1) develop digital logic chips, such as low-power processors, which would inter alia address the large market sectors where the EU has very limited presence today such as computing and communications, and (2) further reinforce the EU’s position in market segments where it needs to maintain current strengths, such as automotive and industrial manufacturing. In addition, as proposed during the consultation process, Member States can put in place a number of reforms and investments: -National policies to stimulate domestic chip design capabilities and to attract foreign design companies would support demand creation for advanced EU semiconductor manufacturing capacities. -National policies to leverage trusted electronics including, as necessary, standards, certification and common requirements for secure chips, iincluding security requirements and related performance-based specifications in public tenders (e.g., for communications networks or data infrastructures), could serve as a means to create markets for semiconductor products. -Lastly, stronger foreign direct investment policy instruments dealing with attempts by companies from other parts of the world to acquire EU semiconductor companies would help keep intellectual property in Europe. 3.3.3.Edge/cloud -Target: “10,000 climate-neutral highly secure edge nodes are deployed in the EU, distributed in a way that will guarantee access to data services with low latency (few milliseconds) wherever businesses are located”

-Baseline (2020): 0 -Source: Annual study on edge deployment under CEF2 (as of 2022); European industrial technology roadmap for the next generation cloud-edge offering of 7 May 2021 -What is the rationale for the set target value? Globally and in Europe, the volume of generated data is greatly increasing and a growing proportion of data is being processed at the edge, moving from the traditional centralised model of data processing to a highly distributed one. In this context, the edge market is maturing. There is currently no data available on edge deployment across Member States. Industry players are mainly in testing and piloting phase. The target of 10 000 edge nodes has been chosen to ensure an edge node density that would allow for an optimal coverage across the EU territory, including in less populated areas. It will also boost Europe’s global leadership in this technology, while other parts in the world are moving quickly. The target has been developed by following a similar model to mobile network deployment. It draws on the findings of the European industrial technology roadmap for the next generation cloud-edge offering elaborated by 27 European digital industry representatives, including telecommunication, edge and cloud providers. The European technology roadmap estimates that by 2030, 300 Near Edge nodes and 14.000 Far Edge nodes (including 9 000 near premise nodes) could be deployed. The target is closely related to the objective of the European strategy for data that aims to equip Europe with trusted, secure, interoperable and resource-efficient cloud to edge services and infrastructure. Contrary to the cloud computing market, there is currently no dominant player or market for edge nodes. Europe has key industrial strengths to build upon, and an accelerated deployment programme for edge nodes will also put Europe ahead of other regions in this new type of data processing that will become mainstream. The achievement of the target is expected to deliver a sufficient density of edge nodes across the European territory to provide the processing capacity and low latency required to enable the most innovative use cases (few milliseconds). It will support the achievement of a cloud- edge continuum, enabling a seamless experience for users across EU territory. An increased density of central-cloud and edge facilities is required for the deployment of innovative middleware and cloud to edge services, which will be supported by EU programmes like the Digital Europe Programme. Applications that were inviable or impractical to deploy on the cloud because of low latency requirements (e.g., connected mobility), high bandwidth requirements coupled with the need to process high volumes of data (e.g., video analytics) or data sovereignty and security requirements (e.g., decentralised processing of sensitive personal data) will be enabled by edge computing. Furthermore, cutting-edge climate-neutral, highly energy-efficient and sustainable edge nodes will deliver the efficient infrastructures for data storage and processing and position Europe as a leader on the path towards reaching climate-neutral data centres by 2030. The increased number of edge nodes will inevitably increase energy consumption: By 2025, edge data centres are expected to account for 12% of the energy consumption of data centres in the EU28. On the other hand, the distributed nature of edge cloud infrastructure can enable a smarter distribution of data across the network, and hence lead to energy savings compared to other alternatives. A key challenge for the achievement of the target will be to define and monitor the deployment of different types of edge nodes so as to adequately answer to users’ needs in terms of the processing capacity and latency across EU territory. According to the European industrial technology roadmap, the total of required edge node capacity (near and far edge) would represent around 550 MW for the whole of the EU and deliver a latency of less than 5 milliseconds anywhere in the Union by 2025. These objectives can be achieved by deploying a capillary network of ‘public edge data centres’ across the territory of the EU, which will combine the benefits of proximity and ultralow latency of on-premise IT-systems with the flexibility and scalability of public cloud. This opens the door to much higher efficiency in terms of energy and resource consumption, and will unlock a myriad of use cases, e.g., related to the Internet of Things, digitisation of industry and Augmented Reality, also in regions of the EU that were previously unable to benefit from these technologies. -What are the baselines and current trends? The estimated target considers the rollout of Near Edge and Far Edge nodes, as well as on premise or near premise and cell site edge nodes. This is to take into account the fact that the deployment of edge nodes can follow different models. The edge rollout that uses the telco network for edge connectivity will move from the Near Edge to the Far Edge in a Cloud to Edge approach. Alternatively, other edge providers may start with an on-premise (private) or near-premise edge rollout, following an Edge to Cloud rollout approach, starting very close to the customer. Source: European industrial technology roadmap for the next generation cloud-edge offering, 7 May 2021. The density of edge nodes across the EU territory will depend on several factors, such as the level of technology maturity, the amount of public support, and the market reaction to the first deployment of edge nodes. Part of the deployment of edge nodes will be market driven, boosted by the development of the Internet of Things, Artificial intelligence, enterprise and consumer use cases as well as 5G roll-out. Globally, edge infrastructure spending on compute and storage is expected to grow at a five-year Compound Annual Growth Rate of 18.9% to reach USD 33.3 billion by 2024. In a first stage, the deployment of near edge and on premise nodes could be sufficient to meet the demand. Under a Digital Decade scenario, it is foreseen that, in addition to the market demand, the deployment of edge nodes will be boosted by key measures enabling for most innovative use cases across sectors and the EU territory. In addition to near edge (every 200-300 km) and on-premise nodes, additional investment will enable a higher density of nodes and boost the deployment of far edge nodes. In a few years, an exponential raise of nodes, stimulated by demand and joint public-private investments, is expected. The Digital Decade scenario would require public funding, especially for those types of edge nodes that are mostly supply-driven (near and far edge). The most realistic and still ambitious investment scenario is a 50:50 private-public investment ratio over time, which could translate into a higher public ratio in the first years of deployment to pre-empt market demand, decreasing over time. This assumption builds on the European technology roadmap that foresees a 30:70 private-public ratio during the first two years (and three first years for far edge), and a 50:50 private-public ratio onwards. The trend described below is based on first industry projections and mainly takes into account available data on the evolution of near and far edge nodes.

It is expected that the number of edge nodes will grow slowly in the next few years, taking into account the time for deployment. Vertical use cases still need to reach maturity and overcome hurdles such as the complexity of deployment in heterogeneous applications. Furthermore, while 5G rollouts are moving forward, they are following a staged approach that could take several years before deploying a high density of edge nodes. Once the market will reach maturity, an exponential growth is expected, boosted by demand and joint public-private investment, before reaching market saturation. Source: Commission services. -What is needed to achieve the target? There is broad consensus among stakeholders that in order to achieve the target, a joint effort of EU, national and private investment will be required. According to first estimates, the total investment amount would need to reach at least 6 billion Euros by 2025 (without connectivity). In line with the Member States Declaration on European Cloud, the public sector should lead by example using innovation procurement investments to reinforce the European development and early adoption of climate-neutral secure edge nodes. An investment channel for the deployment of edge nodes will be the national funding stemming from the national RRPs (Next GenerationEU), as well as possibly European Structural and Investment Funds. The European Alliance for Industrial Data, Edge and Cloud, announced in the updated EU industrial strategy and launched on 19 July 2021, will leverage investment synergies for joint development and deployment of the next generation of European cloud and edge technologies. First, by contributing to stimulate strategic partnerships between different players of the edge and cloud ecosystem (business match-making), the Alliance can help to boost investments in edge nodes. Second, by establishing sectorial working groups dedicated to cloud and edge deployment, including for sector-specific use cases (e.g., for the defence sector), the Alliance will assist in identifying concrete investment areas matching the needs of key European user industries and the public sector. Third, the Alliance can create synergies with other national or industrial initiatives in the area of cloud and edge, such as the private initiative Gaia-X, ensuring that its work will be connected to global market developments. In the European strategy for data, the Commission announced the development of an EU Cloud Rulebook. The EU Cloud Rulebook will compile all existing binding and non-binding rules, codes of conduct, certification schemes and standards applicable to cloud and edge services. It will ensure that the next-generation European disruptive and distributed computing technologies will comply with key European rules, norms and standards. Furthermore, the EU Cloud Rulebook will be translated into common European standards and requirements for the public procurement of data processing services. This policy action should facilitate procurement of trustworthy cloud and edge services by EU, national, regional and local authorities for improving the delivery of public services to EU citizens and businesses. Eleven Member States are currently working, as part of the “European Common Data Infrastructure and Services” Multi-Country Project, on delivering the next generation cloud and edge infrastructure and services, which may take the form of an Important Project of Common European Interest (IPCEI). Such an IPCEI could eventually support some of the first industrial development of next generation climate-neutral and highly secure edge nodes. It could also help to support a higher cloud and edge uptake among companies and public entities as positive externalities. Furthermore, edge nodes will be stimulated by measures to support the deployment of specific use cases, such as 5G for vertical industry applications. In the context of the Multi-Country Project “Pan-European deployment of 5G corridors and Connected and Automated Mobility”, the EU programme Connecting Europe Facility 2 and the RRF will co-finance edge nodes as part of the 5G infrastructure. It is currently difficult to estimate precisely how many edge nodes could be deployed as part of this MCP, as it will depend on the chosen approach by industry. Depending on the chosen scenario (“cloud to edge” or “edge to cloud”), the deployment could range from one edge node every 200-300 km to every 50-60 km, and reach a total varying between 100 and 1000 nodes (along highways) across the EU by 2030. The European Alliance for Industrial Data, Edge and Cloud should help to ensure consistency across the different funding instruments and investment tools mentioned above, and avoid a fragmented approach in different Member States. To bring this into practice, the Alliance will gather a wide range of stakeholders relevant to the data processing value chain to leverage investment synergies, for instance by developing detailed strategic technology and investment roadmaps on cloud and edge. 3.3.4.Quantum computing -Target: “By 2025, Europe will have its first computer with quantum acceleration paving the way for Europe to be at the cutting edge of quantum capabilities by 2030.“ -Baseline (2020): 0 -Source: Monitoring carried out by the Quantum Technologies Flagship’s Strategic Advisory Board -What is the rationale for the set target value? During the Digital Decade, a whole generation of new quantum technologies will emerge, with a far-reaching impact on many activities of Europe’s economy and society. The first devices, in the form of experimental physical platforms or advanced simulators, are already in use, and researchers are now starting to build pilot quantum computers to act as accelerators interconnected with supercomputers, forming “hybrid” machines that blend the best of quantum and classical computing technologies. Throughout the consultation process, experts highlighted the importance of the quantum computing target for facilitating unprecedented developments and findings in complex fields of research (e.g., climate change, health, brain science, biology, sustainable energy, materials, etc.) and industrial development (e.g., simulation sciences, data analytics, AI, digital twins, etc.). Based on the progress made so far, a fully programmable machine of this kind should be available in Europe by 2025, capable of simulating problems with an accuracy and/or complexity beyond the capabilities of classical computers. Several EU start-ups and SMEs, some of them beneficiaries of Horizon 2020 projects under the first phase of the Quantum Technologies Flagship, are already offering first prototypes of functional quantum computers capable of solving specific problems. They are investing in the further maturing of those quantum computers, with the support of European and national funding programmes, but also first investments from private donors, aiming for the commercialisation of quantum computers showing quantum advantage (i.e., the ability to solve problems that a classical computer cannot realistically solve). -What are the baselines and current trends?

European quantum computing research already has an excellent track record. In less than three years, the work of the Quantum Technologies Flagship has led to advances in quantum computing towards higher levels of technology-readiness, enabling researchers to start building experimental machines and addressing optimisation problems. Across Europe, but also world-wide, large and small businesses are showing increasing interest in quantum technologies, and are experimenting with first practical use cases, while venture capitalists are also increasingly investing in the technology. Quantum is also a key area for start-up and SME growth, and currently the EU hosts over 50 quantum start-ups. This number is likely to increase significantly in the coming years, with several Member States putting in place extensive support programmes for start-ups in the domain. These activities will help Europe’s nascent quantum computing industry further develop its technological and engineering capabilities and build a full software and applications ecosystem, most probably providing multiple quantum computing accelerator technologies in Europe by 2025. It is then expected that ongoing European but also worldwide efforts would make it possible to achieve, around the end of this decade, free-standing quantum computers showing quantum advantage with real-world applications. Such computers are expected to comprise of a full stack, highly connected, high fidelity quantum computing engine of at least one thousand physical qubits, exhibiting scalable performance and the capability to out-perform classical computers on relevant real-world use-cases,. This will provide quantum advantage in several fields such as molecular biology, logistics, new materials discovery, process optimisation, machine learning, finance and inventory management. -What is needed to achieve the target? The Quantum Technologies Flagship was launched in 2018 under Horizon 2020, and it receives continued support under Horizon Europe to reach its overarching goal of enabling the transformation of European research into commercial applications that would make full use of the disruptive potential of quantum. The Flagship is a central element of the Commission’s ambitions to foster a world-leading quantum ecosystem in Europe, covering quantum computing and simulation but also quantum sensing and quantum communication. The first European experimental quantum computing platforms (based on superconducting qubits, trapped ions qubits, and semiconductors-based qubits) resulting from the Flagship, are becoming ready for concept validation and trial applications. The latter is already happening, as the EuroHPC Joint Undertaking has launched in 2020 the installation in a supercomputing centre of a quantum simulator, which should be accessible to users for experimental pilots in 2022-2023. In addition, it is expected that in 2021 and 2022, the EuroHPC Joint Undertaking will launch dedicated calls for the development and deployment of advanced quantum computers that will be integrated into high-performance supercomputers. This will allow European players to further mature the systems, test them under real-life conditions, and make them available to a growing number of scientific, industrial and public-sector users. In addition, European industry has recently launched the Quantum Industry Consortium to foster the interests of Europe’s industrial players in quantum. Joint action, investment and coordination at European and national level will be needed to achieve these goals as well as co-investment by Member States and matching investments in large-scale national and regional R&I activities. Several Member States have already in place ambitious national quantum programs, with similar goals – examples include Germany, France, the Netherlands, Austria, and Denmark, among others. Public procurements of innovative quantum computing technology at national level, including through the Resilience and Recovery Facility (RRF) and the EuroHPC Joint Undertaking are expected to contribute to having in the Union, around the end of this decade, a first prototype of free-standing quantum computer showing quantum advantage. Investments in quantum research and infrastructure must be complemented by initiatives in skills and training (supported by the Digital Europe programme) to ensure that Europe’s workforce is able to meet the challenges of the quantum revolution. 3.4.Digital transformation of business 3.4.1.Take up of digital technologies -Target: “75% of European enterprises have taken up: Cloud computing services, Big data, and Artificial Intelligence” -Source: Eurostat, IPSOS 3.4.1.1.Cloud computing services -Target: 75% of European enterprises have taken up Cloud computing services -Baseline (2020): 26% for medium-high sophistication