COMMISSION STAFF WORKING DOCUMENT Digital Decade in 2025: progress and outlook Accompanying the document Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee and the Committee of the Regions State of the Digital Decade 2025: Keep building the EU's sovereignty and digital future
Date: 2025-06-16
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: EU programme, artificial intelligence, competitiveness, digital literacy, digital single market, digital transformation, digitisation, innovation, technological independence, twin transition

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 16.6.2025  SWD(2025) 290 final  COMMISSION STAFF WORKING DOCUMENT Digital Decade in 2025: progress and outlook Accompanying the document Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee and the Committee of the Regions State of the Digital Decade 2025: Keep building the EU's sovereignty and digital future {COM(2025) 290 final} - {SWD(2025) 291 final} - {SWD(2025) 292 final} - {SWD(2025) 293 final} - {SWD(2025) 294 final} - {SWD(2025) 295 final}  
 
 
 
 
 
 
 
 
 
 
 
 
1 

Technological sovereignty, security and competitiveness ............................................................. 2 

1.1 

1.2 

1.3 

A continent supporting digital innovation and sovereignty .................................................. 2 

Digitally transformed and competitive industries ............................................................... 38 

A secure continent ............................................................................................................... 54 

2 

Protect and empower people, preserve EU democracy and values ............................................ 66 

2.1 

2.2 

2.3 

2.4 

Empower people through digital skills................................................................................. 66 

Deploy digital solutions for people and societies ................................................................ 81 

Protect people, including minors, online ............................................................................. 91 

Protect information integrity and democracy ..................................................................... 97 

3 

Harnessing digitalisation for the green transition ...................................................................... 102 

3.1 

3.2 

3.3 

3.4 

Key trends and prospects................................................................................................... 103 

Addressing the environmental footprint of digitalisation ................................................. 107 

Development of concrete digital policies and tools for the green transition .................... 113 

Green/digital twin transition measures at Member State level ........................................ 116 

4 

Coherence and synergy: aligning digital policies and funding at different levels ...................... 121 

4.1 

4.2 

Better and lighter digital legislation ................................................................................... 121 

EU funding for the Digital Decade: state of play ................................................................ 125 

Cooperation with cities and regions as a tool for implementing and disseminating digital 

4.3 
policy  135 

4.4 

The international dimension of the Digital Decade ........................................................... 139 

1 

 
  
1 Technological sovereignty, security and 

competitiveness 

The digital transformation is at the heart of the EU’s strategy to enhance competitiveness,  to drive 
economic  growth  while  ensuring  economic  security,  and  to  safeguard  its  sovereignty.  The  Political 
Guidelines  2024-20291  task  the  new  Commission  to  drive  the  EU’s  progress  towards  a  more 
in  strategic 
competitive  resilient  and 
technologies,  establishing  essential  assets  for  technological  sovereignty  and  resilience,  and 
fostering the commercialisation of deep tech innovation. 

inclusive  future,  which 

implies  attaining 

leadership 

The mandate of the Executive Vice President for Technological Sovereignty, Security and Democracy2 
emphasises  the  need  to  increase  investments  in  frontier  technologies  where  the  EU  can:  have  a 
competitive  edge  over  its  competitors;  enhance  existing  digital  capabilities;  develop  and  deploy 
resilient, secure infrastructures; improve access to secure, fast and reliable connectivity; strengthen 
economic security; foster the uptake of digital technologies by public administrations and businesses; 
and  create  strong,  innovative,  interoperable  digital  ecosystems  and  digital  public  infrastructures 
across the EU.  

The central role of digitalisation and digital technologies has been also highlighted in the reports on 
‘The future of EU competitiveness’3 and on ‘The Future of the Single Market’4. The Letta report calls 
for  a  harmonised  digital  single  market  enabling  seamless  digital  services  across  borders,  and 
emphasises the need to support European tech champions and create a business environment that is 
conducive  to  scaling  start-ups  across  the  EU.  The  Draghi  report  emphasises  the  urgency  of  bold 
action  to  close  the  innovation  gap,  compete  in  the  global  tech  race  and  identify  critical  gaps  in 
achieving  the  EU’s  targets,  such  as  digital  skills,  connectivity,  secure  and  sovereign  cloud 
in  strategic  sectors  such  as  semiconductors  and  quantum 
infrastructure,  and  capabilities 
technologies. It also underscores the importance of not only boosting the EU’s competitiveness but 
also enhancing its sovereignty and resilience and addressing the EU’s reliance on non-EU providers in 
critical technology areas. 

Digital technologies also play a crucial role in advancing the EU’s economic security, underpinning its 
ability to defend its economic interests, lead in innovation, protect its citizens and shape the rules of 
the global economy. 

1.1  A continent supporting digital innovation and sovereignty 

In  an  era  of  rapid  technological  change  and  intensifying  global  competition,  the  EU  faces  critical 
challenges in maintaining its digital leadership and ensuring its economic security. Persistent barriers, 
including a  fragmented Single Market, continue  to hinder the EU’s ability to innovate  and  scale  up 

1 European Commission, Europe’s Choice, Political Guidelines for the next European Commission 2024−2029, 2024. 
2 European Commission, Mission Letter to Henna Virkkunen, 2024.  
3 Draghi, M., The Future of European Competitiveness, 2024 (hereafter referred to as the “Draghi Report”). 
4 Letta, E., Much More Than a Market: Report by Enrico Letta on the Future of the Single Market, 2024 (hereafter referred 
to as the “Letta Report”). 

2 

 
  
 
digital solutions effectively.  Divergent  national regulations, insufficient  interoperability and still too 
limited  cross-border  cooperation  constrain  the  growth  of  a  truly  integrated  European  digital 
ecosystem. This fragmentation not only stifles innovation and competitiveness, but also weakens the 
EU’s capacity to develop homegrown tech champions. 

At the same time, (economic) security risks related to strategic dependencies in global supply chains 
or  rising  geopolitical  and  geoeconomic  tensions  underscore  the  urgent  need  to  improve  our 
technological sovereignty. 

Addressing  these  challenges  requires  strengthening  the  research  and  innovation  (R&I)  ecosystem, 
fostering  the  growth  of  innovative  businesses,  and  advancing  strategic  infrastructure,  including 
advanced connectivity, semiconductors, cloud and edge computing, quantum technologies, and high-
performance computing (HPC). 

The development of a digital euro will play a crucial role in ensuring Europe’s economic autonomy, 
complementing  existing  payment  systems  while  enhancing  security,  efficiency,  and  accessibility.  In 
addition,  the  EU  Digital  Identity  Wallets  form  a  core  component  of  Europe’s  digital  public 
infrastructure, providing trusted, standardised tools for secure digital interactions. This infrastructure 
will  be  complemented  by  the  introduction  of  European  Business  Wallets,  which  will  serve  as 
strategic  enablers  for  a  more  competitive  and  innovation-driven  digital  economy  by  reducing 
administrative burdens, enhancing regulatory certainty, and unlocking new opportunities for digital 
service delivery and cross-border market participation. 

The  following  sections  outline  these  priorities,  providing  an  overview  of  the  current  state  and  key 
policy developments. 

1.1.1  R&I for technological leadership and economic security 

R&I supporting technological leadership 

The EU has important strengths in the field of research and innovation. However, its weaknesses are 
becoming more and more apparent. 

Among the most important challenges is the limited scale of investment in research and innovation, 
with only 10% occurring at the EU level and the lack of focus on breakthrough innovation5. 

In 2023, expenditure on R&D in the EU reached EUR 381 billion, or 2.22% of EU GDP, below the 3% 
target6.  The  private  sector  also  lags  behind,  with  EU  companies  investing  approximately  EUR 270 
billion less in R&D than their US counterparts in 20217. 

Lower levels of R&D&I investment generally translate into lower shares of gross value added (GVA). 
The ICT sector is generally a major performer in terms of R&D. The relation between R&I  spending 
and GVA is usually mutually reinforcing. This means that countries that invest more in R&I, will tend 
to have higher productivity and value creation. The opposite is also true. 

5 Draghi, M., The future of European competitiveness, 2024. Part A – A competitiveness strategy for Europe. 
6 Eurostat, R&D expenditure, 2024. 
7 Draghi, M., The future of European competitiveness, 2024. Part A – A competitiveness strategy for Europe. 

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In  the  EU,  the  trends  are  not  encouraging.  According  to  Eurostat  data,  the  percentage  of  the  ICT 
sector in GVA is relatively low and grew only marginally in recent years, from 4.86% in 2019 to 5.46% 
in 20228. 

Moreover,  Eurostat  data  on  business  expenditure  on  R&D9  and  on  R&D  personnel  in  ICT  sector10 
shows a slightly decreasing trend between 2021 and 2022 in most of the Member States for which 
data is available across the two years. 

Figure  1.  Business  expenditure  on  R&D  (BERD)  in  ICT  sector  as  %  of  total  R&D  expenditure,  2021  and  2022 
(missing for both years for DK, LU, NL) 

80,

70,

60,

50,

%

40,

30,

20,

10,

0,

Source: Eurostat 

2021

2022

8  Eurostat,  2025.  This  indicator  measures  the  importance  of  the  ICT  sector  in  the  economy.  A  strong  ICT  sector  often 
indicates strong innovation ecosystems. A high share of value added may suggest a significant role in global ICT markets, 
reducing reliance on external providers. 
9 Eurostat, Business Expenditure on R&D (BERD) in ICT Sector as % of total R&D Expenditure by NACE Rev. 2 Activity, 2025. 
This indicator shows a decrease for 9 Member States, out of the 16 Member States for which data is available. 
10 Eurostat, R&D Personnel in ICT Sector as % of Total R&D Personnel by NACE Rev. 2 Activity, 2025. This indicator shows a 
decrease for 13 Member States, out of the 17 Member States for which data is available. 

4 

 
  
 
 
Figure 2: R&D personnel in ICT sector as % of total R&D personnel, 2021 and 2022 (missing for both years for 
DK, LU and NL) 

60

50

40

%

30

20

10

0

2021

2022

Source: Eurostat 

The  EU  is  still  weak  on  transforming  scientific  knowledge  into  patents.  A  study  of  221  emerging 
technologies  across  12  clusters  highlights  Europe’s  role  in  scientific  knowledge  production.  While 
the  US  and  China  lead,  Europe  maintains  strong  research  positions  in  Digital  Twin,  AI  &  Machine 
Learning, Therapeutics & Biotechnologies, Energy, and Environment & Agriculture.  

5 

 
  
 
European  organisations  contribute  significantly  to  high-impact  scientific  publications  but  lag  in 
patenting, filing fewer applications than the US and China. Europe serves as a global hub for scientific 
exchange but lacks critical mass among top-performing entities, reflecting a fragmented ecosystem 
with  limited  specialisation  beyond  AI  &  Machine  Learning11.  While  the  volume  and  impact  of  EU 
research is comparable to the output of the two leading economies (China and US), the fact that EU 
organisations  are  not  in  the  top  rankings  suggests  that  research  is  scattered  across  multiple 
organisations  rather  than  centralised.  This  means  weaker  international  visibility  and  difficulties  in 
attracting top-tier international talent to EU universities and research centres. It may also translate 
into  duplication  of  research  efforts,  diluted  funding,  and  limited  pooling  of  resources  such  as 
infrastructure, data or human capital. 

Figure 3: Translation ratio (patents/scientific publications) for each category for EU, US, China, Japan and South 
Korea 

Source: JRC 

These results are corroborated by the EU Industrial R&D Investment Scoreboard12, which monitors 
and  benchmarks  the  performance  of  the  EU’s  leading  industrial  R&D  investors  against  their  global 
peers. In the Scoreboard, the digital sector13 has experienced the highest growth in R&D investment 
over  the  past  20  years  and  is  characterised  by  high  R&D  intensity.  However,  EU  digital  companies 
have struggled to scale up and compete effectively on a global level. 

US companies dominate digital R&D, with 40% of digital companies and 53% of total investment for 
Scoreboard companies in 2023. Alphabet and Meta alone accounted for 12.6% of global digital R&D 
(EUR 72  billion),  surpassing  the  combined  total  of  EU-based  digital  firms  (8.9%).  China  has 
significantly  increased  its  digital  R&D  share  from  7.1%  in  2014  to  19.4%  in  2023,  with  Huawei 
tripling its expenditure to EUR 18.8 billion. 

11 Joint Research Centre (Eulaerts, O., Grabowska, M. and Bergamini, M.) Weak signals in Science and Technologies - 2024, 
Publications Office of the European Union, Luxembourg, 2025, JRC140959.  The report uses data on scientific publications 
and patents, covering the time period 1996- 2023.  
12 Joint Research Centre (Nindl, E., Napolitano, L., Confraria, H., Rentocchini, F.,  Fako, P., Gavinan, J. and Tuebke,  A., The 
2024 EU Industrial R&D Investment Scoreboard.) The 2024 EU Industrial R&D Investment Scoreboard, Publications Office of 
the European Union, Luxembourg, 2024. 
13  The  study  defines  the  digital  sector  as  comprising  firms  within  the  information  and  communication  technologies  (ICT) 
software  and  hardware  sectors,  as  identified  in  the  EU  Industrial  R&D  Investment  Scoreboard.  These  two  sectors 
encompass  ICB  4-digit  categories,  including  ICT  Software  (covering  computer  services,  software,  and  telecommunication 
services)  and  ICT  Hardware  (encompassing  computer  hardware,  semiconductors,  and  telecommunications/electronic 
equipment). 

6 

 
  
 
 
Meanwhile, the EU’s global share declined from 13.7% to 8.9%. Of the 58 EU digital companies in the 
2024 Scoreboard, most are based in Germany (17), the Netherlands (10), and France (9), while 16 EU 
countries have no top digital R&D firms. Only five EU companies–SAP, Siemens, Nokia, Ericsson, and 
ASML–rank among the top 30 digital R&D investors, with SAP (15th) as the only EU software firm in 
the top 50. 

Between  2019  and  2023,  the  largest  R&D  investment  increases  in  the  EU  came  from  ASML 
(+ EUR 1.19 billion),  SAP 
(+ EUR 738 million). 
Companies that tripled R&D investment over this period include  ASML, Spotify, ASM International, 
Elastic, and Sartorius, signalling momentum in semiconductor technologies. 

(+ EUR 980 million),  and 

Infineon  Technologies 

Figure 4: R&D investment shares by global region and EU country in digital sectors. 2023 

Source: The 2024 EU Industrial R&D Investment Scoreboard, European Commission, JRC/DG R&I 

Dependencies and economic security 

The  EU’s  ambition  to  achieve  technological  leadership  in  some  areas,  and  retain  it  in  others  is 
complicated  by  an  unstable  geopolitical  climate  due  to  issues  such  as  intensifying  strategic 
competition between the US and China and the fallout from the Russian invasion of Ukraine. Russia’s 
war of aggression against Ukraine has sparked inflation and energy price increases, and has led to a 
review of the EU’s budget thus moving funds from certain priorities to others14. At the same time, it 
has further highlighted the bloc’s critical dependencies on external suppliers, already made evident 
from the COVID-19 pandemic. 

Disruptive  new  technologies,  together  with  strategic  competition  over  critical  raw  materials,  are 
linking economic and security interests more closely together15. This has brought the EU to examine 
its  technological  competitiveness  lag  and  critical  dependencies,  which  could  translate  into  serious 
risks to the EU’s economy and security in terms of their potential for weaponisation. 

Today,  the  EU  is  still  lacking  a  significant  domestic  semiconductor  manufacturing  capacity,  and  no 
capacity to manufacture the leading-edge chips that are vital for all electronic devices, digital services 

14  European  Commission,  EU  budget  today.  Available  at:  https://commission.europa.eu/strategy-and-policy/eu-
budget/motion/today_en  
15  European  Commission,  Report:  Safer  Together  –  Strengthening  Europe’s  Civilian  and  Military  Preparedness  and 
Readiness, 2004. 

7 

 
  
 
 
and technologies in AI, defence, and other advanced applications16. Around 70% of foundational AI 
models have been developed in the US since 2017. Additionally, the largest EU cloud operator has a 
mere  2%  share  of  the  EU  market,  and  none  of  the  top  ten  global  tech  companies  in  terms  of 
quantum investment are based in the EU.  

In  the  semiconductor  value  chain,  EU  companies  have  strengths 
in  equipment  for  chip 
manufacturing; however, they are weaker in the intermediate inputs and chip-production segments, 
relying heavily on imports: 80% of EU companies’ suppliers are headquartered outside the EU, with 
35%  located  in  the  US,  12.4%  in  Taiwan,  11.7%  in  China  or  Hong  Kong,  10%  in  South  Korea,  and 
nearly 9% in Japan; in addition, European companies have a significant share of their customers in 
semiconductors (63%) headquartered outside the EU17. 

Initiatives under the Economic Security Strategy18 aim to address these risks by promoting the EU’s 
competitiveness, protecting it against economic security risks, and partnering with like-minded non-
EU  countries  that  share  mutual  interests  to  address  common  concerns.  Digital  technologies  are 
central to the Strategy and to the Commission Recommendation on critical technology areas for the 
economic  security  of  the  EU19.  Together  with  the  Member  States,  the  Commission  has  initiated  a 
number of risk assessments covering semiconductors, quantum technologies, AI and biotech, which 
will support decision-making on targeted and proportionate mitigation strategies. 

To  protect  against  technology  leakage,  the  EU  adopted  an  Economic  Security  package  in  January 
202420, which was followed up by several initiatives in 2024 and 2025. 

In May 2024, the Council adopted a Recommendation on enhancing research security21, in response 
to the growing geopolitical risks and the evolving landscape of international research and innovation. 
Special  emphasis  is  placed  on  high-risk  research  areas,  such  as  artificial  intelligence,  quantum 
computing,  biotechnology,  and  advanced  materials,  which  have  the  potential  for  dual-use 
applications. Member States are encouraged to closely monitor these areas and implement stricter 
security  measures  as  necessary.  Moreover,  the  Council  Recommendation  points  to  enhancing 
cybersecurity  practices,  ensuring  better  protection  for  sensitive  research  data,  and  increasing 
awareness among researchers and institutions about the potential security risks. 

In January 2025, the Commission published a Recommendation on reviewing outbound investments 
in  technology  areas  critical  for  the  economic  security  of  the  Union22.  Outbound  investment 
screening  could  serve  as  a  complementary  tool  to  export  controls  on  dual-use  goods  and  could 
prevent the export of sensitive technologies or know-how of EU companies through investments in 
non-EU  countries  where  the  boundaries  between  civil  and  military  activities,  for  example,  are 

16 IC Insights, McClean Report, 2022. 
17 Ciani, A., Nardo, M., The position of the EU in the semiconductor value chain: evidence on trade, foreign acquisitions, and 
ownership, European Commission, Ispra, 2022, JRC129035. 
18 Joint communication to the European Parliament, the European Council and the Council on ‘European economic security 
strategy’, 2023 JOIN/2023/20 final. 
19  Commission  Recommendation  (EU)  2023/2113  of  3 October  2023  on  critical  technology  areas  for  the  EU’s  economic 
security for further risk assessment with Member States (C/2023/6689), OJ L 202, 4.10.2023  
20 European Commission, New tools to reinforce the EU’s economic security, 2024. 
21 Council recommendation on enhancing research security, C/2024/3510, 2024. 
22  Commission Recommendation (EU) 2025/63 of 15 January 2025 on reviewing outbound investments in technology areas 
critical for the economic security of the Union (https://eur-lex.europa.eu/eli/reco/2025/63/oj/eng)  

8 

 
  
 
blurred.  The  Commission  Recommendation  covers 
semiconductors, artificial intelligence and quantum technologies. 

three 

technology  areas:  advanced 

The EU also protects its most sensitive technologies and critical infrastructure, particularly those of 
common  European 
its  FDI  Screening 
interest,  against  malign  foreign  acquisitions  through 
Regulation23, which is has been under revision in 2024. The Commission has proposed to ensure that 
all Member States have a screening mechanism in place with a minimum sectoral scope that applies 
to investment also by European companies that are ultimately controlled by individuals or businesses 
from a non-EU country. 

The EU has been setting up Digital Partnerships with countries like Canada, Japan, South Korea and 
Singapore to advance joint frontier technologies research collaboration in the fields of, for instance, 
semiconductors, high-performance and quantum technologies, and 5G/6G. Furthermore, the EU has 
also concluded several critical channels of communications with India, Japan, Singapore, and the US 
to give early warning of disruptions of the semiconductors supply chain, thus enhancing supply chain 
resilience. 

1.1.2 

Innovative start-ups and scale-ups in the EU 

The EU’s economic competitiveness critically depends on the ability of innovative start-ups and scale-
ups  to access capital, notably  those  active in areas such as Artificial Intelligence  (AI), quantum and 
other Deep Tech fields, biotech and cleantech. 

Progress towards the Digital Decade target 

Target:  The  digital  transformation  of  businesses,  where  the  Union  facilitates  the  growth  of  its 
innovative scale-ups and improves their access to finance, leading to at least doubling the number of 
unicorns. 

KPI definition: Unicorns are measured as the sum of unicorns referred to in Article 2, point (11)(a), of 
the Decision and those referred to in Article 2, point (11)(b), of that Decision. 

Source: Dealroom platform24. 

Available data points: from 2008 to 2024. 

2024 data value25: 286. 

In 2024, the number of unicorns in the EU rose by 12 units (net increase), rising from 274 in 2023 to 
286  in  2024  (a  year-on-year  increase  of  4.4%).  This  corresponds  to  52%  of  the  EU’s  2030  target. 
According  to  the  forecast  along  the  revised  linear  baseline  trajectory,  about  82%  of  the  target  is 
expected to be achieved by 2030, with slightly more than 400 unicorns expected to be active in the 
EU by then. The target of 500 unicorns is expected to be reached in  2034  if no further actions are 
taken. 

23 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for 
the screening of foreign direct investments into the Union, PE/72/2018/REV/1, 2019. 
24Dealroom, Unicorns, 2025. Available at: https://dealroom.co/guides/unicorns  
25The Dealroom platform regularly updates the number of unicorns, the dataset used in this document was downloaded on 
24/03/2025  and  refers  to  the  years  from  2008  to  2024  including  all  possible  retroactive  revisions.  This  includes,  for 
example, a new total of 262 for 2022 (it was previously 249) and 274 for 2023 (previously 263). The UK was excluded from 
the statistics. 

9 

 
  
 
Figure 5: Number of unicorns in the EU. Historical data and revised baseline trajectory 

When  looking  at  the  data  on  unicorns  in  the  EU,  it  becomes  clear  that  the  strong  growth  that 
characterised  COVID  times,  in  2021  and  2022,  has  slowed  down.  Moreover,  there  are  significant 
variations among Member States in the number of unicorn companies. As shown in Figure 6 below, 
Germany  tops  the  list  with  69  unicorns,  followed  by  France  with  48  and  Sweden  with  39.  The 
Netherlands  ranks  fourth  with  32  unicorns.  Conversely,  Portugal  has  only  one  unicorn,  while 
countries like Bulgaria, Hungary, Latvia, Romania, Slovakia, and Slovenia report none. 

On  the  global  scale  the  difference  in  absolute  numbers  of  EU-headquartered  unicorns  remains 
stark,  with  286  unicorns  in  the  EU,  397  in  China,  and  1 681  in  the  USA  at  the  end  of  2024.  In 
percentage terms the EU’s 2024 total represented a growth of 4.4% compared to 2023 (slightly lower 
than the growth 4.7% rate of China). By comparison the growth rate in the US was 6% over the same 
period. 

10 

 
  
 
Figure 6: Number of unicorns, 2024 

Source: Dealroom.co 

Towards an EU Start-up and Scale-up Strategy 

The European Commission is set to adopt an EU Start-up and Scale-up Strategy in 2025, reinforcing 
its commitment to fostering innovation, competitiveness, and technological leadership. This initiative 
aligns  with  the  broader  objectives  of  closing  the  innovation  gap  between  the  EU  and  global 
competitors, as outlined in key reports such as the Letta Report on the future of the Single Market 
and  the  Draghi  Report  on  European  competitiveness.  The  Competitiveness  Compass,  adopted  in 
January  2025,  underscores  this  Strategy  as  a  flagship  action  within  its  first  pillar,  ‘Closing  the 
Innovation  Gap’.  Addressing  financial,  regulatory,  and  administrative  barriers  that  hinder  start-ups 
from scaling into mature, profitable companies is now an urgent priority to prevent their relocation 
outside the EU. In addition, the Commission is working on a ‘28th regime’ proposal that guarantees 
one set of rules across the EU making it easier for companies to operate across the EU. 

Accelerating Member State actions under national competencies 

EU  action  alone  is  not  enough  to  address  these  challenges.  Member  States,  under  their  national 
competencies,  also  have  an  important  role  to  play  to  ‘raise  the  floor’  for  start-ups  and  scale-ups. 
There are opportunities at member state level to take action relating to attraction and retention of 
talent,  access  to  finance,  tech  transfer  policies  and  public  procurement  of  innovations.  Facilitating 

11 

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this is the Member State-led Europe Startup Nations Alliance26 (ESNA), that supports Member State 
innovation policy makers in the sharing and implementation of best policy practices for start-ups. In 
2024  ESNA  grew  its membership  from 18 members  to 21,  reflecting  the  growing  focus of  member 
states on ensuring start-ups have the best framework conditions for growth. 

The potential of the Single Market 

For innovative companies to emerge and existing ones to scale up, the Single Market plays a crucial 
role. The EU’s competitiveness begins within its Single Market, which serves 449 million consumers 
and  31  million  active  companies,  the  majority  of  which  are  SMEs27.  Despite  its  vast  economic 
potential,  the  Single  Market  –  particularly  the  Digital  Single  Market  –  remains  fragmented,  leaving 
approximately a large potential untapped. 

This  fragmentation  results  from  a  complex  landscape  of  national  regulations,  administrative 
procedures,  and  obstacles  to  data  and  knowledge  sharing.  These  challenges  hinder  the  efforts  of 
innovative digital technology companies to scale up across borders. 

However, it is not just regulations or administrative procedures that dampen growth possibilities for 
start-ups. A limited number of large online platforms acting as gatekeepers play an important role in 
facilitating access to important digital services for companies and citizens. In order to foster a more 
level  playing  field  for  small  businesses  from  the  EU  as  well  as  third  countries  that  use  such 
gatekeeper  platforms  to  reach  consumers,  the  Digital  Markets  Act  is  now  in  force  and  imposes 
specific  obligations  and  restrictions  on  these  gatekeepers.  The  DMA  is  creating  significant 
opportunities  to  drive  innovation  in  the  digital  world  and  enhance  fairness  and  contestability  in 
digital markets (see box below). 

Digital Markets Act – Achievements in 2024 

The Digital Markets Act (DMA), which became fully applicable in 2024, aims to ensure fair and open 
digital  markets  by  imposing  specific  obligations  on  designated  large  online  platforms  –  known  as 
gatekeepers – that provide core platform services such as search engines, app stores, and messaging 
services. In 2024, the Commission designated Booking Holdings as a gatekeeper for the provision of 
Booking.com and added Apple’s iPadOS to the list of designated core platform services, bringing the 
total covered by the regulation to seven gatekeepers and 24 core platform services. The Commission 
also  launched  six  non-compliance  investigations  against  Alphabet,  Apple,  and  Meta,  and  initiated 
two specification proceedings to enable greater interoperability of Apple’s software and devices. 

To date, the DMA has demonstrated its tangible and visible impact by addressing some of the key 
issues in the digital sector. This impact is illustrated through the examples discussed below. 

Choice  screens  and  easier  uninstallation:  The  DMA  empowers  users  to  easily  switch  between 
various  digital  services  on  the  gatekeepers’  operating  system  or  web  browser.  For  example,  Apple 
removed several sources of friction in the user journey for choosing an alternative web browser and 
increased the number of software applications for which users can switch the default or that users 
can  un-install.  Alphabet  also  displays  an  options  screen  on  Chrome,  Pixel  and  over  time  on  all 
Android devices to enable users to easily select the search engines and web browsers of their choice. 

26 ESNA website: https://esnalliance.eu/.  
27 European Parliament, Deepening the single market in the light of the Letta and Draghi reports, 2024. 

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Opening  up  of  mobile  ecosystems:  the  DMA  opened  up  opportunities  for  developers.  These 
developers should be free to decide through which channels they wish to distribute their apps and 
users  should  be  allowed  to  access  these  apps  or  app  stores  outside  the  gatekeepers’  app  stores. 
Apple now must allow iPhone and iPad users to install apps by means other than Apple’s own App 
Store, for example by enabling third party app stores and directly downloading apps from the web. 
This led to a number of third-party app stores being launched in the EU, such as AltStore, Aptoide or 
Epic  Game  Store.  Alphabet’s  ecosystem  has  become  even  more  open.  Developers  that  depend  on 
Apple’s  and  Google’s  operating  systems  and  stores  can  now  directly  contact  users,  inform  them 
about offers and direct them to purchase in-app features and services outside the app stores of the 
gatekeepers. 

Parity clauses: The DMA also aims to create fairer and more contestable marketplaces. For example, 
the DMA eliminates  barriers  that  prevent  businesses  from offering  their  goods  or  services  through 
other platforms or direct sales channels at conditions of their choice. As a result, since 1 July 2024, 
travel services companies (i.e.  lodging, car-rental, taxi rides, attractions) in the EU are free to offer 
different prices and conditions on Booking.com compared to their own direct sales channel, such as 
their website, or another online platform. 

Access to finance 

Another  essential  issue  is  the  need  for  substantial  development  of  EU  capital  markets.  A  relative 
lack  of  private  capital  for  ‘big  ticket’  investments  forces  too  many  EU  start-ups  to  seek  late-stage 
growth capital from venture capital funds outside of Europe, which often leads to them moving their 
corporate headquarters outside of the EU. 

Late-stage venture and growth capital funds in Europe is relatively scarce and fragmented in the EU, 
especially  compared to  corresponding markets  in  other  jurisdictions.  The  Savings  and Investments 
Union28  will  be  crucial  to  improve  how  the  EU  financial  system  channels  savings  to  productive 
investment, providing a wider range of efficient financing opportunities for citizens and businesses. It 
will promote equity investment in general with a particular focus on venture capital/growth capital. 

The increasing need for greater simplification 

Beyond fragmentation on the Single Market, EU companies face growing administrative burdens due 
to regulations, particularly in areas  like  digital, energy, manufacturing, health, and transport. More 
than  half  of  European  SMEs  flag  such  regulatory  and  administrative  obstacles  as  their  greatest 
challenge29. The fast-evolving regulatory landscape, with overlaps and obsolescence of some pieces 
of  regulation  designed  at  a  time  when  digital  technologies  did  not  exist  are  increasingly  seen  by 
stakeholders as a barrier to doing and developing business as well as driving innovation. 

This  also  demonstrates  that  public  policies  are  lacking  on  effectiveness  and  responsiveness  in 
fostering  the  competitiveness  of  EU  enterprises.  Leveraging  digitalisation  is  crucial  to  enable  a 
significant shift in regulatory approach towards less red tape and more innovation. By creating safe 
spaces  for  experimentation  based  on  digital  tools,  regulators  can  collaborate  with  various 

28  Savings  and  Investments  Union  A  Strategy  to  Foster  Citizens’  Wealth  and  Economic  Competitiveness  in  the  EU, 
COM(2025) 124 final.  
29 Draghi, M., The future of European competitiveness, Part A – A competitiveness strategy for Europe, p. 14 2024. 

13 

 
  
 
 
stakeholders including innovative enterprises, to understand emerging technologies, assess potential 
risks,  and  develop  appropriate  regulatory  frameworks  that  balance  innovation  with  consumer 
protection and systemic stability. The Omnibus packages of simplification measures are designed to 
address  these  changes  and  support  the  simplification  process.  The  Omnibus  proposal  aims  to 
streamline and modernise regulatory frameworks across the EU, reducing unnecessary complexities 
and fostering a more innovative and competitive environment. 

As  a  cornerstone  of  the  simplification  agenda  the  European  Business  Wallets,  building  on  the  EU 
Digital Identity Wallets, are set to provide a universally accepted digital identity for businesses and 
streamlined  communication  channels,  facilitating  easier  access  to  necessary  regulatory  and 
administrative processes, significantly reducing the burden on businesses and enabling them to focus 
on  innovation  and  growth.  Businesses  are  also  able  to  make  use  of  the  full  potential  of  the  Single 
Market,  by  reducing  the  complexity  of  navigating  national  requirements  for  communicating 
compliance and reporting obligations. 

1.1.3  Ecosystems and infrastructures to support innovation  

The EU stands at  a defining moment where  digital infrastructure is not  just  about  connectivity but 
also  about  resilience,  economic  security,  and  global  leadership.  Despite  the  urgency,  Europe  faces 
significant  challenges  with  gaps  in  connectivity  and  computing  power.  The  EU  still  lacks  pan-
European  secure  and  resilient  digital  infrastructures.  The  continent  is  currently  lagging  in  the 
deployment of fibre, standalone 5G networks, and edge nodes all of which are essential for providing 
the  necessary  backbone  for  seamless  communications,  supporting  digital  services,  including critical 
services, and the connected collaboration in a data- and computing-intensive context. 

Both the report on ‘The future of EU competitiveness’30 and the report on ‘The Future of the Single 
Market’31 underscore the need and opportunity for consolidating the European telecoms sector and 
spectrum policy to free up more space for innovation and growth. These efforts are vital to address 
the  current  surge  in  AI-driven  innovation.  Training  new  foundation  models  and  building  vertically 
integrated  AI  applications  requires  access  to  massive  increases  in  computing  power  and  data-
storage as well as faster, lower latency and more secure digital connectivity. To meet these needs, a 
fundamental  overhaul  of  current  connectivity  architectures  is  required,  ensuring  a  coordinated 
management of computing and network resources32 33. 

Europe’s  path  forward  lies  in  building  a  strong,  secure  and  highly  performant  digital  ecosystem. 
Connectivity  will  be  the  backbone  of  Europe’s  strategic  autonomy,  ensuring  that  technological 
innovation  thrives  within  a  competitive  Single  Market.  By  prioritising  secure  and  resilient  digital 
infrastructures, the EU can create a platform for sustained economic growth and secure its position 
as a leader on the global stage. 

30 Draghi, M., The future of European competitiveness, Part A – A competitiveness strategy for Europe, 2024. 
31 Letta, E., Much more than a market: Report by Enrico Letta on the Future of the Single Market, 2024. 
32 White Paper: How to master Europe’s digital infrastructure needs?, COM/2024/81 final, 2024. 
33 The solution provided by the Connected Collaborative Computing (‘3C Network’) is also at the basis of the functioning of 
connected and autonomous vehicles as well as of advanced e-health services, including motoring and care in remote areas. 

14 

 
  
 
1.1.3.1  Connectivity 

Progress towards the Digital Decade targets 

Target: Secure, resilient, performant and sustainable digital infrastructures where all end users at a 
fixed  location  are  covered  by  a  gigabit  network  up  to  the  network  termination  point,  and  all 
populated areas are covered by next-generation wireless high-speed networks with performance at 
least equivalent to that of 5G, in accordance with the principle of technological neutrality. 

Source:  Broadband  coverage  in  Europe  studies  for  the  European  Commission  by  Omdia  and  Point 
Topic34. 

Available data points: Fixed VHCN (FTTP & DOCSIS 3.1) 2019 to 2024; FTTP: from 2013 to 2024; 5G: 
from 2020 to 2024. 

2024 data values: VHCN = 82.5%; FTTP = 69.2% 5G = 94.3%35. 

Very High-Capacity Network (VHCN) 

The  percentage  of  households  with  fixed  VHCN  connection  rose  by  3.8  percentage  points,  from 
78.7% in 2023 to 82.5% in 2024. This represents a year-on-year increase of 4.9%. 

According  to  the  forecast  along  the  baseline  trajectory,  94.9%  of  the  target  is  expected  to  be 
achieved by 2030. In 2024, the value reached by this KPI stood at about 90% the ideal value along the 
digital  decade  trajectory  (82.5%  instead  of  92.3%).  However,  the  full  target  –  100%  of  households 
covered – is forecast to be reached only in 2047 if no further actions are taken. The remaining 5% of 
households  still  not  covered  by  VHCN  will  be  reached  mainly  through  further  FTTP  deployments, 
which  require  sustained  efforts  considering  that  households  still  not  reached  by  the  network  are 
likely  to be  in the more  cost-intensive semi-rural and rural areas, where only 61.9%  of households 
were reached by VHCN in 2024, up from 55.6% in 2023 (+ 11.3%). 

34 Omdia and Point Topic, for the European Commission, Broadband coverage in Europe, 2024. 
35 Note that figures are constantly updated and revised by the National Regulatory Agencies even retroactively. This may 
cause slight changes of past values with respect to those reported in the ‘2023 Communication on EU-level trajectories’. 

15 

 
  
 
Figure  7:  Fixed VHCN coverage in  the EU. Historical data, Digital Decade (DD) trajectory and revised baseline 
trajectory towards 2030 

Fibre-To-The-Premises (FTTP) 

The  percentage  of  households  with  fibre  connection  rose  by 5.3  percentage  points,  from 63.9%  in 
2023 to 69.2% in 2024. This represents a year-on-year increase of 8.4%. 

According  to  the  forecast  along  the  baseline  trajectory,  89.9%  of  the  target  is  expected  to  be 
achieved by 2030. In 2024, the FTTP coverage stood at about 80% of the ideal value along the digital 
decade trajectory (69.2% instead of 87.1%). However, the full target – 100% of households covered – 
is forecast to be reached only in 2051 if no further actions are taken. Only 58.8% of households living 
in rural areas were reached by the fibre in 2024, up from 52.6% in 2023 (+ 11.9%). 

16 

 
  
 
Figure 8: FTTP coverage in the EU. Historical data, Digital Decade (DD) trajectory and revised baseline trajectory 
towards 2030 

Overall 5G coverage 

The  percentage  of  households  covered  by  5G  (all  spectrum  bands)  rose  by  5.3  percentage  points, 
from 89.0% in 2023 to 94.3% in 2024. This represents a year-on-year increase of 6.0%. 

According to the forecast along the baseline trajectory, 100% of the target is expected to be achieved 
already by 2027. In 2024, 79.6% of households living in rural areas were reached by 5G coverage, up 
from 71.1% in 2023 (+ 11.9%). 

The percentage of households covered by 5G in the 3.4-3.8 GHz band rose by 16.6 percentage points 
between  2023  (51.1%)  and  2024  (67.7%).  This  represents  a  substantial  year-on-year  increase  of 
almost 32.6%. However, only 26.2% of households living in rural areas were reached by 5G mid-band 
coverage in 2024, up from 15.9% in 2023 (+ 65.1%). 

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Figure 9: Overall 5G roll-out in the EU, historical data and revised baseline trajectory towards 2030 

Take-up indicators show a steady increase in high-speed internet subscriptions. In 2023, 65.90% of 
fixed broadband subscriptions were at speeds of 100 Mbps or higher, rising to 71.88% in 2024, with a 
growth rate of 9.1%. For subscriptions at speeds of 1 Gbps or higher, the percentage was 18.47% in 
2023, increasing to 22.25% in 2024, marking a growth rate of 20.5%. The number of 5G SIM as share 
of the population also saw significant growth, from 21.70% in 2023 to 35.56% in 2024, with a growth 
rate of 63.9%. 

An integrated policy approach to connectivity 

increasingly 

interconnected  world,  approaching  connectivity  as  a  series  of 

In  an 
isolated 
technological  domains–space  systems,  submarine  data  cables,  fixed  networks,  and  mobile 
infrastructure–no  longer  reflects  the  complexity  of  modern  data  exchange.  Today,  data  traverses 
these infrastructures seamlessly: a user accessing cloud-based services from a mobile device may rely 
on  local  5G  connectivity,  terrestrial  fibre  backbones,  submarine  cables  spanning  continents,  and 
satellite  relays.  This  interdependence  creates  a  tightly  woven  system  in  which  disruption  or 
underinvestment in one component can undermine the performance, resilience, and security of the 
whole. 

The acceleration of latency-sensitive and mission-critical applications–such as autonomous vehicles, 
remote  surgery,  and  immersive  digital  environments–further  underscores  the  need  for  a  cohesive, 
globally optimised infrastructure. Emerging technologies like edge computing, AI-enabled networks, 
and the proliferation of connected devices (IoT) are eroding traditional distinctions between network 
layers. Future infrastructure must not only accommodate exponentially growing data volumes–now 
estimated  to  amount  to  close  to  400  zettabytes  in  2028  (cf.  illustration  below)  but  also  ensure 
adaptability, robustness, and geographic reach. 

18 

 
  
 
Figure 10.Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2023, 
with forecasts. 

Each layer of this infrastructure contributes a distinct yet interdependent function: submarine cables 
remain the backbone of international data exchange, carrying more than  99% of international data 
traffic; satellite systems extend coverage to remote or disrupted regions and offer redundancy; fixed 
networks deliver high-capacity throughput; and mobile networks provide critical last-mile access. 

Such  future  proof,  resilient  networks  are  a  precondition  for  the  digital  transformation  and 
competitiveness  of  key  European  sectors  and  for  the  full  potential  of  the  data  economy  to  be 
realised.  This  redundancy  and  technical  integration  of  alternative  networks  is  equally  vital  from  a 
security  standpoint,  as  services  requiring  ultra-low  latency  and  real-time  reliability  demand 
distributed, fail-safe networks. 

Yet,  fragmented  governance  and  planning  can  create  systemic  vulnerabilities  or  gaps  in  capacity 
forecasting,  inconsistent  cybersecurity  frameworks,  and  limited  resilience  in  crisis  scenarios.  The 
global threat landscape continues to intensify; in 2024 organisations faced an estimated 600 million 
cyberattacks  per  day,  exposing  the  vulnerabilities  of  both  digital  and  physical  infrastructure,  from 
submarine  cable  sabotage  to  satellite  interference  and  mobile  network  intrusions.  Only  a  unified, 
cross-domain  approach  can  enable  the  deployment  of  coherent  security  standards  and  robust 
operational continuity. 

Beyond  performance  and resilience,  a comprehensive  approach  is  increasingly essential  to  address 
shared structural challenges related to strategic autonomy and global competitiveness. All layers of 
connectivity  are  exposed  to  geopolitical  risk  and  supply  chain  dependencies.  The  EU,  for  instance, 
remains  heavily  reliant  on  non-European  satellite  constellations;  the  Russian  war  of  aggression 

19 

 
  
 
against Ukraine highlighted this dependence, as military and civilian communications were critically 
tied to the availability of the privately operated Starlink system. Similarly, Europe’s access to major 
cloud services – dominated by U.S. providers such as Amazon, Microsoft, and Google, which together 
account for over 70% of the  EU market –  is largely dependent on transatlantic submarine cables36. 
This  creates  potential  vulnerabilities  in  the  event  of  geopolitical  tensions  or  transnational  service 
disruptions. 

In  parallel,  the  global  competition  for  leadership  in  next-generation  networks  (5G  and  6G), 
semiconductor  fabrication,  and  cloud  infrastructure  underscores  the  strategic  value  of  end-to-end 
control  over  digital  connectivity.  Without  an  integrated  approach  –  ranging  from  orbital  assets  to 
terrestrial  infrastructure  –  regions  risk  losing  influence  over  critical  data  flows,  technological 
innovation, and the capacity to uphold sovereign decision-making in the digital realm. In this context, 
connectivity  is  no  longer  a  purely  technical  issue,  it  is  a  foundational  pillar  of  economic  strength, 
digital independence, and geopolitical influence. 

With this in mind, the EU aims to foster a vibrant community of European innovators advancing the 
development of integrated connectivity and collaborative computing infrastructures, as described in 
the 2024 White Paper on “How to master Europe’s digital infrastructure needs”. To reach this goal, 
and ensure the economic security of its network infrastructures, the EU needs to enhance research 
efforts and multi-disciplinary collaboration across its Member States. It also needs to improve access 
to finance for EU actors, including by coordinating public and private investments effectively. 

In  parallel,  significant  efforts  are  ongoing  to  scrutinise  the  regulatory  framework  for  electronic 
communication  networks,  in  order  to  make  sure  that  it  is  fit  for  purpose  to  deliver  the  required 
innovation and investments. At the same time, a part of EU level public funding is adjusted to these 
needs  too,  in  particular  to  support  5G  deployments  coupled  with  innovative  use  cases  and  to 
reinforce the resilience, redundancy and security of core networks, as described below. 

Working towards a Digital Networks Act 

As outlined in the 2024 White Paper on “How to master Europe’s digital infrastructure needs”, a key 
focus  is  the  creation  of  ‘Connected  Collaborative  Computing’  Networks  (‘3C  Networks’).  This 
ecosystem will facilitate the creation of end-to-end integrated infrastructures and platforms for telco 
cloud and edge, which could be used to orchestrate the development of innovative technologies and 
AI applications for various use cases. 

On the regulatory side, an innovation and investment-friendly framework is indeed required not only 
to  realise  this  vision,  but  also  to  achieve  the  ambitious  digital  infrastructure  targets  for  the  Digital 
Decade by 2030. 

As  indicated  in  the  communication  ‘A  Competitiveness  Compass  for  the  EU’,  the  Commission  is 
working towards a future Digital Networks Act (DNA), to be proposed by the end of 2025, which aims 
to  improve  market  incentives  to  build  the  digital  networks  of  the  future,  reduce  burdens  and 
compliance  costs  for  businesses,  making  it  easier  to  operate,  and  thereby  improve  digital 
connectivity for all end-users. 

36 Synergy Research Group, European cloud providers continue to grow but still lose market share, 2022. 

20 

 
  
 
As the Commission’s ‘Work Programme 2025’ stresses, the DNA will facilitate cross-border network 
operation  and  service  provision,  enhancing  industry  competitiveness  and  improving  spectrum 
coordination. To achieve these objectives, the DNA will create a more integrated Single Market for 
connectivity,  driving  further  harmonisation  and  reducing  fragmentation  across  Member  States  by 
simplifying processes, and enabling smooth cross-border operations. It will also focus on addressing 
emerging cross-border challenges, including data privacy concerns, and deliver more clarity on issues 
such as quality-based services and the Open Internet guidance on specialised services. 

Furthermore, the Commission is considering measures to expedite the transition to energy-efficient 
fibre  networks  by  phasing  out  copper  by  2030,  aiming  to  incentivise  deployment  while  preventing 
competitive distortions. National Regulatory Authorities (NRAs) will play a crucial role in monitoring 
the  migration  process,  setting  clear  timelines,  and  preventing  practices  that  could  undermine 
competition. 

On  the  public  funding  side,  the  creation  of  the  ‘Connected  Collaborative  Computing’  Networks  is 
prepared via the set-up of large-scale pilots under Horizon Europe as well as under the Connecting 
Europe Facility, while a possible new Important Project of Common European Interest (IPCEI)37 in the 
computing infrastructure is being discussed. 

In particular, the second CEF Digital work programme for 2024-27, adopted in October 2024, builds 
on the results of the first work programme (2021-23) and reflects evolving policy priorities. It makes 
a further EUR 205 million available for 5G Large Scale Pilot Projects, by merging the 5G Corridors and 
5G for Smart Communities into a single topic. The aim of this new concept of 5G large scale pilots is 
to  integrate  5G  standalone  system  deployments  with  edge  cloud  capabilities  and  with  vertical  use 
cases, in order to ultimately stimulate innovation and take-up across Europe. By selecting excellent 
and  highly  replicable  and  scalable  projects,  CEF  (the  Connecting  Europe  Facility)  aims  to  foster  a 
seamlessly  connected  and  secure  European  digital 
industrial 
transformation and valuable societal applications alike. 

infrastructure  that  supports 

The  first  Work  Programme  is  progressing  with  EUR 221  million  invested  so  far  in  66  best  practise 
projects,  EUR 128  million  for  5G  Smart  Communities  and  EUR 93  million  for  5G  Corridors.  Several 
ongoing  projects  have  already  integrated  5G  standalone  with  edge  cloud  capabilities,  in  order  to 
support  applications  such  as  connected  and  automated  mobility,  virtual  learning  environments, 
remote healthcare, border control, and smart agriculture. 

Two examples of projects (currently under implementation) 

High  Connectivity  via  5G  (HI5):  This  project  offers  5G  connectivity  and  enables  smart  traffic 
management and surveillance as well as connectivity for Services of General Economic Interest (SGEI) 
across  the Toulouse  metropolitan  area.  The  initiative  builds  on  the  Métropole’s  large  existing  data 
centre infrastructure, high points and optical fibres, to create a resilient and independent 5G private 
infrastructure at low operating costs. 

5G  NETC:  the  project  aims  to  improve  cross-border  network  service  continuity  for  established 
services  and  adopt  5G  infrastructure  in  public  environments  to  support  new  5G  services  and 
applications. The goal is to enable applications and services for connected and automated mobility 
on road and 5G-enabled Future Railway Mobile Communication Systems (FRMCS) use case solutions 

37 IPCEIs are State aid instruments, funded by Member States under EU State aid rules. 

21 

 
  
 
and their introduction. 5G NETC covers a 3 354 km length of transport path between SE-FI-DK-NO-LV, 
and benefits from a EUR 15 million EU grant. 

Ensuring that spectrum needs for future connectivity are met 

Despite  the  delays  beyond  legal  deadlines,  the  assignment  of  the  three  5G  pioneer  bands  has 
progressed  across  the  EU  and  reached  74%  on  average  (February  2025).  The  3.6  GHz  primary  5G 
band  has  been  allocated  in  all  EU-27,  although  in  some  Member  States  only  partially.  Market 
demand  has  been  staggered  for  the  26  GHz  pioneer  band,  which  has  resulted  in  fragmented 
assignment (of at  least  1 GHz)  in 12 Member States, or 44% on  EU average. The  700 MHz pioneer 
band has been assigned in 25 Member States. 

While the implementation of the 5G spectrum roadmap is almost complete with the harmonisation 
of the 42 GHz band and the ongoing harmonisation of the 3.8-4.2 GHz band targeting mainly vertical 
applications,  the  EU  is  set  to  develop  a  spectrum  roadmap  towards  6G.  In  this  regard  the  Radio 
Spectrum Policy Group (RSPG), following the adoption of its Report on a 6G Vision is starting work on 
a 6G spectrum roadmap. This is correlates with the topics of future use of the upper 6 GHz band and 
the sub-700 MHz band as well the forthcoming RSPG Opinion on WRC-27. 

Another  major  related  work  item  of  the  RSPG  is  aiming  to  define  an  EU-level  policy  approach  to 
satellite Direct-to-Device (D2D) connectivity and related Single Market issues. Those deliverables are 
essential  inputs  to  the  inception  of  a  comprehensive  future  EU  spectrum  roadmap  to  address 
wireless broadband and sectoral needs as well as the impact of network convergence. 

Standard setting for 6G 

The global race for 6G standardisation demands a proactive EU role. From a European perspective, it 
is  crucial  that  EU  policies  and  priorities  shape  the  global  standardisation  landscape,  ensuring  that 
European  companies  remain  well  represented  even  as  new  stakeholders,  particularly  vertical 
industries, join the dialogue. 

Whilst the 5G standardisation process is still ongoing, the EU has actively contributed to shaping the 
future  of  mobile  connectivity.  Notably,  hundreds  of  industry  contributions  to  the  3GPP  originate 
from EU-supported projects under the 5G PPP initiative and the SNS JU. 

EU  action  for  2025  is  focused  on  fostering  global  industry  standards  under  EU  leadership  for  key 
5G/6G  technologies,  including  radio  access  and  core  networks,  and  for  innovative  network 
architectures. This is being achieved through the active exploitation of EU-funded research results in 
major international standardisation bodies such as 3GPP, ITU, and ETSI. 

In addition, ensuring that 5G/6G standards are compatible with innovative vertical use cases and that 
adequate spectrum is available will require broader participation from industries and sector-specific 
standards-developing organisations. 

An  inclusive  standardisation  process  is  essential  to  address  the  divergent  market  needs  across 
regions, and the European Commission remains committed to ensure that all relevant use cases are 
represented. To this end, the inception workshop organised by 3GPP in South Korea in March 2025 
started officially the 6G standardisation process. 

22 

 
  
Open RAN 

Open  Radio  Access  Network  (RAN)  can  potentially  represent  an  opportunity  to  foster  a  more 
diversified  and  thus  more  competitive  vendor  landscape.  By  opening  the  main  components  of  the 
RAN to a wider set of suppliers, Open RAN can promote innovation and cost efficiency. 

On 4 December 2023, Ericsson and AT&T announced a USD 14 billion strategic agreement for a five-
year  cloud-native  open  network  development  based  on  Open  RAN.  Furthermore,  Nokia  and 
Deutsche  Telekom  (DT),  have  begun  to  deploy  a  multi-vendor  Open  RAN  network  with  Fujitsu  in 
Germany. Other recent significant partnership announcements include those between Ericsson and 
Telefonica, Nokia and DT and Nokia and Vodafone. Finally, Orange and Vodafone agreed to build an 
Open RAN with RAN sharing in rural parts of Europe where they both operate mobile networks. The 
initial  commercial  deployment  in  a  rural  area  near  Bucharest,  Romania,  constitutes  a  real-life 
experience of the new operational model, integrating multi-vendor hardware and software. All these 
developments suggest that EU vendors intend to be active across all 5G segments. 

Open RAN advocates also claim that Open RAN can reinforce  network  security. However, the joint 
report  by  EU  Member  States  in  2022  on  Open  RAN’s  cybersecurity  challenges  remains  a  critical 
reminder that, despite its potential, Open RAN still lacks maturity and poses significant security risks. 

Presenting its Mobile Economy Europe 2025 report, the GSMA highlighted two elements relative to 
Open  RAN,  confirming  the  cybersecurity  challenges,  due  its  large  attack  surface  and  the  mitigated 
openness of the network, as it is often the case that operators choose a sole vendor for Open RAN 
provision. 

The Commission is monitoring developments38, with the objective of consolidating Europe’s position 
in  the  telecom  supply  chain,  while  accelerating  advanced  5G  network  deployment.  In  this  context, 
Open RAN could be seen as another opportunity to reinforce the EU supply ecosystem. To this end, 
the Commission is supportive of the inclusion of Open RAN specifications in the 3GPP process. 

Working to develop and integrate space connectivity 

The  satellite  market  is  undergoing  significant  transformation,  driven  by  decreasing  costs  for  space 
launch  and  satellite  manufacturing.  Satellites  are  increasingly  seen  not  only  to  provide  broadband 
connectivity to underserved areas – albeit not a full substitute to fibre optic connectivity – they are 
becoming  an  essential  component  of  a  secure  and  resilient  converged  terrestrial/non-terrestrial 
network. 

This  trend  has  been  enabled  by  the  development  of  satellite  constellations  in  non-geostationary 
orbits (NGSOs), particularly low earth orbits (LEOs) which facilitate low-latency exchange of data at a 
higher rate and enable, alone or in combination with satellites in higher orbits, a multitude of use-
cases. 

Moreover,  the  convergence  and  integration  of  non-terrestrial-network  (NTN)  and  terrestrial 
networks  will  become  increasingly  prevalent  thanks  to  the  latest  3GPP  Standard  releases,  which 
include  the  integration  of  satellite  connectivity  for  5G  and  for  6G  in  the  future.  This  will  help 
supplement  terrestrial  mobile  connectivity  using  satellites  (satellite  direct-to-device,  i.e.  D2D)  and 
make  it  more  resilient  and  secure,  thanks  to  advanced  encryption  features.  As  a  result,  satellite 

38 European Commission, 5G Observatory, 2025. 

23 

 
  
 
operators  are  both  competing  with  and  partnering  with  mobile  network  operators  (MNOs),  as 
evidenced by several recently announced MNO/satellite collaborations. 

The EU is actively regaining strategic presence in space. A cornerstone of this effort is IRIS², the new 
EU  multi-orbit  satellite  constellation  for  secure  connectivity.  In  December  2024,  the  European 
Commission  and  the  SpaceRISE  industry  consortium,  comprising  the  three  major  EU  satellite 
operators, signed a 12-year concession contract for the design, development, and operation of IRIS². 
Once  operational  in  2030,  IRIS²  will  consist  of  292  satellites  in  medium  earth  orbit  (MEO)  and  low 
earth  orbit  (LEO),  providing  secure  connectivity  services  to  EU  institutions,  private  companies,  and 
citizens, as well as high-speed broadband to eliminate connectivity dead zones. Europe’s largest LEO 
constellation, Eutelsat’s OneWeb, has 661 satellites launched, with a signed order with Airbus to add 
a further 100 satellites in future. 

Despite  this  progress,  IRIS²  represents  only  an  incremental  step  in  the  EU’s  satellite  capacity,  with 
Europe’s  current  3 893  launched  and  planned  satellites  far  behind  the  US  (7 633  launched  and  an 
additional  33 397  planned  satellites)  and  China  (220  launched  and  an  additional  27 198  planned 
satellites), confirming the extremely ambitious expansion plans for both US and China in the coming 
years39. On the regulatory side, the Commission continues its work to develop a common approach 
for the satellite constellations that will provide services in the EU. In 2024, the Commission requested 
the  Radio  Spectrum  Policy  Group  (RSPG)  an  opinion  on  satellite  constellations  access  to  the  EU 
market  and  satellite  D2D  that  will  be  published  in  June  2025.  Additionally,  the  EU  is  exploring  the 
potential  of  the  EU  harmonised  2 GHz  mobile  satellite  system  (MSS)  frequency  band,  which  will 
become available for reassignment in 2027, as a strategic tool to support its ambitions in the space 
market.  The  RSPG  published  an  opinion  in  February  2024  and  a  study  is  being  conducted  by  the 
European  Commission  on  the  implementation  of  the  current  regulatory  framework  for  MSSs,  the 
satellite connectivity market and forward-looking regulatory issues and scenarios. 

By investing in secure, resilient, and competitive satellite infrastructure, the EU is ensuring that space 
connectivity  remains  a  cornerstone  of  its  technological  sovereignty,  reinforcing  Europe’s  security, 
economic resilience, and leadership in next-generation telecommunications by fostering innovation. 

39 Detecon International GmbH, Study on Mobile satellite services (MSS) in the 2 GHz band in the EU, 2025.  

24 

 
  
 
Figure  11. Broadband Internet, D2D and IoT satellite  constellations in  terms of total number of launched and 
planned country/region40 

Source: Detecon International GmbH 

Submarine cables: working towards secure and resilient backbone networks 

Submarine  data  cables  are  the  backbone  of  global  digital  communication,  carrying  over  99%  of 
international  data  traffic,  making  their  security  and  resilience  a  top  priority  for  the  EU.  Enhancing 
cable  security  is  fundamental  to  the  EU’s  goals  of  safeguarding  its  digital  sovereignty,  boosting 
economic  resilience,  and mitigating  potential vulnerabilities  that could  be  exploited  by  geopolitical 
adversaries. 

In response  and following the 2024 White Paper on  ‘How to Master Europe’s Digital Infrastructure 
Needs’  and  the  ‘Recommendation  on  Secure  and  Resilient  Submarine  Cable  Infrastructures,’  the 
European  Commission  established  an  Expert  Group  comprising  Member  State  authorities  and  the 
European Union Agency for Cybersecurity (ENISA), which held its third meeting on 12 March 2025. 
This  Group  is  responsible  for  monitoring  security  risks,  sharing  best  practices,  and  coordinating 
resilience measures across the EU. 

In  February  2025,  the  European  Commission  and  the  High  Representative  adopted  the  EU  Action 
Plan on Cable Security, a major step toward strengthening Europe’s submarine cable infrastructure. 
This  plan  adopts  a  comprehensive  resilience  cycle  approach,  focusing  on  prevention,  detection, 
response, recovery, and deterrence, including: prevention through coordinated risk assessments and 
mitigation;  detection via  enhanced  surveillance  and real-time  monitoring;  response  by  establishing 
rapid-response mechanisms and improving the EU-level crisis framework; recovery through ensuring 
repair  vessel  availability,  facilitating  spare  part  stockpiling,  and  setting  up  an  EU  Cable  Vessels 
Reserve;  and  deterrence  via  legal,  diplomatic,  and  strategic  actions  against  perpetrators  of  cable 
disruptions  and  hybrid  threats,  while  fostering  ‘cable  diplomacy’  with  global  partners.  These 

40  Please  note  that  these  figures  are  indicative  and  do  not  account  for  the  complexities  of  multiple  shareholders  from 
different  countries,  unless  it  is  close  to  a  50/50  split.  Moreover,  these  figures  exclude  some  claims  and  announcements. 
Finally,  counting  satellites  may  also  not  be  the  most  accurate  metric,  as  it  does  not  account  for  weight.  Comparing 
kilograms in orbit is probably a more meaningful metric, should it become available. 

25 

 
  
 
 
initiatives  are  expected  to  launch  throughout  2025  and  2026,  underscoring  the  EU’s  dedication  to 
safeguarding its critical infrastructure. 

On  the  funding  front,  CEF  Digital  has  been  supporting  since  2021  the  deployment  of  new  or 
significant upgrades of existing backbone networks, including submarine cables, within and between 
Member  States  and  between  the  EU  and  non-EU  countries.  To  date,  51  Digital  Global  Gateways 
projects have been signed for a total of EUR 420 million. 

These  projects  significantly  contribute  to  boosting  global  connections  between  Europe  and  Africa 
(e.g.  the  Medusa  Africa  or  Canalink-Morocco  projects),  the  Middle  East  (e.g.  the  BlueMed  East 
project) and Asia (Arctic connectivity), as well as reinforcing connections between Member States in 
the Mediterranean, the Atlantic, the Baltic Sea and Continental Europe (including Central and Eastern 
Europe). These projects also support connectivity in Outermost Regions and Overseas Countries and 
Territories, like in the Pacific Ocean (e.g. the NUANUA project), the Caribbean (e.g. the BCA project), 
the Canary Islands (e.g. the PENCAN-X project) and the Azores-Madeira area (e.g. the Atlantic CAM 
project). 

The  second  CEF  Digital  Work  Programme  2024-2027,  adopted  in  October  2024,  has  made  an 
additional  EUR 542  million  available  to  co-fund  backbone  connectivity  projects,  bringing  the  EU’s 
total investment in these critical infrastructures over the current financial framework to nearly EUR 1 
billion. 

A  significant  part  of  the  CEF  Digital  resources  will  continue  to  support  the  deployment  of  new 
backbone  networks,  in  particular,  submarine  cables  within  and  between  Member  States  and 
between  the  EU  and  non-EU  countries.  Thus,  contributing  to  the  increased  coverage,  capacity, 
resilience  and  security  of  EU’s  digital  communications  infrastructure.  Not  least,  CEF  Digital  will 
support  quantum  communication  infrastructure  by  co-funding  cross-border  links  between  national 
quantum  communication  networks  and  the  deployment  of  optical  ground  stations 
for 
interconnections  with  the  EuroQCI’s  space  component.  This  will  complement  the  national  QCI 
projects,  as  well  as  the  overarching  actions  to  develop  European  quantum  communication 
technologies funded under the 2021-22 DIGITAL work programme. 

1.1.3.2  Semiconductors 

Progress towards the Digital Decade target 

Target: Secure, resilient, performant and sustainable digital infrastructures where the production, in 
accordance  with  Union  law  on  environmental  sustainability,  of cutting-edge  semiconductors  in  the 
Union is at least 20% of world production in value. 

Source: Study in progress by the International Data Corporation. 

Available data points: from 2019 to 2023. 

2024 data value (estimate): 10.5% of the global market share by value. 

The  European  Union  has  set  ambitious  goals  for  the  digitalisation  of  its  economy  where  the 
development of the semiconductor industry is a key component of the strategy. 

The  historical  evolution  of  the  EU  semiconductor  value  chain  revenues  has  experienced  a  steady 
increase from EUR 57 billion in 2019 to EUR 104 billion in 2024, as shown in the figure which displays 
the EU’s semiconductor value chain market in absolute values and the EU’s share from 2019 to 2030. 
This growth is expected to continue, almost linearly, to EUR 166 billion in 2030. 

26 

 
  
According to an ongoing study by the International Data Corporation (IDC), the 11.7% EU’s share of 
global value chain revenues in 2023 was due to strength from equipment, automotive and industrial 
companies as they fulfilled long lead time products. Inventory corrections and the high growth of the 
global market led the EU’s market share to a forecasted 10.5% in 2024. It is worth nothing that the 
EU’s share is projected to constantly increase again in the coming years pulled by the steady growth 
of the EU’s value chain revenues. This relative increase will occur despite the strong growth of the 
global market revenues now projected to pass EUR 1.4 trillion in 2030. The steady increase of both 
the EU’s semiconductor value chain revenues and the relevant EU’s share confirm the effectiveness 
of  EU policy for the  sector, where  the digital transition and the global demand for semiconductors 
rapidly accelerate with fierce competition from other regions all over the world. 

The projections indicating that the global semiconductor market will exceed EUR 1.4 trillion by 2030, 
effectively  more  than  doubling  its  value  over  the  decade,  implies  that  the  EU’s  semiconductor 
revenues  must  more  than  quadruple  from  its  current  value  if  its  Digital  Decade  target  is  to  be 
achieved by 2030. 

Figure 12: EU semiconductor value chain revenue and share versus the global market. Values are estimated as 
of 2024 

Source: International Data Corporation 

To address this challenge, the  EU has been pushing its main policy interventions in the  sector. The 
European Chips Act has established a framework to attract investments from major semiconductor 
manufacturers into a first-of-a-kind for EU facilities, with the first seven projects announced already 
exceeding  EUR 30  billion  in  investments  and  with  further  promising  projects  in  the  pipeline;  the 
approved Important Project of Common European Interest on Microelectronics and Communication 
Technologies  (IPCEI  ME-CT),  building  on  the  first  IPCEI  on  microelectronics,  brings  together  14 
Member States and 56 companies, channelling a combined total of around EUR 20 billion from both 
private  and  public  sources  into  68  collaborative  projects  across  multiple  countries;  furthermore, 
proposals for new IPCEI candidates in the area of advanced semiconductor technologies, as well as 

27 

 
  
 
other topics in the digital field such as AI and computing infrastructure, are currently in the design 
phase. 

The IDC’s study takes into account the impact of such policy interventions and investments, whose 
tangible effects are expected to become apparent and further positively impact the market figures in 
the second half of the decade. 

For  Europe  to  globally  compete  in  the  sector,  doubling  down  on  investments  and  continuing  its 
commitment  on  the  leading  value  chain  areas  such  as  semiconductor  equipment,  chips  design, 
analog  semiconductors,  sensors,  photonics,  while  entering  the computing  and AI  silicon markets  is 
mandatory. The progress made in the EU has been positive and has become a solid foundation that 
will continue to encourage change and innovation not just from a technology perspective but also in 
proving a framework that drives sustainable development, and businesses plan across companies in 
the region. 

1.1.3.3  Cloud & edge infrastructure 

Progress towards the Digital Decade target 

Target:  Secure,  resilient,  performant  and  sustainable  digital  infrastructures  where  at  least  10 000 
climate-neutral  highly  secure  edge  nodes  are  deployed  in  the  Union,  distributed  in  a  way  that 
guarantees access to data services with low latency (i.e. a few milliseconds) wherever businesses are 
located. 

Source: Edge Observatory 

No available observed data points 

2024 data value (estimate): 2257. 

The  Edge  Observatory  for  the  Digital  Decade  reported  that  a  total  of  2 257  edge  nodes  were 
deployed across the EU  in 2024, reflecting a single-year increase of  1 072 new nodes  compared to 
2023. 

The  edge  nodes  trajectory  is  based  on  the  data  prepared  by  the  Edge  Observatory  study41.  The 
trajectory  began  modestly  in  2022,  with  498  nodes  deployed.  The  deployment  has  continued  to 
gather momentum in 2024, marking the start of a more aggressive scaling phase that aims to extend 
connectivity to broader areas, including rural and underserved regions. 

2025  represents  a  pivotal  moment  in  the  deployment  trajectory,  in  which  it  is  expected  the  most 
substantial  single-year  increase  of  1 455  new  nodes.  As  the  deployment  enters  2026,  the  pace  is 
expected to remain strong pushing the total to 5 459 nodes. However, as the infrastructure matures, 
the  rate  of  new  deployments  is  expected  to  moderate  slightly  in  2027,  with  1 565  new  nodes, 
reaching a cumulative total of 7 024 nodes. 

The trajectory shows a gradual tapering off in new deployments in 2028 and beyond, as the network 
nears completion. By 2030, the final push adds 835 nodes, culminating in the target of 10 000 nodes. 
This final phase ensures that the network is fully operational and capable of supporting a wide range 
of digital services and applications across the EU. 

41 European Commission, Edge observatory for the digital decade – monitoring the deployment of edge nodes, 2024. 

28 

 
  
 
Figure  13:  Edge  node  estimated  deployment  (EU  projection  to  2030).  The  edge  node  trajectory  is  based  on 
findings of the Edge Observatory study (https://digital-strategy.ec.europa.eu/en/policies/edge-observatory) 

The density of edge nodes across the EU reveals varying levels of deployment across member states. 
France,  Germany,  Italy,  and  Spain  are  at  the  forefront  of  Edge  node  deployment.  As  part  of  their 
efforts, these  leading Member  States should prioritise  the deployment of edge  nodes that support 
high-demand  applications.  Moreover,  these  member  states  could  benefit  of  edge  deployments 
targeted for AI data processing and integration with future digital infrastructures. Member States in 
which edge deployments remain less widespread (Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, 
Greece,  Hungary,  Latvia,  Lithuania,  Luxembourg,  Malta,  Portugal,  Romania,  Slovakia,  and  Slovenia) 
are  encouraged  to  promote  experimentation  and  target  deployments, with  particular  emphasis  on 
AI-driven applications to showcase the value of edge computing and lay the groundwork for larger-
scale implementations. 

In this context, today’s edge node deployments are mainly addressing the critical need of accessing 
real-time data, with 20% of organisations already using such solutions extensively and 42% planning 
to  adopt  them.  Over  time,  AI  and  machine  learning  applications  in  business  use  cases  indicate  a 
promising future adoption rate of edge nodes at 54%. This underlines the transformative potential 
of  artificial  intelligence  and  machine  learning  in  driving  business  innovation,  decision  support,  and 
monetisation of edge solutions42. 

The relevance of edge computing in view of exploiting the potential of AI 

Progress  in  AI  is  sustained  by  advances  in  three  main  areas:  algorithms,  data  and  compute 
infrastructure. For the latter, researchers estimate the amount of compute utilised to train leading AI 
systems has expanded by 350 million times over the past 13 years43 and is growing at a pace of 4.6 

42 European Commission, Edge Observatory for the digital decade – monitoring the deployment of edge nodes, 2024. 
43 Lennart Heim, Markus Anderljung, Emma Bluemke, Robert Trager, Centre of the Governance of AI, Computing Power and 
the Governance of AI, 2024.  

29 

 
  
 
 
times per year44. These figures, offer an understanding that AI’s full potential can only be reached if 
computer infrastructure and software are available to train and use AI models at scale. According to 
the OECD, a lack of access to the necessary infrastructure and software can cause compute divides to 
emerge or deepen, undermining AI’s productivity gains and competitive advantages45. 

In  this  regard,  different  types  of  AI  processes  pose  different  requirements  that  compute 
infrastructures need to meet to execute these processes. The state-of-the-art trend in generative AI 
and  large  language  models  is  heavily  reliant on extremely  high-performance  processing,  storage  of 
large  data  sets  and  advanced  scalability  means.  This 
is  despite  algorithmic  and  software 
enhancements  in  pursuit  of  reducing  the  computing  power  needs.  These  elements  are  solely 
available in high concentrations of computing power, made accessible through cloud services. Next 
to  this,  the  inference  of  generative  AI  and  large  language  models,  along  with  fine-tuning  and 
execution of predictive AI processes, is suitable for edge computing environments and the compute 
capacity available  in  edge  nodes.  The  reason  is that these  processes  obtain enough  computational 
resources by relying on general purpose hardware enriched with lower-end hardware accelerators, 
for instance, in GPUs, smart network interface cards (smartNICs) and field programmable gate arrays 
(FPGAs) which are commonly available in edge nodes. 

The requirement to gather, process, and transmit massive amounts of data to the central cloud is a 
roadblock  for  AI  use  cases  that  require  low  latency.  Edge  computing  has  the  potential  to  act  as  a 
critical component for AI inference closer to where data are generated as part of a distributed edge 
and  cloud  environment  for  AI.  This  encompasses  multiple  use  cases  like  video  observation  and 
analysis and asset/equipment monitoring, tracking, or performance optimisation to cite just a few46. 
Edge computing enables more immediate AI processing of the massive data volumes of generated at 
the edge, the intelligent interpretation of this data in minimal processing times (milliseconds), while 
providing a more secure processing environment and lowering data transmission costs and network 
congestion. 

Ongoing policy developments: the IPCEIs and the Cloud and AI Development Act 

Following  its  approval  on  5 December  2023,  the  activities  of  the  IPCEI  Next  Generation  Cloud 
Infrastructure  and Services  (IPCEI-CIS)  kicked  off  in  March 2024  with  a  number  of  R&D&I  projects 
and  first  industrial  deployment  that  will  last  until  December  2031  (as  the  projects  of  different 
companies  have  different  duration,  this  is  the  latest  end  date  of  a  participating  project)  (see  box 
below). 

Progress on the IPCEI Next Generation Cloud Infrastructure and Services (IPCEI-CIS) 

A  total  of  19  companies  from  seven  member  states  (France,  Germany,  Hungary,  Italy,  the 
Netherlands, Poland, and Spain) are participating in this IPCEI. The IPCEI CIS will put Europe on the 
path to the cloud infrastructure of the future. To this end, the seven participating Member States are 
providing  up  to  EUR 1.2  billion  in  public  funding,  unlocking  an  additional  EUR 1.4  billion  in  private 
investments. 

44 EPOCH AI, Notable AI models, 2025. 
45 OECD, A blueprint for building national compute capacity for artificial intelligence, OECD Digital Economy Papers, No 350, 
OECD Publishing, 2023, Paris. 
46 Edge Observatory for the Digital Decade, Edge Deployment Data report 1., 2023.  

30 

 
  
 
Together, the projects pursue the objective of building a high-performance cloud-edge infrastructure 
based  on  European  values  and  ensuring  European  competitiveness.  The  aim  is  to  create  a  multi-
provider cloud-edge continuum. 

The  IPCEI  CIS  foresees  important  dissemination  and  spillover  effects  across  the  Union,  beyond 
participating  Member  States  and  companies.  Dedicated  dissemination  actions  performed  by  the 
companies  will  play  an  important  role47.The  Cloud  Infrastructure  and  Services  Exploitation 
Resources Office (CISERO), funded under the Digital Europe Programme, may provide, if and where 
necessary, assistance  to the  IPCEI_CIS participating companies  in their primary efforts in delivering 
their dissemination and spill-overs actions. 

Guiding future actions, the Competitiveness Compass highlights the importance of compute, cloud, 
and data infrastructures in strengthening Europe’s AI capabilities. 

An  EU  Cloud  and  AI  Development  Act  will  focus  on  equipping  Europe  with  secure,  modern,  and 
sustainable  infrastructure  to  scale  up  Europe’s  computational  capacity.  By  mobilising  public  and 
private initiatives, it will support the deployment of infrastructure for training very large AI models, 
enabling  key  AI  ecosystems  throughout  the  EU,  in  addition  to  addressing  capacity  gaps  and 
supporting  investments  in  sustainable  and  sovereign  cloud,  edge,  AI  and  telecom  networks 
infrastructure. The Act will also set focus on cutting red tape to stimulate investment, accelerating 
permitting procedures, and improve access to land, finance and energy. 

Complementary to these developments, several Member States in the context of the Joint European 
Forum  for  IPCEI  (JEF-IPCEI)  in  November  2024  decided  to  enter  the  design  phase  of  two  new 
potential IPCEIs. The first one on  innovative  AI Services (IPCEI-AI), with a focus on R&D&I  and first 
industrial  deployment  of  AI  compute  technologies  and  services;  and  a  second  one  on  deploying 
computing infrastructure (IPCEI-ECI) across the EU territory. 

The need to step up investments 

Access  to  large-scale  computing  power  is  essential  for  advancing  technological  capabilities  in  AI  in 
general, and particularly in the development of large languages models (LLMs). AI is a key driver of 
increasing demand for compute capacity, but not the only one, as general cloud workloads are also 
on the rise. 

In  February  2025,  Commission  President  Ursula von  der  Leyen  launched InvestAI, a  major  initiative 
aimed at mobilising EUR 200 billion for AI investments, including the establishment of a new EUR 20 
billion European fund dedicated to AI gigafactories. These gigafactories will be equipped with at least 
100 000 next-generation AI chips, four times the capacity of current AI factories under deployment. 
While  the  gigafactories  funded  through  InvestAI  will  represent  the  world’s  largest  public-private 
partnership in high performance for the development of reliable AI, additional AI compute resources 

47 For example they will (i) beyond their usual open-source software practices and business models, grant permissive, non-
restrictive  open-source  software  licenses  to  any  interested  party  and  actively  engage  with  and  contribute  to  the 
development of open-source communities; (ii)  provide access to interested  parties to at least 20% of the capacity of the 
edge  nodes  and  laboratories  employed  in  their  projects;  (iii)  expand  the  developed  technologies  to  additional  economy 
sectors;  (iv)  perform  targeted  trainings,  produce  self-standing  technical  materials,  engage  in  conferences,  publications, 
partnerships with universities and research organisations; and (v) license intellectual property rights at fair, reasonable, and 
non-discriminatory terms. 

31 

 
  
 
 
in  traditional  cloud  and  edge  data  centres  will  be  necessary  to  meet  the  broader  AI  compute 
demands of business and society across the EU. In 2023, average construction costs for a data centre 
in  the  EU  reached  EUR 8.4  million  per  MW48  and  cloud  providers  point  at  investment  needs  of  at 
least EUR 1 billion for 200-300 MW of installed capacity. The future Cloud and AI Development Act 
will  contain  measures  to  boost  the  deployment  of  sustainable  data  centres  in  the  EU,  including 
through  faster  permit  procedures.  Currently,  the  average  time  to  obtain  a  permit  to  build  a 
greenfield data centre and the related environmental authorisations lies upwards of 48 months. The 
Cloud  and  AI  Development  Act  will  explore  way  of  paving  the  way  towards  simplifying  the 
deployment of data centres in the EU that are highly sustainable and innovative. 

1.1.3.4  Quantum technologies and High-Performance computing 

Progress towards the Digital Decade target 

Target: Secure, resilient, performant and sustainable digital infrastructures where the Union has, by 
2025, its first computer with quantum acceleration, paving the way for the Union to be at the cutting 
edge of quantum capabilities by 2030. 

Source: Key Performance Indicators for the monitoring of quantum technologies in Europe (prepared 
by the Strategic Advisory Board of the Quantum Flagship)49. 

Available data points: from 2022 to 2024. 

2024 data point: 2. 

The starting value for this KPI is 0 in 2022 and it reached and overtook the target in 2024 as the first 
two quantum simulators were deployed in France and Germany50, see trajectory in the figure below. 
It  is  expected  that  six  additional  quantum  computers  will  be  deployed  until  the  end  of  2025  as 
several  procurements  are  currently  ongoing.  Due  to  the  specificity  of  this  target,  no  baseline 
trajectory is established.  

48 Savills Data Centre, European Data Centres Navigating the new data-centric frontiers, 2024. 
49Quantum Flagship, Key performance indicators, 2024. 
50  Key  Performance  Indicators  for  Quantum  Technologies  in  Europe,  Strategic  Advisory  Board  of  the  European  Quantum 
Flagship, 2025. 

32 

 
  
 
Figure 14: Number of quantum computers in the EU. Trajectory towards 2030 

Note:  The  quantum  computing  trajectory  is  based  solely  on  an  assessment  by  experts  (same  as  in  the  ‘2024 
Communication on EU-level trajectories’). 

The EU’s leading role in quantum technologies 

Quantum  technologies  are  poised  to  revolutionise  multiple  industries,  driving  innovation  in 
healthcare,  transportation,  energy,  defence,  chemicals,  and  pharmaceuticals.  Recognising  their 
strategic importance, the EU launched the Quantum Technology Flagship in 2018, committing EUR 1 
billion  over  a  decade  to  reinforce  Europe’s  leadership  in  quantum  research  and  transform 
breakthroughs into impactful applications. Thanks to additional national programmes, total funding 
has grown to EUR 7 billion. 

Quantum  remains  a  global  priority,  with  frequent  technological  breakthroughs  and  increasing 
geopolitical focus and regions taking measures to secure their interests in this strategic field. In 2024, 
for instance, the Commission and Member States embarked on a joint risk assessment for quantum 
in line with the EU’s economic security strategy51, while the United States started to impose export 
controls  on  quantum  computing,  reshaping  global  supply  chains  and  potentially  limiting  EU 
companies’ access to key technologies. 

In global terms, the EU remains a leading source  of public funding for research and innovation in 
quantum,  and  European  efforts  were  given  renewed  impetus  by  the  signature  of  the  Quantum 
Declaration by 26 Member States confirming the strategic importance of quantum technologies and 
committing  to  collaborating  on  the  development  of  a  world-class  quantum  technology  ecosystem 
across  Europe52.  Still,  Europe  lagged  behind  other  regions  in  the  availability  of  private  finance 
needed  for  the  most  promising  EU  start-ups  in  quantum  to  scale  up,  an  issue  highlighted  in  the 
report  on  ‘The  Future  of  European  Competitiveness’  where  it  is  reported  that  ‘for  quantum 

51 In line with Commission Recommendation of 03 October 2023 on critical technology areas for the EU’s economic security 
for further risk assessment with Member States, (C(2023) 6689 final). 
52 European Commission, European declaration on quantum technologies, 2025. 

33 

 
  
 
 
computing,  EU  companies  attract  only  5%  of  global  private  funding  compared  with  a  50%  share 
attracted by US companies’53. 

According  to  another  independent  report  by  Olivier  Ezratty54,  several  US  quantum  firms  attracted 
private VC funding in hundreds of millions of dollars whereas most EU start-ups operate with under 
EUR 20 million. This limited private fund hinders the scale-up capacity and contributes to brain drain 
and IP migration. Moreover, it creates dependence on non-European capital and platforms, putting 
Europe’s quantum sovereignty at risk, especially for hardware and full-stack quantum solutions. 

The announcement of the European Innovation Council’s new STEP Scale up scheme55, offering up to 
EUR 900  million  of  deep  tech  scale-up  funding  for  EU  start-ups  in  strategic  sectors,  particularly  in 
quantum  technologies,  will  help  to  partially  remedy  this.  The  objective  of  this  new  scheme  is  to 
support start-ups, SMEs and small mid-caps through investments between 10 and 30 million. 

Through  its  existing  programmes,  EIC Pathfinder, EIC  Transition  and  EIC  Accelerator,  the  European 
Investment Council already invested over 200 million EUR in all the fields of quantum technologies: 
sensing,  communication  and  computing.  These  investments  will  continue  in  order  to  ensure 
accelerated growth, scaling, and international competitiveness for European quantum start-ups. 

The Commission, together with the EIC, is set to put in place several initiatives targeted at providing 
dedicated financial resources and for quantum start-ups and SMEs to support their growth, product 
development, and market entry. These initiatives are expected to offer start-ups expert mentoring in 
intellectual  property  management,  quantum  market 
quantum  technology  commercialisation, 
analysis,  and  access  to  leading  quantum  testbed  infrastructure  provided  by  European  Quantum 
Excellence Centres and national quantum hubs. 

As quantum companies move through the EIC programmes, the Commission will establish structured 
guidance  and  dedicated  support  for  quantum  companies  transitioning  from  EIC  Pathfinder  and 
Transition programmes into the Accelerator, ensuring coherent support throughout their technology 
and  business  maturation  processes.  In  parallel,  the  Commission  is  supporting  the  development  of 
Quantum  Pilot  Lines,  which  will  provide  the  first  industrial  manufacturing  capabilities  for  key 
quantum  components  in  Europe.  These  pilot  lines  aim  to  bridge  the  gap  between  research  and 
market deployment, fostering the emergence of a competitive quantum industry. 

The Quantum Strategy and Quantum Act to be published in 2025 and 2026 respectively will outline 
additional  measures  for  EU’s  ambitious  plans  to  establish  itself  as  the  global  leader  in  quantum 
technologies by 2030 and beyond. 

The EuroHPC JU & the ‘AI factories’ Initiative 

On  supercomputing,  the  EU’s  commitment  to  establishing  a  full  competitive  supercomputing 
infrastructure is embodied in the HPC JU, launched in 2018 with a budget of nearly EUR 7 billion for 
2021-2027, co-funded by the EU, Participating States, and private actors. Over the past five years, the 
EuroHPC  has  contributed  to  the  acquisition  of  eight  supercomputers,  including  notable  examples 

53Draghi, M., The future of European competitiveness, 2024. 
54 Opinions Libres, Understanding quantum technologies 2024, 2025.  
55  European 
Innovation  Council,  STEP  scale  up  European 
https://eic.ec.europa.eu/eic-funding-opportunities/step-scale_en  

Innovation  Council,  STEP  scale  up.  Available  at: 

34 

 
  
 
such  as  LUMI  (ranked  #8  globally),  Leonardo  (#9),  and  MareNostrum  5  (#11)56,  which  collectively 
multiply Europe’s computational capabilities, and the first European system to reach the exascale57 
frontier  (JUPITER).  A  second  exascale  supercomputer  (Alice  Recoque)  is  to  be  installed  within  the 
next  year.  With  the  launch  of  the  AI  Factories,  the  EU  will  equip  itself  with  at  least  six  additional 
supercomputers  in  2025  -2026  to  match  the  EU’s  ambition  of  becoming  the  AI  Continent.  These 
efforts  have  propelled  the  development  of  a  world-leading,  secure,  and 
interconnected 
supercomputing  ecosystem,  broadening  the  use  of  high-performance  computing  (HPC)  and 
cultivating essential skills for European science and industry. 

European High-Performance Computing Joint Undertaking (EuroHPC) is de facto contributing to the 
Digital  Decade’s  objective  to  have  a  first  European  computer  with  quantum  acceleration  by  2025, 
paving the way for cutting edge quantum capabilities in the EU by 2030. In this respect, EuroHPC has 
already  selected  eight  sites  across  the  EU  to  host  the  first  EU  quantum  computers  in  Czechia, 
Germany, Spain, France, Italy, Poland, Luxembourg and the Netherlands. 

On 9 July 2024, an amendment to the regulation on the European High Performance Computing Joint 
Undertaking (EuroHPC JU) – the ‘AI Factories Act’ – entered into force, with enlarged objectives for 
the  EuroHPC  including  the  development  and  operation  of  AI  Factories.  The  AI  Factories  consist  of 
deploying  and  operating  AI  dedicated  supercomputers  connected  to  large  data  centres,  enhancing 
the  performance  of  these  supercomputers  by  regularly  upgrading  their  AI  capabilities.  AI  Factories 
will  also  provide  AI-dedicated  supercomputing  services  in  support  of  the  AI  start-up  and  research 
ecosystem for the large-scale training and development of general purpose, trustworthy and ethical 
AI models and systems, and of AI user communities for the development, validation and running of 
emerging AI applications, in particular in the areas of health and care, climate change, robotics, and 
connected  and  automated  driving.  AI  Factories  will  also  foster  talent  development  with  advanced 
education, training, skilling and reskilling activities for relevant AI stakeholders. 

The AI Factories will create synergies at EU level and will cooperate with, and federate other relevant 
EU  AI  initiatives,  such  as  the  Artificial  Intelligence  On-Demand  platform,  the  AI  Testing  and 
Experimentation  Facilities,  the  EuroHPC  Competence  Centres,  the  EuroHPC  Centres  of  Excellence, 
and any other emerging European AI initiatives. These changes will enable the Joint Undertaking to 
offer tailored computing power and services to nurture large-scale AI training and development and 
uptake in the EU. 

The Commission has already announced the initial 13 AI Factories’ hosting entities, bringing together 
17  Member  States  and  two  associated  EuroHPC  participating  states.  This  initiative  will  be 
complemented  with  a  call  to  establish  AI  Factory  Antennas  in  additional  participating  states, 
providing access to established AI Factories’ supercomputers. The existing support for AI Factories of 
around  EUR 2  billion,  co-financed  by  the  EU  and  the  Member  States,  is  already  the  largest  public 
investment in AI infrastructure in the world. 

Conclusion and way forward 

Over recent years, EU and Member States have undertaken significant efforts to advance the work 
towards the achievement of the KPI for quantum technologies, as defined in the Digital Decade Policy 

56 Top500 list, November, 2024.  
57 Systems capable of executing more than one trillion calculations per second. 

35 

 
  
 
Programme  (‘Quantum  computing  measured  as  the  number  of  operational  quantum  computers  or 
quantum simulators, inc. as accelerators of HPC supercomputers, deployed and accessible to the user 
communities’). Thanks to the continued commitment and substantive investment of resources both 
at  EU  and  Member  States  level,  the  target  of  operationalising  one  such  system  by  2025  has  been 
achieved ahead of schedule, with the deployment of two quantum simulators in France and Germany 
under the HPC-QS project already in 202458. Additional systems are currently under deployment and 
are expected to become available by the end of 2025. 

At  the  same  time,  looking  ahead  to  2025,  the  EU’s  initiatives  on  AI  infrastructure  demonstrate  a 
strong foundation for establishing Europe as the leading AI continent. 

Funding  of  AI  Gigafactories  with  a mix  of  grants  and  equity  will  serve  as one  of  the  pilot  cases  for 
strategic technologies announced in the Competitiveness Compass59. 

In  view  of  the  recent  US  new  export  controls  placing  restrictions  on  advanced  AI  chips60,  the 
development  of  sovereign  European  technologies  (e.g.  RISC-V  based  accelerators)  are  taking 
additional relevance, to ensure the viability of these large-scale AI training facilities. 

1.1.4  The digital Euro – contributing to a resilient payments ecosystem 

The  way  that  citizens  and  businesses  use  money  is  rapidly  evolving.  While  the  EU  ensures  the 
availability and acceptance of cash, its use is steadily declining. Between 2019 and 2024, the share of 
cash  payments  in  the  euro  area  dropped  from  72%  to  52%  of  point-of-sale  transactions.  Digital 
payments are steady increasing in value terms, with cards accounting for 48% of online transactions 
in  2024,  and  mobile  payment  wallets  and  mobile  apps  together  accounting  for  29%  of 
transactions61. 

This  shift  raises  critical  questions  about  the  role  of  central  bank  money  in  preserving  monetary 
stability  and  financial  sovereignty.  Traditionally,  cash  has  served  as  a  ‘monetary  anchor’  that 
guarantees the role of public money in the economy. However, as digital transactions grow, central 
banks must ensure that public money remains accessible and relevant. Globally, 107 jurisdictions are 
actively  exploring  their  own  central  bank  digital  currency  (CBDC)  initiatives,  with  44  in  the  pilot 
stages62. 

Stablecoins – issued by private entities and pegged to fiat currencies – have experienced significant 
growth  in  recent  years,  particularly  in  market  capitalisation.  Currently,  approximately  99%  of  the 
global stablecoin market capitalisation is denominated in US dollars, with the vast majority of digital 
asset transactions  also  conducted  in  US  dollars63.  In  the  future,  non-euro  denominated  stablecoins 
could serve as a systemic tool for cross-border payments: this could risk weakening the role of the 
euro in European and international retail payment markets. 

Today,  the  EU  lacks  a  unified  payment  system,  and  while  some  countries  have  their  own  national 
payment systems, the EU as a whole relies heavily on international card schemes, representing over 

58 HPC QS, High performance computer – quantum simulator hybrid. Available at: https://www.hpcqs.eu/.  
59 European Commission, An EU compass to regain competitiveness and secure sustainable prosperity, 2025. 
60 Federal Register, Framework for artificial intelligence diffusion, 2025. 
61 European Central Bank, Study on the payment attitudes of consumers in the euro area (SPACE), December, 2024. 
62 Atlantic Council, Central Bank Digital Currency Tracker, 2025. 
63 DefiLlama, Defi Dashboard, 2025. Available at: https://defillama.com/  

36 

 
  
 
64% of all card-initiated transactions in the euro area64. This external dependence exposes the EU to 
geopolitical and cybersecurity risks. 

The  digital  euro  would  be  designed  to  strengthen  the  EU’s  sovereignty,  economic  security,  and 
competitiveness  by  providing  a  public  digital  payment  solution  that  complements  private  options. 
This  would  ensure  a  competitive  and  reliable  alternative  in  an  era  where  non-European  payment 
solutions and foreign digital currencies are growing65. 

The  legislative  proposal  establishing  the  digital  euro  and  regulating  its  essential  elements  was 
adopted  by  the  Commission  in  June  2023.  The  legislative  process  progressed  in  2024,  with  the 
European Parliament and Council continuing negotiations within each of the institutions. 

The final decision on issuing the digital euro, including its technical design choices, will be taken by 
the European Central Bank after the legislative process is concluded. The ECB’s two-year preparation 
phase,  running  until  Autumn  2025,  includes  defining  a  digital  euro  public  scheme  through  the 
Rulebook  Development  Group,  selecting  providers  for  infrastructure  development,  and  testing 
technical aspects such as offline functionality and the roll-out plan. National central banks within the 
Eurosystem  have  been  actively  involved  in  the  ECB’s  preparation  phase,  contributing  to  technical 
development and stakeholder engagement. 

The  digital  euro's  successful  implementation  will  depend  on  a  wide  variety  of  technical,  legal  and 
economic  factors,  including  the  role  of  the  private  sector.  Developing  a  digital  euro  requires 
significant investment in infrastructure, cybersecurity, and user adoption. While the Eurosystem will 
bear  its  own  costs,  public  funding  alone  will  not  suffice.  Private  investment  and  industry 
collaboration are essential to ensure a secure and efficient ecosystem. Large-scale adoption depends 
on  seamless  integration  with  existing  point-of-sale  terminals,  mobile  apps,  and  banking  interfaces. 
Investment  is  required  to  ensure  interoperability  with  existing  private  payment  systems.  Looking 
ahead, investment will be essential to develop robust digital payment systems capable of enhancing 
cybersecurity and ensuring seamless interoperability between public and private financial solutions66. 

A key innovation is the offline/proximity functionality, allowing small transactions without third-party 
validation,  ensuring  a  higher  level  of  privacy.  Implementing  this  feature  requires  investment  in 
hardware security, cryptographic protocols, and tamper-resistant storage. Depending on the design 
choices,  secure  offline  wallets  may  include  hardware-based  solutions  (e.g.  secure  elements  in 
smartphones) or dedicated offline payment cards. 

The  digital  euro  will  be  widely  accessible  and  inclusive.  Offline  use  is  relevant  for  areas  of  poor 
internet  connectivity  and  for  frictionless  payments  in  situations  such  as  high-speed  trains  or 
underground  parking.  Beyond  being  a  fallback  option,  offline  payments  will  support  users’  privacy 
preferences.  Further,  the  digital  euro  supports  financial  and  digital  inclusion  by  allowing  people 
without bank accounts to open digital euro accounts easily (e.g. at entities specifically designated by 
Member States, such as post offices) so that they can use basic services free of charge. 

64 Volume share of international card schemes in total electronically initiated card payments with cards issued in the euro 
area  and  transactions  acquired  worldwide  for  the  first  half  of  2023.  Based  on  data  collected  under  Regulation  (EU) 
No 1409/2013 of the European Central Bank on payments statistics (ECB/2013/43), as amended. 
65  Bellia,  M.,  Di  Girolamo,  F.  E.,  Nai  Fovino,  I.,  Petracco,  M.,  Sportiello,  L.  and  Vespe,  M.  (2023),  Future  of  the  euro:  pay 
everywhere  and  whenever  you  want,  Science  for  Policy  Briefs,  European  Commission,  Joint  Research  Centre,  Ispra. 
JRC134382. 
66 Draghi, M. The Future of European Competitiveness—A Competitiveness Strategy for Europe, 2024. 

37 

 
  
 
Conditional payments – transactions automatically executed upon meeting predefined conditions set 
by users – will also require investment. Public-private partnerships will play a crucial role in ensuring 
that payment service providers can offer this feature to users. 

The digital euro and the potential for simplification 

The  legislative  proposal  also  foresees  that  when  performing  digital  euro  transactions  and  opening 
digital  euro  accounts,  users  can  easily  identify,  authenticate,  and  authorise  payments  via  the 
European Digital Identity Wallets. Furthermore, thanks to the interoperability and synergy between 
the digital euro and the European Digital Identity Wallets, users will be able to access various public 
and  private  services  in  the  digital  economy  via  a  secure  and  privacy-by–design  solution,  with 
streamlined costs for the industry. 

Overall,  progress  has  been  made  in  laying  the  groundwork  for  the  digital  euro,  following  the 
European Commission’s legislative proposal in June 2023 and the ECB’s ongoing preparation phase. 

A  well-structured  digital  euro  should  offer  benefits  for  consumers,  financial  institutions,  and 
businesses by reducing costs, increasing competition, and strengthening financial resilience. 

1.2  Digitally transformed and competitive industries 

Europe’s competitiveness is affected by lower productivity compared to its global competitors, which 
can be tied to the insufficient diffusion of digital technologies, which impacts the ability to use tech 
to develop new services and business models67. 

1.2.1  Digitalisation of SMEs 

Progress towards the Digital Decade target 

Target:  the digital transformation of businesses,  with more than 90% of the  EU's  SMEs reaching  at 
least a basic level of digital intensity68. 

Source:  Eurostat  –  European  Union  survey  on  ICT  usage  and  e-commerce  in  enterprises  (code: 
ISOC_E_DII69). Since 2021, two different versions of this indicator are measured every second year: 
Digital Intensity Index (DII) version III measured in 2021 and 2023; DII version IV measured in 2022 
and 2024. DII version III is expected to be available for both 2025 and 2026.  

Available  data  points:  from  2015  to  2024.  Only  DII  versions  3  and  4  are  currently  used,  available 
since 2021. Break in series every year, except for DII version III, years 2021 and 2023 are comparable, 
and for DII version IV, years 2022 and 2024 are comparable. 

67 Europe’s choice, Political Guidelines for the next European Commission 2024−2029, p. 9. European Commission, Europe’s 
choice, Political Guidelines for the next European Commission 2024−2029, 2024. p. 9.  
68  As  defined  in  Commission  Implementing  Regulation  (EU)  2021/1190  of  15 July  2021  laying  down  the  technical 
specifications of data requirements for the topic ‘ICT usage and e-commerce’ for the reference year 2022, and subsequent 
implementing regulations pursuant to Regulation (EU) 2019/2152 of the European Parliament and of the Council (Text with 
EEA relevance), in particular Article 7(1) and Article 17(6). 
69 The KPI is computed as the complement to 100 of the percentage of SMEs with a very low digital intensity index (sub-
category E_DI4_VLO). 

38 

 
  
 
 
 
2024  data  value  (DII  version  IV):  72.9%  (annual  growth  used  to  estimate  DII  version  III  baseline 
trajectory = 2.8%). 

The  percentage  of  SMEs  with  at  least  a  basic  level  of  digital  intensity  (version  IV)  rose  by  3.9 
percentage points in two years, from 69.0% in 2022 to 72.9% in 2024. This reflects a modest year-on-
year increase of 2.8%. 

According to the forecast along the baseline trajectory based on DII version III, only 75% of the target 
is expected to be achieved by 2030, with an estimated 67.9% of SMEs having at least a basic level of 
digital intensity by then. In 2024, the value reached by this KPI stood at about 89% of the ideal value 
along the digital decade trajectory (59.2% instead of 66.5%). The target is expected to be reached not 
earlier than 2045 if no further actions are taken. 

Figure  15:  Digital  Intensity  Index  version  III.  Historical  comparable  data,  estimated  2024  data  point,  Digital 
Decade (DD) trajectory and revised baseline trajectory towards 2030 

Even though EU Member States are making a considerable effort to advance business digitalisation, 
progress  remains  uneven  across  Member  States  and  sectors.  While  some  Member  States  have 
already  achieved  the  90%  target  (Finland  and  Denmark),  others  are  still  catching  up,  with  some 
countries trailing well below the EU average. 

39 

 
  
 
Figure 16: Enterprises with at least a basic level of digital intensity, 2024 (% of SMEs) 

(*) Break in the time series 

Source: Eurostat (online data code: isoc_eb_diin2) 

Similar variations can also be seen across the different sectors, with the level of digitalisation varying 
significantly from sectors like ICT to more traditional ones like construction or accommodation and 
food service activities. 

Figure  17:  Enterprises  with  at  least  a  basic  level  of  digital  intensity  (DII  version  IV),  by  economic  activity,  EU, 
2024 (% of enterprises) 

Source: Eurostat (online data code: isoc_eb_diin2) 

SMEs face several challenges in digitalising their operations, including a lack of awareness about the 
resulting  benefits,  limited  access  to  finance,  and  gaps  in  digital  skills.  To  address  these  challenges, 
various  initiatives  have  been  implemented  across  the  region.  Common  strategies  to  support  SME 
digitalisation include knowledge-building activities, funding initiatives, and ecosystem collaboration. 

40 

0102030405060708090100At least basic level of digital intensityTarget(¹) Breakin the time series.Source:Eurostat (online data code: isoc_e_dii)EU -74%  0102030405060708090100Accommodation and food service activitiesConstructionTransportation and storageAdministrative and support service activitiesManufacturingWater supply; sewerage, waste management and remediation activitiesWholesale and retail trade; repair of motor vehicles and motorcyclesReal estate activitiesElectricity, gas, steam and air conditioning supplyProfessional, scientific and technical activitiesInformation and communication2024All activitiesSource:Eurostat (online data code: isoc_eb_diin2) 
  
 
 
Knowledge-building  efforts  help  SMEs  understand  digital  technologies’  benefits,  often  through 
events,  workshops,  and  training  programs  that  focus  on  upskilling  employees.  Funding  initiatives, 
such  as  grants  and  tax  incentives,  are  also  widely  offered  to  reduce  the  financial  burden  of  digital 
transformation. Moreover, ecosystem collaboration, particularly through partnerships with research 
institutions and other stakeholders, enhances SMEs’ access to information and expertise70. 

A  pivotal  component  of  these  efforts  is  the  European  Digital  Innovation  Hubs  (EDIHs)  Network. 
Launched  in  2023  and  covering  nearly  90%  of  EU  regions,  it  supports  SMEs  and  public  sector 
organisations in adopting advanced digital technologies like AI and big data. EDIHs provide significant 
services,  including  networking,  skills  development,  investment  support,  and  opportunities  to  test 
digital solutions before investing. 

The  EDIH  Network  has  organised  numerous  events  and  conducted  thousands  of  digital  maturity 
assessments to help firms identify strengths and areas for improvement. On average, firms engaging 
with  EDIHs  show  a  moderate  level  of  digital  maturity,  and  many  demonstrate  progress  over  time. 
Most  SMEs  that  undergo  follow-up  assessments  report  increased  digital  maturity,  highlighting  the 
essential role of these initiatives in fostering digital transformation across Europe. 

Insights on the path to digitalisation from the activities of the EDIHs 

By  employing  the  Digital  Maturity  Assessment  Tool  (DMAT),  EDIHs  assess  the  digital  maturity  of 
SMEs  across  six  key  dimensions:  Digital  Business  Strategy,  Digital  Readiness,  Human-Centric 
Digitalisation,  Data  Management,  AI  &  Automation,  and  Green  Digitalisation.  The  results  provide 
insights into the diverse digitalisation journeys undertaken by SMEs. 

Recent findings reveal that SMEs engaging with EDIHs average a digital maturity score of 40 out of 
100, indicating moderate digitalisation. Notably, AI & Automation scores are particularly low, at just 
19,  suggesting  early-stage  adoption  of  these  advanced  technologies.  On  the  other  hand,  Data 
Management contribute more positively to overall scores.  

The  distribution  of  DMAT  scores  varies  widely  among  participating  firms,  with  the  Financial  and 
Insurance  sector  and  the  Information  and  Communication  sector  leading  in  digital  maturity.  In 
contrast, the Agriculture, Forestry, and Fishing sector scores lowest on average. 

Progression  in  digital  maturity  is  evident;  firms  generally  need  to  reach  moderate  digital  maturity 
before significantly leveraging AI and Automation. Advanced digital developments depend on robust 
data  management,  security,  and  employee  engagement  in  digital  strategies  (see  chart  below). 
Furthermore, follow-up assessments show that, on average, firms increase their overall DMAT scores 
by 7 points around one year later, with 90% demonstrating improved digital maturity71. 

Average DMAT dimension scores at different levels of digital maturity 

70 Study on Digitalisation of Business in the EU Member States: Initiatives, Impacts and Contribution to the Digital Decade 
2023-26, 2025. 
71 European Commission: Joint Research Centre, Nepelski, D. and Stake, J., The EDIH SME DMAT 2.0: Revision of the EDIH 
Digital  Maturity  Assessment  Framework  for  SMEs,  Publications  Office  of  the  European  Union,  Luxembourg,  2024, 
JRC141446. 

41 

 
  
 
Note: 
The 
Source: JRC elaboration 

dimension 

score 

is 

estimated 

using 

locally  weighted 

regression 

analysis. 

Member States’ efforts 

Best Practice Accelerator: technology take-up 

To  help  EU  Member  States  overcome  challenges  in  the  take-up  of  advanced  technologies,  a 
Technology Take-up Cluster was launched in August 2024 under the leadership of Belgium. As a 
key component of the Best Practice Accelerator (BPA) within the governance of the Digital Decade 
Policy Programme, its primary goal is to share and record high-level initiatives at government level 
that  can  be  replicated  in  Member  States  to  promote  tech  take-up.  There  have  been  two 
workshops focusing on AI uptake and data and interoperability, with presentations from Belgium 
and Finland. In addition, eight best practices have been submitted to the Best Practice Repository, 
available to all Member States. A short description is provided below: 

Belgium has contributed two practices. The first, ’Start AI’, connects organisations with AI experts 
to help identify and harness AI potential, with 98% of participating companies recommending the 
initiative to others. The second, Althumi, is dedicated to streamlining processes in smart societies 
by empowering citizens to control their personal data. 

Denmark has introduced an SME grant scheme, which aims to clarify the digitalisation potential 
for  small  and  medium  enterprises,  connects  them  with  suitable  solution  providers,  and  offers 
assistance throughout the implementation process. 

Finland  has  showcased  ’RELEX  Solutions’  as  a  testament  to  successful  start-up  innovation  and 
support. This solution tackles inefficient supply chain and retail operations by providing tools for 
optimising  demand  forecasting,  inventory  management,  and  retail  planning.  As  a  result, 
businesses can reduce waste, improve product availability, and enhance profitability. 

Hungary has submitted ’KKV Digital’, a self-assessment tool designed to measure digital intensity 
in SMEs that stands out by assessing businesses using 23 criteria. 

Germany  has  presented  two  notable  practices:  the  ’AI  Opportunity  Market’  (MaKi)  and  the 
federal IPv6 Programme. MaKi aims to create a comprehensive platform for AI systems in federal 
administration,  eventually  extending  to  federal  states  and  municipalities.  The  federal  IPv6 
Programme  assists  in  the  implementation  of  the  IPv6  internet  protocol  across  142  individual 
migration projects with federal authorities and organisations. 

Lastly,  the  Netherlands  has  devised  a  National  Technology  Strategy  that  highlights  the  ten 

42 

 
  
 
technologies  (including  AI,  data  science,  semiconductors,  quantum  technologies,  and  cyber 
technologies)  that  will  be  given  priority  when  it  comes  to  innovation  subsidies  and  strategic 
efforts. 

1.2.2  Take-up of advanced digital technologies 

In order to build and uphold a robust and sovereign Europe, the take-up of advanced technologies is 
of  the  utmost  importance.  Other  than  increasing  productivity  by  allowing  for  automation,  carrying 
out  AI  analysis  and  reducing  costs  for  European enterprises,  the  use of  pioneering  technology  also 
drives  innovation,  attracts  talent  and  boosts  private  investment.  Additionally,  an  increased  use  of 
advanced  technologies  also  answers  the  call  for  securing  European  sovereignty.  By  reducing 
European  reliance  on  external  factors  from  outside  the  internal  market,  we  will  ensure  strategic 
independence in a geopolitical landscape which is changing rapidly around us. As private and public 
actors within the EU become more digitalised, trust in public institutions will be strengthened, and 
we will be less fragile when met by disinformation or other disruptions spread by malign entities. 

Progress towards the Digital Decade target 

Target: The digital transformation of businesses, where at least 75% of EU enterprises have taken up 
one or more of the following, depending on their business operations: (i) cloud computing services; 
(ii) data analytics (as of 2024); (iii) artificial intelligence. 

Source: Eurostat – European Union survey on ICT usage and e-commerce in enterprises. 

Available data points: Cloud: 2014, 2016, 2018, 2020, 2021 and 2023 (break in series in 2021); Data 
analytics (big data before 2023): 2016, 2018, 2020 and 2023 (break in series in 2023); AI: 2021, 2023 
and 2024. 

2024 data values: AI = 13.5% 

(No 2024 data for Cloud, Data Analytics and ‘AI or Cloud or Data analytics’) 

The  percentage  of  enterprises  using  artificial  intelligence  or  cloud  computing  services  or  data 
analytics stood at 54.7% in 2023. No other data point is available, therefore the speed of diffusion of 
the baseline trajectory is estimated on the basis of the cloud KPI. The timing of diffusion is instead 
computed based on the 2023 observed value. 

According to the forecast along the baseline trajectory, 96% of the target is expected to be achieved 
by  2030,  with  72.3%  of  enterprises  expected  to  use  at  least  one  of  the  three  key  technologies  by 
then. The target is expected to be reached in 2032 if no further actions are taken. 

43 

 
  
Figure  18: Percentage of  enterprises using AI or cloud computing or data analytics in  the EU. Historical data, 
Digital Decade (DD) trajectory and baseline trajectory towards 2030 (same speed of diffusion parameter as in 
cloud baseline trajectory) 

Among SMEs, the uptake was slightly lower at 53.74%, whereas a significantly higher proportion of 
large enterprises – 86.71% – adopted these technologies. This reflects a percentage point difference 
of 32.97 between SMEs and large enterprises, indicating that while usage was widespread across all 
enterprise  sizes,  large  enterprises  tended  to  engage  with  these  technologies  at  a  markedly  higher 
rate than SMEs. 

The  box  below  provides  insights  on  the  uptake  of  several  advanced  technologies  across  industrial 
ecosystems, showing a general upward trend. 

Adoption of advanced technologies by industrial ecosystems 

When  analysing  the  progress  made  in  the  adoption  of  advanced  technologies  by  industrial 
ecosystems,  it was clear that  there was  a leap forward  for  several advanced digital technologies  in 
2023. Results show that cloud technologies have significantly progressed in terms of adoption across 
all ecosystems, closely followed by AI, which has recently seen significant growth in the adoption rate 
in  some  ecosystems.  The  adoption  rate  of  connected  devices  (internet  of  things)  also  increased 
notably,  although  it  is more  specific  to  certain  ecosystems  such  as  electronics,  aerospace,  defence 
and health. 

The  industrial  ecosystems  that  made  the  most  overall  progress  since  last  year  in  adopting  digital 
technologies include aerospace and defence, electronics and the cultural and creative industries, all 
of which saw an increase of over 10 percentage points. The figure below shows the progress in the 
adoption rate of digital technologies by industrial ecosystem. 

44 

 
  
 
The level of private-sector investment  in digital technologies is relatively low when  compared  with 
global competitors. Robotics is the technology in which multiple industrial ecosystems (10 out of 12) 
invest  over  5%  of  their  annual  turnover.  The  annual  investment  for  SMEs  in  cloud  computing  is 
estimated  at  EUR 136.56  billion  in  total,  making  cloud  computing  the  technology  with  the  highest 
overall  investment  of  all  advanced  digital  technologies  analysed  in  the  European  Monitor  of 
Industrial  Ecosystems  project.  When  zooming  in  on  individual  industrial  ecosystems,  business 
investment  in  digital  technologies  may  well  exceed  5%  of  turnover.  For  instance,  the  electronics 
industrial ecosystem stands out for the high level of investment in cloud computing (23.19%), edge 
computing (22.73%), robotics (19.05%), IoT (12.28%) and big data (5.88%). 

Source: EMI enterprise survey 2024 

1.2.2.1  Take-up of cloud services 

Cloud computing constitutes a foundation for innovation and growth. Access to cloud computing is 
the  gateway  for  accessing  processing  power,  storage,  and  software.  Through  the  cloud,  users  can 
access  these  features  on  demand  and  have  flexibility  in  adjusting  the  capacity  purchased  to  their 
needs  without  upfront  infrastructure  investments.  Cloud  computing  is  thus  a  driver  for  innovation 
and  competitiveness  in  today’s  digital  economy.  It  is  also  the  gateway  to  the  computing  capacity 
needed for AI, primarily for fine-tuning and inference. 

Progress towards the Digital Decade target 

The percentage of enterprises using sophisticated or intermediate cloud computing services rose by 
5 percentage points, from 34.0% in 2021 to 38.97% in 2023. This represents a year-on-year increase 
of 7.1%. 

According to the forecast along the baseline trajectory, approximately 86% of the target is expected 
to be achieved by 2030, with 64.4% of enterprises expected to adopt sophisticated or intermediate 
cloud  services  by  then.  In  2023,  the  gap  stood  at  about  82%  of  the  ideal  value  along  the  digital 

45 

 
  
 
 
decade  trajectory  (38.9%  instead  of  47.3%).  The  target  is  expected  to  be  reached  not  earlier  than 
2036 if no further actions are taken. 

Figure 19: Percentage of  enterprises using cloud computing services in the EU. Historical data, Digital Decade 
(DD) trajectory and revised baseline trajectory towards 203072 

A  significant  difference  existed,  however,  in  the  degree  of  uptake  among  SMEs  and  large 
enterprises. While nearly 2 out of 5 (38.04%) SMEs adopted cloud services, over 2 out of 3 (69.72%) 
large  enterprises  used  these  services.  This  indicates  a  31.68  percentage  point  difference  in  uptake 
between SMEs and large enterprises at EU level. 

Significant  differences  can  also  be  seen  across  Member  States, with  the  uptake  rate  ranging  from 
72.99% in Finland to below 20% in Greece, Bulgaria and Romania. 

More  detailed  data  show  that  enterprises  are  gradually  moving  towards  higher 
sophistication in terms of the types of services purchased, especially in some sectors. 

levels  of 

72Eurostat’s  indicator  ‘Enterprises  purchasing  at  least  one  of  the  following  cloud  computing  (CC)  services:  hosting  of  the 
enterprise’s database, accounting software applications, customer relationship management software, computing power’ 
(code E_CC_GE_ME) is used for the period 2014-2020. A break in series occurred in 2021 when the indicator ‘Enterprises 
buying  sophisticated  or  intermediate  CC  Services’  was  used.  This  indicator  includes  different  CC  services:  Accounting 
software (CC_PFACC); ERP software (CC_PERP); CRM software (CC_PCRM); Security software (CC_PSEC); Database hosting 
(CC_PDB) and Hosting environment for application development (CC_PDEV). 

46 

 
  
 
 
Figure 20: Level of sophistication of purchased cloud computing services by economic activity, EU, 2023 (% of 
enterprises buying cloud services) 

Source: Eurostat (online data code: isoc_cicce_usen2) 

Although  the  number  of  EU  enterprises  using  cloud  services  is  on  the  rise,  the  main  providers  of 
cloud computing services are US companies. Despite the continued expansion of EU cloud providers, 
US providers  accounted for 72% of the market for  infrastructure as a service  (IaaS),  platforms  as a 
service (PaaS), and hosted private cloud in 2022. This trend is expected to persist, with US providers 
projected to drive 65% of data centre demand in Europe by 202873, reinforcing concerns about the 
EU’s  reliance  on  foreign  cloud  and  AI  computing  infrastructure  and  the  possible  negative 
repercussions on sovereignty and operational autonomy. 

Finally, it should also be considered that, for many businesses, the cloud is the gateway towards AI 
and  adopting  cloud  services  is  a  necessary  first  step  that  paves  the  way  for  their  adoption  of  AI 
services. 

2024 was marked by EU cloud providers advancing their compliance efforts. The Data Act entered 
into force  in January 2024 and will enter  into application on 12 September 2025. By enabling free, 
fast and fluid switching, the Data Act is designed to boost competition in the EU cloud market. The 
Data Act hinders lock-in practices and ensures that cloud service providers compete on performance 
and  price,  thereby  opening  up  the  market  for  cloud  innovation  and  for  providers  to  differentiate 
themselves from their competitors. 

The higher level of competition and improved trust in cloud  services is expected to have a positive 
effect on cloud uptake by EU enterprises. The Commission has launched a study to monitor whether 
the  reduction  of  switching  and  egress  charges  is  indeed  producing  effects  in  the  EU  cloud market, 
and  another  study  to  build  the  common  EU  repository  for  the  interoperability  of  data  processing 
services. Moreover, the work of the expert group on B2B data sharing and cloud computing will, over 
the  course  of  2025,  feed  into  a  Commission  recommendation  on  standard  contractual  clauses  for 
data processing services. These will serve as a voluntary compliance tool for the Data Act’s provisions 
on cloud switching. 

73 McKinsey, The role of power in unlocking the European AI revolution, 2024. 

47 

 
  
 
 
Additionally, with AI driving up demand for data storage and processing, the announced Cloud and AI 
Development  Act  will  ensure  that  the  EU  has  sufficient  cloud  capacity  and  adequate  data  centre 
infrastructure  to  serve  the  needs  of  EU  businesses  and  public  administrations.  The  proposed  Act 
must  be  viewed  in  the  context  of  the  Digital  Decade  and  other  complementing  legislative 
frameworks, such as the Artificial Intelligence Act. 

1.2.2.2  Take-up of data analytics 

The data economy is based on the accessibility of high-quality data. If data is unavailable, new and 
innovative products and services might not be produced, thereby placing EU enterprises and public 
services  at  a  disadvantage  compared  to  their  international  counterparts.  Consequently,  it  is 
necessary to break down technical, semantic and legal barriers to data sharing and use. 

The  European  Strategy  for  Data,  introduced  by  the  Commission,  sets  forth  a  path  to  a  true  single 
market  for  data,  where  data  will  be  available  and  flow  freely  within  the  internal  market.  The 
measures introduced, based on the strategy, will allow for further standardisation, interoperability, 
and  the  breakdown  of  legal  barriers  and  will  support  the  uptake  of  data  analytics  by  –  amongst 
others – EU enterprises. 

Progress towards the Digital Decade target 

The percentage of enterprises using data analytics stood at 33.3% in 2023. According to the forecast 
along the baseline trajectory, approximately 67% of the target is expected to be achieved by 2030, 
with  50.3%  of  enterprises  expected  to  use  data  analytics  by  then.  The  target  is  expected  to  be 
reached not earlier than 2048 if no further actions are taken. 

Figure  21: Share of enterprises using Data Analytics in  the EU. Historical data, Digital  Decade (DD) trajectory 
and baseline trajectory towards 2030 

32.09% of SMEs adopted data analytics, while the percentage was significantly higher among large 
enterprises, with 71.81% using data analytics. This indicates a  39.72 percentage  point  difference in 
the use of data analytics between SMEs and large enterprises in the EU. 

There are differences among the Member States as well: Hungary and Croatia are leading with rates 
above 50%, while Poland and Slovenia are lagging behind with rates below 20%. 

48 

 
  
 
The 2020 European Data Strategy describes the vision of a European single market for data  where 
data can flow  freely  across borders  and sectors in full compliance  with European rules and values. 
The strategy  also laid down the  foundations  for  common European data spaces in a set of vertical 
sectors of strategic importance for the European Union as a whole. 

The strategy formed the basis for several legal acts (Data Act74 and Data Governance Act75), the aim 
being to open up access to data. Both these acts work in tandem with existing rulesets, such as the 
GDPR76 and the Open Data Directive (ODD)77, and more recent rulesets, such as the European Health 
Data Spaces (EHDS)78 and the AI Act79. 

Building on the 2020 European Data Strategy, the Commission is developing a European Data Union 
Strategy. The Data Union Strategy should aim to streamline existing data rules, potentially creating a 
simplified,  clearer,  and  more  harmonised  legal  framework  for  businesses  and  administrations  to 
share  data more  seamlessly  and  at  scale,  while  still upholding  high  privacy  and  security  standards. 
Additionally, it may explore options to increase the availability of high-quality data, consider possible 
investments in data infrastructures, examine ways to use data to reduce the administrative burden, 
and address the external aspects of data flows. 

1.2.2.3  Take-of up AI 

Use  of  artificial  intelligence  technology  is  increasingly  recognised  as  a  key  determinant  of 
competitiveness not just in the high-tech sector, but across the whole economy. 

Progress towards the Digital Decade target 

The percentage of enterprises using AI rose by 5.4 percentage points, from 8.1% in 2023 to 13.5% in 
2024. This represents a substantial year-on-year increase of 67%. 

According to the forecast along the baseline trajectory, slightly less than half of the target is expected 
to be achieved by 2030, with 35.9% of enterprises expected to adopt AI by then. In 2024, the value 
reached  by  this  KPI  stood  at  about  half  the  ideal  value  along  the  digital  decade  trajectory  (13.5% 
instead of 28.4%). The target of 75% of enterprises using AI is expected to be reached in 2042 if no 
further actions are taken. 

74 Regulation (EU) 2023/2854 of the European Parliament and of the Council of 13 December 2023 on harmonised rules on 
fair  access  to  and  use  of  data  and  amending  Regulation  (EU) 2017/2394  and  Directive  (EU) 2020/1828  (Data  Act), 
PE/49/2023/REV/1, 2023. 
75 Regulation (EU) 2022/868 of the European Parliament and of the Council of 30 May 2022 on European data governance 
and amending Regulation (EU) 2018/1724 (Data Governance Act), PE/85/2021/REV/1, 2022. 
76 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural 
persons  with  regard  to  the  processing  of  personal  data  and  on  the  free  movement  of  such  data,  and  repealing  Directive 
95/46/EC (General Data Protection Regulation), 2016. 
77 Directive (EU) 2019/1024 of the European Parliament and of the Council of 20 June 2019 on open data and the re-use of 
public sector information (recast), PE/28/2019/REV/1, 2019. 
78 Regulation (EU) 2025/327 of the European Parliament and of the Council of 11  February 2025 on the European Health 
Data Space and amending Directive 2011/24/EU and Regulation (EU) 2024/2847, PE/76/2024/REV1, 2025. 
79 PE/24/2024/REV/1, 2024. 

49 

 
  
 
Figure  22:  Percentage  of  enterprises  using  AI  in  the  EU.  Historical  data,  Digital  Decade  (DD)  trajectory  and 
revised baseline trajectory towards 2030 

SMEs  had  an  uptake  rate  of  12.64%,  while  large  enterprises  demonstrated  a  significantly  higher 
usage rate of 41.17%. This reveals a 28.53 percentage point difference in the use of AI between SMEs 
and  large  enterprises  in  the  EU.  It  is  particularly  encouraging  to  note  that  growth  among  small 
enterprises  shot  up  by  no  less  than  71%,  vastly  outpacing  the  relative  increase  of  35%  by  large 
companies. Thus, small companies are starting to catch up. 

Two  sectors  are  driving  uptake:  the  information  and  communication  sector  and  the  professional, 
scientific  and  technical  activities  sector,  whereas  the  construction  and  accommodation  sectors  are 
well below the average. 

Figure 23: SMEs using AI technologies by economic activity, EU, 2024 

Source: Eurostat (online data code: isco_eb_ain2) 

At  the  same  time,  uptake  differs  greatly  among  Member  States,  from  27.6%  in  Denmark  to  about 
3.1%  in  Romania.  Nevertheless,  growth  is  well  distributed  across  EU  Member  States,  with  some 
countries which had previously very low AI uptake displaying the highest growth rates. 

50 

 
  
 
 
Figure 24: Enterprises using AI technologies by Member State, EU, 2024 

Source: Eurostat (online data code: isco_eb_ai) 

EU enterprises utilised various AI technologies, with no single technology dominating. In 2024, 6.88% 
used  AI  for  written  language  analysis  (text  mining),  followed  by  5.41%  using  natural  language 
generation.  Other  technologies,  such  as  speech  recognition,  machine  learning  for  data  analysis, 
workflow  automation,  and  image  recognition,  were  used  by  3.23%  to  4.78%  of  enterprises.  Only 
1.01% used AI for autonomous machine movement. 

Figure 25: Enterprises using AI technologies by type of AI technology and size class, EU, 2024, % of enterprises 

Source: Eurostat (online data code: isco_eb_ai) 

51 

051015202530 
  
 
 
Overall, current data on AI use in the EU shows that ubiquitous AI usage is still a long way off, but 
that progress is promising. 

Following the launch of ChatGPT at the end of 2022 and the emergence of more and more powerful 
competitive  generative  AI  models  throughout  the  period,  the  uptake  of  AI  by  EU  companies 
accelerated significantly from 2023 to 2024. 

Investments in AI 

Quantitative  estimates  of  the  effects  of  AI  on  aggregate  productivity  are  still  uncertain.  However, 
partial estimates point to significant gains. For example, benefits of USD 60-110 billion per year are 
estimated from the use cases of AI in the pharma and medical device industries. In the automotive 
sector,  AI-powered  (generative)  algorithms  can  improve  performance  and  reduce  material  use, 
reduce  inventories,  accelerate  the  time  to  market  from  R&I  and  increase  labour  productivity.  AI 
uptake  in  freight  and  passenger  transport  will  enable  increasingly  automated  functions  to  deliver 
safety and quality and reduce fuel consumption. In the energy sector, where more than 50 use cases 
are  already  deployed  today,  ranging  from  grid  maintenance  to  load  forecasting,  estimates  of  the 
market value for future AI applications reach USD 13 billion80. 

Following a slowdown in 2022 and 2023, AI investments have bounced back strongly. According to 
Dealroom,  global  venture  capital  investments  in  AI  reached  $124.9  billion  in  2024,  marking  a  58 
percent increase on 202381; while private investments in AI in the EU grew by 22 percent in 2024 to 
USD 10.8 billion82.  

At the same time, the European Commission is multiplying its initiatives in favour of AI investment. 
At  the  AI  Summit,  President  von  der  Leyen  announced  InvestAI,  an  initiative  to  mobilise  EUR 200 
billion for investment in AI in line with the political priorities of the Competitiveness Compass. This 
includes the launch of the InvestAI Facility, with a view to mobilising EUR 20 billion of investment for 
AI infrastructure, notably targeting up to 5 AI gigafactories across the EU. This builds on the creation 
of 13 AI Factories, with overall investments in supercomputing infrastructure and AI Factories in the 
EU that will reach EUR 10 billion over the 2021-2027 period. 

Implementation of the AI Act 

The speedy adoption of AI systems requires legal certainty for the entities in question. Other than 
the Data Union Strategy, which will help streamline the EU's legislative data landscape and identify 
measures to scale up the European data market, the EU has also taken steps to involve stakeholders 
and clarify the European Artificial Intelligence Act. 

To  facilitate  the  understanding  of  these  provisions,  on  4 February  2025  the  European  Commission 
adopted guidelines on prohibited practices, and on 6 February it adopted guidelines on the definition 
of an AI system. The guidelines on prohibited practices specifically address practices such as harmful 
manipulation, social scoring, and real-time remote biometric identification, among others. They are 
designed  to  ensure  the  consistent,  effective,  and  uniform  application  of  the  AI  Act  across  the 

80 Draghi, M., The future of European competitiveness, Part A – A competitiveness strategy for Europe, 2024.  
81 Dealroom, Artificial intelligence, 2024. Available at: https://app.dealroom.co/sector/technology/artificial 
intelligence/overview. 
82 Dealroom, Artificial intelligence, 2024. Available at:  
https://app.dealroom.co/sector/technology/artificial%20intelligence/overview?hqType=regions&hqValue=EU27. 

52 

 
  
 
European  Union.  While  they  offer  valuable  insights  into  the  Commission’s  interpretation  of  the 
prohibitions,  they  are  non-binding,  with  authoritative  interpretations  reserved  for  the  Court  of 
Justice  of  the  European  Union  (CJEU).  The  guidelines  provide  legal  explanations  and  practical 
examples  to  help  stakeholders  understand  and  comply  with  the  AI  Act’s  requirements.  Although 
these  guidelines  and  recommendations  are  non-binding,  they  are  important  stepping  stones  to 
ensure that companies  interested in using AI can evaluate whether they are  compliant with the  AI 
Act. They are designed to evolve over time and will be updated as necessary, in particular in light of 
practical experiences, new questions and use cases that arise. 

Boosting AI uptake 

The AI Office has been actively working on boosting AI adoption through various support instruments 
to enhance technological integration across Member States. Recently, the EU has intensified its focus 
on AI adoption, designating it as a main priority to ensure  competitive and innovative  growth. The 
various initiatives mentioned in this chapter are part of the  AI Continent Action Plan  published on 
9 April  2025,  which  outlines  a  set  of  actions  relating  to  computing  infrastructure,  data,  the 
development  of  AI  algorithms  and  adoption,  skills,  and  regulatory  simplification  to  make  the 
European Union a global leader in artificial intelligence. 

European  Digital  Innovation  Hubs  (EDIHs)  play  a  key  role  in  supporting  effective  AI  integration  by 
ensuring successful digital transformations of SMEs, small mid-caps and public sector organisations. 
Functioning as one-stop shops, they  provide  stakeholders with the opportunity to test  AI solutions 
before investing in them, but also offer funding advice, networking opportunities, and training. From 
December  2025,  EDIHs  will  place  increased  emphasis  on  AI  uptake  and  ensuring  adoption  of  AI 
solutions across sectors. 

Additionally, a key measure is the GenAI4EU initiative, which takes a sectoral approach and has thus 
far allocated close to EUR 700 million in planned Horizon Europe and Digital Europe Programme calls. 

GenAI4EU  aims  to  stimulate  the  uptake  of  generative  AI  in  a  wide  range  of  sectors,  fostering 
collaboration between AI start-ups and deployers of AI in industry and the public sector. GenAI4EU is 
dedicated  to  unlocking  the  revolutionary  potential  of  generative  AI  through  ambitious  projects, 
aiming notably to optimise production lines in manufacturing, improve robot autonomy and human-
robot  collaboration  in  complex  tasks,  and  enhance  our  cyber  defence  and  medical  imaging 
capabilities. 

Moreover, the Commission is adopting the Apply AI strategy to boost new industrial uses of AI and 
to improve the delivery of a variety of services. More specifically, the strategy will be assessing the 
potential  of  AI  technologies  in  strategic  sectors,  including:  advanced  manufacturing;  aerospace; 
security and defence; agri-food; energy and fusion research; environment and climate; mobility and 
automotive;  pharmaceutical;  biotechnology;  advanced  materials  design;  robotics;  electronic 
communications; cultural and creative industries; and science. Furthermore, the public sector will be 
a driver of the strategy. To ensure coherence among the different support measures for AI, the Apply 
AI  strategy,  for  which  a  wide  array  of  stakeholders  and  the  public  are  consulted,  will  serve  as  the 
nexus  strengthening  the  interplay  and  effectiveness  of  support  instruments  and  targeting  them 
towards the needs of AI adopters. 

In  terms of  actions,  the  Apply  AI  strategy will  identify  policy  actions  and  concrete  deliverables  per 
sector,  with  key  performance  indicators  to  be  achieved.  Among  others,  the  Commission  will 
contribute to supporting developments through its funding programmes as well as through enablers 

53 

 
  
such  as  the  AI  Factories  and  Gigafactories,  Data  Spaces,  Testing  and  Experimentation  Facilities, 
European  Digital  Innovation  Hubs,  and  AI  Skills  Academies,  which  will  focus  on  sector-specific 
frameworks. This, in turn, will support AI uptake by European enterprises and the public sector. 

Increasing the level of AI skills in the EU is one of the priorities that the Apply AI strategy will pursue, 
as  an  AI-literate  workforce  is  necessary  to  boost  AI  uptake.  Notably,  the  AI  Skills  Academy  will 
function  as  a  one-stop  shop  providing  education  and  training  on  skills  related  to  the  development 
and deployment of AI, and in particular generative AI. 

Finally,  a  candidate  IPCEI  in  the  field  of  AI  is  currently  being  designed.  Interested  Member  States, 
with the support of the  Commission services,  are  involved in the design phase where they explore 
the  potential  scope  and  structure  of  an  IPCEI.  This  IPCEI  candidate  focuses  on  R&D&I  and  first 
industrial deployment activities aiming at developing groundbreaking AI technologies and services.  

1.3  A secure continent 

As geopolitical tensions deepen and the nature of conflict evolves, the intersection between digital 
innovation  and  defence  has  become  a  strategic  imperative  for  the  European  Union.  The  war  in 
Ukraine has exposed critical vulnerabilities and accelerated the EU’s resolve to enhance its defence 
posture,  while  global  technological  competition  –  particularly  in  areas  like  artificial  intelligence, 
quantum  technologies,  and  secure  connectivity  –  has  underscored  the  urgency  of  investing  in 
advanced  capabilities.  In  this  context,  the  EU  is  shifting  towards  a  more  integrated  approach  that 
connects  digital  policy  with  defence  preparedness,  recognising  that Europe’s  security  and  strategic 
autonomy  increasingly  depend  on  its  ability  to  develop,  deploy,  and  govern  cutting-edge  digital 
technologies.  At  the  same  time,  the  EU  is  facing  an  intensifying  cybersecurity  threat  landscape, 
marked  by  a  surge  in  ransomware  attacks,  growing  IoT  vulnerabilities,  and  the  targeting  of  critical 
infrastructure. This has prompted the development of a robust regulatory and policy framework to 
enhance  cyber  preparedness,  promote  resilience,  and  protect  Europe’s  digital  and  physical  assets. 
This chapter explores the emerging digital–defence nexus, outlining key trends, synergies, and policy 
initiatives shaping the future of a secure and sovereign Europe. 

1.3.1  Digital-Defence nexus - Context and key trends 

The European Union finds itself at a pivotal moment, confronting an increasingly volatile geopolitical 
environment. Since the Russian  war of  aggression against  Ukraine  in 2022, the EU and its Member 
States  have  committed  to  strengthening  defence  readiness  and  reinforcing  the  European  Defence 
Technological and Industrial Base (EDTIB). The war in Ukraine, coupled with shifting global alliances 
and  mounting  geopolitical  tensions,  has  underscored  the  imperative  for  Europe  to  bolster  its  own 
defence capabilities. The necessity for sustained military support to Ukraine, alongside the need to 
deter  future  aggressions,  makes  it  clear  that  the  EU  must  develop  a  robust,  agile,  and  highly 
innovative defence industry to ensure long-term security and strategic autonomy. 

Against  this  backdrop,  the  EU  has  taken  significant  steps  to  accelerate  defence  investment  and 
enhance military preparedness. The White Paper for European Defence – Readiness 2030, published 
in  March  2025,  provides  a  political  framework  for  these  efforts,  laying  out  the  case  for  a  surge  in 
European  defence  investment.  In  particular,  it  identifies  four  strategic  priorities  for  European 
defence  readiness  by  2030:  increasing  and  sustaining  support  for  Ukraine;  closing  critical  defence 
capability  gaps;  promoting  defence  readiness  through  enhanced  military  mobility  and  stockpiling 
efforts;  and  strengthening  the  European  defence  industry  by  increasing  demand  predictability, 

54 

 
  
working  towards  simplification  and  accelerating  the  transformation  of  defence  through  disruptive 
technologies. 

The  latter  point  underpins  a  modern  and  adaptive  defence  industry,  requiring  an  overarching 
approach to research, development and investment in transformative and disruptive technologies, in 
addition  to  the  appropriate  framework  conditions  necessary  for  an  innovative  defence  industry 
ecosystem to develop. 

To  translate  this  vision  into  action,  the  ReArm  Europe  Plan  is  creating  the  conditions  for  an 
unprecedented surge in defence investment, enabling up to EUR 800 billion in defence expenditure 
over the coming years. 

1.3.1.1  Synergies between Digital & Defence – Facts and figures 

Digital technology and infrastructure are fundamental to enhancing the EU’s defence capabilities and 
military  edge.  The  Digital  Decade  Policy  Programme,  while  primarily  focused  on  the  digital 
transformation, contributes significantly to strengthening the  EU’s  security, defence,  resilience  and 
strategic autonomy. In particular, its focus on supporting the development of sovereign solutions for 
European digital infrastructures and advanced digital technologies is bound to directly contribute to 
the overall level of preparedness of the EU and its Member States. 

There  are  some  areas  where  the  Digital  Decade  target,  process  and  bodies  provide  vital  support 
which  is  likely to  produce  positive  spin-ins  for  EU  security  and  defence. Of  those  areas,  we  should 
mention in particular: 

Secure Connectivity (IRIS², 5G/6G, Sovereign Cloud Networks) 

Robust and secure communication networks are essential for modern defence operations. 

IRIS²  is  set  to  become  the  European  Union’s  third  flagship  programme,  providing  secure  satellite 
communications. The constellation is designed to enhance  the EU’s  resilience and ensure seamless 
connectivity for Member States. IRIS² will help bridge existing connectivity gaps while safeguarding 
critical  infrastructure.  By  providing  robust  and  secure  communication  channels,  IRIS²  will  prove 
instrumental  for  defence  and  military  users  –  reducing  reliance  on  third-country  providers  like 
Starlink and enhancing the EU’s strategic autonomy. 

The integration of 5G and emerging 6G technologies is poised to significantly enhance the European 
Union’s  defence  capabilities.  5G  networks  offer  high  data  rates  and  ultra-reliable  low-latency 
communications,  crucial  for  modern  military  operations,  including  intelligence,  surveillance,  and 
reconnaissance  (ISR)  systems.  Looking  ahead,  6G  technology  is  expected  to  further  revolutionise 
defence  operations  by  enabling  more  reliable,  high-speed,  low-latency  communications.  This 
advancement will support critical defence applications such as robotics, autonomous systems, virtual 
reality training, and advanced sensing capabilities.  

Additionally,  sovereign  cloud  networks  can  ensure  that  sensitive  defence  data  is  stored  and 
processed within the EU, maintaining data sovereignty and security. Sovereign cloud networks offer a 
crucial solution by, for example, providing a common, EU-based digital platform for integrating and 
operating naval systems (SOTS). These networks also facilitate predictive and prescriptive analytics, 
enhancing situational awareness and operational readiness. 

55 

 
  
Artificial Intelligence 

Artificial  intelligence  is  having  a  transformative  effect  on  our  society  and  economies.  Equally,  AI  is 
having a significant impact on modern warfare, by enhancing decision-making, operational efficiency, 
and strategic autonomy. 

AI-driven  capabilities  enable  faster  threat  detection,  improved  situational  awareness,  optimised 
logistics, and greater precision in targeting. As global powers invest heavily in AI for defence, securing 
a technological edge is essential for the EU’s security and resilience. Through the European Defence 
Fund  (EDF),  the  EU  is  actively  supporting  AI  research  and  development,  making  it  a  key  enabler 
across multiple defence domains83. 

There  is  significant  potential  to  leverage  synergies  between  civilian  and  defence  AI  to  accelerate 
innovation  and  enhance  Europe’s  competitiveness  and  strategic  autonomy  in  this  critical  domain. 
Initiatives  such  as  AI  Factories  and  EuroHPC  could  provide  critical  infrastructure  for  developing 
advanced  AI  models,  supporting  key  defence  applications  such  as  real-time  data  processing, 
predictive analytics, and autonomous systems. 

Semiconductors 

Semiconductors  are  critical  to  the  EU’s  digital  transformation,  and  they  are  essential  for  defence 
capabilities,  underpinning  technologies  in  aerospace,  communications,  and  security  systems.  The 
global  semiconductor  supply  chain  is  highly  sensitive  and  vulnerable  to  geopolitical  tensions,  with 
export  controls  such  as  the  US  International  Traffic  in  Arms  Regulations  (ITAR)  potentially  limiting 
access  to  key  technologies.  As  such,  ensuring  a  secure  and  sovereign  semiconductor  production 
capacity for critical sectors, including defence, is a priority for the European Commission. 

An  example  of  leveraging  EU  civilian  instruments  for  defence  applications  is  NanoXplore,  a  French 
SME that developed NG-MEDIUM, the first fully European space-qualified Field-Programmable Gate 
Array, with support from Horizon Europe. Originally focused on space applications, NanoXplore has 
expanded into the  defence  sector, providing radiation-hardened components essential for military-
grade  electronics.  This  transition  exemplifies  how  EU-funded  technological  advancements  can 
enhance Europe’s strategic autonomy in defence. 

Quantum 

Quantum  computing  holds  the  potential  to  revolutionise  defence  capabilities,  particularly  in 
cryptography, intelligence, and advanced simulations. 

Quantum Key Distribution (QKD), supported by initiatives such as EuroQCI,  can  ensure ultra-secure 
military communications, reducing vulnerabilities to cyber threats. 

Quantum  sensing  enhances  geospatial  intelligence,  submarine  detection,  and  inertial  navigation, 
with  projects  like  Carioqa-PMP  and  QSG  Pathfinder  paving  the  way  for  advanced  surveillance  and 
reconnaissance applications. 

EU civilian instruments supporting the development of quantum technologies, such as the Quantum 
Flagship  and  Horizon  Europe,  can  be  leveraged  for  defence  applications,  fostering  innovation  in 

83  Examples  include  AIDEDex  and  CONVOY  for  AI-driven  threat  detection;  AIDA  and  AInception  for  cybersecurity 
applications; or FaRADAI and KOIOS for AI-powered language processing in defence. 

56 

 
  
 
quantum-enhanced AI and supercomputing. These technologies support faster AI model training for 
defence applications and improve decision-making in complex operational environments. Quantum 
Space  Gravimetry  (QSG)  can  enhance  Earth  surface  mapping  and  navigation  accuracy,  crucial  for 
intelligence  and  surveillance.  EU  quantum  supercomputers,  developed  under  the  EuroHPC  Joint 
Undertaking, could support high-complexity defence applications. 

Additionally, spin-in projects under the EDF, such as ADEQUADE and QuantaQuest, explore disruptive 
quantum solutions tailored for European defence needs. 

Start-Ups and Unicorns: Driving Defence Innovation 

A strong ecosystem of defence-tech start-ups and SMEs is critical for Europe’s ability to develop and 
scale  up  cutting-edge  defence  technologies.  Recent  EU  initiatives  have  sought  to  strengthen  this 
ecosystem by providing dedicated support and investment opportunities for companies developing 
defence  and  dual-use  technologies,  while  the  Digital  Decade's  strong  and  continued  focus  on  the 
development  of  start-ups and  unicorns  proved to  be  vital  in  supporting  a  competitive  and  thriving 
ecosystem. 

The  launch  of  the  EUDIS  Matchmaking  and  Business  Accelerator  programmes  marks  an  important 
step in supporting EU start-ups and SMEs, including those focused on dual-use technologies. The EU 
is also mobilising investment through key funding instruments. As announced in the White Paper on 
the  Future  of  European  Defence,  the  European  Innovation  Council  (EIC)  and  the  TechEU  Scale-up 
Fund  will  provide  financial  backing  to  companies  working  on  dual-use  technologies,  helping  them 
scale up and compete globally. 

Investment in defence is further supported by major policy shifts at the European Investment Bank 
(EIB).  The  recent  revision  of  the  EIB’s  exclusion  policy  signals  a  commitment  to  stepping  up 
investment in security and defence-related projects, thereby addressing longstanding funding gaps in 
this  sector.  These  efforts  ensure  that  EU  start-ups  remain  at  the  forefront  of  innovation  in  critical 
digital technologies with defence applications. 

1.3.1.2  Key measures taken at EU level in 2024 

In 2024, the European Commission took several steps to support digital technologies for defence. 

In January 2024, the European Commission launched, through the European Investment Fund (EIF), 
the  EUR 175  million  Defence  Equity  Facility.  This  facility  targets  venture  capital  and  private  equity 
funds  investing  in  European  companies  developing  innovative  defence  technologies  with  dual-use 
potential.  The  initiative  seeks  to  stimulate  private  investment,  aiming  to  leverage  approximately 
EUR 500  million  in  total  funding.  To  date,  two  investment  deals  have  been  signed,  with  two  more 
expected by the end of the year. 

Throughout  2024,  the  European  Commission  continued  to  support  defence  innovation  through 
various  programmes.  The  EDF  financed  projects  focused  on  critical  digital  technologies  such  as  AI, 
quantum technologies, cloud solutions, and secure communications. These projects aim to enhance 
operational effectiveness and technological advancement within the defence sector. 

In  parallel,  Technological  Challenges  took  place  under  the  EDF  to  foster  innovation  and  problem-
solving within the defence community. The 2024 challenge topics addressed pressing defence needs, 
including robust autonomous drone navigation and multi-source satellite image analysis. 

57 

 
  
The  Commission  launched  EUDIS  Hackathons.  Under  the  theme  ‘Digital  in  Defence’,  the  first 
Hackathon  was  held  from  31  May  to  2 June  2024.  It  took  place  simultaneously  across  6  European 
countries  (Belgium, Greece,  Hungary,  Italy,  Lithuania,  and  Poland),  gathering 275  participants  from 
16 countries, 79 mentors and experts, and 6 winning teams. This initiative sparked the creation of 70 
cutting-edge ideas and innovative solutions in the defence sector. 

The  event  focused  on  enhancing  Europe’s  defence  capabilities  in  three  challenge  areas:  Subsea 
Infrastructure Protection, Improving Situational Awareness, and Cybersecurity in  Defence. The next 
edition will take place in 2025, under the topic Rapid Defence Solutions for the Ukrainian battlefield 
and beyond. 

In  March  2025,  the  EU  published  the  White  Paper  for  European  Defence  and  the  ReArm  Europe 
Plan/Readiness  2030.  The  White  Paper  outlines  strategic  priorities  for  defence  technology 
investments,  identifying  AI,  quantum  technologies,  cybersecurity,  and  electronic  warfare  as  key 
capability  domains  requiring  focused  investment.  Additionally,  the  White  Paper  proposes  the 
development  of  a  European  Armament  Technological  Roadmap  in  2025,  leveraging  investments  in 
key technologies with dual-use potential, with an initial focus on AI and quantum. 

This initiative is complemented by ProtectEU, the European Internal Security Strategy, which aims to 
increase  Member  States’  capabilities  to  protect  societies  and  democracies  from  online  and  offline 
threats, as well as the Preparedness Union Strategy, which will boost the EU’s ability to anticipate, 
prevent, and respond to the threats faced by the EU. 

Collectively, these initiatives underscore the EU’s commitment to advancing digital transformation in 
defence,  ensuring  that  technological  progress  translates  into  enhanced  security  and  strategic 
autonomy. 

1.3.1.3 

Investment needs/investment gaps 

The EU’s defence sector has faced decades of underinvestment, with a cumulative defence spending 
gap of over EUR 1.25 trillion from 2006 to 2022. This has resulted in a lack of necessary capabilities 
and  modernisation  across  the  European  Defence  Technological  and  Industrial  Base  (EDTIB)84.  The 
recently adopted ReArm Europe Plan/Readiness 2030 aims to address these gaps by mobilising up to 
EUR 800 billion in defence investments. This includes SAFE, which provides EUR 150 billion in loans 
for  joint  defence  projects,  and  greater  flexibility  within  the  Stability  and  Growth  Pact,  allowing 
Member States to increase defence spending without breaching fiscal rules. These measures will help 
to create a more supportive environment for boosting defence investment across the EU. 

SMEs and start-ups developing defence and dual-use technologies are particularly affected by these 
funding  gaps85,  with  defence  start-ups  still  facing  significant  challenges  in  accessing  finance, 
especially during growth stages. Many of these companies report difficulties in accessing traditional 
financial instruments, with close to 40% of defence SMEs indicating that they find access to finance 
difficult or very difficult86. 

Several barriers hinder private sector investment in the EU defence sector: 

84 European Commission, Defence Investment Gaps Analysis and Way Forward, 2024. 
85  Dealroom.co  &  NATO  Innovation  Fund,  Defence,  Security  and  Resilience  in  Europe:  The  state  of  start-ups  and  venture 
capital, 2025. 
86 European Commission, Access to equity financing for European defence SMEs, 2023. 

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•  Exclusion  policies:  historically,  the  EIB  and  EIF  exclusion  policies  limited  investments  in 
certain  defence  activities.  However,  following  the  adoption  of  the  EU’s  White  Paper  on 
Defence – Preparedness 2030, these policies have been updated, which should help reduce 
the barriers to private investment. 

• 

•  Ethical  and  regulatory  concerns:  private  investors  have  often  been  deterred  by  ethical 
concerns and regulatory uncertainties surrounding defence-related investments, especially in 
relation to ESG criteria. 
Lack of defence-specific financial instruments: the EU lacks a well-developed ecosystem of 
defence-focused venture capital and private equity funds. The launch of the Defence Equity 
Facility  (DEF)  under  InvestEU  is  a  step  in  the  right  direction,  providing  financial  support  to 
private funds investing in defence technologies, particularly those with dual-use potential. As 
announced  in  the  White  Paper,  investment  in  dual-use  companies  by  the  EIC  and  TechEU 
Scale-up Fund is also expected to address some of these financing gaps. 

•  The  EIB  is  preparing  a  study  titled  ‘Analysis  of  the  market  gap  for  growth  stage  funding  in 
strategic  technologies  and  identification  of  funding  sources  for  an  initial  set  of  potential 
investments’. It will offer further insights into the specific funding gaps in the defence sector 
and provide recommendations for improving access to finance for defence companies. 

1.3.1.4  The way forward 

In light of the evolving geopolitical landscape and the changing nature of warfare, the Commission’s 
efforts to integrate digital technologies into defence remain critical for enhancing the EU’s security 
and defence capabilities. Existing civilian-focused initiatives have laid the foundations for leveraging 
cutting-edge  digital  technologies  –  including  AI,  quantum  technologies,  and  semiconductors  –  to 
strengthen  defence  capabilities.  However,  challenges  remain,  including  the  need  to  deepen 
integration between defence and digital policy, address gaps in digital infrastructure, and accelerate 
innovation in critical technologies. 

To  build  on  current  momentum,  we  should  further  leverage  EU  civilian-focused  instruments  and 
investments in dual-use technologies to support defence priorities. The Commission should also step 
up  investment  in  emerging  technologies  with  dual-use  potential  and  ensure  that  both  digital  and 
defence policies are aligned. A more coordinated approach will be key to enhancing EU preparedness 
in the face of evolving threats. 

The Commission’s recent White Paper on European defence recognises the profound transformation 
that the defence landscape is undergoing, driven by the rapid evolution of new technologies and the 
global  technology  race:  technologies  like  AI,  cloud  and  quantum  computing,  advanced  and  secure 
connectivity, autonomous systems and alternative energy sources  have the capacity to disrupt and 
transform traditional approaches to warfare. The White Paper also points out that the EU’s strategic 
competitors, including Russia and China, are investing  heavily in military innovation. As a response, 
the  White  Paper  proposes  the  development  of  a  European  Armament  Technological  Roadmap  in 
2025, which  will  identify  key  defence  technologies  and  leverage  investments  in  dual-use  advanced 
technological capabilities, initially focusing on critical areas such as AI and quantum. 

Major strategic-level  documents  have  also  pointed  at  the  key  trends  and  contributions  that  digital 
technologies  could  bring  to  the  defence  and  security  sectors,  highlighting  the  potential  for 

59 

 
  
maximising the impact of investments, the risks stemming from new and disruptive technologies, and 
the opportunity for their integration in new security and defence applications87. 

The structured cooperation process established by the Digital Decade Policy Programme, along with 
its  multi-level  governance  system,  holds  substantial  potential  to  advance  the  objective  of 
strengthening security and defence in the EU, while fostering security culture across EU digital policy 
sectors. Building on the Digital Decade method and processes would facilitate and promote a ‘whole-
of-government’  and  ‘whole-of-society’  approach  to  addressing  security  challenges  and  defence 
readiness, as advocated by the Niinistö report. Moreover, the Digital Decade Policy Programme could 
provide  valuable  input  and  support  the  development  of  the  proposed  European  Armament 
Technological Roadmap. 

The Digital Decade Policy Programme could contribute to EU security & defence efforts in several key 
areas: 

•  Supporting innovative actors, including start-ups proposing disruptive digital applications and 

services, and connecting the defence and digital innovation communities. 

•  Assisting  Member  States  in  developing  digital  infrastructures  that  contribute  to  societal 

resilience in crisis contexts. 

•  Fostering a new mindset towards preparedness and security culture across the digital sector. 
• 
investments,  and 

Identifying  synergies  between  defence  and  digital  programmes, 
applications. 

1.3.2  Cybersecurity 

1.3.2.1  The cybersecurity threat landscape in 2024 

Cyber  threats  continue  to  evolve  at  an  alarming  pace,  with  increasingly  sophisticated  attacks 
targeting critical sectors and exploiting emerging vulnerabilities. In 2024, the healthcare sector  was 
particularly affected, with ransomware accounting for 71% of cyber incidents impacting patient care 
in the EU, leading to delayed treatment and diagnosis, and restricted access to emergency services88. 
Supply  chain  attacks  have  also  surged,  as  cybercriminals  exploit  weaknesses  in  third-party vendors 
and service providers,  while  nation-state actors intensify  politically motivated cyber espionage  and 
infrastructure disruptions. 

87  Draghi,  M.,  The  future  of  European  competitiveness,  2024.  In  particular  on  the  digital  contribution  to  defence:  ‘(…)  a 
weak tech sector will hinder innovation performance in a wide range of adjacent fields, such as pharma, energy, materials 
and  defence’;  Niinistö  S.,  Safer  together:  strengthening  Europe’s  civilian  and  military  preparedness  and  readiness,  2024 
Niinisto  report:  ‘The  wider  set  of  dual-use  infrastructures  and  capabilities  that  become  vital  in  a  war  or  crisis  require  an 
urgent upgrade. (…) This report has also flagged further dual-use opportunities in relation to space, critical infrastructure, 
maritime, communications, cyber, etc. within legal and regulatory margins. Moreover, a cultural shift is required within the 
EU  to  mainstream  civil-military  synergies  and  dual-use  potential,  rather  than  keeping  defence-related  applications  and 
requirements  separated  from  civilian  innovation  and  broader  funding  options.  We  simply  cannot  afford  to  pay  for  these 
artificial  limitations  any  longer’;  Competitiveness  Compass  for  the  EU,  COM(2025)  30  final;  Joint  Communication  ‘A  new 
European  Defence  Industrial  Strategy:  Achieving  EU  readiness  through  a  responsive  and  resilient  European  Defence 
Industry’, JOIN (2024), defence industry. 
88 Joint Research Centre, Cybersecurity in the Health and medicine sector, 2024. 

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The growing use of IoT and operational technology (OT) devices in cyberattacks further complicates 
the  threat  landscape,  with  IoT  malware  increasing  by  107%  in  the  first  half  of  2024,  and 
compromised devices enduring an average of 52.8 hours under attack89. 

Meanwhile,  ransomware  attacks  rose  by  11%  compared  to  2023,  but  enforcement  actions  against 
major  groups  like  LockBit  have  led  to  a  more  fragmented  threat  environment,  with  46  new 
ransomware  groups  identified  in  202490.  These  developments  underscore  the  need  for  stronger 
cybersecurity measures, enhanced threat intelligence, and coordinated efforts to mitigate risks. 

ENISA’s ‘2024 Report on the State of Cybersecurity in the Union’ reveals concerning trends in public 
cybersecurity  awareness,  with  declining  confidence  among  EU  citizens  in  their  ability  to  protect 
themselves from cybercrime and generally low awareness about reporting mechanisms. The report 
also highlights a significant cyber hygiene gap between SMEs and large enterprises. 

ENISA has developed the  ‘AR-in-a-Box’  toolkit  providing  organisations of all sizes with resources  to 
create  tailored  cybersecurity  awareness  programs  to  enhance  their  security  culture.  It  has  also 
conducted  targeted  awareness  campaigns  over  the  past  three  years  (2022-2024)  for  specialised 
audiences in the energy, healthcare, and transport sectors. Simultaneously, the agency launched the 
CyberALL  campaign  focused  on  promoting  cybersecurity  roles  and  enhancing  inclusion  within  the 
field,  further  demonstrating  a comprehensive  approach  to  building  cybersecurity  awareness across 
different sectors and demographics. 

Beyond  organisational  awareness,  the  report  also  identified  disparities  in  cybersecurity  education 
across  Member  States  and  emphasises  the  critical  need  to  strengthen  the  EU  cyber  workforce 
through the Cybersecurity Skills Academy, with ENISA playing a key role through its development and 
promotion  of  the  European  Cybersecurity  Skills  Framework  (ECSF),  which  benefits  various  sectors 
while  also  piloting  an  innovative  cybersecurity  skills  attestation  scheme  designed  to  further 
harmonise and enhance the EU cybersecurity landscape. 

ENISA’s  May  2024  Cybersecurity  Education  Maturity  Assessment  shows  progress,  with  78%  of 
Member  States  now  providing  cybersecurity  education  to  primary  and  secondary  school  pupils, 
reaching a 66% overall maturity level. To further harmonise these efforts, ENISA’s CyberEdu platform 
centralises standardised resources and frameworks that can be adopted across the EU, supporting a 
more unified approach to cybersecurity education and awareness. 

The European Cybersecurity Month (ECSM) has served as a cornerstone initiative for cross-Member 
State  collaboration  in  cybersecurity  awareness.  Since  2012,  ECSM  has  united  diverse  stakeholders 
under  ‘Cybersecurity  is  a  Shared  Responsibility,’  and  this  has  proven effective, with  the campaigns 
reaching  over  47  million  EU  citizens  in  2023  through  its  network  of  more  than  300  partners  from 
governments, universities, think tanks, and businesses across all Member States. 

1.3.2.2  Cybersecurity in enterprises 

When it comes to cybersecurity in enterprises, according to Eurostat, 92.76% of surveyed enterprises 
in  the  EU  with  more  than  10  employees  and  self-employed  persons  used  at  least  one  ICT  security 
measure in 2024. 

89 SonicWall 2024 Mid-Year Cyber Threat Report, 2024. 
90 Cyberint platform, 2025, Ransomware Annual Report 2024. 

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However,  for  specific  individual  measures  the  figures  were  lower:  for example,  only 35.50%  of the 
enterprises had documents on measures, practices or procedures on ICT security, and only 34.10% of 
the  enterprises  had  used  an  ICT  risk  assessment.  Commonly  used  measures  included  strong 
password authentication (83.69% of enterprises) and data backups in a separate location (79.23% of 
enterprises). According to Eurostat, 21.54% of enterprises experienced ICT-related security incidents 
leading to some consequences in 2023. 

Under the NIS Directive, the NIS Cooperation Group has published annual reports on the number of 
cybersecurity incidents reported. The latest available report covers the year 2023, showing that the 
total  number  of  incidents  reported  under  the  NIS  Directive  was  1 077  –  an  increase  from  the  890 
incidents  reported  in  2022.  For  the  fourth  consecutive  year,  the  health  sector  reported  the  most 
incidents (309), followed by the transport (209) and banking (149) sectors. 

The NIS Investments Report, published annually by ENISA, assesses the overall cybersecurity maturity 
level of entities in critical sectors. The 2024 NIS Investments Report found that the median level of 
information security spending among the surveyed organisations was 9.0% of overall IT spending, an 
increase of 1.9 percentage points compared to the previous year. Furthermore, the report found that 
on average, organisations already covered by the NIS Directive perceived themselves as more mature 
in terms of cyber risk management, network and information security arrangements and cyberattack 
detection and response capability, compared to organisations in sectors newly covered by the NIS2 
Directive. 

ENISA’s 2024 Report on the State of Cybersecurity in the Union, published pursuant to Article 18 of 
the NIS2 Directive, displays the overall level of cybersecurity maturity of 10 critical sectors and sub-
sectors based on a methodology developed by ENISA. The report finds that the telecommunications 
sector has the  highest level of maturity, while  the  oil sector’s maturity is the lowest. Among other 
recommendations,  the  report  proposes  that  Member  States  assess  and  monitor  the  maturity  and 
criticality  of  sectors  at  national  level,  and  that  they  conduct  national  risk  assessments  of  selected 
sectors. 

Insight internet standards adoption 

Globally agreed Internet standards are at the core of the evolution of the Internet and by extension 
of the digital economy and society. The deployment of the latest available standards not only  adds 
enhanced  or  new  features  to  the  Internet  infrastructure,  but  in  many  cases  also  brings  crucial 
improvements  to  cybersecurity.  Hence,  following  the  2020 communication  ‘The  EU's  Cybersecurity 
Strategy  for  the  Digital  Decade’  and  the  2022  standardisation  strategy  ‘An  EU  Strategy  on 
Standardisation Setting global standards in support of a resilient, green and digital EU single market’, 
the  Commission  biannually  publishes  deployment  data  for  several  categories  of  cybersecurity-
relevant  key  internet  standards  and  best  practices.  The  data  is  published  on  the  EU  Internet 
Standards  Deployment  Monitoring  Website  and  consolidates  publicly  available  data  and  its  own 
measurements based on an empirical approach by the Commission’s Joint Research Centre. The data 
shows slow and/or incomplete deployment rates for several Internet standards, which deliver very 
basic  and  crucial  security  features  and  Internet  functionalities,  despite  their  well-accepted 
benefits.  This  undermines  trust  in,  and  the  resilience  of  the  Internet  as  a  crucial  infrastructure  for 
societies  and economies. The  slow  transition from IPv4 to IPv6, the latest version of the  Internet’s 
underlying  work  horse,  stifles  innovation  due  to  the  depletion  of  IPv4  addresses  and  creates  and 
perpetuates a double attack surface. The current user-side and server-side IPv6 adoption rates in the 
EU  are  roughly  36.4%  and  16.8%  respectively,  which  is  only  a  little  ahead  of  the  average  global 

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adoption rate. The adoption rate is steadily increasing both globally and in the EU, though at a very 
slow pace for the EU. In particular, the user-side adoption rate is highly fragmented across Member 
States,  with  Belgium,  France,  Germany,  Greece,  Hungary,  and  Portugal  in  the  lead  (>40%)  and 
Croatia, Cyprus, Malta, Slovakia, and Spain lagging behind (<10%). 

Another  example  are  the  Domain  Name  System  Security  Extensions  (DNSSEC).  The  Domain  Name 
System (DNS) attributes human-readable names to IP addresses. It is one of the most critical parts of 
the  internet  infrastructure.  DNSSEC  are  a  suite  of  specifications  that  improve  the  security  of  DNS. 
Based on Q3 2024 data, the DNSSEC validation rate by resolvers in the EU reaches 47.5% and hence 
is  higher  than  the  global  rate  which  scores  approximately  32.5%.  The  validation  rate  is  trending 
upward, but at very slow pace. Similarly to IPv6, the values are fragmented across Member States. 
Overall, the values are clearly insufficient to achieve the benefits of DNSSEC deployment. 

1.3.2.3  Key measures taken in 2024/2025 

The  EU  has  taken  significant  steps  in  2024  and  early  2025  to  strengthen  cybersecurity  across  all 
sectors.  Among  the  key  developments,  the  NIS2  Directive,  adopted  in  December  2022,  sets 
cybersecurity  risk  management  and  incident  reporting  requirements  for  essential  and  important 
entities  in  18  critical  sectors.  On  17 October  2024,  the  Commission  adopted  an  implementing  act 
detailing technical and methodological requirements for risk management and incident reporting in 
digital infrastructure, digital services, and B2B ICT service management. As the transposition deadline 
for Member States passed on the  same  day, the Commission launched infringement procedures in 
November  against  23  Member  States  that  failed  to  comply,  while  continuing  to  support  the 
transposition process. 

Further  reinforcing  cybersecurity,  the  Cyber  Resilience  Act  introduces  mandatory  cybersecurity 
requirements  for  hardware  and  software  products  on  the  EU  market.  It  entered  into  force  on 
10 December 2024 and includes a three-year transition period, with reporting obligations starting in 
September 2026 and full implementation in December 2027. To facilitate its roll-out, an expert group 
has  been  established,  and  a  standardisation  request  has  been  issued  to  European  Standardisation 
Organisations.  The  Commission  is  also  preparing  an  implementing  act  to  define  critical  product 
categories and a delegated act setting conditions for cybersecurity-related notifications. Additionally, 
ENISA is working on a single reporting platform where manufacturers will report vulnerabilities and 
severe security incidents. 

Another  major  step  was  the  entry  into  force  of  the  Cyber  Solidarity  Act  on  4 February  2025, 
establishing the European Cybersecurity Alert System, the EU Cybersecurity Emergency Mechanism, 
and  the  Cybersecurity  Incident  Analysis  Mechanism.  The  Alert  System  will  rely  on  a  network  of 
National and Cross-border Cyber Hubs to enhance cyber threat detection and situational awareness 
using  advanced  technologies  like  AI.  The  Emergency  Mechanism  will  build  preparedness  and 
response capabilities, including an EU Cybersecurity Reserve of trusted providers to assist in handling 
large-scale cyber incidents. A dedicated Incident Review Mechanism will also assess significant cyber 
threats and incidents. 

The European cybersecurity certification framework was  further strengthened  with an amendment 
to the Cybersecurity Act, published in January 2025 and effective since 4 February. This amendment 
expands  the  scope  of  certification  to  include  managed  security  services,  bolstering  protection  for 
industries, citizens, and critical infrastructure. Additionally, a new implementing regulation adopted 
in  December  2024  establishes  a  process  for  notifying  conformity  assessment  bodies  through  the 

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NANDO information system. The Commission has invited Member States to designate their National 
Cybersecurity Certification Authorities accordingly. 

Despite  the  robust  framework  provided  by  the  5G  Toolbox  to  secure  5G  networks,  many  Member 
States have yet to impose necessary restrictions on high-risk suppliers, leading to persistent strategic 
dependencies. This situation increases the risk of interference by non-EU countries and could impact 
future 6G infrastructure, which will be built on existing 5G networks. To address this, Member States 
must  fully  implement  the  5G  Toolbox  without  further  delay,  while  the  Commission  is  exploring 
additional legislative measures to enhance internal market resilience. 

Cybersecurity  in  healthcare  has  also  become  a  priority,  with  the  new  Commission’s  Political 
Guidelines announcing an EU action plan to improve cyber threat detection, preparedness, and crisis 
response  for  hospitals  and  healthcare  providers.  Adopted  on  15 January  2025,  the  plan  includes 
tailored guidance, tools, services, and training to reinforce cybersecurity in the sector. 

In  February  2025,  the  Commission  put  forward  a  proposal  for  a  Council  Recommendation  on  a 
Cybersecurity Blueprint, updating the 2017 framework to reflect legislative and institutional changes. 
The  revised  Blueprint  strengthens  cooperation  among  Member  States  and  EU  entities  in managing 
large-scale  cyber  incidents  and  integrates  cyber  crisis  response  into  the  broader  EU  crisis 
management  framework.  It  enhances  shared  situational  awareness  and  coordination  between civil 
and military cybersecurity actors. The Council Recommendation was adopted in June 2025. 

Work is also progressing on the European Quantum Communication Infrastructure (EuroQCI), which 
is  integrated  into  the  Union  Secure  Connectivity  Programme  (IRIS²).  EuroQCI  will  provide  highly 
secure  quantum-enhanced  encryption  for  public  administrations  and  critical  infrastructure,  such  as 
hospitals  and  energy  grids.  Throughout  2024,  efforts  focused  on  deploying  national  quantum 
communication networks, advancing key European technologies, and preparing for the deployment 
of quantum communication in space. Eagle-1, Europe’s first quantum communication satellite, is set 
to launch in 2026. While EuroQCI will mitigate some risks posed by quantum computing to current 
encryption methods, the transition to post-quantum cryptography (PQC) remains essential. To guide 
this  transition,  the  Commission  published  a  recommendation  in  2024  outlining  a  coordinated 
roadmap, working with Member States to secure digital infrastructure and services against emerging 
cyber threats. Germany’s federal cyber security authority (BSI), together with representatives of 17 
other  Member  States,  published  a  joint  statement  on  post-quantum  cryptography  in  November 
2024, advocating for industry, critical infrastructure providers and public administration to start the 
transition to PQC. 

1.3.2.4 

Investment needs and market trends 

At EU level, to date,  dedicated funding  for cybersecurity  is provided by Horizon Europe  and Digital 
Europe Programmes, in the form of grants. InvestEU provides limited funding for cybersecurity, and 
in competition with other digital technologies. 

The  aim  of  EU  funding  is  to  strengthen  EU  technological  sovereignty,  develop  the  European 
cybersecurity market to make it more competitive on the global landscape, and enhance European 
strategic autonomy in cybersecurity, ultimately making the European Union more cyber resilient. EU 
funding  is  also  instrumental  in  supporting  industry,  particularly  SMEs,  in  their  uptake  of  EU  cyber 
legislation, such as NIS2 and the Cyber Resilience Act (CRA). 

The European Cybersecurity Investment Platform study of October 2022 released by the EIB provides 
an  extensive  analysis of  the  European  investment  landscape  in  cybersecurity  and  compares  it  with 

64 

 
  
major  competitors  worldwide.  Despite  being  released  at  the  end  of  2022,  the  study  and  its 
quantitative  analysis  remain  extremely  relevant:  the  study  reports  that  the  current  provision  of 
financing for cybersecurity projects in the European Union is limited to only a few specialised funds 
actively  investing  in  this  sector.  In  fact,  in  2021  venture  capital  investments  in  cybersecurity  in 
Europe amounted to about EUR 814 million, compared with over EUR 15 billion in the United States 
and EUR 2.5 billion in Israel. 

In addition, 70% of the EU’s supply of cybersecurity venture capital is concentrated in four Member 
States – namely France, Germany, Italy and Spain – and, according to consulted stakeholders, there 
is little cross-border investment, thus hindering the emergence of larger funds. 

To address the investment gap, the study suggests various solutions, one of which is to strengthen 
public-private partnerships combining various resources, including from the European Commission, 
the  EIB,  national  investment  funds,  national  cybersecurity  funds,  and  private  sector  investors.  The 
EIB study also highlights the lack of data on the cybersecurity sector. The scarcity of data is a barrier 
for more investors to enter the market, as they struggle to make informed investment decisions. 

To address  the  public  availability of EU  cyber market data, the Commission, through the  European 
Cybersecurity Competence Community (ECCO)  procurement contract  led by ECSO (European Cyber 
Security  Organisation),  has  recently  developed  a  data  platform  on  the  European  Cybersecurity 
Market  (ECCO  Market  Observatory).  It  will  soon  be  available  to  the  public  on  the  European 
Cybersecurity Competence Centre website. Such a data platform could be of benefit to a variety of 
stakeholders, including investors. 

Insights  derived  from  the  ECCO  Market  Observatory  show  that  the  EU  cybersecurity  ecosystem 
generates  around  EUR 67  billion  and  consumes  around  EUR 65  billion  each  year,  with  encryption 
being  the  largest  sector  in  Europe.  The  main  activity  in  cybersecurity  is  the  provision  of  services 
which, at EUR 48 031 billion, accounts for 72% of total sales, followed by software development and 
production at 13% and consulting at 12%. 

The  main  EU  consumers  of  cybersecurity  products  and  services  are  the 
insurance  sector 
(EUR 5 billion/7.7%),  followed  by  ICT  (EUR 4.9  billion/7.5%),  financial  services  (EUR 4.6 billion/7.0%) 
and government (EUR 4.3 billion/6.6%). 

Trade  between Member  States  is  significant  and  comprises over  10%  of  production  in  all  Member 
States.  Import/export  figures  with  the  rest  of  the  world  indicate  that  the  EU,  in  financial  terms, 
consumes roughly what it produces with possibly a slight trade surplus. 

1.3.2.5  Conclusions 

In sum,  2024 and early 2025 have marked a pivotal period in strengthening the  EU’s cybersecurity 
landscape.  Faced  with  a  rapidly  evolving  threat  environment  –  driven  by  ransomware,  IoT 
vulnerabilities,  supply  chain  risks,  and  geopolitical  tensions  –  the  EU  has  responded  with  an 
ambitious  and  multifaceted  policy  agenda.  Key  legislative  instruments  such  as  NIS2,  the  Cyber 
Resilience Act, and the Cyber Solidarity Act are reshaping the regulatory and operational framework, 
while ENISA’s expanding role supports harmonisation, awareness, and skills development. Persistent 
challenges  remain,  notably  in  closing  the  investment  gap,  fostering  cross-border  financing,  and 
ensuring full and timely implementation across Member States. 

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2 Protect and empower people, preserve 

EU democracy and values 

The digital transformation is a key driver for building a fair, inclusive and secure society in line with 
the European Declaration on Digital Rights and Principles91. A people-centred digital decade requires 
not  only  boosting  technological  capacity  and  economic  competitiveness  but  also  strengthening 
societal  resilience,  democratic  integrity,  and  individual  empowerment  in  a  fast-changing  digital 
landscape. 

Ensuring that all people can meaningfully participate in the digital world requires investment in both 
basic and advanced digital skills, from everyday literacy to cutting-edge expertise in AI, cybersecurity 
and semiconductors. Strengthening Europe’s digital talent base is essential for supporting innovation, 
closing social and territorial divides, and equipping citizens for an evolving labour market shaped by 
technological disruption. 

At  the  same  time,  achieving  an  inclusive  digital  society  based  on  trust  depends  on  the  ability  to 
provide secure, interoperable and user-friendly public services that are accessible across borders and 
designed  around  people’s  needs.  This  requires  efforts  to 
improve  transparency,  reduce 
administrative burden and foster more connected and efficient digital public infrastructures. 

In  parallel,  rising  systemic  risks–ranging  from  illegal  and  harmful  content  and  addictive  design  to 
information manipulation by foreign actors–highlight the need for stronger protections in the digital 
space.  Ensuring  the  safety  and  well-being  of  users,  particularly  children,  and  safeguarding  the 
integrity of information and of democratic processes is essential to upholding fundamental rights in 
the  EU  and  preserving  social  trust.  Together,  these  efforts  shape  a  digital  environment  rooted  in 
inclusive participation and democratic values. 

This chapter presents the progress made toward the Digital Decade targets in these areas, highlights 
structural gaps, and outlines key policy levers for a digital transformation that empowers individuals 
and strengthens democratic resilience. 

2.1  Empower people through digital skills 

2.1.1  Equip people with at least basic and above basic digital skills 

In today’s digital world, basic digital skills and literacy are essential for both economic participation 
and  civic  engagement.  These  skills  are  necessary  not  only  for  employment–where  most  job  roles 
require  some  level  of  digital  competence  for  effective  performance  and  adoption  of  emerging 
technologies–but also for navigating a wide range of online services such as shopping, banking, and 
e-voting.  They  are  also  crucial  for  engaging  in  lifelong  learning  opportunities,  including  online 
courses, and for developing safe and responsible online habits to guard against risks such as phishing, 
fraud, and disinformation. 

91  While  reference  is  sometimes  made  to  the  Declaration  on  Digital  Rights  and  Principles  in  this  Chapter,  the  SWD 
‘Monitoring  of  the  European  Declaration  on  Digital  Rights  and  Principles,  SWD(2025)  293,  https://digital-
in  this  respect  at  both 
strategy.ec.europa.eu/en/policies/2025-state-digital-decade-package,  presents  action  taken 
European and national level. 

66 

 
  
 
Bridging  the  digital  divide  is  therefore  critical  for  ensuring  that  all  Europeans  have  fair  and  equal 
access  to  education  and  training  in  basic  digital  skills.  This  is  not  only  key  to  achieving  a  human-
centric, secure, and sustainable digital transformation but also to securing quality jobs, fostering an 
inclusive society, protecting democracy, and upholding EU values. The Declaration on Digital Rights 
and  Principles  includes  a  number  of  commitments  made  by  Member  States  on  digital  education, 
training and skills (e.g. promoting high-quality digital education and training, including with a view to 
bridging the digital gender divide, giving everyone the possibility to adjust to changes brought by the 
digitalisation of work through up-skilling and re-skilling etc). 

As  digital  technologies  become  more  pervasive,  people  are  interacting  daily  with  algorithms 
embedded  in  social  media,  search  engines,  and  shopping  platforms,  often  without  realising  how 
these systems shape what they see, what they choose, and how they think. The growing presence of 
general-purpose AI in everyday life–from work to education and communications–further reinforces 
the  importance  of  algorithmic  awareness  and  AI  literacy.  These  skills  are  essential  for  identifying 
bias, recognising misleading or false  information, and understanding how personalised content can 
influence  not  only  consumer  choices  but  also  democratic  processes.  Finally,  greater  awareness  of 
one’s digital footprint also plays an important role in promoting more sustainable digital behaviours 
and supporting environmental goals.  

Progress towards the Digital Decade target 

Target: A digitally skilled population and highly skilled digital professionals, with the aim of achieving 
gender balance, where (a) at least 80% of those aged 16-74 have at least basic digital skills. 

KPI definition (referring to part (a) of the target): At least basic digital skills, measured as percentage 
of individuals aged between 16 and 74 years old disaggregated by sex with ‘basic’ or ‘above  basic’ 
digital skills in each of the following five dimensions: information, communication, problem solving, 
digital content creation and safety skills. It is measured based on the activities that individuals carried 
out  during  the  previous  three  months92;  and  gender  convergence,  measured  as  the  percentage  of 
women and men among those individuals with ‘basic’ or ‘above basic’ digital skills. 

Source: Eurostat, European Union survey on ICT usage in households and by individuals. 

Available data points: 2015, 2016, 2017, 2019, 2021, 2023 (break in series in 2021). 

2023 data values: 55.6% 

The  percentage  of  people  with  at  least  basic  level of  digital  skills rose  by  a mere  1.7  percentage 
points in two years, from 53.9% in 2021 to 55.6% in 2023. This represents a year-on-year increase of 
1.5%. 

In 2024, the percentage of people with at least basic level of digital skills stood at 93% of the ideal 
value  along  the  digital  decade  trajectory  (55.6%  instead  of 59.7%).  The  gap  between  the  forecast 
value and the ideal one is expected to widen until the end of the decade. 

92 Defined based on the Eurostat methodology reflecting the revised Digital Competence Framework (DIGCOMP 2.0), as also 
set out in Commission Implementing Regulation (EU) 2022/1399 of 1 August 2022 specifying the technical items of the data 
set, establishing the technical formats for transmission of information and specifying the arrangements and content of the 
quality reports on the organisation of a sample survey in the use of information and communication technologies domain 
for the reference year 2023 in accordance with Regulation (EU) 2019/1700 of the European Parliament and of the Council. 

67 

 
  
 
According to the forecast along the baseline trajectory, only 74.8% of the target will be achieved by 
2030, reaching 59.8% instead of 80%. 

At this very slow pace of progress, the full target is forecast to be reached not earlier than in 2063 if 
no further actions are taken. 

Figure  26:  At  least  basic  digital  skills  in  the  EU.  Historical  data,  Digital  Decade  (DD)  trajectory  and  revised 
baseline trajectory towards 2030 

Basic digital skills in the EU: gaps, disparities and risk factors 

Figure 27. At least basic digital skills. DESI period 2024 (data from 2023). 

While the EU has made progress in expanding access to digital technologies, the distribution of basic 
digital  skills  remains  uneven  across  population  groups  and  Member  States.  Evidence  from  recent 
surveys and studies highlights a persistent divide between those equipped to participate fully in the 
digital world and those at risk of exclusion. This section presents key data points that illustrate the 

68 

 50 55 60 65 70 75 80 852015201620172018201920202021202220232024202520262027202820292030Percentage of citizens with at least basic digital skillsDD trajectory = ideal path to reach the targetHistorical data2024 Baseline trajectory based on past perfomance2023gap = 4.2 pp2030target2030 gap = 20.2 pp 
  
 
 
scope  of  the  challenge,  examining  digital  skill  gaps  by  age,  education,  socio-economic  status,  and 
labour  market  participation,  as  well  as  mismatches  between  supply  and  demand  in  the  labour 
market. 

Many school-age children lack essential digital competences. The 2023 International Computer and 
Information  Literacy  Study  (ICILS)93  found  that  43%  of  13  to  14-year-olds  across  22  EU  education 
systems did not possess a basic level of digital skills. Large disparities were observed across countries, 
socioeconomic  statuses,  and  migrant  backgrounds.  While  Czechia  and  Denmark  performed  well, 
Romania and Greece significantly underperformed. 

Home  resources  play  a  defining  role  in  student  outcomes.  The  ICILS  data  highlight  how  unequal 
access  to  digital  tools  and  parental  support  at  home  shapes  students’  digital  performance.  In  this 
context,  schools  must  function  as  equalisers,  helping  level  the  playing  field  through  adapted 
curricula, teacher support, and targeted resources. Closing this gap is essential for preparing students 
for academic success and active participation in a digital economy and society. 

Educational  attainment  remains  a  strong  predictor  of  digital  skills.  According  to  the  DSI  2.094,  in 
2023, the gap in at least basic digital skills between individuals with a high level of formal education 
and  those  with  little  or  no  formal  education  was  46.2  percentage  points.  Ireland,  Portugal,  and 
Greece  exhibited  the  largest  disparities,  with  gaps  of  73.8,  65.6,  and  63.1  percentage  points, 
respectively.  In  contrast,  Estonia,  Finland,  and  Lithuania  displayed  the  smallest  disparities  at  11.6, 
13.9 and 22.2 percentage points, respectively. 

Specific  skill  areas  remain  underdeveloped.  Individuals  are  assumed  to  possess  digital  skills  when 
they engage in an online activity or software use. The DSI suggests that digital content creation and 
safety  skills  are  the  weakest  areas,  indicating  gaps  in  programming  skills,  data  handling,  and  basic 
cybersecurity practices. 

93 2023 International Computer and Information Literacy Study 
94 Digital Skills Indicator 2.0, EU survey on the use of ICT in households and by individuals, 2023. 

69 

 
  
 
Figure 28. Digital Skills Index components. 

Labour  market  demand  remains  concentrated  and  uneven.  A  Joint  Research  Centre  (JRC) 
exploratory study95 using the European database on online job advertisements (OJA) found that 27% 
of job postings required at least  one  digital competence  of  the Digital Competence  Framework for 
Citizens  (DigComp)96.  The  highest  demand  was  for  skills  in  information  and  data  literacy,  content 
creation,  and  collaboration.  However,  safety-related  skills  were  rarely  mentioned,  revealing  a 
possible  disconnect  between  labour market  expectations  and  the  broader  societal  need  for  secure 
digital engagement. 

Older generations continue to lag behind. Across the EU, there is a 41.8 percentage point gap in at 
least  basic  digital  skills  between  individuals  aged  16-24  and  those  aged  65-74.  The  difference  is 
especially  pronounced  in  Malta,  Croatia  and  Czechia  (74.2,  68.4,  and  67.1  percentage  points 
respectively), mainly due to higher levels of digital competence among younger adults. Luxembourg, 
Ireland and Germany record the smallest age-related disparities97. 

Vulnerable  demographic  groups  face  compounded  disadvantages.  Another  JRC  study98  has 
identified young people (aged 16-24)  with low  educational attainment, manual workers, and those 
unemployed  or  outside  the  labour  market  as  highly  likely  to  lack  basic  digital  skills.  For  instance, 
young people aged 16-24 with low education face a 43% probability of being digitally excluded. This 

95 Joint Research Centre, Cosgrove, J et al, Mapping DigComp digital competences to the ESCO skills framework for analysis 
of  digital  skills  in  EU  online  job  advertisements  |  European  Skills,  Competences,  Qualifications  and  Occupations  (ESCO), 
2024. 
96  Joint  Research  Centre,  Digital  Competence  Framework  for  Citizens  (DigComp)  The  Digital  Skills  indicator,  based  on  the 
Digital Competence Framework for Citizens (DigComp 2.2) measures 12 key competences across five areas: Information and 
data literacy, Communication and collaboration, Digital content creation, Safety, and Problem solving. 
97 State of the Digital Decade 2024 report 
98 Joint Research Centre, Bertoni, E et al, JRC Publications Repository - Digital skills gaps - a closer look at the Digital Skills 
Index  (DSI  2.0),  2025.  The  findings  are  based  on  a  multivariate  analysis  conducted  by  the  Joint  Research  Centre  (JRC) 
examining the Digital Skills Indicator and the specific competencies it measures. 

70 

 
  
 
 
is compounded by low participation in digital citizenship and low levels of data skills, cybersecurity 
literacy, and online learning. 

The  above  findings  highlight  a  considerable  risk  of  digital  exclusion  among  younger  generations 
and vulnerable groups. As threats of cybersecurity breaches and disinformation grow, EU initiatives 
promoting  citizen  cyber  skills  and  fostering  cybersecurity  and  cyber  literacy  in  schools  are  more 
relevant  than  ever.  At  the  same  time,  the  data  emphasises  the  need  to  support  digital  lifelong 
learning  and  ensure  that  access  to  digital  skills  training  is  accessible  to  all  segments  of  society. 
Bridging the digital divide will be essential for reducing the proportion of low achievers in computer 
and information literacy (CIL) to less than 15% by 2030, in line with EU targets, and for ensuring that 
no one is left behind in Europe’s digital transformation. 

Supporting basic digital skills through EU-level initiatives 

To  accelerate  progress  towards  the  2030  Digital  Decade  targets,  the  EU  has  introduced  a 
comprehensive policy and investment framework aimed at strengthening digital skills across society. 
These measures are designed to support Member States in closing persistent digital gaps, improving 
educational pathways, and ensuring that all citizens can thrive in the digital transition. As emphasised 
in the Draghi report  and reaffirmed in the Competitiveness Compass, investment in digital skills is 
essential  for  revitalising  Europe’s  human  capital,  fostering  innovation,  and  securing  long-term 
prosperity. 

The  Union  of  Skills  package99,  adopted  on  5 March  2025,  reflects  the  EU’s  strategic  vision  for 
equipping  people  to  succeed  in  learning,  employment,  and  daily  life.  It  places  particular  focus  on 
strengthening basic digital skills and building an education and training system that is both resilient 
and  future-proof.  As  announced  in  the  package,  the  Commission  will  propose a  2030  Roadmap  on 
the  future  of  digital  education  and  skills,  to  promote  universal  access  to  digital  education  for  all, 
alongside  the  development  of  an  AI  literacy  framework  and  support  the  integration  of  AI  in 
educational settings. The roadmap will also address online safety, digital well-being, and the role of 
technology in fostering educational innovation. 

Complementing  this,  the  Action  Plan  on  Basic  Skills  reaffirms  the  EU’s  commitment  to  quality 
education for all and introduces a Basic Skills Guarantee. The plan recognises digital skills as part of 
the  essential  skill  set  for  modern  life  and  includes  several  key  measures  to  promote  inclusion  and 
digital  empowerment.  As  discussed  in  the  following  paragraphs,  media  and  digital  literacy  are 
identified as key to active and informed citizenship. There is also a growing demand for proficiency in 
digital collaboration tools and in skills related to cybersecurity, AI, machine learning and big data. The 
action  plan  includes  mainstreaming  digital  and  basic  literacy  teaching  in  initial  teacher  education; 
developing guidelines and best practices for assessing digital  skills;  creating a basic skills toolkit for 
apprenticeships, including components on digital skills, and promoting quality learning materials on 
digital  skills,  literacy  and  cybersecurity  through  initiatives  such  as  the  EU  Code  Week,  the  Better 
Internet for Kids platform, and the network of national Safer Internet Centres (see 2.3.2). Attracting 
digital talent from outside the EU is also complementary to these efforts. To this end, the EU Talent 

99  Communication  from  the  Commission  to  the  European  Parliament,  the  European  Council,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions: The Union of Skills, COM(2025) 90 final. 

71 

 
  
 
Pool100  will  facilitate  international  recruitment  between  European  employers  with  job  vacancies  in 
shortage occupations and the skilled jobseekers from outside the EU. 

Building  a  stronger  digital  talent  pipeline  also  requires  reinforcing  the  role  of  science,  technology, 
engineering, and mathematics (STEM) in education policy. By anchoring STEM as a strategic pillar in 
the EU’s education and skills policies, the STEM Education Strategic Plan and its underpinning actions 
will contribute  to foster the  development of  digital  skills as part of the  STEM skills across different 
levels  of  education  and  sectors.  The  Plan  promotes  the  participation  of  girls  and  women  in  STEM 
studies  and  careers,  strengthens  the  STEM  talent  pipeline,  from  early  education  to  advanced 
research and  lifelong  learning,  and  supports  educational  innovation  by  bringing  education  industry 
and  research  closer  together.  Improving  teaching  capacity  remains  essential  for  integrating  digital 
skills  in  education  systems.  Building  on  the  2023  Council  Recommendation  on  improving  the 
provision  of  digital  skills  in  education  and  training,  the  Commission  established  a  high-level  Expert 
Group on Informatics Education in July 2024. This group supports Member States by addressing key 
educational challenges in informatics and providing pedagogical guidance for teachers. To ensure a 
collaborative  and  practice-based  approach,  the  Commission  is  also  organising  workshops  with 
informatics  teachers  from  across  Europe.  The  final  guidelines  are  expected  to  be  published  by  the 
end of 2025 in all official EU languages. 

Efforts to  promote  responsible  and  inclusive  use  of emerging  technologies  are  being  strengthened 
through the AI Continent Action Plan. Recognising the accelerating influence of artificial intelligence 
in  daily  life,  the  Commission  adopted  the  plan  on  9 April  2025.  Aligned  with  the  AI  Act  and  the 
European  Declaration  of  Digital  Rights  and  Principles,  the  plan  outlines  actions  to  support  the 
upskilling  and  reskilling of professionals  in  all  fields  and  the  wider  population  in  the  use  of  AI. The 
plan  promotes  the  responsible  and  inclusive  use  of  AI  in  both  educational  and  societal  contexts, 
supporting citizens to understand and safely navigate AI-powered technologies101. 

To support access to learning and improve coordination, the EU maintains a centralised platform for 
digital  skills  information  and  training  opportunities. The Digital  Jobs  and  Skills Platform102  is  a  one-
stop-shop connecting users to high-quality resources and learning opportunities, ranging from basic 
digital  skills  to  advanced  specialisations.  In  2024,  the  platform  received  285 000  visits  and  hosted 
over  15 000  registered  stakeholders.  It  also  anchors  the  Digital  Skills  and  Jobs  Coalition,  with  25 
national  coalitions  and  22  national  portals  linked  to  the  platform,  offering  updates  on  national 
initiatives  and  supporting  cooperation  across  Member  States.  Furthermore,  on  4 July  2024,  the 
winners  of  the  2024  edition  of  the  European  Digital  Skills  Awards103  were  announced.  Out  of  267 
innovative  approaches  to 
applications,  five  outstanding  projects  were  chosen,  showcasing 
empowering individuals with digital competences, including fostering digital literacy and inclusion. 

Ensuring  transparency  in  digital  skills  assessment  is  also  a  priority.  The  Commission  is  currently 
updating  the  Digital  Competence  Framework  for  Citizens  (DigComp)104  to  version  3.0.  The  current 
DigComp  2.2  already  includes  more  than  250  examples  of  knowledge,  skills,  and  attitudes  across 

100 Proposal for a Regulation of the European Parliament and of the Council establishing an EU Talent Pool. COM(2023) 716 
final.  
101 AI Continent Action Plan, COM(2025)165.  
102 European Commission, Digital Skills and Jobs platform. Available at: https://digital-skills-jobs.europa.eu  
103European Digital Skills Awards 2025 : https://digital-skills-jobs.europa.eu/en/european-digital-skills-awards-2025.  
104 See above. 

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areas  such  as  AI,  datafication,  teleworking,  misinformation  and  disinformation.  To  support 
implementation, the JRC launched a process in 2024 to define indicative learning outcomes for each 
improve  the  transparency  and 
competence,  provide  guidance  to  stakeholders,  and  help 
comparability of certified digital skills across Europe. The updated digital competence framework will 
be launched at the end of 2025. 

Finally,  the  Commission  is  investing  in  lifelong  learning  systems.  As  part  of  its  broader  evidence-
based approach, the Commission published a report in July 2024 examining how Erasmus+ projects 
funded  under  the  2018-2021  KA2  calls  have  contributed  to  enhancing  basic  and  advanced  digital 
skills in vocational education and training (VET)105. The findings and lessons learned from 30 in-depth 
case  studies  and  an  Annex  of  100  inspiring  good  practices  cover  crucial  areas  like  artificial 
intelligence, virtual and augmented reality in VET, industry-specific digital skills – for example, in the 
agriculture, health or logistics sectors. The results confirmed the added value of Erasmus+ in building 
capacity for digital skills training within initial and continuing VET. 

Member State efforts 

Best Practice Accelerator: basic digital skills 

To advance their 2030 Digital Decade targets, Member States are implementing a broad spectrum 
of measures to strengthen digital skills across all segments of the population. The BPA has served 
as  a  key  forum  to  support  this  effort,  enabling  the  exchange  of  national  experiences  and  the 
identification  of  common  challenges,  and  fostering  peer  learning.  More  than  half  of  the  34 
practices  submitted  through  the  BPA  focus  specifically  on  boosting  at  least  basic  digital  skills 
among those most at risk of digital exclusion. 

The  digital  skills  cluster,  launched  under  Slovenia’s  leadership  in  July  2024,  has  facilitated 
structured  coordination  among  Member  States,  helping  scale  up  successful  approaches.  Six 
thematic workshops held over the course of one year supported in-depth discussion of national 
measures. These discussions were complemented by contributions from the Digital Jobs and Skills 
Platform, which brought forward more than 20 additional practices from National Coalitions. 

The  featured  practices  place  a  strong  emphasis  on  human-centred,  locally  anchored  delivery 
models  designed  to  reach  underserved  groups–such  as  older  adults,  rural  communities, 
individuals with low formal education, and disadvantaged youth. Slovenia alone contributed four 
initiatives:  free  adult  training  for  over  23 000  people  held  over  three  months;  the  nationwide 
rollout of Digi Info Points; the Mobile Heroes project, which brings digital classrooms directly to 
rural  seniors;  and  a  youth-focused  initiative  which  supports  non-formal  training  aligned  with 
DigComp 2.2.106 

Several Member States discussed how public services can act as inclusive training infrastructures. 
France’s  Conseillers  Numériques  programme  embedded  trained  advisors  in  community  spaces, 
reaching nearly five million individuals. Italy mobilised young people through a Digital Civic Service 
and  built  a  national  support  network.  Belgium  trained  over  6 000  civil  servants  under  its 

105 European Commission, ERASMUS+ projects focusing on digital skills and engaging young people in vocational education 
and training - Analysis of a selection of good practices. 
106 See above. 

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Connectoo programme, while Austria’s Digital Skills Initiative coordinated inclusion and advanced 
talent development efforts in government. 

Other  practices  showcased  how  digital  competence  frameworks  and  learning  platforms  can 
personalise upskilling journeys. Spain’s Generation D platform offers more than 1 700 resources 
linked  to  a  self-assessment  tool.  Finland  introduced  a  national  digital  competence  framework, 
funding over 150 local projects with a strong emphasis on early education. Germany’s DigitalPakt 
Alter  established  over  300  local  hubs  to  support  older  adults  in  trusted,  low-pressure  digital 
learning environments. 

Despite  this  solid  foundation,  persistent  challenges  remain.  Most  initiatives  rely  on  informal 
learning,  with  limited  links  to  formal  qualifications  or  recognised  outcomes.  Many  are  pilot 
projects  or  depend  on  short-term  funding,  and  systematic  impact  assessments  are  rare.  This 
makes it difficult to evaluate long-term progress or scale efforts sustainably. 

Nonetheless,  several  success  factors  are  evident.  Effective  practices  tend  to  be  embedded  in 
national  digital  strategies,  implemented  through  cross-sector  partnerships,  and  delivered  by 
trusted  actors  within  communities.  These  approaches  share  a  commitment  to  making  digital 
transformation  inclusive,  helping  people  not  just  access  services  but  gain  the  confidence  to 
participate fully in the digital society. 

2.1.2  A highly skilled digital workforce: ICT specialists and advanced digital skills 

ICT  specialists  are  at  the  heart  of  Europe’s  digital  competitiveness.  As  the  architects  of  digital 
transformation,  they  drive  innovation  in  frontier  technologies,  enable  productivity  gains  across 
sectors, and support the development of human-centric digital services. Their expertise is essential 
for  the  deployment  and  maintenance  of  advanced  infrastructure–from  next-generation  cloud  and 
data  systems  to  AI  factories  and  EuroHPC  JU  supercomputers–and  for  delivering  secure,  efficient, 
and trusted digital solutions. In an increasingly interconnected environment, they are also critical for 
safeguarding Europe’s digital resilience, particularly in the face of rising cyber threats. 

As  demand  surges  for  specialists  in  areas  such  as  artificial  intelligence,  cybersecurity,  and 
semiconductors, the EU faces the dual challenge of scaling up a technically skilled workforce while 
ensuring its diversity, adaptability, and long-term sustainability. Addressing persistent shortages and 
gaps across these high-growth domains, including supporting gender convergence, will be essential 
not  only  for  meeting  the  Digital  Decade  target  of  20  million  ICT  specialists  by  2030  but  also  for 
strengthening  Europe’s  industrial  capacity, technological  leadership, and  strategic  autonomy  in  the 
digital age. 

Progress towards the Digital Decade target 

Target (same as previous): A digitally skilled population and highly skilled digital professionals, with 
the aim  of achieving gender balance, where  (…)  (b) at least 20 million ICT specialists are employed 
within the Union, while promoting the access of women to this field and increasing the number of 
ICT graduates. 

Source: Eurostat – Labour Force Survey. 

Available data points: from 2011 to 2024. 

2024 data values: Number of ICT specialists in employment = 10.3 million (corresponding to 5.0% of 
total employment); Percentage of women among ICT specialists in employment = 19.5%. 

74 

 
  
The total number of ICT specialists in employment rose by 471 000, from around 9.8 million in 2023 
to  10.3  million  in  2024.  This  reflects  a  4.8%  year-on-year  growth  in  the  number  of  employed  ICT 
specialists. However, ICT specialists still accounted for just 5.0% of total EU employment in 2024, a 
slight increase from 4.8% in 2023. 

According  to  the  forecast  along  the  baseline  trajectory,  around  12.4  million  ICT  specialists  are 
expected  to  be  in  employment  by  2030, meaning  that  only  62%  of  the  target will  be  achieved  by 
2030 (Figure 29). In 2024, the value reached by this KPI stood at about 85% of the ideal value along 
the digital decade trajectory, around 10.3 instead of 12.1 million. The full target – 20 million of ICT 
specialists in employment by 2030 - is forecast to be reached only in 2051 if no further actions are 
taken. 

Figure  29:  ICT  specialists  in  the  EU.  Historical  data,  Digital  Decade  (DD)  trajectory  and  revised  baseline 
trajectory towards 2030 

In 2024, women accounted for 19.5% of employed ICT specialists, a figure virtually unchanged from 
2023,  when  it  stood  at  19.4%.  Over  the  past  decade,  the  gender  gap  in  ICT  employment  has 
remained  pronounced,  with  men  consistently  outnumbering  women  by  around  60  percentage 
points–women’s  representation  fluctuated  between  16.2%  and  19.5%,  while  men’s  ranged  from 
80.5% to 83.8% (Figure 30). Despite a brief decline between 2013 and 2015, the share of women in 
ICT  roles  has  grown  gradually  since  2012,  albeit  at  a  slow  pace  (Figure  30,  left).  In  contrast,  the 
proportion of men peaked in 2014-2015 and has since declined (Figure 30, right), yet it still exceeds 
women’s representation by more than fourfold. 

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Figure 30: Percentage of individuals employed in ICT specialists’ occupations in the EU by sex (2012-2024). The 
solid line shows the time trend since 2012. Left-hand side: percentage of women in total ICT specialists; right-
hand side: percentage of men in total ICT specialists. The range of values is different in the two charts. 

The  EU’s  data  and  AI  workforce  is  expanding  rapidly,  but  structural  labour  shortages  are 
deepening.  According to the  Data Market  Study 2024-2026107, the number of data professionals in 
the  EU  reached  8.23  million108  in  2024,  accounting  for  4.5%  of  total  employment  and  reflecting  a 
growth rate of 4.2% over the previous year. This growth has been primarily driven by the rise of AI 
and  the  growing  demand  for  data-driven  decision-making  across  sectors.  Yet  it  has  not  kept  pace 
with industry needs: the current  talent  gap stands at  500 000 workers, or 5.7% of overall demand. 
Projections  indicate  that  this  shortfall  could  reach  631 000  under  the  baseline  scenario  and  up  to 
839 000  under  a  high-growth  scenario  by  2030,  corresponding  to  5.8%  and  6.8%  of  workforce 
demand,  respectively.  These  projections  account  for  expected  inflows  and  outflows  in  the  labour 
market, including immigration, retirement, sickness, career transitions, and educational output. 

Demand  for  advanced  AI  competences  is  accelerating  across  all  sectors  of  the  economy. 
By 2027, the EU is expected to require between 6.2 and 7 million workers with advanced AI skills109. 
This  surge  in  demand  reflects  not  only  the  growth  of  technical  roles  such  as  machine  learning 
engineers,  AI  developers,  and  prompt  engineers,  but  also  the  rapid  diffusion  of  AI  across  non-
technical domains110. Sectors such as healthcare, manufacturing, finance, and public administration 
are  increasingly  reliant  on  professionals  who  understand  how  to  manage  and  apply  AI  solutions 
responsibly.  Beyond  technical  expertise,  these  hybrid  roles  require  cross-disciplinary  knowledge  to 
address AI’s ethical, legal and organisational dimensions. 

AI  literacy  is  becoming  essential  for  a  majority  of  the  EU  workforce.  According  to  estimates  by 
Cedefop, approximately 61% of workers will need some  form of AI-related competence to manage 
the evolving impact of AI on their jobs111. This reflects a shift toward workplace environments where 

107 European Data Market Study 2024-2026 
108 Data professionals are workers who collect, store, manage, and/or analyse, interpret, and visualise data as their primary 
activity or as a relevant part of their activity. This includes data technicians and data business professionals, but  not users 
who, based on sophisticated tools, take decisions after having analysed and interpreted the available data. 
109  LeADS,  D1.3  Final  ADS  demand  and  forecast  report,  2023.  Asset/fleet  and  freight  management,  claims  and  fraud 
management and healthcare are expected to register the highest growth across industries. 
110 Advanced Digital Skills, ADS Demand Dashboard. 
111  Cedefop,  Artificial  Intelligence  in  EU  Workplaces:  another  great  divide?  First  insights  from  Cedefop’s  AI  skills  survey, 
2024. 

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understanding  algorithmic  processes,  automation  and  data  ethics  is  becoming  part  of  everyday 
professional life–even outside of ICT-specific roles. 

Closing  the  AI  skills  gap  will  require  a  broader  and  more  inclusive  talent  pool.  While  it  remains 
difficult to quantify the full scope of the  AI skills shortage, the continuous emergence of AI-related 
tasks and occupations points to a growing and persistent gap. Increasing the participation of women 
in  AI  and  data  professions  will  be  essential  for  ensuring  that  the  sector  can  meet  future  labour 
demands with a diverse and resilient workforce112. 

threats 

intensify, 

As  digital 
is  under  growing  pressure.  
the  cybersecurity  workforce 
Increased  exposure  to  cyber  threats  and  the  implementation  of  new  EU  regulatory  frameworks–
including  the  NIS2  Directive,  the  Cyber  Resilience  Act,  and  the  Digital  Operational  Resilience  Act 
(DORA)–have  significantly raised the demand for qualified cybersecurity professionals. In 2024, the 
estimated need stood at 1.25 million specialists, yet only 951 000 were employed, leaving a gap of 
299 000, or 25% of the ideal workforce size. This represents a 9% increase in the gap compared to 
the previous year113. 

Despite  higher  investment  in  cybersecurity,  capacity  remains  constrained.  According  to  the 
European  Union  Agency  for  Cybersecurity (ENISA),  EU  organisations  increased their  investments  in 
information security by 1.9 percentage points between 2022 and 2024114. However, the share of full-
time equivalents (FTEs) allocated to cybersecurity tasks declined–from 11.9% to 11.1% over the past 
four years–highlighting a persistent shortfall in dedicated staffing despite financial commitments. A 
flash  Eurobarometer  survey115  confirms  that over  half of  companies  face  recruitment  challenges  in 
cybersecurity.  The  main  reasons  cited  are  a  lack  of  qualified  candidates  (45%)  and  a  shortage  of 
applicants  (44%),  pointing  to  structural  mismatches  in  both  the  quality  and  quantity  of  available 
talent. Many organisations are also forced to rely on non-specialist hires or internal reskilling. 

The  workforce  lacks  formal  qualifications  and  remains  largely  male-dominated.  According  to  the 
same Eurobarometer survey, among employed cybersecurity professionals, 76% do not hold formal 
qualifications  or  certification.  A  majority  of  cybersecurity  workers  (57%)  joined  the  profession  by 
adding  cybersecurity  skills  to  an  existing  role,  while  34%  were  recruited  from  other  professional 
domains.  Gender  imbalances  are  also  striking:  56%  of  companies  report  having  no women  in  their 
cybersecurity workforce, despite 70% acknowledging the importance of improving gender balance in 
the sector. 

The  EU  semiconductor  sector  is  poised  for  strong  growth,  but  workforce  supply  is  limited. 
According  to  the  Skills  Strategy  2024  report  of  the  European  Chips  Skills  Academy,  the  European 
semiconductor  industry  employed  approximately  382 200  people116  in  2023.  Of  these,  around  74% 
(282 800)  were  in  core  technical  roles,  while  the  remainder  were  in  support  functions  such  as 

112 Interface, AI's Missing Link: The Gender Gap in the Talent Pool, 2024. 
113 ISC2, Cybersecurity Workforce Study by ISC2, 2024. 
114 ENISA, NIS Investments 2024 | ENISA. 
115 European Commission, Cyberskills Eurobarometer survey, May 2024. 
116 Around 263 000 were directly involved in semiconductor production. Additionally, approximately 61 000 people worked 
in  companies  supplying  equipment  for  semiconductor  fabrication,  27 100  in  material  supply  and  wafers,  11 340  in 
developing design software and Intellectual Property, and 19 760 in research and technology organisations. 

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management and sales. Driven by increased demand and production goals117 under the EU Chips Act, 
the sector is expected to grow significantly by 2030. 

Semiconductor production expansion will require tens of thousands of new technical professionals. 
By  the  end of  the  decade,  projected  growth  could  generate  an  additional 155 900  new  jobs,  along 
with  the  need  to  replace  around  115 500  existing  workers118.  This  creates a  combined  demand  for 
over 270 000 positions by 2030, largely in technical functions critical to chip design, fabrication, and 
packaging. 

The  education  system  is  not  producing  enough  graduates  to  meet  EU  semiconductor  demand. 
Despite strong job creation forecasts, the inflow of qualified graduates is expected to increase at a 
modest  pace  of  just  1%  annually119,  constrained  by  both  low  enrolment  rates  and  demographic 
trends. If left unaddressed, this shortfall will result in an estimated talent gap of 75 390 positions in 
core technical roles by 2030120, meaning only 64% of projected workforce demand would be met. 

Supporting advanced digital skills through EU level initiatives 

The  EU  has  introduced  targeted  policy  and  funding measures  to  expand  the  pool of  ICT  specialists 
and improve their skills in critical technology domains. The Competitiveness Compass promotes ‘skills 
and quality jobs’ as a key measure to boost Europe’s competitiveness by revitalising productivity and 
investing in skills for leadership in future technologies. While some initiatives - such as the Union of 
Skills  and  the  AI  Continent  Action  Plan  -  have  already  been  outlined  in  the  context  of  basic  digital 
skills,  this  section  focuses  on  how  these  and  other  actions  are  contributing  specifically  to  the 
development of high-level digital expertise. These measures respond directly to the growing demand 
for talent in areas such as  AI, cybersecurity, semiconductors, and quantum technologies, and form 
part of a wider strategy to reinforce Europe’s technological sovereignty and innovation capacity. 

Strengthening  Advanced  Digital  Talent  through  Strategic  Programmes.  Building  on  the  broader 
Union  of  Skills  initiative  and  responding  to  the  need  for  a  more  coordinated  approach  targeted  at 
emerging  skills  needs  of  EU  companies,  the  EU  is  rolling  out  a  number  of  flagship  measures  to 
support advanced digital skills. Among these is the establishment of four new Digital Skills Academies 
focused on AI, Quantum, Virtual Worlds, and Semiconductors. These academies aim to complement 
national education systems by offering specialised training programmes aligned with labour market 
needs.  In  parallel,  the  Commission  is  promoting  joint  degrees  and  the  development  of  future 
European degrees in digital technologies, with a view to strengthening interdisciplinary skills that are 
relevant to priority sectors such as biotechnology, health, and climate science. 

The  launch of  the  European  Advanced Digital  Skills  Competitions will  further encourage  excellence 
and visibility in cutting-edge digital domains among young people across Europe, raising the profile of 
careers  in  high-tech  domains  and  fostering  excellence  in  frontier  digital  fields.  The  Union  of  Skills 

117 Employment forecasts are estimated  based on SEMI’s latest forecasts (June 2024) of installed  production capacity for 
the  period  2024-2027.  Employment  elasticity,  meaning  the  percentage  change  in  employment  associated  with  a  1% 
increase  in  installed  capacity,  is  estimated  using  historical  employment  data  from  DECISION  database  and  historical 
installed capacity data from SEMI. 
118 The replacement rate (4%) is calculated using the Cedefop’s ‘Skills forecast database. 
119 Note that the analysis does not account for non-EU graduates. 
120 12 500 software engineers, machine learning engineers, data engineers, data analysts and data scientists, 3 800 system 
designers,  2 400  analogue  designers,  3 000  cybersecurity  experts,  and  54 000  professionals  with  electrical  engineering 
degrees. 

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package also includes dedicated training actions under the Destination Earth (DestinE) programme, 
targeting advanced competences in modelling, AI applications, and environmental data systems.  

Scaling the AI workforce through the AI Continent Action Plan. Under the AI Continent Action Plan, 
adopted in April 2025, the EU is increasing its capacity to develop and retain AI talent, particularly in 
strategic sectors such as industry and public administration. While the Action Plan includes broader 
actions to promote AI literacy, it also sets out specific measures to strengthen AI skills and talent and 
enlarge the EU’s pool of AI specialists. These include educating and training the next generation of AI 
experts  based  in  the  EU,  incentivising  European  AI  talent  to  stay  and  to  return  to  the  EU  and 
attracting and retaining skilled AI talent from non-EU countries, including researchers. 

Expanding the cybersecurity workforce through coordinated EU action. In the field of cybersecurity, 
the EU has reinforced its response through the Cybersecurity Skills Academy121, which complements 
earlier  measures  focused  on  citizen  awareness  and  basic  competences.  Under  the  Digital  Decade 
Policy  Programme,  the  Academy  supports  the  creation  of  a  European  Digital  Infrastructure 
Consortium (EDIC) focused on cybersecurity skills, currently led by Greece. The Commission has also 
allocated  EUR 10 million  under  the  Digital  Europe  Programme  to support  the  establishment of  the 
Academy122.  A  key  deliverable  for  2025  is  the  launch  of  an  industry-academia  network,  which  will 
connect  companies  that  have  pledged  to  train  cybersecurity  professionals  with  higher  education 
institutions, vocational training providers, and university alliances. This network will help scale up the 
delivery of cybersecurity-specific programmes and expand the pool of qualified professionals in this 
field. 

The  Commission  is  working  in  parallel  with  National  Coordination  Centres  under  the  European 
Cybersecurity  Competence  Centre  to  support  national  implementation.  These  centres  are  tasked 
with building a shared repository of training and certification schemes, identifying relevant funding 
streams,  and  establishing  indicators  to  monitor  workforce  developments  at  EU  level.  The  Polish 
Presidency of  the  Council of  the  EU  has  prioritised  cybersecurity  skills,  hosting  a  dedicated  debate 
under  the  Horizontal  Working  Party  on  cyber-Issues  and  continuing  the  momentum  generated  by 
initiatives launched during the Hungarian Presidency in cooperation with the Commission and ENISA. 

Building  semiconductor  talent  through  Chips  Competence  Centres.  To  address  shortages  in  the 
semiconductor workforce, the Industrial Alliance on Processor and Semiconductor Technologies has 
launched  a  dedicated  Skills  Working  Group,  bringing  together  industry  and  stakeholders  to 
coordinate  action.  In  addition,  Chips  Competence  Centres  (CCCs)  are  being  established  across 
Member  States  as  part  of  the  EU  Chips  Act.  These  centres  will  play  a  key  role  in  facilitating 
collaboration between academia and industry, delivering hands-on technical training, and supporting 
the development of national and regional talent pipelines. 

Preparing Europe’s quantum workforce. Under the European Quantum Declaration123, coordinated 
quantum competence clusters are being developed to support training, research, and innovation in 
quantum  technologies.  These  clusters  aim  to  foster  collaboration  across  Member  States  and  help 
establish a coherent European skills ecosystem in this strategically critical field. 

121 Cyber Skills Academy: Get Involved | Digital Skills and Jobs Platform 
122 EU Funding & Tenders Portal 
123 European Commission, European Declaration on Quantum Technologies, 2023. 

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Fostering innovation, diversity and entrepreneurship through targeted measures. In addition to the 
above  sector-specific  efforts,  the  EU  is  supporting  digital  innovation  and  inclusion  through 
complementary  strategic  initiatives.  The  European  Data  Union  Strategy  and  the  EU  Start-up  and 
Scale-up Strategy, announced under the Competitiveness Compass, aim to support the development 
of digital entrepreneurship and ensure that Europe has the skills and data infrastructure needed to 
compete  globally.  These  initiatives  recognise  that  highly  skilled  ICT  professionals  are  not  only 
employees but also innovators, start-up founders, and drivers of growth in digital ecosystems.  

Promoting greater gender diversity in ICT professions. The Commission has launched the WIDCON 
(Connecting  Women  in  Tech)  project.  This  initiative  seeks  to  better  understand  the  barriers  to 
women’s  participation  in  ICT  and  create  a  network  of  experts  and  practitioners  to  identify  and 
disseminate effective solutions. By supporting more inclusive digital talent pipelines, the EU aims to 
tap  into  the  full  potential  of  its  population  and  build  a  more  resilient,  representative,  and  future-
ready digital workforce. 

Member State measures 

Best Practice Accelerator: ICT specialists 

Of  the  34  practices  submitted  under  the  Digital  Skills  Cluster,  15  target  the  ICT  specialist 
workforce,  covering  diverse  areas  such  as  curriculum  modernisation,  AI  readiness,  gender 
equality,  and  SME  upskilling.  Several  Member  States  have  prioritised  reforms to  strengthen  the 
education-to-labour  transition.  In  Czechia,  informatics  and  computational  thinking  have  been 
formally embedded into school curricula, while Finland’s National STEM Strategy has reached over 
100 000 pupils and 11 000 professionals through teacher training and systemic change e.g. update 
of education curricula. Austria’s Digital Skills Initiative addresses both ends of the skills pipeline, 
combining awareness-raising with support for ICT apprenticeships and institutional coordination. 

A large group of practices focus on building AI literacy and readiness in the public sector. Germany 
has presented three flagship initiatives: AI Studios, which use participatory workplace training to 
demystify AI; BeKI, a national advisory centre providing science-based AI guidance to all sectors; 
and KIPITZ, a platform designed to introduce AI concepts and use cases to civil servants. Similarly, 
Greece’s  national  training  programme  for  civil  servants,  implemented  together  with  Microsoft, 
strengthens  public  sector  capacity  in  AI,  cloud,  and  cybersecurity  through  targeted  learning 
modules. 

In Ireland, the SuCcES Programme has introduced structural reforms to improve the recruitment 
and retention of women in academic computing roles, while the INGENIC Network fosters inter-
university  collaboration  on  equality  measures.  TU  Dublin’s  mentoring  model  supports  female 
students in the early years of study to strengthen belonging and reduce drop-out rates. Croatia’s 
Girls  in  ICT  initiative,  which  pairs  high  school  students  with  professional  role  models  through 
interactive panels and storytelling, has inspired two initiatives in Luxembourg: Girls Deploy Your 
Digital Talent and Girls in ICT Day, both aimed at motivating teenage girls to explore ICT careers. 

At the interface between skills and industry, Romania’s Skills in Advanced Technologies for SMEs 
delivers large-scale upskilling in frontier technologies–AI, RPA, big data, and cloud–to more than 
2 000  companies.  This  business-oriented  model  responds  directly  to  labour  shortages  in  the 
private sector while boosting SME resilience and innovation. 

Despite  these  promising  efforts,  notable  thematic  gaps  remain.  To  date,  no  Member  State  has 
submitted  a  BPA  practice  focused  on  semiconductor  workforce  development,  vocational  ICT 

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specialisations,  or  structured  cybersecurity  career  pipelines.  While  the  issue  of  advanced  digital 
skills shortages was repeatedly raised in workshop discussions, few concrete training programmes 
or national workforce strategies have been shared in this domain. Similarly, no national AI talent 
strategy  has  been  presented,  nor  do  current  practices  include  targeted  reskilling  pathways  for 
mid-career professionals seeking entry into ICT fields. 

Challenges  also persist with shared dimensions  across Member States. Many countries continue 
to  face  shortages  of  qualified  instructors  and  lack  well-developed  systems  for  ICT  career 
orientation.  Specialisation  pathways  within  formal  education  are  being  developed  slowly,  and 
efforts to retain women and other underrepresented groups in specialist roles are not yet backed 
by long-term structures. 

Nevertheless, the  BPA has helped  identify  promising  dual-track approaches: those that combine 
mentoring,  outreach,  and  visibility  campaigns  with  systemic  reforms  in  recruitment,  training 
delivery,  and  public-private  partnerships.  These  initiatives  demonstrate  that  growing  the  ICT 
workforce  requires  not  only  investing  in  high-level  expertise  but  also  addressing  the  structural 
barriers that affect diversity, access, and retention. 

To  accelerate  progress  towards  the  Digital  Decade  targets,  Member  States  are  sharing  best 
practices to build on well tested models, address thematic blind spots, and continue exchanging 
knowledge and solutions through the BPA platform and its dedicated thematic clusters. 

2.2  Deploy digital solutions for people and societies 

2.2.1  Digital public services that are user-friendly and accessible to all 

Progress towards the Digital Decade targets  

Target:  The  digitalisation of  public  services,  where  there  is  100%  online  accessible  provision of  key 
public services and, where relevant, it is possible for citizens and businesses in the Union to interact 
online with public administrations. 

KPI definition: 

Citizens: Online provision of key public services for citizens, measured as the share of administrative 
steps  that  can  be  done  fully  online  for  major  life  events.  The  following  life  events  are  considered: 
moving; transport; starting a small claims procedure; family; career; studying; and health. 

Businesses:  Online  provision  of  key  public  services  for  businesses,  measured  as  the  share  of 
administrative steps needed to start a business and conduct regular business operations, which can 
be done fully online. 

Source: e-Government benchmark124. 

Available data points: from 2013 to 2024 (break in series in 2020). 

2024 data value: Citizens = 82.3 (score 0-100); Businesses = 86.2 (score 0-100). 

The digital public service score for citizens rose by 2.9 percentage points, from 79.4/100 in 2023 to 

124 eGovernment Benchmark 2025 study. Available at: https://digital-strategy.ec.europa.eu/en/news-redirect/883225 

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82.3/100 in 2024. This represents a year-on-year increase of 3.6%. 

According to the forecast along the baseline trajectory, 92.0% of the target is expected to be achieved 
by 2030 (Figure 31). In 2024, the score for citizens stood at about 88% of the ideal value along the 
digital  decade  trajectory  (82.3/100  instead  of  93.3/100).  However,  the  full  target  –  a  score  of  100 
corresponding to fully online procedures for all the services – is forecast to be reached only in 2060 if 
no further actions are taken. The score of cross-border online availability stood at 71.3/100 in 2024, 
up from 68.4/100 in 2023, +4.2% in one year. 

Figure 31. Share of administrative steps that can be taken through online public services for major life events for 
citizens and resident foreign nationals (0 = no steps can be done online; 100 = the whole process can be done 
online). Historical data, Digital Decade and revised baseline trajectory. 

The digital public service score for businesses rose by a mere 0.8 percentage points, from 85.4/100 
in 2023 to 86.2/100 in 2024. This represents a year-on-year increase of only 0.9%. 

According to the forecast along the baseline trajectory, 92.6% of the target is expected to be achieved 
by 2030 (Figure 32). In 2024, the score for businesses stood at about 91% of the ideal value along the 
digital  decade  trajectory  (86.2/100  instead  of  95.0/100).  However,  the  full  target  –  a  score  of  100 
corresponding to a fully online procedure for all the services – is forecast to be reached not earlier 
than  2068  if  no  further  actions  are  taken.  The  score  of  cross-border  online  availability  stood  at 
73.8/100 in 2024, up from 73.1/100 in 2023, approximately +1% in one year. 

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Figure 32. Share of public services needed to start a business and conduct regular business operations that are 
available online for national and for foreign users (0 = no steps can be done online; 100 = the whole process can 
be done online). Historical data, Digital Decade and revised baseline trajectory. 

Interoperability and enabling legislation 

The Interoperable Europe Act, which entered into force in April 2024 and became fully applicable in 
January  2025,  represents  a  major  step  in  creating  seamless  digital  public  services  for  citizens  and 
businesses  across  Europe.  The  Act  simplifies  and  accelerates  interactions  and  data  exchanges  with 
public services, helping public administrations in completing the Digital Single Market and reducing 
administrative burdens, especially for SMEs. 

From January 2025 onwards, the Act introduced mandatory interoperability assessments for trans-
European digital public services, ensuring that cross-border interoperability challenges are addressed 
early. This new obligation applies  both to Member State  public administrations  and to  EU entities. 
Guidelines  for  these  assessments125  are  available  on  the  Interoperable  Europe  Portal  to  guide  EU 
entities and Member States. As part of its digital-ready policymaking framework, the Commission has 
developed  a  new  Legislative  Financial  and  Digital  Statement  to  accompany  its  proposals.  The 
chapter  on  the  digital  dimension  includes  essential  information  on  the  digital  aspects  of  proposals 
and  serves  as  the  Commission’s 
interoperability  assessment  report,  as  mandated  by  the 
Interoperable Europe Act. It ensures that the Commission thoroughly assesses digital impacts when 
drafting proposals so that they are fit for the digital age. 

The  first  meeting  for  the  Interoperable  Europe  Board,  held  on  5 December  2024,  marked  the 
operational launch of the Act’s governance structure. Comprising high-level representatives from the 
European Commission and all EU Member States, the Board is developing the ‘Interoperable Europe 
Agenda’,  a  strategic  roadmap  for  interoperability  that  steers  the  digital  transformation of the  EU’s 
public sector. The Board is also responsible for recommending interoperability solutions, which will 

125 European Commission, Guidelines for interoperability assessments, 2024  

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be  labelled  as  ‘Interoperable  Europe  solutions’.  Since  2024,  a  new  monitoring  mechanism 
developed  jointly  by  the  European  Commission,  the  JRC  and  Member  States  has  been  in  place  to 
monitor the Act’s implementation and the state of interoperability in the EU. 

The  Act  also  introduces  a  framework  for  interoperability  regulatory  sandboxes.  These  controlled 
environments  allow  public  administrations  and  businesses  to  develop  and  test  innovative  digital 
solutions, generating insights for more consistent, data-driven implementation of EU legislation. 

To support the implementation of the Act, the Commission has initiated several support actions. The 
Coordination and Support Action Innovative and Connected Public Administrations under the Digital 
Europe  Programme  helps  Member  States  collaborate  to  identify,  develop  and  test  interoperability 
solutions,  paving  the  way  towards  a  Multi-Country  Project  on  Connected  and  Innovative  Public 
Administrations. Additionally, the Interoperable Europe Community, launched in April 2025, fosters 
collaboration among stakeholders involved in the digital government and interoperability. 

Strategic priorities: technological sovereignty and GovTech innovation 

As  the  EU  progresses  towards  the  Digital  Decade’s  goals,  the  sovereignty  of  Member  States  over 
government digital infrastructures is becoming crucial. Achieving technological sovereignty requires 
reducing reliance on non-EU tech providers and improving the ability of the EU to act independently 
in the digital world. Technological sovereignty allows Member States to drive innovation in the public 
sector, shape their digital environments – from cloud services to AI solutions – and protect sensitive 
data. It fosters the development of tailored solutions, actively contributing to the EU’s advancements 
in  cutting-edge  technologies.  Crucially,  technological  sovereignty  allows  the  EU  to  pursue  an 
approach to technological innovation that is focused on responsible innovation, ensuring that AI and 
other  emerging  technologies  align  with  values  such  as  privacy,  fairness,  and  transparency.  This 
enables  Member  States  to  implement  secure,  sustainable,  and  citizen-centric  digital  solutions, 
reinforcing Europe’s vision of a competitive and digitally resilient future. 

GovTech plays a key role in the Interoperable Europe Act, combining governance and technology to 
improve public services and administrative operations. It involves collaboration between the public 
sector  and  start-ups  and  SMEs  to  procure  innovative  solutions  which  streamline  administrative 
processes,  foster  transparency  and  improve  data-driven  decision-making.  Notable  initiatives  under 
the GovTech umbrella include: 

•  GovTech4all Incubator: A testing arena for public administrations to pilot GovTech solutions 
in  secure  environments,  fostering  experimentation  and  refining  concepts  before  broader 
implementation; 

•  Public Sector Tech  Watch:  An observatory  promoting  knowledge  of emerging  technologies 

within the public sector, serving as a resource hub; 

•  The  GovTech  Connect:  A  space  for  the  community  of  GovTech  actors  to  exchange 

experiences and seize opportunities. 

AI and digital public services 

The  use  of  AI in  the  public  sector  has  expanded to include  multiple  applications  such  as  decision-
making and healthcare, increasingly addressing complex challenges and paving the way to significant 
future  advancements.  Member  States  have  developed  guidelines,  strategies,  and  action  plans  to 
ensure  that  AI  benefits  are  maximised  and  risks  are  mitigated.  These  benefits  include  automating 
routine tasks, improving decision-making, and providing personalised services to citizens, all of which 
enhance public services delivery. 

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In this context, the European Commission is rolling out the Apply AI Strategy, aiming to accelerate AI 
adoption and innovation in several sectors, including the public sector, by leveraging European-made 
AI  solutions.  As  part  of  this  effort,  under  the  Digital  Europe  Programme  2025/2027,  the  European 
Commission has allocated a budget of EUR 21 million, to support up to four pilot projects. 

Accessibility and simplification 

The  Web  Accessibility  Directive  (WAD)  reflects  the  EU’s  efforts  to  ensure  digital  inclusion  and 
equality.  By  mandating  that  websites  and  mobile  applications  of  the  public  sector  meet  certain 
accessibility standards, the directive plays a crucial role in enabling all Europeans to participate fully 
in  the  digital  economy  and  society.  The  second  monitoring  period  of  WAD  concluded  in  2024. 
Member  States  have  demonstrated  increased  commitment  to  online  service  accessibility,  as 
evidenced  by  improved  monitoring  reports.  These  efforts  include  training  and  awareness-raising 
activities, ensuring that online services are accessible to all. 

In  line  with  the  European  Commission’s  goals outlined  in  the  Competitiveness  Compass,  the  EU  is 
advancing  several 
initiatives  to  support  simplification  and  reduce 
administrative  burdens.  These  measures  aim  to  streamline  regulatory  reporting  for  both  Member 
States and EU entities, directly supporting the EU’s goal to cut reporting obligations by 25%, with a 
particular focus on reducing compliance costs for SMEs (on simplification, see chapter 4). 

interoperability-related 

Digital-ready policymaking 

Digital-ready policymaking is a priority for the EU, with a view to reducing national implementation 
costs  by  optimising  expenditure  on  IT  systems  required  for  policy  implementation.  Collaborative 
efforts within the European Commission are vital for the effective operation of frameworks such as 
the  Single  Digital  Gateway  and  the  Once-Only  Technical  System  (OOTS).  These  efforts  ensure 
coherent policy implementation and leverage synergies to enhance interoperability across the EU. 

The  forthcoming  European  Business  Wallet  (see  below),  the  Single  Digital  Gateway,  and  the  OOTS 
create a cohesive ecosystem of digital solutions that simplify various aspects of life for Europeans. 

2.2.2  Trusted solutions for online interaction: the EU Digital Identity Wallet 

The  European  Digital  Identity  (EUDI)  Framework  supports  the  EU’s  digital  transformation,  the 
improvement  of  digital  services  for  people  and  businesses,  and  progress  towards  Digital  Decade 
targets. Central to this initiative is the European Digital Identity Wallet, which facilitates the secure 
storage, management, and validation of personal identification and digital documents. By 2030, the 
aim is for electronic identification to be accessible for all Union citizens, in line with the Declaration 
on Digital Rights and Principles. 

Digital identity wallets  will fundamentally transform EU  public infrastructures by providing secure, 
EU-wide  recognised  electronic  identification.  These  wallets  enable  online  authentication  for 
accessing  essential  services,  such  as  government,  healthcare,  and  banking,  thereby  eliminating  the 
need for multiple passwords. They also enable the creation of legally binding e-signatures and allow 
for  the  storage  of  critical  documents  like  educational  credentials,  driving  licenses,  electronic 
prescriptions  and  the  European  Health  Insurance  Card.  This  functionality  ensures  easy  access  and 

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simplifies daily transactions and travel within Europe, significantly enhancing security, efficiency, and 
convenience. 

2024 was marked by key legislative achievements in the area of digital identity. The European Digital 
Identity Framework126 came into effect in May, followed by the adoption of nine implementing acts 
in November 2024 and April 2025, setting uniform technical standards and putting in place a robust 
certification  framework.  These  milestones  pave  the  way  for  reaching  the  Digital  Decade  target 
mandating  that  each Member  State  provides  at  least  one  digital  identity  wallet  to  every  individual 
and entity by the end of 2026.  

Member State measures 

In  2024,  Romania  and  Finland  joined  other  EU  Member  States  in  notifying  their  electronic 
identification (eID) schemes, bringing the percentage of the EU population127 now having access to 
electronic identification to 95%. However, Hungary, Greece, and Ireland have not yet notified their 
eID schemes. The  number of Member  States with notified eID schemes  has increased significantly, 
from just one in 2017 to 24 by 2025–marking major progress towards a more integrated and secure 
digital public service landscape across Europe. 

Member  States  have  taken  major  steps  toward  developing  and  releasing  their  own  wallets  by  the 
end of 2026. This will ensure that EU citizens have secure, trusted, and seamless cross-border access 
to public and private services. Prior to this, Member States only had voluntary mutual recognition of 
electronic identification schemes.  

Four of the implementing regulations set uniform standards, specifications, and procedures for the 
technical  functionalities  of  the  digital  wallets,  including  data  formats  for  the  cross-border  use  of 
digital  documents  and  measures  to  ensure  their  reliability  and  security.  These  standards  enable 
Member  States  to  develop  secure,  privacy-enhancing  wallets  that  are  interoperable  across  the 
European  Union.  The  fifth  implementing  regulation  outlines  specifications  and  procedures  for 
building  a  robust  certification  framework  for  these  wallets,  guaranteeing  their  security  and  the 
protection of user privacy and personal data. 

Digital  wallets  will  bring  many  direct  benefits  to  EU  citizens  and  residents.  Several  use  cases  are 
already  being  tested  in  Large  Scale  Pilot  (LSP)  projects.  The  wallets  will  provide  a  digital 
infrastructure for a wide range of applications in different public and private sectors. Students and 
job seekers, for instance, can store and share academic credentials for job applications or university 
admissions.  Drivers  can  download,  store,  and  share  their  driving  licences  digitally,  eliminating  the 
need for a physical copy. Travelers can store and share key travel documents, allowing an effortless 
check-in to flights and hotels. 

Pilot projects and stakeholder involvement 

Since April 2023, the Commission has funded four Large Scale Pilot (LSP) projects to develop and 
test the EU Digital Identity Wallets across 11 different use cases, involving over 350 entities from 
nearly  all  Member  States.  Building  on  the  valuable  insights  of  these  pilots,  two  new  LSPs  will 
launch  in  2025,  with  a  combined  investment  of  over  40  million  EUR  from  the  Commission  and 

126 Regulation (EU) 2024/1183 of the European Parliament and of the Council of 11 April 2024 amending Regulation (EU) 
No 910/2014 as regards establishing the European Digital Identity Framework, OJ L, 2024/1183. 
127 Based on EU27 population (2023) Demography of Europe – 2024 edition - Interactive publications – Eurostat. 

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Member States. 

New consortia pilots in 2025 

Aligned  with  the  Commission’s  goals  to  enhance  European  competitiveness  and  reduce 
administrative burdens, the Wallet Ecosystem for Business & Payment Use cases, Identification, 
Legal  person  representation  and  Data  sharing  (WE  BUILD)  consortium  aims  to  pilot  the  use  of 
EUDI Wallets across 13 business, supply chain, and payments use cases. This consortium includes 
more than 170 partners comprising a balanced mix of Member States, public entities, SMEs, large 
European companies and global leaders  in the digital identity ecosystem. The Advanced Project 
for  Trusted  Identity  Technologies  and  Unified  Digital  Ecosystem  (APTITUDE)  will  focus  on  four 
use cases: payments, mobile vehicle registration certificates, digital travel credentials, and tickets 
and  travel check-in,  supported  by  nearly  120  partners.  Both  projects  are  foreseen  to  run  for 24 
months  starting  in  Q3  2025,  continuing  the  foundational  work  initiated  by  the  Commission  and 
building on the knowledge from earlier LSP projects like NOBID, DC4EU, POTENTIAL, and EWC128. 

Funding and investment outlook 

The development of EUDI Wallets is supported by funding from the Digital Europe Programme (DEP), 
which focuses on bringing digital technology to businesses, citizens and public administrations. 

With  regards  to  the  future  investment  needs,  the  testing  and  development  of  use  cases  remain 
essential  for  the  development  of  the  EUDI  Wallets  and  their  features.  The  goal  is  to  ensure  that 
Member States can offer feature-rich wallets by 2026 and beyond. The LSPs are  strengthening this 
exact process and continue to push the frontier with the new projects starting in 2025 (see above). 

As  noted  in  the  Competitiveness  Compass,  digitalisation  goes  hand  in  hand  with  simplification.  To 
better  implement  EU  legislation,  companies  and  public  authorities  need  increased  support  for 
capacity building and technical assistance. 

The European Business Wallet 

Scheduled for proposal by the Commission in Q4 2025, the European Business Wallet will serve as a 
horizontal enabler for Europe’s competitiveness. Designed as a core tool to reduce reporting burdens 
and  streamline  digital  business  operations  in  the  EU,  the  Business  Wallet  will  facilitate  secure 
transactions  and open new  opportunities for trust service  providers. This initiative, building on the 
European  Digital  Identity  Framework,  will  create  a  seamless  environment  where  businesses  can 
interact  with  public  administrations  across  the  EU,  and  will  streamline  cross-border  regulatory 
compliance129. 

In  2024,  the  EU  achieved  significant  legal  and  practical  progress  in  the  development  of  the  EUDI 
Wallets.  With  new  regulations  now  in  effect,  Member  States  have  shown  strong  commitment  to 
deploy  digital  public  infrastructures  and  harnessing  the  benefits  of  cross-border  interoperability. 
Over the next two years, the range of use cases available is expected to continue to expand. 

128  For  more  information  on  the  LSPs,  see  SWD  ’Monitoring  of  horizontal  recommendations  2024’,  SWD(2025)  291: 
https://digital-strategy.ec.europa.eu/en/policies/2025-state-digital-decade-package . 
129 The text is relevant to chapter 4: Coherence and synergy: aligning digital policies and funding at different levels. 

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2.2.3  e-Health and digital technologies for healthcare 

Progress towards the Digital Decade target 

Target:  The  digitalisation  of  public  services,  where  100%  of  Union  citizens  have  access  to  their 
electronic health records. 

KPI  definition:  Access  to  e-health  records,  measured  as:  (i)  the  nationwide  availability  of  online 
access services for citizens to their electronic health records data (via a patient portal, or a patient 
mobile  app)  with  additional  measures  in  place  that  enable  certain  categories  of  people  (e.g.  legal 
guardians, people with disabilities, older persons) to also access their data, and (ii) the percentage of 
individuals  able  to  obtain  or  make  use  of  their  own  minimum  set  of  health-related  data  currently 
stored in public and private electronic health-record (EHR) systems. 

Source: Capgemini Invent 

Available data points: from 2022 to 2024 

2024 data value: 82.7 (score 0-100) 

The  access  to  eHealth  indicator  rose  by  3.6  points,  from  79.1  in  2023  to  82.7  in  2024.  This 
represents a year-on-year increase of 4.5%. 

According to the forecast along the baseline trajectory, the target is expected to be achieved by the 
end of 2027 (Figure below). 

Figure 33. e-Health composite indicator. Historical data, Digital Decade and revised baseline trajectory. 

Member State measures 

All  Member  States  have  implemented  some  form  of  electronic  health  access,  either  regionally  or 
nationally, increasing the volume of accessible health data and improving access to technologies and 
opportunities for specific population groups. 

Estonia joined Belgium in achieving a 100% score in electronic health record access thanks to its new 
health mobile app. Starting from lower scores in 2023, Czechia, Ireland, Romania and Slovakia made 

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notable  progress  in  2024,  thus  narrowing  the  gap  with  the  leading  Member  States  in  the  area  of 
electronic health. 

Conversely,  Austria  and  the  Netherlands  saw  their  scores  decline  in  2024,  mainly  due  to 
discontinued  systems  and  reduced  functionalities  or  availability  of  services  for  legal  guardians  and 
authorised persons accessing records on behalf of others. 

Germany,  Greece,  Hungary,  Lithuania,  Luxembourg  and  Sweden  maintained  their  previous  year’s 
scores. This stability is mainly due to ongoing updates; scores are expected to improve in 2025 and 
beyond as current efforts come to fruition. 

While  2024  saw  improvements  in  the  availability  of  hospital  discharge  reports,  no  net  gains  were 
recorded  on  medical  images.  With  regard  to  health  data,  key  improvements  were  achieved  in  the 
handling  of  personal  information;  procedures  and  operations;  eDispensation  information;  and  lab 
test results. 

The  number  of  healthcare  providers  integrating  data  into  electronic  health  records  continued  to 
increase  across  the  EU,  though  a  significant  disparity  persists  between  public  and  private  sector 
providers, with the latter lagging behind. 

European Health Data Space Regulation 

The adoption of the European Health Data Space Regulation, effective from 26 March 2025, marks a 
significant milestone. It ensures that citizens can securely access their electronic health records, both 
nationally and across-borders, improving the efficiency and accessibility of health data for secondary 
uses such as research, innovation and policymaking. 

In 2024, a political agreement was reached on the proposed European Health Data Space Regulation, 
which  took  effect  on  26 March  2025.  Efforts  to  implement  the  Regulation’s  requirements  are 
underway. 

By  March  2027,  Member  States  must  publish  common  specifications  for  interoperability,  security 
and the logging of electronic health records. Additionally, they need to establish compliance testing 
environments  and  cross-border  digital  health  infrastructures  (MyHealth@EU  and  HealthData@EU) 
and services. 

By  2029,  Member  States  must  ensure  that  all  priority  categories  of  data  (patient  summaries, 
ePrescriptions, lab results) are accessible to citizens for both primary and secondary uses and comply 
with all other Regulation requirements. Additional data categories such as hospital discharge reports, 
medical imaging and genomic data must comply by March 2031. 

Authentication via a (pre-)notified eID compliant with the eID Regulation has seen a strong increase 
across Member States, further supporting secure and efficient access to health data. 

EU health data infrastructure initiatives 

The use of health data and advanced technologies holds great potential to improve citizen access to 
health services, increase the quality and efficiency of healthcare, foster personalised approaches and 
support AI-driven research and innovation. Stepping up investment and adoption of AI to enhance 
public services, including healthcare, is a key aspect of the Political Guidelines for 2024-2029130. This 

130 European Commission, Europe’s Choice, Political Guidelines for the next European Commission 2024−2029, 2024.  

89 

 
  
 
involves,  among  other  actions, 
including 
supercomputing  and  genomics,  while  respecting  fundamental  values  and  ensuring  data  protection, 
privacy  and  security.  In  addition,  five  of  the  first  selected  AI  factories  will  include  a  focus  on  life 
sciences and health. 

frontier  technologies, 

investment 

increased 

in 

The  European  Commission’s  health  data  infrastructure  initiatives  contribute  to  the  goals  of  the 
European  Health  Data  Space131.  For  example,  under  the  European  Cancer  Imaging  Initiative, 
launched  in  December  2022,  cancer  imaging  and  clinical  data  are  shared  between  12  European 
countries  to  support  innovation  in  clinical  decision-making  and  prediction.  At  the  core  of  this 
initiative,  the  DIGITAL-funded  Cancer  Image  Europe  platform  supports  data  analytics  and  clinical 
data access for clinicians, researchers and innovators to develop AI-based solutions. A 2024 open call 
to join the European Cancer Imaging Initiative drew significant interest, underlining its value to the 
medical imaging community and the broader health ecosystem. 

The  1+Million  Genome  Initiative,  one  of  the  world’s  largest  genomics  projects,  aims  to  provide 
secure access to genomic data and the related clinical data. In 2024, a demonstrator was developed, 
that  showcases  how  a  federated  genomic  data  infrastructure  can  share  data  held  in  different 
countries,  and  significant  progress  was  made  towards  achieving  a  sustainable  legal  and  business 
model  for  the  infrastructure.  This  progress  was  achieved  within  the  EU-funded  implementing 
projects of the 1+Million Genome Initiative, which will continue guiding the strategic orientation of 
the initiative and will support preparatory work for the creation of a European Digital Infrastructure 
Consortium, a legal entity, to operate and maintain the European Genomic Data Infrastructure. 

 The  European  Virtual  Human  Twins  Initiative,  launched  in  December  2023,  aims  to  accelerate 
personalised care through advanced modelling, with applications in drug discovery, clinical research, 
and  medical  training.  In  2024,  a  EUR 24  million  procurement  launched  the  development  of  an 
advanced platform for Virtual Human Twins. This platform aims to promote interoperability among 
computational  models  and  datasets,  addressing  the  fragmentation  of  the  VHT  ecosystem, 
innovators  and 
particularly  by  offering  high  performance  computing  capacities  to  smaller 
researchers. 

In 2024, the Commission launched two projects under Digital Europe Programme, allocating EUR 10 
million to the  development  of  a cutting-edge  federated infrastructure for Intensive  Care  Unit (ICU) 
data across Europe. These projects aim to enhance secure cross-border access and interoperability 
among healthcare datasets. 

Cybersecurity in the health sector 

In January 2025, the European Commission presented the first of the President’s ‘100 day’ initiatives, 
a European action plan on the cybersecurity of hospitals and healthcare providers. This plan focuses 
on  strengthening  the  sector’s  capacities  to  prevent,  detect  and  respond  to  cybersecurity  threats, 
improve  recovery  processes,  and  deter  cyber  threat  actors.  Specific  actions  will  be  rolled  out 
progressively  in  2025  and  2026,  in  collaboration  with  health  providers,  Member  States,  and  the 
cybersecurity community. 

131  European  Commission,  European  Health  Data  Space  Regulation.  Available  at:  https://health.ec.europa.eu/ehealth-
digital-health-and-care/european-health-data-space-regulation-ehds_en  

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2.3  Protect people, including minors, online 

In  the  last  decade,  digital  services  have  considerably  changed  the  daily  lives  of  all  Europeans, 
including  children  and  young  people,  transforming  and  multiplying  the  ways  they  communicate, 
learn,  and  express  their  opinions  and  ideas.  Online  platforms  have  taken  a  crucial  role  in  shaping 
daily  interactions,  whether  for  commercial,  educational,  leisure  or  social  purposes.  Beyond  the 
opportunities  they  offer,  they  also  bring  challenges,  such  as  the  rapid  dissemination  of  illegal  and 
harmful  content–including  hate  speech,  terrorist  propaganda,  unlawful  images,  and  marketing  of 
counterfeit  products.  The  pervasive  nature  of  these  platforms  necessitates  robust  regulatory 
frameworks and a whole-of-society approach to manage their extensive impact, as advocated in the 
Declaration on Digital Rights and Principles. 

2.3.1  Preserve safety, security and wellbeing in digital environments 

Across the  European  Union,  online  platforms  have  become  an  integral  part of life.  Today,  Amazon 
reaches  nearly  2  in  5  Europeans132,  Google  Search  is  used  by  almost  every  person  in  1  out  of  2 
households  in the EU133, and  YouTube  is used by almost  every European134.  Social media platforms 
also  command  significant  attention,  with  Instagram  and  Facebook  each  catering  to  around  3  in  5 
people  in  the  EU135.  And  platforms  like  X,  Pinterest,  and  Snap  engage  about  20-25%  of  Europeans 
each136. 

Moreover, EU residents are active online consumers, with 77% of EU internet users having bought 
or  ordered  goods  or  services  online  in  2024137.  They  have  solid  online  safety  awareness  -  in  2023 
roughly 7 out of 10 (69.6%) individuals undertook at least one action to protect their  personal data 
online138.  According  to  the  2024  Special  Eurobarometer  on  Justice,  Rights  and  Values,  72%  of 
respondents across the EU indicated having heard of the GDPR139. 

In  the  past  six  months  alone,  over  10  billion  content  moderation  decisions  were  made  by  online 
platform  providers140,  underscoring  the  colossal  volume  of  information  being  managed  and  the 
growing need for clear and consistent standards. 

Fostering online safety and rights protection at EU level 

To create a safe, fair, and transparent digital space that upholds user rights and security, the EU has 
adopted the Digital Services Act (DSA), a landmark legislative act establishing a comprehensive legal 

132 Amazon EU Store Transparency Report 
133 Signed-out recipients, versus 356 million signed-in recipients, Google Transparency Report, information about monthly 
active  recipients  under  the  Digital  Services  Act  (EU),  https://storage.googleapis.com/transparencyreport/report-
downloads/pdf-report-24_2024-7-1_2024-12-31_en_v1.pdf. 
134 Ibid, signed-out recipients, versus 459 million signed-in recipients. 
135  For  both  the  Facebook  and  Instagram  numbers  are  based  on  the  most  recent  DSA  transparency  reports  of  Meta, 
covering April to September 2024. 
136  The  latest  transparency  report  puts  X  at  106  million  users,  X  transparency:  AMARS  in  the  EU;  Pinterest’s  total 
authenticated user base is 81 million. Pinterest, Digital Services Act; Snap, EU transparency page 
137 Eurostat, (isoc_ec_ib20). 
138  At  least  one  of  the  following:  blocked  or  limited  cookies,  checked  website  security  where  personal  data  is  provided, 
limited access to social media profile or shared content, read privacy policy statements, refused  use of personal data for 
advertising, restricted or refused access to geographical location. Eurostat 2023. 
139 European Commission, Special Eurobarometer 552, Justice, rights and values - October 2024 - - Eurobarometer survey. 
140 See data of the DSA transparency database. Available at: https://transparency.dsa.ec.europa.eu/. 

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framework to address the inherent risks posed by online platforms and set out the responsibilities 
of digital services providers. 

The  DSA  categorises  intermediary  service  providers  into  different  tiers,  with  more  extensive 
obligations for Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs). 
These platforms, categorised based on the average number of their monthly users, are required to 
adhere  to  stringent  compliance  rules.  In  2024,  the  EU  expanded  this  list  to  25  VLOPs  and  VLOSEs, 
most  recently  including  platforms  like  Shein,  Temu,  and  XNXX.  The  Commission  exercises  its 
enforcement  mandate  with  vigilance,  initiating  formal  proceedings  against  any  suspected  non-
compliance. 

The DSA provides regulators and platforms with a varied set of tools and mechanisms to proactively 
manage  risks.  For  example,  one  key  obligation  for  platforms  is  to  implement  ‘notice  and  action’ 
mechanisms, which allow users to report illegal content effectively. Service providers are required to 
process these notifications in a timely manner, giving priority to those submitted by trusted flaggers 
(independent experts in detecting illegal content). 

To  uphold  the  robust  standards  set  by  the  Digital  Services  Act,  the  European  Commission  actively 
engages in comprehensive enforcement actions. This involves launching formal proceedings  against 
platforms  that  are  suspected  of  non-compliance.  In  2024,  notable  cases  included  actions  against 
major  entities  like TikTok,  Meta’s  Facebook  and  Instagram,  AliExpress,  and  Temu.  The  Commission 
currently  has  13  open  proceedings,  having  closed  its  first  proceedings,  against  TikTok,  in  August 
2024 and most recently opened proceedings against four adult content platforms in May 2025. The 
proceedings  are  focused  on  issues  such  as  content  transparency,  the  protection  of  minors,  and 
dissemination of illegal products. 

In  addition  to  launching  formal  proceedings,  the  Commission  has  sent  over  100  requests  for 
information  (RFIs)  to  gather  critical  data  from  VLOPs  and  VLOSEs.  The  RFIs  target  priority  areas, 
including  the  spread  of  illegal  content  and  disinformation,  consumer  protection,  and  digital 
transparency e.g. in advertising. 

Collaboration is essential for effectively managing the intricate challenges of digital governance. By 
endorsing  voluntary  codes  of  conduct  to  counter  harmful  content  and  by  fostering  inter-agency 
partnerships and coordinated efforts between law enforcement bodies, such as Europol, and Digital 
Services Coordinators (DSCs) across Member States, the EU unites various stakeholders in a collective 
mission. These initiatives drive a cohesive response to illegal content and systemic risks, reinforcing a 
digital ecosystem grounded in mutual responsibility and proactive engagement. 

In  a  collaborative  effort  to  mitigate  systemic  risks,  in  January  2025  the  EU  endorsed  the  Code  of 
Conduct  on  Countering  Illegal  Hate  Speech  Online+.  The  Code  represents  a  commitment  by 
stakeholders to actively combat harmful content. It strengthens the way online platforms deal with 
content that EU and national laws define as illegal hate speech through commitments on: terms and 
conditions;  the review time  for  notices of illegal content;  the  transparency of content  moderation; 
multi-stakeholder  cooperation;  and  awareness-raising.  In  this  way,  the  Code  facilitates  online 
platforms’  compliance  with  the  DSA  when  it  comes  to  risks  of  dissemination  of  illegal  content 
through their services. 

As digital commerce continues to expand, one of the European Union’s priorities has been to create 
a harmonised framework to ensure fair trading practices and consumer protection across its single 
market. In February 2025, the e-Commerce Communication was adopted to protect consumers and 

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ensure that products imported via e-commerce comply with EU rules and fair-trading practices141. It 
proposes a comprehensive set of actions across the entire life cycle of the goods142, prioritising the 
enforcement  of  digital  rules,  in  particular  the  Digital  Services  Act,  and  calls  for  strengthened 
cooperation  among  all  relevant  authorities  in  areas  such  as  customs,  environmental  protection, 
product safety and consumer protection, while promoting the use of digital tools. Looking ahead, 
the  Commission  plans  to  closely  monitor  the  implementation  of  these  initiatives  and  assess  their 
impact on the digital marketplace. 

In addition,  in the  seven  years since  the General Data Protection Regulation became applicable, it 
has empowered people by allowing them to have control over their data. It has also helped create a 
level playing field for businesses and provided a cornerstone  for the  panoply of initiatives  that  are 
driving the digital transition in the EU. There has been a significant uptick in enforcement activity by 
data protection authorities in recent years, including the imposition of substantial fines in landmark 
cases.  Data  protection  authorities  have  imposed  over  6 680  fines  amounting  to  around  EUR 4.2 
billion143. These activities include fines against big tech companies like Meta, Amazon and TikTok. 

By November 2025, a comprehensive evaluation will be conducted to determine how effectively the 
DSA interacts with other EU rules, such as data protection and consumer protection legislation, and 
to identify areas for improvement144. 

Digital Markets Act145: Users and businesses have more control over their data 

Barriers  to  data  access  can  lead  to  less  contestability,  less  innovation  and  less  choice  for  users. 
Users can now choose whether they agree for their data to be combined and/or cross-used across 
the services of ‘gatekeepers’ (a designation under the DMA for large online platforms offering core 
platform services).  For example, Alphabet  now gives users  the possibility to decide  whether their 
personal data is used and combined, for profiling purposes, across Alphabet products like Search, 
YouTube, Ad services, Google Play, Chrome, Google Shopping and Google Maps. 

All  gatekeepers  now  offer  data  portability  solutions  for  users  and  enable  easier  data  access  for 
businesses.  For  example,  users  of  Google  Search,  Facebook  or  TikTok  can  give  access  to  their 
historic and future data to authorised third parties,  to enable these  parties  to offer competing or 
innovative services.  

2.3.2  Protect children 

According  to  2025  Digital  Decade  Eurobarometer,  the  vast  majority  of  respondents  believe  that 
public authorities need to take urgent actions to: protect children online from the negative impact 
of  social  media  on  mental  health  (93%);  restrict  access  to  age-inappropriate  content  through  age 

141  Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee  and  the  Committee  of  the  Regions:  A  comprehensive  EU  toolbox  for  safe  and  sustainable  e-commerce, 
COM(2025) 37 final. 
142 European Commission, Factsheet on the e-Commerce communication, February 2025.  
143 Communication from the Commission to the European Parliament and the Council: Second Report on the application of 
the General Data Protection Regulation, COM(2024) 357 final. 
144 As mandated by Article 91 DSA. 
145 See Chapter 1 of this SWD. 

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assurance  mechanisms  (92%);  and  tackle  cyberbullying  and  online  harassment  (92%)146.  Among 
respondents  of  the  2024  Youth  survey  (aged  16-30),  social  media  is  the  top  source  for  news  on 
political and social issues, with 42% relying on it, followed by television with 39%. The preference for 
TV increases  with age,  and older  respondents in this age  group are more  likely to use online  news 
platforms and radio147. 

The World Health Organisation’s Health Behaviour in School-aged Children (HBSC) study published in 
2024  reveals  that  cyberbullying  is  a  significant  problem:  1  in  8  adolescents  report  that  they  have 
cyberbullied  others,  and  1  in  6  having  experienced  cyberbullying,  with  boys  slightly  more  likely  to 
report cyberbullying others148. In this context, in 2024 the EU-funded Safer Internet Centres received 
and handled over 54 000 calls where cyberbullying was the main issue (14% of contacts)149. On the 
other  hand,  issues  related  to  sexual  content  or  contact  (including  grooming,  the  nonconsensual 
sharing  of  intimate  images,  and  the  online  sexual  coercion  and  extortion  of  children  (sextortion)) 
accounted for 24% of all contacts150. Research suggests that intensive use of online social networks 
correlates with loneliness and emotional distress among young people, while this is largely not the 
case for instant messaging tools151. 

Data  from  EU  Member  States  also  paints  a  concerning  picture  of  children  spending  significant 
amount  of  time  online152,  and  lacking  awareness  about  commercial  influencer  content.  38%  of 
children  between  the  ages  of  6  and  12  in  Denmark  did  not  recognise  this  type  of  content  as 
advertising.  Children  also  tend  to  spend considerable  sums  of  money  on  in-game  purchases,  with 
7% of them spending more than EUR 80/month. In Finland, 69% of respondents indicated that they 
use social media or play games  online for more than  three  hours a day during weekdays153. As a 
background, 34% of adolescents surveyed in the HBSC study reported playing digital games daily, 
with 22% playing for at least four hours on a gaming day154. In Poland, in the fourth quarter of 2024, 
every second underage Internet user had contact with erotic content, spending an average of 10 to 
14 minutes a day viewing such content155. 

Consequently, harmful and illegal content, conduct,  and contact and consumer risks are  frequently 
present for children online. Often using digital products and services designed for adults, children can 

-  special  Eurobarometer 

report:  https://digital-strategy.ec.europa.eu/en/news-

146  The  Digital  Decade  2025 
redirect/883227.  
147 Eurobarometer, Youth survey 2024. 
148  Health  Behaviour  in  School-aged  Children  (HBSC)  international  report  from  the  2021/2022  survey  presented  in  2024, 
updated every four years, in collaboration with the WHO Regional Office for Europe. Cosma A et al., A focus on adolescent 
peer  violence  and  bullying  in  Europe,  central  Asia  and  Canada.  Health  Behaviour  in  School-aged  Children  international 
report from the 2021/2022 survey. Volume 2. 
149 Better internet for kids – review of year 2024 
150 Ibid. 
151  Joint  Research  Centre,  Cabeza  Martínez,  B  et  al.,  Social  Media  Use,  Loneliness  and  Emotional  Distress  Among  Young 
People  in  Europe  (9 January  2025).  Ca’  Foscari  University  of  Venice,  Department  of  Economics  Research  Paper  Series 
No 01/2025, Available at SSRN: https://ssrn.com/abstract=5089729. The paper uses a survey sample of people aged 16-35. 
152 The largest share (32%) of the participants in the study use three to four hours, 19% use five to six hours, and as much as 
7% use seven to eight hours every day, see Skærmbrug og børn og unges mentale sundhed | Ugeskriftet.dk – (in Danish). 
153 From a survey by the Finnish  Mannerheim League for Child Welfare. Respondents ranged from 9-22 years of age, but 
83% were 13-17 year olds. They surveyed 3 627 respondents. 
154 WHO 2024 HBSC study, Boniel-Nissim, M et al, Volume 6. A focus on adolescent social media use and gaming in Europe, 
central Asia and Canada: Health Behaviour in School-aged Children international report from the 2021/2022 survey 
155 Fundacja Instytut Cyfrowego Obywatelstwa, Bigaj, M et al.  Children's Internet - Report on monitoring the presence of 
children and young people on the Internet. March 2025 (in Polish). 

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be  particularly  exposed  to  misleading  and  aggressive  commercial  practices  online.  In  addition, 
digital  services,  from  social  media  to  interactive  games,  can  expose  children  to  risks  such  as 
unsuitable content, bullying, grooming, child sexual abuse or radicalisation. Seeing explicitly violent, 
aggressive,  or  sexual  content  (such  as  beheadings  and  extreme  pornography)  can  desensitise 
children  to  such  behaviour,  normalise  violence  and  affect  their  mental  health  and  well-being. 
Although 13 is the minimum age for most social media platforms, many users are younger, as age-
gating is generally ineffective for most digital content and services at present156. 

As shown above, recent years have seen an escalation in cyberbullying. That has a profound impact 
on  healthy  relationships  among  minors,  their  mental  health  and  trust  in  the  digital  environment. 
Cyberbullying is pervasive and challenging to prevent. Despite the high reported numbers, it is likely 
that  the  problem  is  in  fact  underreported  as  children  often  lack  sufficient  knowledge  on  reporting 
tools or do not trust that there will be an appropriate follow-up to their requests and may decide not 
to act at all. 

Supporting children through EU-level initiatives 

The European Union has a comprehensive legislative and policy framework to address these topics, 
including the Digital Services Act (DSA), the Audiovisual Media Services Directive (AVMSD)157 and the 
Better Internet for Kids (BIK+)  strategy. In addition, the  EU AI Act specifically prohibits AI practices 
that  exploit  the  vulnerabilities  of  children158  .  Under  the  Act,  high-risk  AI  applications  must  ensure 
that  the  mandatory  risk  management  system  pays  special  attention  to  the  impact  that  the 
applications  may  have  on  minors.  The  EU  co-funded  network  of  Safer  Internet  Centres  (SICs)  has 
been  established  to  provide  awareness  campaigns,  trainings,  and  resources  on  online  safety, 
including  cyberbullying.  In  2024  the  network  and  the  BIK  platform  reached  more  than  35  million 
users159. 

As  the  protection  of  minors  online  is  a  clear  priority  in  the  DSA  enforcement,  in  2024,  the 
Commission opened four proceedings related to the protection of minors online: two against TikTok 
and  one  each  against  Instagram  and  Facebook.  As  a  result,  TikTok  suspended the  task  and  reward 
programme,  which has  been  criticised for exacerbating the risk of addiction, in  the TikTok Lite  app 
and  committed  not  to  roll  it  out  –  or  any  similar  programme  -  in  the  future  in  the  EU.  This 
commitment has been made legally binding. 

The Commission has also sent requests for information to three adult content platforms designated 
as such under the DSA, asking for more details on the measures they have taken to diligently assess 
and  effectively  mitigate  against  risks  related  to  the  protection  of  minors  online,  including  details 
related  to  age  assurance  mechanisms  adopted  by  these  platforms.  Based  on  their  responses  and 
other analysis, in May 2025 the Commission opened formal proceedings against Pornhub, Stripchat, 
XNXX, and XVideos which also focus on the risks for the protection of minors, including those linked 
to the absence of effective age verification tools. 

156 European Parliamentary Research Service, Negreiro M, Online age verification methods for children, February 2023. 
157 In particular the provisions on protecting minors against harmful content (Articles 6a and 28b), in particular the 
requirement to adopt appropriate measures to that end, including through age verification. 
158 This prohibition became applicable as of 2 February 2025. 
159 SWD ’Monitoring of horizontal recommendations 2024’, SWD(2025) 291: https://digital-
strategy.ec.europa.eu/en/policies/2025-state-digital-decade-package.  

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President von der Leyen has also placed great emphasis on protecting the mental well-being of users 
of social media services. In the 2024-2029 Political Guidelines, the President announced an EU-wide 
inquiry into the broader impacts of social media and excessive screen time on mental health and 
well-being  of  users,  particularly  children  and  adolescents.  This  evidence-based  inquiry  will 
complement existing research and ensure appropriate policy developments in this area. The aim is to 
provide  practical  recommendations  for  stakeholders,  including  policymakers,  on  fostering  healthy 
digital habits and mitigating potential harm to young people’s mental well-being. 

Additionally, upcoming guidelines on the protection of minors under Article 28 of the DSA will assist 
providers  of  online  platforms  accessible  to  children  and  young  people  to  ensure  a  high  level  of 
include 
privacy,  safety  and  security  for  minors  using  their  services.  The  guidelines  will 
recommendations in areas such as age assurance, default settings, systems content moderation and 
child  rights  impact  assessments.  The  guidelines  will  be  applicable  to  all  sizes  of  online  platforms 
accessible to minors, except if their providers are micro and small enterprises, and are expected to 
be adopted in 2025. 

The Commission is procuring a short-term age verification solution, a ‘mini-wallet’, to bridge the gap 
until the EU Digital Identity Wallet is available (by end of 2026). The objective is to develop a privacy-
preserving160  age  verification  solution  that  will  be  localised  and  published  by  Member  States  or 
other  authorised  entities  in  relevant  app  stores.  The  technical  specifications  for  the  solution  are 
being prepared with input from Member States and other stakeholders. With a design phase in early 
2025  and  a  development  phase  in  the  spring  of 2025,  the  white  label  application  is  planned  to  be 
released  by  summer  2025.  The  application will  be  highly  customisable  and modular,  and  ready  for 
localisation and publishing by Member States. 

Moreover,  the  upcoming  evaluation  of  the  AVMSD  due  by  December  2026  will  provide  an 
opportunity to assess the added value of the Directive’s provisions relating to protection of minors 
against  harmful  content  and,  if  appropriate,  present  proposals  for  their  review.  The  Political 
Guidelines  also  provide  for  an  action  plan  against  cyberbullying  to  address  the  growing  trend  of 
abusive  online  behaviour.  The  action  plan  will  ensure  a  safe  online  environment  for  children  with 
targeted  initiatives  to  tackle  the  issue  while  promoting  digital  literacy  and  supporting  awareness-
raising  efforts.  The  SICs  network  will  be  at  the  core  of  the  action  plan,  which  will  also  build  on 
existing good practices of tools and services offered at national level. 

Member State efforts 

In the context of children protection online, there were several developments at national level. For 
example, Ireland adopted its Online Safety Code in October 2024. Around the same time, the French 
national  regulatory  authority  Arcom  adopted  a  technical  framework  determining  the  minimum 
technical  requirements  that  adult  content  platforms  need  to  integrate  in  their  age  verification 
systems. 

In  2024,  Greece  launched  a  comprehensive  strategy  to  protect  minors  from  online  dangers, 
particularly  focusing  on  internet  addiction  and  social  media  overexposure.  The  strategy  aims  to 

160  For  importance  of  a  GDPR-compliant  age  assurance  see  the  statement  of  the  European  Data  Protection  Board  from 
February 2025. 

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create  a  safer,  more  supportive  online  environment  for  minors  while  addressing  the  psychological 
impacts of internet addiction. 

2.4  Protect information integrity and democracy 

Disinformation  and  foreign  information  manipulation  and  interference  are  serious  threats  to 
societies,  information  integrity  online  and  to  the  inclusive  digital  public  space  protected  by  the 
Declaration  on  Digital  Rights  and  Principles.  These  phenomena  can  undermine  democratic 
institutions and processes (such as elections) by preventing people from making informed decisions 
or  discouraging  them  from  voting.  They  also  have  the  potential  to  polarise  societies  by  pitting 
communities  against  each  other.  The  rise  of  new  technologies  has  made  it  possible  to  spread 
disinformation and manipulate information on a scale and at a speed never seen before. 

2.4.1  Tackle information manipulation 

There has been a significant rise in coordinated inauthentic behaviour (CIB) on social media in recent 
years.  Networks  of  fake  accounts,  bots,  and  troll  farms  flood  digital  platforms  with  misleading 
narratives,  creating  the  illusion  of  grassroots  support  or  public  outrage.  These  manufactured 
campaigns, often directed by state or non-state actors, distort political discourse, influence elections, 
and weaken societal trust in legitimate institutions. 

The spread of disinformation can come from domestic sources, but often it can be linked to foreign 
information manipulation and interference (FIMI) carried out by hostile foreign actors. FIMI refers 
specifically  to  coordinated  efforts  by  foreign  (often  state-sponsored)  entities  to  manipulate  the 
information  environment  in  target  countries.  These  activities  are  designed  to  sow  discord, 
undermine  institutions,  and  shape  public  opinion  to  serve  strategic  geopolitical  interests.  In  the 
context  of  the  current  volatile  geopolitical  environment,  FIMI  has  become  a  powerful  tool  in  the 
hands of unfriendly governments trying to undermine our societies. 

At  the  same  time,  manipulation  of  social  media  algorithms  enable  the  amplification  of 
disinformation faster than ever before. Actors seeking to spread falsehoods have learned to exploit 
recommender  systems,  hijack  trending  topics,  and  game-search  engine  rankings,  making  it 
increasingly difficult for the public to distinguish credible information from deliberate deception. 

These  tactics  fundamentally  disrupt  public  discourse,  often  by  creating  the  illusion  of  widespread 
support or opposition where none truly exists. One such method is astroturfing, a strategy in which 
coordinated disinformation campaigns pose as grassroots movements. From fabricated petitions and 
deceptive  online  comments  to  mass-coordinated  social  media  activity,  astroturfing  distorts  public 
perception, manipulates policy debates, and undermines open dialogue. The result is a manufactured 
consensus that pressures businesses, policymakers, and the public into adopting positions that may 
not accurately reflect societal views. 

This  manipulation  of  public  perception  is  particularly  concerning  given  how  difficult  it  is  for 
individuals to differentiate between truth and falsehood online. The 2024 OECD Truth Quest Survey 
assessed  individuals’  ability  to  identify  false  and  misleading  content  online  across  21  countries.  It 
examined  whether  certain  types  of  content  are  more  easily  distinguishable  as  false,  the  role  of 
content  themes  in  detection,  and  the  impact  of  AI-generated  content  labelling.  According  to  the 
survey,  participants  correctly  identified  the  veracity  of  content  60%  of  the  time.  True  claims  were 
detected less often (56%) than false and misleading content (61%). This means that many individuals 
struggle  with  distinguishing  true  content  from  false  content.  In  general,  almost  50%  of  the  EU 

97 

 
  
population state that they have seen untrue or doubtful information on internet news sites or social 
media (the figure being over 70% in the Netherlands, for example)161. 

With the rise of generative AI, it is likely that this problem will only grow. These tools allow nefarious 
actors  to  produce  disinformation  content  at  high  speed  and  on  a  large  scale.  With  rapid 
improvements  in  technology,  much  of  this  content  (whether  images,  audio,  or  video)  is  virtually 
indistinguishable  from  real  content.  These  tools  are  already  being  used  by  different  influence 
operations trying to manipulate elections and public opinion in general. 

EU’s efforts to address online information integrity 

As part of the European Union’s ongoing efforts to tackle online disinformation, the Commission has 
introduced  a  range  of  policy  measures  to  increase  the  responsibility  of  online  platforms. These 
measures are designed to ensure that online platforms take proactive steps to combat the spread of 
false  or  misleading  information,  ensuring  a  safer  and  more  reliable  digital  environment  for  all.  In 
February  2025  the  Commission  and  the  European  Board  for  Digital  Services  endorsed  the 
integration of the voluntary Code of Practice on Disinformation into the framework of the Digital 
Services  Act  (DSA)  under  Article 45  of  that  Act.  Its  conversion  into  the  Code  of  Conduct  on 
Disinformation  will  take  effect  from  1 July  2025.  This  integration  will  allow  the  Code  to  become  a 
significant  and  meaningful  benchmark  for  determining  DSA  compliance  regarding  disinformation 
risks. The Code may be considered as an appropriate risk mitigation measure for signatories who are 
providers of VLOPs and VLOSEs that adhere to and comply with its commitments. In addition, as part 
of the DSA enforcement  action, the  Commission has launched four formal proceedings against  the 
major  platforms Meta,  TikTok  and  X,  which  focus on  risk  assessment  and mitigation  in the area of 
information manipulation. 

Aside from the conversion, in 2024 the Commission continued monitoring the implementation of the 
Code  of Practice  on  Disinformation  and worked  with  signatories  to  implement  their  commitments, 
focusing,  in particular, on transparency, accountability and cooperation measures  in the  context of 
elections (see section below). 

The Commission also continued to support the European Digital Media Observatory (EDMO), which 
gathers  fact  checkers,  researchers  and  media  literacy  specialists  to  contribute  to  the  fight  against 
disinformation, which is particularly crucial in the context of elections. It ensured that all 14 national 
and  regional  EDMO  hubs,  operational  since  2023  with  geographical  coverage  of  the  whole  EU 
territory, remained fully operational through the refinancing of a set of 8 hubs in 2024. Overall, 14 
national and regional EDMO hubs have been operational since 2023, ensuring EDMO’s geographical 
coverage of all of the EU. Through dedicated taskforces, the work by EDMO and the hubs has been 
particularly  instrumental  in  identifying  and  analysing  disinformation  on  the  2024  European 
Parliament elections, on Russia’s war of aggression against Ukraine and on the Israel-Hamas conflict. 

The  Commission  kept  supporting  media  literacy  projects  to  strengthen  societal  resilience  against 
disinformation.  In  October,  a  new  call  for  proposals  under  the  Creative  Europe  programme  was 
launched162,  dedicated  to  innovative  cross-border  projects  helping  to  enhance  Europeans’ media 
literacy  skills  and  limit  the  detrimental  impact  of  disinformation. In  October,  EDMO  also  launched 

161 Eurostat, ‘Evaluating data, information and digital content’, isoc_sk_edic_i21, 2023 data. 
162 European Commission, Call for Proposals – Cross-Border Media Literacy projects. Available at: https://digital-
strategy.ec.europa.eu/en/funding/call-proposals-cross-border-media-literacy-projects. 

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Guidelines  for effective media literacy initiatives, which aim  to increase  the effectiveness of media 
literacy initiatives across Europe. 

The  Commission  also  remains  actively  involved  in  the  development  of  a  series  of  multidisciplinary 
research and innovation projects, with a budget of EUR 28 million for the 2022-2027 period, which 
aim  to  create  AI-based  tools  to  detect  deepfakes  and  manipulated  content  in  the  form  of  videos, 
images and voices. 

Significant  work  is  being  done  to  combat  disinformation  and  manipulative  behaviour  online,  while 
also  promoting  free  speech.  However,  even  more  can  be  done,  and  a  greater  effort  is  needed  to 
combat the challenges linked to disinformation. 

2.4.2  Support democratic processes and election integrity 

When people are repeatedly exposed to false information, their trust in legitimate sources erodes. 
This  leads  to  a  situation  where  no  one  knows  what  to  believe,  creating  an  environment  where 
conspiracy  theories  and  scepticism  thrive.  As  trust  in  institutions  like  governments,  media,  and 
science declines, democratic processes weaken, and social cohesion suffers163. 

While most Europeans think  online social networks allow people to get  involved in political affairs, 
they also believe that information found on them cannot be trusted. Around two thirds agree that 
online  social  networks  can  get  people  interested  in  political  affairs  (67%,  no  change  since  autumn 
2023) and more than 6 in 10 agree that online social networks are a good way to have your say on 
political issues (62%, + 1 percentage point since autumn 2023). Over 62% of Europeans now express 
distrust  toward  political  content  on  social  networks,  with  particularly  high  levels  of  concern  in 
Sweden (83%), Spain (73%), and Finland (69%) (Eurobarometer 2024)164. 

Given  the  growing  scepticism  toward  digital  information  sources,  editorially  responsible  media 
services,  their  freedom  and  pluralism  have  an  even  more  crucial  role  in  empowering  people  to 
make informed choices. However, their fundamental protection faces a medium risk level in the EU, 
according to the 2024 Media Pluralism Monitor (MPM) by the Centre for Media Pluralism and Media 
Freedom165.  The  analysis  considered  elements  such  as  the  existence  of  effective  regulatory 
safeguards to protect freedom of expression both online and offline, favourable conditions for free 
and  independent  journalism  and  the  presence  of  independent  and  effective  media  authorities.  In 
2024  the  average  risk  score  for  the  Member  States  was  34%,  up  by  approximately  3  percentage 
points from the 2023 results. The report identified persisting issues such as a lack of transparency in 
online platforms’ removal of media content and journalists’ digital safety. 

When  it  comes  to  risks  linked  to  market  plurality,  including  transparency  of  media  ownership, 
plurality  of  media  providers  and  digital  markets,  in  addition  to  editorial  independence  from 
commercial  and  owner  influence,  the  2024  MPM  gives  a  high  average  risk  score  of  67%  for  the 
Member  States,  albeit  a  few  decimal  points  lower  than  in  2023.  The  main  risks  derive  from  the 
concentration of media ownership and the concentration in the digital markets, which threaten the 
pluralism of offer and pluralism of exposure, respectively. 

163  A  JRC  study  has  identified  trust  as  the  key  indicator  for  public  institutions  communication  activities  to  deal  with  the 
increased spread of dis- and misinformation, see Joint Research Centre, Smillie, L. and Scharfbillig, M.,  Trustworthy Public 
Communications, Publications Office of the European Union, Luxembourg, 2024, JRC137725. 
164 European Commission, ‘Standard Eurobarometer 102 – autumn 2024’, report on media use. 
165 Media Pluralism Monitor 2024 – CMPF. 

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EU-level action to support democracy online 

As  part  of  its  commitment  to  protecting  and  promoting  democracy  in  the  European  Union,  the 
European  Commission  has  been  actively  working  to  address  the  complex  challenges  posed  by 
disinformation, online manipulation, and electoral interference (see subsection above).  

In addition, digital technologies have been used to make democracies more participatory, inclusive, 
accountable, and responsive, leading to more social equality, and better decision and policymaking 
processes.  The  European  Commission’s  Citizens’  Engagement  Platform166  has  been  instrumental  in 
actively  involving  citizens  in  EU  policymaking,  and  in  2024,  the  platform  supported  the  European 
Citizens’ Panels on Energy Efficiency and Tackling Hatred in Society, gathering stakeholders’ ideas to 
shape relevant policy developments. 

In the context of elections, the Commission has taken concrete steps to mitigate systemic risks and 
ensure  the  integrity  of  electoral  processes.  Beyond  the  DSA  Guidelines  on  the  Mitigation  of 
Systemic  Risks  for  Electoral  Processes  from  spring  2024,  throughout  2024  and  into  2025,  the 
Commission  has  closely  monitored  and  supported  elections  across  the  EU,  including  the  European 
elections  in  June  2024,  sharing  expertise  with  national  authorities,  organising  round  tables  with 
stakeholders,  and  conducting  stress  tests  to  simulate  election  manipulation  and  interference 
scenarios. To further support Member States’ regulators in their work with VLOPs and VLOSEs, the 
Commission  published  a  DSA  election  toolkit  in  February  2025167,  summarising  best  practices  and 
approaches  to mitigating  risks such as hate speech, online  harassment, and manipulation of public 
opinion. 

In  December  2024,  the  Commission  took  a  significant  step  by  opening  formal  proceeding  against 
TikTok  under  Digital  Services  Act,  as  response  to  the  2024  Romanian  presidential  elections.  This 
decision  followed  indications  of  foreign  interference  in  the  elections,  with  the  Commission 
suspecting  that  TikTok  may  have  failed  to  properly  assess  and  mitigate  systemic  risks  to  election 
integrity.  The  investigation  focuses  on  TikTok’s  management  of  risks  related  to  its  recommender 
systems and policies on political advertisements, paying particular attention to whether the platform 
has diligently addressed regional and linguistic aspects of national elections. 

Important work has been done with signatories to the Code of Practice on Disinformation, which has 
led  to  the  successful  implementation  of the  Rapid Response  System (RRS)  ahead  of  the European 
Elections. The RRS enabled fact checkers and civil society organisations to flag suspicious content and 
receive feedback from platforms, helping to protect the integrity of the electoral process. The Code’s 
taskforce  has  also  delivered  new  measurements  of  structural  indicators,  providing  insights  into 
online disinformation trends during the electoral period. Besides the European Parliament elections, 
the Code’s RRS was activated for the elections in France and Romania in 2024 and continues to be 
applied in 2025.  

In regular public reporting on the implementation of their commitments under the Code, signatories 
provided  dedicated  information  on  the  election-specific  actions  they  had  implemented  for  the 
European  elections  (as  well  as  Russia’s  war  of  aggression  against  Ukraine  and  the  Hamas  terrorist 

166 European Commission, Citizens Engagement Platform, available at: https://citizens.ec.europa.eu/index_en. 
167 European Commission, Commission presents new best-practice election toolkit on the Digital Services Act, Press Release, 
20 February 2025. 

100 

 
  
 
attacks on Israel)168. The Code’s taskforce also delivered new measurements of the Code’s Structural 
Indicators, giving insights into online disinformation covering the electoral period across major online 
platforms in the EU. 

In  addition  to  these  initiatives,  the  Commission  has  been  supporting  the  work  of  the  European 
Digital  Media  Observatory  (EDMO),  which  monitored  the  EU-wide  online  information  space  and 
exposed disinformation during the 2024 European Parliament elections169 

A  comprehensive  toolbox  employed  by  the  Commission  on  the  nexus  of  election  integrity  and 
information  manipulation  includes  also  the  recommendation  on  inclusive  and  resilient  electoral 
processes which encourages measures to protect the information environment around elections 170. 
It  recommends  developing  public  awareness,  media  literacy  and  critical  thinking  to  address 
information  manipulation,  interference  and  disinformation  related  to  elections  Additionally,  the 
Commission  supports  Member  States  through  the  European  Cooperation  Network  on  Elections, 
which  fosters  dialogue,  cooperation  and  practical  solutions  to  a  range  of  threats  in  the  context  of 
elections,  including  FIMI  and  disinformation.  In  2024,  the  rules  on  transparency  and  targeting  of 
political  advertising  were  introduced171.  Among  others,  they  tackle  the  use  of  advanced  targeting 
techniques and the threat of information manipulation and interference.  

Looking  ahead,  the  Commission  is  committed  to  stepping  up  its  efforts  to  counter  foreign 
information manipulation and interference online, as outlined with the European Democracy Shield 
initiative172, announced in the 2024-2029 Political Guidelines. This initiative aims to enhance Europe's 
capacity  to  detect,  analyse,  and  proactively  counter  disinformation  and  information  manipulation 
building on the work already done under the European Democracy Action Plan and the Defence of 
Democracy Package. The Commission further plans to bolster fact-checking coverage across Europe 
through  a  European  Network  of  Fact  Checkers,  which  will  play  a  critical  role  in  detecting  and 
countering disinformation. In addition,  the  Commission  will reflect on ways to continue  supporting 
independent and pluralistic news media and a trustworthy information sphere. 

The  Commission’s  actions  demonstrate  a  comprehensive  and  multifaceted  approach  to  supporting 
information  integrity  in  the  EU,  including  in  the  context  of  democratic  processes.  By  combining 
regulatory  frameworks,  stakeholder  and  citizen  engagement,  and  support  for  fact-checking  and 
media  literacy  initiatives,  the  Commission  is  working  to  create  a  more  resilient  and  transparent 
online environment, where citizens can access accurate and trustworthy information. 

168 Available at : www.disinfocode.eu. 
169 For details, see the Commission’s Report on the 2024 elections to the European Parliament (publication pending at the 
time of writing). 
170 Commission Recommendation (EU) 2023/2829 of 12 December 2023 on inclusive and resilient electoral processes. 
171 Regulation (EU) 2024/900 on the transparency and targeting of political advertising. 
172 See the Commission’s call for evidence for the European Democracy Shield. 

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3 Harnessing  digitalisation  for  the  green 

transition 

The green and digital transitions are at the heart of the Competitiveness Compass for the EU173 to 
regain competitiveness  and secure  sustainable prosperity. The  Compass identifies  high and volatile 
energy prices as a key challenge and sets out areas for intervention to facilitate access to clean and 
affordable energy. In this context, digitisation is a key enabler to maximise the synergies between 
the  green  transition  and  competitiveness,  e.g.  by  reducing  costs,  meeting  resource  needs, 
optimising  supply  chains,  enabling  circular  scalable  business  models.  Digitalisation,  when  properly 
used and governed, is also a catalyst for a green, inclusive and competitive economy due to its net 
positive  impact  on  the  environment  and  climate.  By  ensuring  that  the  environmental  benefits  of 
digitalisation outweigh its negative impacts, the EU will be able to meet the sustainability targets and 
objectives already set, in particular as part of the European Green Deal174. Policy priorities and key 
performance  indicators  should  concentrate  on  quantifying  and  amplifying  the  net  environmental 
impact  of  digitalisation.  In  this  way we  will  boost  green  innovation  and  deliver  measurable  energy 
and material efficiency gains, making the EU more competitive as an economy and less dependent on 
materials and resources. 

in  the  report  on 

‘The  future  of  EU 
To  complete  this  holistic  approach  as  highlighted 
Competitiveness’175,  the  green/digital  twin  transition  must  bolster  economic  vitality  without 
compromising  growth,  innovation  and  social  equity,  emphasising  that  Europe’s  future  lies  in 
harmonising  environmental  objectives  with  economic  and  social  policies.  The  Political  Guidelines 
2024-2029176  task  the  new  Commission  with  resolving  the  inherent  conflicts  and  maximise  the 
synergies between economic competitiveness and environmental sustainability, recognising the key 
role  of  digitalisation  in  the  endeavour.  This  is  also  reflected  in  the mandate of  the  Executive  Vice-
President for Technological Sovereignty, Security and Democracy177. It emphasises leveraging digital 
innovation  to  drive  the  green/digital  twin  transition,  ensuring  Europe’s  competitiveness  while 
fostering a climate-neutral, resource-efficient, and socially inclusive future, including sustainability as 
a goal for the review of the Digital Decade Policy Programme. 

The  Digital  Decade  sets  the  objectives  of  ensuring  not  only  that  digital  infrastructure  and 
technologies become more sustainable and resource-efficient but also that digital infrastructures and 
solutions  deliver  benefits  across  all  three  dimensions  of  sustainability:  economic,  social  and 
environmental. This chapter focuses on the environmental benefits and includes several references 
to  the  sustainability  of  infrastructure  targets,  in  particular  edge  nodes  and  semiconductors.  It  also 
points to ways of maximising the environmental and climate benefits of digitalisation. In summary, 
the  Digital  Decade’s  objectives  and  targets,  like  the  European  Declaration  on  Digital  Rights  and 
Principles, are all seeking to promote sustainable digital technologies, products and services with a 
minimum  negative  impact  on  the  environment  and  society.  We  need  to  continue  developing  and 

173 Competitiveness Compass for the EU, COM(2025) 30 final. 
174 European Commission, ‘The European Green Deal’, 2020. 
175 Draghi, M., ‘The future of European competitiveness’, 2024. 
176 European Commission, Political Guidelines for the next European Commission, 2024. 
177 European Commission, Henna Virkkunen – Mission Letter, 2024. 

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utilising  science-based  methods  to  measure  and  better  understand  the  environmental  impact  of 
digitalisation  and  to  provide  accurate  and  easy-to-understand  information  on  that  impact  in  a 
transparent  and  open  way.  This  includes,  in  particular,  energy  and  material  consumption  of 
digitalisation  as  well  as  positive  effects  (e.g.  avoided  emissions)  and  negative  indirect  effects  (e.g. 
rebound). 

3.1  Key trends and prospects 

The digital transition aims to minimise conflicts and maximise synergies between the green transition 
and the competitiveness of EU industry. Digital technologies present opportunities for streamlining 
operations and improving resource  efficiency, which can help reduce  the  costs associated with the 
green transition. Automation and data analytics, for example, can optimise energy consumption and 
waste  management.  Additionally,  digital  solutions  can  simplify  compliance  with  environmental 
regulations by automating emissions tracking and reporting, making it easier for businesses to meet 
standards while avoiding high costs. Advanced technologies like blockchain and IoT can also enhance 
supply  chain  transparency  and  efficiency,  helping  companies  mitigate  disruptions  and  transition  to 
sustainable  materials  more  effectively.  Furthermore,  digital  tools  enable  businesses  to  assess  risks 
linked  to  green  investments  by  providing  predictive  analytics  and  scenario  modelling,  facilitating 
informed decision-making. 

To  maximise  synergies,  digital  technologies  foster  innovation,  enabling  companies  to  develop 
sustainable  products  and  services  quickly  and  efficiently.  Collaborative  platforms  can  also  drive 
partnerships in research and development (R&D) for green technologies. The availability of real-time 
data  allows  businesses  to  align  sustainability  goals  with  strategic  objectives,  improving  overall 
competitiveness.  Digital  tools  also  enhance  customer  engagement  by  helping  companies 
communicate their sustainable practices more effectively, thus increasing brand loyalty and market 
reach. Platforms for training and skill development ensure that employees gain the expertise needed 
to support both digital and green transitions, preparing the workforce  for the future178. Moreover, 
digital  technologies  enable  the  integration  of  circular  economy  practices  by  tracking  product  life 
cycles, which allows companies to design for reuse and recycling, further boosting competitiveness. 
Finally,  scalability  is  another  advantage,  as  digital  solutions  help  businesses  implement  green 
initiatives more efficiently across various operations and geographies. 

The green transition also presents several opportunities for ICT enterprises in the EU. The demand 
for energy-efficient technologies opens doors for innovation, such as the development of low-power 
processors, AI-powered energy management systems, and green cloud solutions. These innovations 
not  only  meet  environmental  needs  but  also  create  new  business  models.  ICT  companies  can  also 
benefit  from  adopting  energy-efficient  infrastructure,  like  renewable  energy-powered  data  centres 
with  advanced  cooling  systems,  which  reduce  both  emissions  and  long-term  energy  costs. 
Additionally, the growing emphasis on sustainability creates new market opportunities for green ICT 
solutions,  including  software  and  hardware  for  environmental  monitoring  and  smart  grids.  Digital 
tools,  such  as  IoT  solutions  and  blockchain,  are  pivotal  in  supporting  sustainability  by  optimising 
resource  usage  and ensuring sustainable supply  chains. The transition to a circular economy offers 
ICT  companies  the  chance  to  lead  in  developing  recyclable,  repairable,  and  modular  products, 

178 IEA, World Energy Employment 2024, 2024.  

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differentiating  themselves  in  the  market  and  appealing  to  eco-conscious  consumers.  Furthermore, 
when the net impact of digital solutions is positive, ICT companies can tap into green financing for 
the  development  and  deployment  of  digital  solutions  provided  by  the  EU,  such  as  the  European 
Green Deal Investment Plan and Horizon Europe funding, to support their sustainability efforts. 

Regarding  the  key  trends  we  can  identify  worldwide,  the  ICT  sector  keeps  growing  significantly, 
reflecting the global increase in digital adoption. The number of internet users worldwide grew by 
160%179, and broadband networks were substantially expanded. This expansion in digital connectivity 
supports work,  learning,  and  economic  activities  but  also  raises  concerns  about  the  environmental 
effects of ICT proliferation. While digital technologies enable improvements in energy efficiency and 
agriculture, the overall environmental impact is still under scrutiny. The growth of the ICT sector has 
been rapid, outpacing overall economic growth. Technological advances, such as the miniaturisation 
of processors and increased storage capacity, have driven this growth, but it is unclear whether these 
efficiency gains have led to a net positive environmental impact. Large tech companies have become 
major  consumers  of  renewable  energy  and  their  demand  for  electricity  can  strain  delivery  of 
renewable resources to smaller firms or other sectors of the economy such as the electrification of 
mobility. Four large ICT companies are among the world’s top 20 corporate electricity consumers180. 
Power purchase agreements (PPAs) have helped stabilise the renewable energy market, though they 
do not always guarantee consistent low-carbon electricity consumption. Transparency regarding the 
carbon  intensity  of  digital  technologies’  energy  use  is  crucial  for  understanding  their  true 
environmental impact. 

The  environmental  impacts  of  digital  technologies  vary  across  three  distinct  categories:  direct, 
enabling, and systemic effects. While these technologies contribute to more efficient practices and 
in  some  areas,  they  also  present  significant  challenges  related  to  resource 
sustainability 
consumption, waste,  and emissions. Understanding these categories helps distinguish the different 
ways digital technologies influence the complexity of their environmental impact. 

179 ITU, World Telecommunication/ICT Indicators Database, 2023. 
180 The World Bank & ITU, Measuring the Emissions & Energy Footprint of the ICT Sector, 2024  

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Figure 34. Digital technologies can have direct, enabling, and systemic effects on the environment, with positive 
and negative impacts (source: OECD, 2024) 

The  ‘direct  effects’  of  digital  technologies  refers  to  their  immediate  impact  on  the  environment 
through  resource  consumption  and  emissions.  For  example,  data  centres  generate  significant 
amounts  of  excess  heat,  which  could  be  repurposed  for  district  heating  or  local  energy  networks, 
although scaling up such solutions remains challenging. Similarly, wastewater from data centres can 
be  cleaner  than  the  source  water,  but  its  treatment  still  requires  energy  and  generates  emissions. 
Data centres waste over 90% of the energy they consume as heat181, which could potentially be used 
to decarbonise nearby buildings. However, while centralisation has led to energy efficiency gains in 
large operations, the overall energy demand continues to rise. The direct ICT sector footprint is the 
subject  of  many  studies  with  various  definitions  of  ‘ICT  sector’  and  different  methodologies.  As  a 
result, estimates of the ICT sector footprint vary widely from 1.7% to 4% of global greenhouse gas 
(GHG)  emissions.  The  ICT  sector’s  electricity  demand  is  projected  to  triple  by  2030,  necessitating 
urgent  action  on  green  energy  procurement  and  efficiency  standards.  Regarding  the  sectoral 
breakdown,  mobile  networks  would  contribute  68%  of  telecommunications  emissions  while  fixed 
networks would contribute around 24% and data centres around only 8%182. Consumer devices and 
cloud  services  also  contribute  significantly.  Additionally,  the  environmental  impact  of  digital 
technologies  extends  to  the  mining  of  critical  materials  like  cobalt  and  lithium,  which  raises 
significant environmental and human rights concerns. Digital technologies also contribute to e-waste, 
which  is  often  improperly  disposed  of  in  developing  countries,  exacerbating  environmental  harm. 
Despite  regulations  such  as  the  EU’s  WEEE  Directive,  recycling  rates  for  e-waste  remain  low.  The 
increasing  energy  demands  of  AI  and  machine 
learning  systems  also  highlight  the  direct 
environmental  effects,  with  specialised  hardware  like  GPUs  being  more  energy-efficient  but  still 
adding strain to energy grids. The AI models require vast computing power, leading to increased use 
not  only  of  electricity  but  also  of  water  for  powering  and  cooling  data  centres.  Similarly, 

181 OECD, ‘Review of relevance of the OECD Recommendation on ICTs and the Environment’, 2024. 
182 The World Bank & ITU, Measuring the Emissions & Energy Footprint of the ICT Sector, 2024.  

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semiconductor manufacturing  relies on  the consumption of much  water  and  the  use  of many  rare 
materials, raising concerns about resource scarcity and its impact on EU sovereignty. 

The  ‘enabling  effects’  describes  how  digital  technologies  can  support  sustainability  across  various 
sectors by improving efficiency and reducing waste. Recent studies suggest that digital technologies 
can  reduce  emissions  up  to  20%  by  2050183.  High-digital-intensive  sectors,  for  instance,  have  seen 
stable or even low growth in greenhouse gas emissions since 2010, showing how digital innovations 
can  help  reduce  environmental  footprints.  Digital  technologies  enable  better  energy  management, 
such as through AI-driven digital twins, smart sensors, and virtual meeting platforms that reduce the 
need for travel. In agriculture, digital tools like AI and IoT technologies help  optimise resource use, 
increasing crop yields while minimising water and energy consumption. For example, smart irrigation 
systems can reduce water usage by up to 30%, addressing water scarcity while maintaining a healthy 
crop184. Similarly, IoT technologies can enable remote repairs, extending the lifespan of products and 
thus  reducing  e-waste.  In  the  energy  sector,  digital  technologies  support  the  integration  of 
renewable energy and the management of decentralised grids. Smart grids, energy storage systems, 
and AI-driven solutions optimise energy flows, reduce waste, and lower reliance on fossil fuels. The 
installation of nearly 1.1 billion smart meters worldwide in 2021 illustrates how digital infrastructure 
is  already  helping  create  more  sustainable  energy  systems185.  Smart  meters  are  estimated  to  save 
around  3.34%  of  electricity  consumption  in  private  households  while  at  the  same  time  increasing 
consumers’ awareness of energy consumption. 

The  ‘systemic  effects’  refers  to  how  digital  technologies  influence  human  behaviour  and  societal 
patterns  toward  more  sustainable  practices.  Digital  technologies  have  the  potential  to  nudge 
individuals and organisation toward greener choices. For example, notifications about energy use or 
suggestions for eco-friendly alternatives can encourage consumers to reduce energy consumption or 
make more sustainable purchases. Household spending, which accounts  for a significant  portion of 
GDP  in  many  countries,  could  be  influenced  by  these  ‘digital  nudges’,  thereby  contributing  to  a 
broader  green  transition.  The  rise  of  teleworking,  facilitated  by  digital  tools  during  the  COVID-19 
pandemic, highlights  how digital technologies can reduce  the need for physical services and travel. 
However, these technologies also have unintended consequences. Efficiency gains may be offset by 
‘rebound effects,’ where the increased convenience or use of energy-efficient technologies leads to 
higher  resource  consumption.  For  example,  purchasing  an  energy-efficient  appliance  may  result  in 
more frequent use, negating the expected energy savings. Similarly, AI systems may unintentionally 
encourage  emissions-heavy  activities,  such  as  greater  resource  consumption  or  inefficiencies  in 
autonomous vehicles. To mitigate these effects, the concept of ‘digital sobriety’ has been proposed, 
advocating for the responsible deployment of digital technologies that align with sustainability goals. 
Insights into consumer behaviour, such as addressing biases, can help shape policies like eco-labelling 
or mandatory information disclosure, further promoting greener choices. 

183 The World Economic Forum, ‘Digital technologies can cut global emissions by 20%. Here's how’, 2022. 
184 Kalpana, Ponugoti & Smitha, L. & Madhavi, Dasari & Nabi, Shaik & Kalpana, G. & Kodati, Sarangam,  ‘A Smart Irrigation 
System  Using  the  IoT  and  Advanced  Machine  Learning  Model:  A  Systematic  Literature  Review’,  International  Journal  of 
Computational and Experimental Science and Engineering, 2024. 
185 Behavioural Insights Team of the UK Government, ‘Reviewing energy supplier evidence on impacts of smart metering on 
domestic energy consumption’, 2023. 

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3.2  Addressing the environmental footprint of digitalisation 

3.2.1  Data centres, cloud and edge computing, AI 

Previous projections regarding the direct environmental footprint of digitalisation are no longer valid 
due  to  the  latest  developments  in  Generative  AI  and  the  resulting  stark  increase  in  energy 
consumption, GHG emissions and water use. 

The  rapid  expansion  of  digital  infrastructure,  including  data  centres,  AI  computing,  cloud  services, 
and  telecommunications  networks,  has  significant  environmental  implications.  Data  centres  are 
major  consumers  of  energy  and  water.  The  distribution  of  energy  use  within  the  ICT  landscape  is 
shifting. Traditionally dominated by consumer devices,  consumption is increasingly  concentrated in 
networks  and  data  centres.  This  change  is  fuelled  by  technological  developments  such  as  edge 
computing, which is projected to represent 12% of the EU’s total data centre energy use by 2025 and 
up to 40% of server capacity by 2030186. At the current rate of adoption, Europe’s data centre power 
consumption is expected to almost triple from about 62 terawatt-hours (TWh) today to more than 
150 TWh by the end of the decade187. Globally, data centres are using 400 TWh; the study’s prognosis 
is that by 2035 this will triple to 1 200 TWh. Therefore, it is crucial to consider the energy source. A 
big  portion  of  this  projected  increase  is  attributed  to  AI188.  Relevant  studies  converge  towards  an 
average growth rate in annual data centre energy consumption of 13% per year between 2023 and 
2030 (a total increase of 85 TWh)189. That is twice the growth rate experienced between 2018 and 
2023. Comparatively high energy prices negatively affect the competitiveness of data centres located 
in  Europe  compared  to  other  regions  of  the  world.  Some  cooling  technologies  mean  that  a  1  MW 
data  centre  can  use  up  to  15.5  million  litres  of  water  annually190.  The  limited  availability  of 
(renewable)  energy  and  water,  especially  in  regions  with  a  strong  data  centre  presence,  in 
conjunction with high operational costs due to high energy costs in Europe, is a key bottleneck for 
data centre deployment and results in winner-takes-all scenarios where large cloud service providers 
pre-empt  the  purchase  of  resources  in  a  given  region191.  Technological  innovation  promises 
significant  resource  savings  and  –  by  extension  –  lower  operating  costs.  For  example,  innovative 
forms of cooling can significantly reduce water and energy consumption. Adopting highly sustainable 
technologies can give data centre operators a competitive edge and help them overcome bottlenecks 
related to resource scarcity. At the same time, under the right conditions, data centres can make a 
positive  societal  contribution  by  offering  flexibility  services  to  the  grid  and  supplying  nearby  areas 
with waste heat. 

The  recast  EU  Energy  Efficiency  Directive  requires  large  data  centres  (with  more  than  500  kW  of 
installed capacity) to  report  on  a number of KPIs  that inform on the environmental impact of data 
centres. In March 2024, the Commission adopted Delegated Regulation (EU) 2024/1364 laying down 
the key performance indicators which data centre operators must report to a European database by 

186 European Commission,  ‘Energy-efficient Cloud Computing Technologies and Policies for an Eco-friendly Cloud Market’, 
2020. 
187 McKinsey, ‘The role of power in unlocking the European AI revolution’, 2024.  
188 IEA, ‘Energy and AI’, 2025. 
189 McKinsey, The role of power in unlocking the European AI revolution, 2024. ; IEA, ‘Energy and AI’, 2025. 
190 The World Economic Forum, ‘Circular water solutions key to sustainable data centres’, 2024. 
191  These  are  scenarios  in  which  a  large  data  centre  operator  buys  up  available  resources  and  thus  prevents  others  from 
entering the market in a specific location. 

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15 September  2024  pursuant  to  Article 12  of  the  Energy  Efficiency  Directive.  These  cover  detailed 
information regarding the energy and water consumption, cooling efficiency, use of waste heat etc. 
The  data  collected  will  inform  further  policy  action  under  the  Energy  Efficiency  Directive.  The  KPIs 
defined in the Delegated Regulation will form the basis for an EU-wide rating scheme for data centre 
sustainability,  work  on  which  is  taking  place  over  the  course  of  2025.  The  first  annual  reporting 
yielded  incomplete  information  on  data  centre  sustainability  performance  in  the  EU,  but  it  was 
nonetheless a significant step forward in establishing the reporting and the respective platform. The 
second reporting cycle has a deadline of 15 May 2025. Member States are encouraged to work with 
their  respective  national  industries  to  improve  the  data  collection,  considering  the  importance  of 
adequate information for future policy choices. The Commission will assess the 2024 data available 
and  submit  a  report  to  the  European Parliament  and  the  Council,  exploring  further  possible  policy 
action  such  as  minimum  performance  standards  for  new  data  centres,  in  accordance  with  Article 
12(5) of the EED recast. 

The future Cloud and AI Development Act will provide a significant boost to research and innovation 
in  technological  solutions  that  improve  data  centre  energy  efficiency  and  maximise  the  societal 
contribution of those solutions. Moreover, the Act will improve the conditions for deploying highly 
sustainable  data  centres  in  the  EU  and  provide  incentives  for  private-sector  investments  in 
sustainable  data  centres,  in  particular  by  offering  a  simplified  pathway  to  deployment  as  well  as 
other  support  measures  to  operators  planning  innovative  and  sustainable  data  centres.  The  large-
scale deployment of data centres will put a strain on the EU’s energy grid. The strategic roadmap for 
digitalisation and AI in the energy sector will propose further measures to facilitate the sustainable 
integration of data centres into the energy system. 

Regarding water consumption, many of the data centres which power AI and cloud computing use 
water-cooled  systems,  which  can  consume  significant  amounts of  water.192  As  a policy  response  to 
this  issue,  the  aforementioned  reporting  on  data  centre  sustainability  also  covers  a  data  centre’s 
total water input,  total potable water input,  and Water Usage Effectiveness (WUE). These KPIs will 
also feature in the future rating scheme for data centre sustainability. In addition, the future Cloud 
and  AI  Development  Act  will  boost  research  in  water-efficient  data  centre  solutions  and  consider 
water  usage  as  a  determining  factor  for  whether  a  planned  data  centre  may  obtain  access  to  the 
benefits that intend to boost the deployment of sustainable data centres in the EU. Moreover, the 
EU  is  exploring  and  promoting  alternative  more  water-efficient  cooling  solutions,  notably  in  the 
context of the Water  Resilience  Strategy. The  EU Circular Economy Action Plan193  promotes  water-
efficient cooling technologies and encourages reusing excess heat from data centres. 

The Clean Industrial Deal and the Affordable Energy Action Plan, like the Draghi report, highlight the 
enabling  role  of  digitalisation  and  AI  in  accelerating  the  EU’s  energy  transition  and  boosting 
competitiveness. The upcoming Strategic Roadmap on digitalisation and AI in the energy sector will 
aim  to  use  the  potential  of  digital  and  AI  technologies  in  energy  to  accelerate  the  twin  green  and 
digital  transitions.  The  Net-Zero  Industry  Act  aims  to  boost  the  manufacturing  of  technologies  to 
digitalise the grids and energy system-related energy-efficient technologies. 

192 The World Economic Forum, ‘Circular water solutions key to sustainable data centres’, 2024. 
193 European Commission, ‘Circular economy action plan’, 2020.  

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Concerning  material  consumption,  critical  raw  materials  are  at  the  heart  of  the  semiconductors 
industry, with the production of chips and digital hardware at the centre. Such production depends 
on rare earth elements (REEs) and metals such as cobalt, lithium, and gallium, which are subject to 
geopolitical supply risks. The huge development of digital technologies is bringing the fastest growth 
in  the  demand  for  transition  minerals.  To  meet  the  growing  demand  for  low-carbon  technologies, 
production of minerals such as graphite, lithium and cobalt could increase by nearly 500 per cent by 
2050194. The EU Chips Act aims to increase European semiconductor production to reduce reliance on 
foreign supply chains. 

e-Waste growth 

The  ICT  sector  generates  53.6  million  tonnes  of  e-waste  per  year  globally195,  of  which  only  17%  is 
properly  recycled.  Short  Lifespan  of  Devices:  Many  consumer  devices  (smartphones,  laptops)  have 
limited  repairability,  increasing  premature  disposal.  The  Right  to  Repair  Directive  strengthens 
consumer  rights  to  extend  device  lifetimes  and  increase  refurbishment  rates.  The  Ecodesign  for 
Sustainable  Products  Regulation  (ESPR)  introduces  mandatory  circularity  requirements  for  digital 
devices.  The  ESPR  is  the  key  instrument  to  develop  a  single  market  for  sustainable  products. 
Ecodesign  requirements  –  i.e.  harmonised  performance  and  information  rules  –  will  be  developed 
and adopted for the most impactful products on our market, to reduce their negative environmental 
impact and improve information. In addition, there will be measures to prevent destruction of unsold 
products and possible  mandatory  green  public  procurement  (GPP)  requirements,  to boost  demand 
for sustainable products and create lead markets. 

The  first  ESPR  working  plan  will  identify  priority  products  for  the  coming  years  (to  be  adopted  by 
19 April  2025).  Products  have  been  assessed  on  the  basis  of  their  potential  contribution  to  EU 
environmental,  climate  and  energy  efficiency  policies,  and  other  criteria  set  in  the  ESPR.  The  draft 
ESPR working plan196 presented to the Ecodesign Forum on 18 February 2025 includes a number of 
energy-related  products  such  as  displays,  smartphones  and  tablets,  and  horizontal  measures  on 
repairability,  recyclability  and  recycled content. Those  are  likely  to  include  consumer  electronics  in 
their respective scopes. 

All  in  all,  the  ESPR  will  help  to  ensure  that  the  materials,  resources  and  value  of  products  are 
maintained  in  the  economy  for  as  long  as  possible  and  to  accelerate  progress  towards  a  single 
market for sustainable products, reinforcing the EU’s overall resilience and competitiveness. 

Measures  under  the  ESPR  will  build  on  the  Ecodesign  Directive’s  and  the  Energy  Labelling 
Regulation’s  successful  examples,  such  as  those  of  smartphones  and  tablets.  As  of  20 June  2025 
those  products,  when  put  on  the  EU  market,  will  have  to  display  an  energy  label  containing 
information  on  their  energy  efficiency,  battery  longevity,  protection  from  dust  and  water,  and 
resistance to accidental drops. This is also the first time that a product placed on the EU market will 
be  required  to  display  a  reparability  score  (also  present  on  the  energy  label).  This  will  help  EU 
consumers  make  more  informed  and  sustainable  purchasing  choices  and  encourage  sustainable 
consumption. 

194 UNCTAD, ‘2024 Digital economy report’, 2024. 
195 UNITAR, ‘The global e-waste monitor’, 2024. 
196 European Commission, Group of experts on eco-design for sustainable products and energy labelling, 2025. 

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Green AI initiatives 

The  AI  Office  is  managing  a  study  called  ‘Development  of  a  study  to  measure  and  foster  energy 
efficient  and  low  emission  artificial  intelligence  in  the  EU’197.  The  final  results  will  be  obtained  by 
summer 2026 and will focus on four main objectives. First, a literature review must be carried out to 
explore  the  carbon  footprint  of  AI,  covering  all  life-cycle  stages,  including  the  production  of 
hardware.  The  carbon  footprint  should  be  estimated  in  accordance  with  Recommendation  (EU) 
2021/2279. Second, a measurement framework for the energy consumption of AI must be developed 
to identify common ground to make the energy consumption of different AI applications comparable, 
in both the development and application stages. Third, an enforcement concept must be developed 
to ensure compliance and conformity. To leverage synergies and foster coherence, the governance 
framework  should  align  with  existing  or  forthcoming  legally  binding  procedures  and  requirements 
and  the  governance  put  in  place  for  them.  It  will  be  necessary  to  analyse  different  governance 
settings,  along  with  the  functions  of  the  bodies  and  detailed  cost  and  time  estimates  for  each 
scenario.  A  comprehensive  implementation  framework  must  be  designed  to  guide  the  assessment 
process for entities that would fall under the provisions of the AI Act or the AI energy and emission 
label.  This  implementation  framework  should  encompass  various  aspects  (i.e.  measurement 
methodology,  definition  of  test  standards  and  procedures  for  testing  AI  systems,  ensuring 
consistency, accuracy, representativity and reproducibility of measurements). Fourth, support must 
also be provided for the design of a repository showcasing the energy-efficient design of AI systems. 
The  repository  will  highlight  the  development  of  best  practice  and  operation  solutions  for  energy-
efficient  AI,  including  computing hardware. It will further enable coders  to download or copy code 
content  (e.g.  Github,  HuggingFace),  fostering  the  practical  implementation  of  energy-efficient  AI 
practices. 

3.2.2  Connectivity 

Connectivity 
is  a  central  pillar  of  the  twin  transitions.  Telecommunications  contributes  to 
sustainability  challenges  through  its  life  cycle  impacts  on  climate,  energy  consumption,  and  the 
environment,  primarily  due  to  rising traffic  demand and  the  energy  required  for  data  transmission 
and computing. Additionally, the  complexity and scale  of telecommunications infrastructure create 
significant  issues  related  to  greenhouse  gas  emissions,  e-waste,  and  circular  economy  practices. 
While the energy consumption of communications networks looks set to keep increasing in the next 
few  years,  the  carbon  footprint  is  expected  to  increase  only  modestly198  or  to  stabilise,  depending 
also on the overall transition to renewables in the EU in the coming years and on the effectiveness of 
the circularity measures applied to the ICT sector. 

In 6G research, energy efficiency will be an important design criterion (‘efficiency by design’). In the 
longer  term,  new  transmission  technology  and  low-power  cells  are  promising  to  ensure  that,  even 
with the massive growth in data expected, energy consumption levels of future networks will not be 
significantly higher  than  those of today’s networks. However, in the  value  chain of communication 
services  and  devices,  home  devices  continue  to  present  the  biggest sustainability  challenge.  About 

197  European  Commission,  ‘Artificial  Intelligence  Act:  Call  for  tenders  to  measure  and  foster  energy  efficient  and  low 
emission artificial intelligence in the EU’, 2024. 
198 International Energy Agency 2022. 

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85%  of  the  carbon  footprint  of  smartphones  over  their  lifespan  is  expected  to  result  from  their 
production and distribution and only 15% from their usage199. 

Under  the  2022  Digitalising  the  Energy  System  Action  Plan200,  the  Commission  is  to  explore  the 
possibility  of  developing  common  indicators  to  enable  the  monitoring  and  benchmarking  of  the 
energy consumption and environmental footprint of communications networks. In March 2024, the 
Commission delivered on this task in an in-depth technical report201, which recommended eight out 
of  the  19  sustainability  indicators  analysed.  Building  on  this,  the  Action  Plan  further  calls  on  the 
Commission  to  establish  an  EU  Code  of  Conduct  for  the  sustainability  of  telecommunications 
networks.  The  Commission  has  been  closely  involving  stakeholders  with  relevant  expertise,  in 
particular through a workshop on 6 May 2025. The Commission also involved standardisation experts 
via  the  StandICT  project,  which  is  funded  by  Horizon  Europe.  At  Member  State  level,  this  work  is 
supported,  in  particular,  by  a  study  carried  out  by  the  German  National  Regulatory  Authority 
(BNetzA) on the comparability of sustainability standards of telecommunications infrastructure. The 
Commission  plans  to  publish  the  EU  Code  of  Conduct  by  the  end  of  2025,  as  forecast  in  the 
Digitalising  the  Energy  System  Action  Plan.  In  its  December  Conclusions  on  the  2024  White  Paper 
‘How to master Europe’s digital infrastructure needs’202, the Council called upon the Commission ‘to 
consider proposing a target on green digitalisation in the context of the review of the Digital Decade 
Policy Programme, based on an agreed monitoring methodology’. It is recommended that Member 
States closely align any national initiatives with the work on the upcoming EU Code of Conduct. 

3.2.3  Semiconductors 

Semiconductors are  the key enablers of the dual digital and green  transitions  and are essential for 
achieving  sustainability  goals  by  enabling  energy-efficient  technologies  in  renewable  energy,  smart 
grids, and electric vehicles (EVs). They reduce energy consumption through low-power technologies 
and environmental sensing, while advanced materials enhance efficiency in power electronics. These 
innovations  support  the  EU  Green  Deal  and  global  efforts  to  cut  carbon  emissions.  On  the  other 
hand,  semiconductor  manufacturing  faces  significant  sustainability  challenges,  primarily  due  to  its 
high energy consumption, extensive water usage, and reliance on hazardous chemicals. Fabrication 
plants  consume  vast  amounts  of  electricity,  leading  to  substantial  greenhouse  gas  emissions. 
Additionally, the industry depends on perfluoroalkyl and polyfluoroalkyl substances (PFAS), known as 
‘forever chemicals,’ which pose environmental and health risks due to their persistence and toxicity. 
Addressing  these  challenges  requires  a  comprehensive  approach, 
including  transitioning  to 
renewable  energy  sources,  developing  alternative  materials,  and  enhancing  resource  efficiency 
throughout the manufacturing process. 

The  Industrial  Alliance  on  Processors  and  Semiconductor  Technologies203  is  a  collaborative 
European  initiative  aimed  at  strengthening  the  semiconductor  industry’s  competitiveness  and 
sustainability.  It  was  launched  in  July  2024.  Within  the  alliance,  a  dedicated  Working  Group  on 
Sustainability and PFAS has been created with the objective of promoting strategies to mitigate PFAS-
related  environmental  and  health  impacts,  fostering  research  and  development  of  suitable 

199 JRC, 2020; European Environmental Bureau, 2019; Journal of Cleaner Production, Volume 177, 2018. 
200 Digitalising the energy system - EU action plan, COM(2022) 552 final, 2022. 
201 Joint Research Centre European Commission, ‘Green and sustainable telecom networks’, 2024. 
202 European Council, ‘Digital infrastructure: Council approves conclusions on the Commission’s White Paper’, 2024. 
203 European Commission, ‘Industrial Alliance on Processors and Semiconductor Technologies’, 2025. 

111 

 
  
 
alternatives,  and  advising  the  European  Commission  on  policy  actions  to  ensure  compliance  with 
environmental regulations while considering industry constraints. 

The European Chips Act204, which entered into force in September 2023, aims to strengthen Europe’s 
semiconductor supply chain security and resilience while driving sustainable innovation. Under Pillar 
2,  it  facilitates  investments  in  first-of-a-kind  semiconductor  manufacturing  facilities  in  Europe.  To 
qualify,  these  facilities  must  introduce  new  and  advanced  manufacturing  processes  or  products, 
which  include  measurable  reduction  in  the  consumption  of  energy,  water,  and  chemicals  and 
improvements  in  recyclability.  In  general,  the  European  Commission  supports  dedicated  research 
initiatives focused on sustainable manufacturing practices, aiming to improve resource efficiency in 
semiconductor production and find alternatives to environmentally harmful substances. 

The  Chips  Joint  Undertaking  (Chips  JU)205,  which  was  launched  on  30 November  2023,  is  the  key 
implementation vehicle of Pillar 1 of the Chips Act, driving R&D, innovation, and capacity building to 
strengthen  Europe’s  semiconductor  ecosystem.  The  Strategic  Research  and  Innovation  Agenda  for 
the Electronic Components and Systems industry (ECS-SRIA) provides the strategic roadmap for the 
Chips JU, aligning research with Europe’s technological and sustainability goals. The SRIA emphasises 
sustainability  as  a  core  objective,  focusing  on  enhancing  energy  performance  and  minimising  the 
environmental  footprint  of  the  industry,  aligning  with  broader  environmental  and  climate  goals. 
Specific strategies include the adoption of advanced engineering tools to improve resource efficiency 
and  minimise  waste,  as  well  as  eco-design  and  circular  economy  principles,  such  as  the  9R 
framework,  to  reduce  environmental  impact.  The  Chips  JU  and  its  predecessors,  the  Electronics 
Components  and  Systems  for  European  Leadership  Joint  Undertaking  (ECSEL  JU)  and  Key  Digital 
Technologies  Joint  Undertaking  (KDT  JU),  have  actively  promoted  sustainability  in  semiconductor 
manufacturing  through  dedicated  R&D  focus  areas  and  projects  supported  with  Horizon  Europe 
funding. In its 2024 Work Programme, the Chips JU included a call entitled ‘Sustainable and Greener 
Manufacturing’206, allocating EUR 15 million to support a collaborative project aimed at reducing the 
environmental footprint of semiconductor manufacturing. The selected project, called Genesis, has 
recently  started;  it  is  led  by  the  French  Alternative  Energies  and  Atomic  Energy  Commission  (CEA) 
and involves 60 partners from 12 Member States. Genesis aims to enhance the sustainability of ICT 
manufacturing  by  improving  process  efficiency,  recyclability,  and  resource  management.  It  focuses 
on reducing the use of critical raw materials (CRMs) and eliminating toxic compounds like PFAS, while 
developing innovative material recovery solutions. By integrating eco-friendly processes and circular 
economy principles, the project seeks to minimise waste, lower environmental impact, and promote 
a  greener  semiconductor  industry.  Other  relevant  projects  (like  Sustronics,  and  EECONE)  focus  on 
circular  economy  principles,  bio-based  materials,  and  reducing  electronic  waste.  These  initiatives 
promote  energy-efficient,  repairable,  and  recyclable  electronics,  in  alignment  with  the  EU’s 
sustainability goals. 

Furthermore,  Horizon  Europe  and the  EIC  also  support  sustainable  semiconductors  and  electronics 
through targeted calls, such as the Pathfinder Challenge on Responsible Electronics of the EIC 2024 

204  Regulation  (EU)  2023/1781  of  the  European  Parliament  and  of  the  Council  establishing  a  framework  of  measures  for 
strengthening Europe’s semiconductor ecosystem and amending Regulation (EU) 2021/694 (Chips Act). 
205 Chips Joint Undertaking, Empowering Europe's Semiconductor Industry, 2023. 
206 Chips Joint Undertaking, ‘Sustainable and Greener Manufacturing’, 2024. 

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Work  Programme,  which  funds  research  on  eco-friendly  components  and  systems  and  supports 
semiconductor start-ups with sustainable and energy-saving innovations. 

3.3  Development  of concrete digital policies and tools for the  green 

transition 

Emerging  evidence  shows  that  digital  technologies  are  delivering  tangible  efficiency  gains  for 
sustainability  across  Europe.  The  European  Commission’s  Joint  Research  Centre  estimates  that 
today’s  digital  tools  could,  if  optimally  deployed,  cut  15-20%  of  total  greenhouse  gas  emissions207. 
According to Eurostat (2025)208, renewable energy sources accounted in 2023 for 45.3% of the EU’s 
gross  electricity  consumption  –  the  highest  share  on  record  –  aided  by  smart  grids  and  AI-driven 
management that help integrate wind and solar energy209. 

Artificial intelligence is increasingly being deployed across Europe to optimise resource use at scale, 
and  also  to  support  people  in  making  more  climate-conscious  choices.  For  example,  AI-powered 
systems  for  smart  home  energy  management,  food  waste  reduction,  and  sustainable  mobility 
planning  are  demonstrating  measurable  environmental  benefits.  In  relation  to  greenhouse  gas 
emissions,  AI  is  estimated  to  mitigate  global  emissions  by  5-10%210.  AI-powered  consumer  tools  – 
such  as  eco-friendly  routing  –  are  enabling  significant  emissions  reductions  by  optimising  everyday 
decisions.  These  systems  can  suggest  driving  routes  that  maintain  smoother  speeds,  avoid 
congestion,  and  minimise  elevation  changes,  while  preserving  comparable  arrival  times.  When 
applied in logistics, these systems can reduce emissions by up to 25%211. These tools contribute not 
only  to  individual  behavioural  shifts  but  also to  systemic  decarbonisation  across  transport,  energy, 
and  consumption  patterns  –  all  essential  pillars  of  the  EU  Green  Deal  and  the  Digital  Decade 
objectives. 

In 2024, the European Union made tangible progress in implementing policies that align the digital 
transformation with its climate and sustainability goals. Moving beyond vision statements, the focus 
shifted  to  the  concrete  implementation  of  regulatory  frameworks,  data  ecosystems,  digital 
infrastructures,  and  intelligent  tools  designed  to  support  emissions  reduction,  circularity,  and 
resilience. 

3.3.1  Laying  the  foundations:  Regulation  and  standards  for  twinning  the  green  and  digital 

transitions 

A  strong  regulatory  foundation  is  key  to  ensuring  that  digitalisation  promotes  sustainability  by 
design.  In  2024,  the  EU  strengthened  this  foundation  through  key  legislation  and  standard-setting 
initiatives. 

The  Energy  Efficiency  Directive  (EED)  now  requires  large  data  centres  (with  capacity  of  more  than 
500 kW) to report on key performance indicators (KPIs) related to energy use, water  consumption, 
cooling efficiency, and renewable energy uptake. A Delegated Act adopted in spring 2024 introduced 
a  formal  reporting  scheme,  standardising  metrics  such  as  Power  Usage  Effectiveness  (PUE),  Water 

207 Joint Research Centre, European Commission, ‘5 digital solutions for a greener Europe’, 2023. 
208 Eurostat, ‘2023: record-breaking increase in renewable electricity’, 2025. 
209 European Parliament, ‘Increasing Flexibility in the EU Energy System’, 2025. 
210 Boston Consulting Group, ‘Reduce Carbon and Costs with the Power of AI’, 2021. 
211 Mandal J. & Asim Mohammed, I., Implementation, International Journal of Supply Chain Management, 2024. 

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Usage  Effectiveness  (WUE),  and  Renewable  Usage  Effectiveness  (RUE).  A  second  Delegated  Act  is 
under  preparation  to  introduce  a  labelling  system  for  data  centre  energy  performance,  with 
recommendations expected in Q3 2025. 

At the same time, the Ecodesign for Sustainable Products Regulation (ESPR), adopted in June 2024, 
introduced  the  Digital  Product  Passport  (DPP)  to  enhance  product  transparency  and  sustainability. 
The CIRPASS project concluded in March, paving the way for CIRPASS-2, launched in May 2024. This 
follow-up initiative will demonstrate the functioning of DPPs in 13 pilot settings and provide evidence 
for future standardisation. 

Meanwhile, the AI Act entered into force in August 2024. While focused on safety and fundamental 
rights,  it  also  includes  provisions  for  resource  efficiency,  requiring  providers  of  general-purpose  AI 
models to report energy and computational resource consumption. The Commission is empowered 
to  adopt  Delegated  Acts  to  harmonise  methodologies  for  calculating  energy  use,  enabling 
comparability and accountability. 

A key milestone was the publication in April 2024, by the European Green Digital Coalition (EGDC), of 
a  science-based  method  to  estimate  the  net  environmental  impact  of  digital  solutions  in  major 
sectors  of  the  economy  such  as  energy,  transport,  construction,  agriculture,  smart  cities,  and 
manufacturing.  This  work  was  done  by  the  EGDC  Pilot  Project  in  the  framework  of  the  European 
Action plan on Digitalising the EU energy system, which supported relevant organisations and experts 
to work with the EGDC members to develop the Net Carbon Impact Assessment Methodology for ICT 
Solutions.  For  the  first  time  there  is  a  detailed  and  agreed  methodology  to  calculate  both  the 
negative and positive carbon impact of digital solutions such as those used in  the context of smart 
cities. If the net impact is positive, that provides the necessary evidence to policymakers and financial 
actors to support the scale-up of such solutions. In March 2025 the new EGDC Pilot 2 started, which 
will calculate 50 case studies from different sectors including smart cities settings and bring financial 
institutions  to  develop  eligibility  criteria  for climate  (green)  financing of the  deployment  of  proven 
green digital (including AI-based) solutions. 

Together,  these  legislative  and  standardisation  efforts  define  the  boundaries  and  expectations  for 
climate-aligned  digitalisation.  To  support  them,  the  EU  is  also  investing  in  infrastructure  and  data 
ecosystems that make such compliance feasible and scalable. 

3.3.2  Building the Infrastructure: Data spaces and digital backbones 

To  translate  policy  into  practice,  the  EU  has  supported  the  development  of  shared  data 
infrastructures and enabling platforms to support sustainability-driven innovation. 

In the energy sector, six ongoing projects funded by Horizon Europe are preparing the ground for the 
deployment  of  the  energy  data  space.  Five  of  them  develop  detailed  use  cases,  identify  building 
blocks  and  define  interoperability  requirements.  A  coordination  and  support  action  will  seek  to 
establish  an  interoperability  framework  and  an  open,  cross-domain  community  of  stakeholders  to 
work on developing, testing and deploying interoperable energy services. The Smart  Energy Expert 
Group  was  launched  in  October  2024  to  support  the  establishment  and  governance  of  the  energy 
data space, through its ‘Data for Energy’ subgroup. A new project that started in April 2025, funded 
by the Digital Europe programme, will work on the deployment of the energy data space. 

The EU also invested EUR 56 million in flagship projects including TwinEU (a digital twin of the EU’s 
electricity  system),  ODEON,  and  HEDGE-IoT,  all  of  which  leverage  AI  and  IoT  to  increase  system 
efficiency  and  resilience.  Complementing  these  efforts,  the  ECLIPSE  project  integrates  real-time 

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smart  meter  data  into  customised  applications  that  help  users  monitor  and  reduce  consumption, 
improving both household energy efficiency and grid stability. A catalogue of smart grid indicators is 
also  being  developed  to  measure  the  performances  of  smart  grids  both  at  distribution  and 
transmission level. 

Beyond  energy,  data  spaces  have  expanded  in  mobility  and  agriculture.  The  Common  European 
its  deployment  phase,  with  the  deployEMDS  action 
mobility  data  space  (EMDS)  entered 
implementing 16 use cases across nine cities and regions. These include optimising public transport, 
planning zero-emission zones, and enabling multimodal travel solutions. 

In  agriculture,  the  Common  European  Agricultural  Data  Space  (CEADS)  advanced  significantly.  The 
AgriDataSpace  preparatory  action  concluded  in  Q2 2024,  and  the  deployment  phase  will  begin  in 
Q2 2025. The CEADS will enable AI-based innovations to improve resource efficiency, reduce inputs 
such as water and fertiliser, and support sustainable farming practices. 

These  infrastructures  provide  the  connective  tissue  for  data-driven  innovation.  Once  in  place,  they 
enable the development of targeted digital tools that serve the public, ecosystems, and climate goals 
in tangible ways. 

3.3.3  Digital tools for climate monitoring, urban planning, and resilience 

Building  on  these  digital  foundations,  2024  saw  the  roll-out  of  powerful  tools  and  applications 
supporting climate adaptation and sectoral decarbonisation. 

Destination  Earth  (DestinE)  and  the  EU  Digital  Twin  Ocean  completed  their  first  implementation 
phase in June 2024, releasing a pre-operational version of their digital twin platform. It offers high-
resolution  simulations,  tailored  climate  impact  data,  and  on-demand  ‘what-if’  scenario  analysis  to 
support  evidence-based  adaptation  policies,  long-term  resilience  planning  and  scenarios  for 
sustainable economic activities. 

The Horizon Europe-funded WATERVERSE project is developing a European water data management 
ecosystem. The project focuses on real-world case studies in six countries, including predicting water 
quality (NL), digital village twin for flood protection (DE), smart water tools and risk management (FI), 
water  digital  twin  and  water  analytics  tools  (CY),  management  of  the  water  cycle  and  open 
innovation (ES) and combined sewer overflow performance (UK). 

Horizon  Europe  funded  project’s  clusters  (19  currently  active  from  WP2021)  develop  improved 
uptake  and  applications  on  key  environmental  and  climate  issues  (freshwater  ecosystems,  fires, 
climate  intelligence),  making  use  of  combined  AI  and  satellite  /  in-situ  observations  with  further 
developments planned in upcoming WPs. 

Meanwhile, the Green Deal Data Space (GDDS), supported through the Digital Europe Programme, is 
integrating  over  500  datasets  across  climate,  biodiversity,  pollution,  and  circular  economy  areas, 
helping stakeholders monitor progress against Green Deal targets. 

In  urban  sustainability,  the  new  LDT-CitiVERSE-EDIC  will  receive  within  the  EU  LDT  toolbox  a 
complete set of digital services to be used together with the EU building dataset for AI-based impact 
assessment of New European Bauhaus strategies. The DEP project DigiNEB on the digital dimension 
of the NEB domain, completed in cooperation with the NEB Academy, will offer the LDT-CitiVERSE-
EDIC practical opportunities for exploitation of its platform and services. The tools developed under 
the  2024  call  on  CitiVERSE  projects  will  provide  relevant  input  to  further  develop  the  EU  Virtual 

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Worlds ecosystem. This input will be promoted with the support of the LDT-CitiVERSE-EDIC for reuse 
and quick uptake in this key area. 

These  applied  tools  show  the  practical  value  of  high-quality  data  and  computing  infrastructure, 
turning EU investments into visible and impactful change on the ground. 

3.3.4  Sustainably shaping AI, emerging tech and circular innovation 

Alongside deployment, the EU is embedding sustainability in the design of future digital technologies. 

The Apply AI Strategy, which was being developed in 2024, will promote the use of AI in industrial 
and  environmental  domains,  including  traffic  optimisation,  precision  agriculture,  and  renewable 
integration.  Support  is  being  mobilised  through  AI  Factories,  common  data  spaces,  and  computing 
infrastructure. 

The next phase of DestinE will add machine-learning demonstrators for climate prediction and launch 
user-facing  tools  like  ‘forecast  in  a  box’  and  a  climate  chatbot.  These  tools  will  enhance  public 
engagement and decision-making in climate policy. 

Efforts  in  circularity  are  also  intensifying.  The  CIRPASS-2  project  will  deliver  recommendations  for 
standardising  DPP  implementation,  while  upcoming  regulations  under  the  Ecodesign  Directive  for 
Digital  Devices  will  introduce  requirements  for  repairability  and  recyclability.  Extended  Producer 
Responsibility (EPR) schemes are under consideration to strengthen the end-of-life management of 
electronic products. 

As  the  EU  continues  to  invest  in  frontier  digital  technologies,  the  integration  of  sustainability 
principles at design phase is becoming the norm – ensuring long-term environmental value alongside 
innovation. 

3.4   Green/digital twin transition measures at Member State level 

The  year  2024  saw  a  wave  of  activity  aimed  at  operationalising  the  green/digital  twin  transitions 
through national strategies, regulatory frameworks, and sector-specific deployments. This shift is no 
longer  limited  to  high-level  ambitions  or  isolated  pilot  projects.  Instead,  national  strategies, 
regulatory  frameworks,  and  sector-specific  deployments  are  increasingly  reflecting  a  dual  focus: 
enabling  digital  transformation  while  simultaneously  advancing  environmental  objectives.  The 
resulting  activity  signals  the  beginning  of  a  more  mature  and  systemic  phase  of  policy 
implementation in the context of the Digital Decade. 

3.4.1  Digital and green transitions in the national roadmaps 

In their national Digital Decade roadmaps, 19 Member States included 67 measures contributing to 
the  green  transition.  These  measures  focus  on  greening  the  digital  transition  by  making  digital 
technologies  and  infrastructure  more  energy-efficient  and  on  using  digital  technologies  and 
infrastructure to leverage the green transition. Among those measures, more than 30 are specifically 
designed for the objectives of the green transition. 

In total, 17 measures from the repository are scheduled to begin in 2024 or 2025, reflecting the fact 
that Member States are no longer preparing for the green/digital transition – they are acting on it. 

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Among  the  most  tangible  of  these  actions  are  national  efforts  to  reduce  the  environmental 
footprint of digital infrastructure. Ireland’s Shared Government Data Centre212, which will continue 
to  be  developed  through  2025,  aims  to  consolidate  disparate  public  IT  systems  into  a  centralised, 
cloud-based infrastructure that significantly reduces energy consumption. Luxembourg has  likewise 
pushed forward the green-digital transition by developing a National Energy Data Platform. Required 
by  law  and  implemented  by  the  Transmission  System  Operator  CREOS,  the  platform  serves  as  a 
central hub for exchanging energy market data across electricity and gas sectors. It aims to increase 
data accessibility for customers and market actors, improve the efficiency of market processes, and 
support  better  regulatory  reporting.  By  enabling  secure,  standardised,  and  transparent  data  flows, 
the platform lays the digital foundation for a more sustainable and competitive energy system. This 
type of investment reflects a broader shift across Member States – from siloed, voluntary greening 
initiatives to principles  of energy efficiency and sustainability  embedded  in core  digital governance 
structures.  Rather  than  treating  environmental  considerations  as  secondary  or  external,  public 
authorities are beginning to treat sustainability as foundational to digital infrastructure design. 

Beyond  infrastructure,  several  Member  States  are  increasingly  adopting  strategic  frameworks  that 
embody  an  emerging  consensus  that  digitalisation  must  be  mobilised  to  enhance  environmental 
monitoring, reduce ecological footprints, and foster circular economic models. In this regard, France 
has  made  notable  advances.  Its  2030  Acceleration  Strategy  for  Eco-responsible,  Competitive  and 
Sovereign Digital Technology sets out a long-term national vision to anchor ecological transition and 
technological  sovereignty  at  the  heart  of  digital  policy.  Under  this  strategic  umbrella,  France  has 
reinforced its leadership on green ICT through a series of targeted measures included in its adjusted 
Digital Decade roadmap. These include the first national reference framework on the environmental 
impact of AI, which has led to the creation of a frugal AI standard for measuring and reducing energy 
and  material  use,  and  the  introduction  of  a  EUR 20  repairability  bonus  for  highly  repairable  digital 
devices.  Together,  these  initiatives  represent  a  coordinated  effort  to  integrate  environmental 
responsibility into digital innovation, product design, and market incentives. 

European Lighthouse of AI for Sustainability 

ELIAS213,  funded  by  the  European  Union,  aims  to  establish  Europe  as  a  leader  in  AI  research  that 
drives sustainable innovation and economic development. For this purpose, it has created a Network 
of  Excellence  of  34  partners  in  17  countries  that  is  connecting  researchers  in  academia  with 
practitioners in the industry. Use cases include, e.g.: i) AI for building optimisation: cost reduction by 
reducing energy consumption through smart control systems, which requires both control algorithms 
and  prediction  of  actual  consumption  on  the  basis  of  historical  patterns  and  metadata,  such  as 
meteorological  information;  ii)  AI  for  forecasting  the  state  of  vegetation:  studying  AI-based 
predictions of the effects of climate extremes on ecosystems, which can then be translated into crop 
harvest, forest health and water balance forecasts. The project will run for four years. 

In  2024,  Member  States  began  operationalising  the  green-digital  nexus  not  only  through  strategic 
frameworks  but  also  through  concrete  reforms  that  reflect  systemic  integration.  Italy’s  ‘Transition 
5.0’  Plan  stands  out  as  a  flagship  measure,  linking  digitalisation  and  sustainability  through  a 

212 European Commission, ‘Development of a Shared Government Data Centre’, 2025. 
213 ELIAS – Lighthouse of AI for Sustainability. 

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EUR 12.7 billion programme running over 2024-2025. The plan introduces a performance-based tax 
credit  for  investments  in  production  structures,  conditional  on  achieving  measurable  reductions  in 
energy consumption. Building on the earlier Transition 4.0 Plan, it supports the adoption of energy-
efficient technologies, digital systems for monitoring consumption, and renewable energy solutions, 
while also funding workforce training specifically in skills that support the sustainable transformation 
of  production  processes.  Together,  such  frameworks 
illustrate  how  Member  States  are 
institutionalising  the  green-digital  agenda  at  both  strategic  and  operational  levels,  embedding 
environmental goals in the core of national digitalisation policies. In Slovenia, reforms have focused 
on  regulation:  the  country’s  Green  Public  Procurement  Regulation  has  been  modernised  to 
incorporate  digital  tracking  systems  that  ensure  compliance  with  environmental  criteria,  making 
public procurement an engine of green-digital alignment. 

A  number  of  measures  starting  in  2024  demonstrate  how  Member  States  are  deploying  digital 
technologies  directly  to  achieve  climate  and  environmental  goals.  For  example,  Denmark  launched 
three distinct but complementary measures under this objective. The ‘Establishment and Operation 
of  a  Supply  Digitalisation  Programme’  aims  to  create  frameworks  and  regulations  for  how  data  is 
collected,  structured  and  made  accessible  in  the  utilities  sector,  starting  with  data  from  the 
electricity,  heating  and  water  sectors.  Simultaneously,  the  measure  ‘Monitoring  Groundwater  and 
Ensuring Clean Drinking Water’ leverages data analytics to enhance knowledge about drinking water 
supply,  and  ‘Improved  Transition  to  Electric  Vehicles  and  Alternative  Fuels  Through  Open  and 
Standardised  Data’  will  establish  an  IT  solution  to  display  and  distribute  standardised  data  from 
publicly accessible charging points and fuelling stations in Denmark. Thus, it appears that some MS 
have adopted the use of digital technology to monitor the ecological transition in their territory by 
capturing and sharing data of environmental interest. 

These  initiatives  are  a  decisive  move  toward  sector-specific  deployment  of  digital  tools  –  not  as 
pilots,  but  as  embedded  components  of  environmental  policy.  They  signal  a  phase  of  operational 
maturity where  digital  technology  is  not  only  enabling  the  green  transition  but  actively  shaping  its 
implementation. 

Funding and MCPs to twin the green and digital transitions 

A wide range of EU funding instruments and Multi-Country Projects (MCPs) have been mobilised to 
accelerate  the  deployment  of  digital  technologies  for  sustainability  and  climate  action.  These 
initiatives focus on building interoperable infrastructures, platforms, and datasets to support sectors 
such as energy, mobility, construction, and manufacturing  in achieving the objectives of the Green 
Deal and the Digital Decade. 

Among the key instruments, the establishment of European Digital Infrastructure Consortia (EDICs) 
represents  a  strategic  approach  to  scaling  up  common  digital  assets  across  Member  States.  In  this 
context,  the  LDT-CitiVERSE-EDIC,  set  up  in  February  2024  and  launched  in  Valencia  in  December 
2024, exemplifies how EDICs can provide operational platforms for reusing EU-funded services, tools, 
and data infrastructures. While initiated in the urban context, the EDIC’s architecture – built on the 
first SIMPL-based EU Data Space – is designed for broader reuse, including in sectors such as energy 
efficiency, or sustainable construction. 

The  Digital  Europe  Programme  (DEP)  continues  to  serve  as  a  major  funding  source  for  digital 
sustainability  tools,  including  projects  like  DigiNEB,  which  developed  the  digital  dimension  of  the 

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New European Bauhaus (NEB) and created synergies with the NEB Academy to ensure training and 
practical uptake. Outputs from DigiNEB and the 2024 CitiVERSE call will feed into the development of 
the  EU  Virtual  Worlds  ecosystem,  providing  immersive  environments  for  scenario  testing,  digital 
twins, and AI-supported impact assessment across domains. 

3.4.2  Sharing of best practices within the Digital Decade Policy Programme 

The Green IT cluster of the Digital Decade Best Practice Accelerator has been led by France since it 
was  launched  during  the  first  workshop  in  July  2024.  Since  then,  two  more  workshops  have  taken 
place at which several Member States presented their best practices to address the environmental 
impact of data centres, to measure the impact of ICT, and to contribute to the circular economy and 
the collection of electronic waste. 

France has three best practices on the twin transition field: i) the General Policy Framework for the 
Eco-design  of  Digital  Services214,  which  targets  ICT  professionals  and  sets  out  78  criteria  and  best 
practices to apply eco-design principles in the development of a service and to draft an Eco-design 
ii)  the  development  and  availability  of  Product  Category  Rules  (PCRs)215  for 
declaration; 
environmental  evaluation  and  labelling,  aiming  to  ensure  the  comparability  and  robustness  of 
environmental information provided to consumers, covering the entire product life cycle; and iii) the 
Alt IMPACT Communication Campaign216 to raise public awareness about the environmental impact 
of digital technologies,  which is part of the measures taken by the  French government  to promote 
digital  sobriety  (such  as  the  ‘Digital  and  Environment’  roadmap  and  the  2021  REEN  law  aimed  at 
reducing the environmental footprint of digital technology). 

The  Netherlands  presented  its  Sustainable  Digitalisation  Action  Plan217  published  in  July  2024.  It 
outlines 44 specific actions along three main action lines that  seek to make the digital sector more 
sustainable,  while  simultaneously  leveraging  digitalisation  for  sustainability  by  improving  the 
efficiency of production processes, optimising the use of existing resources and enabling circular use 
of  raw  materials  and  resources.  These  actions  unify  efforts  from  both  the  government  and  the 
private sector, building on existing policies without requiring additional resources or capacity. 

Finland  presented  its  measures  to  increase  the  knowledge  base  on  the  environmental  handprint 
and footprint effect of the ICT Sector218. This best practice was put forward in response to the lack of 
reliable  and  comparable  data  that  Finland  identified  as one  of  the  challenges  when  drawing  up  its 
national climate and environmental strategy for the ICT sector (published in 2021). 

Luxembourg presented its Product Circularity Data Sheet (PCDS), a tool designed to provide detailed 
information about  the  circular characteristics of products,  such as their recyclability  and durability, 
and the use of recycled materials, which is aligned with the horizontal requirements of the ESPR. 

214 ARCEP & ARCOM, ‘General policy framework for the ecodesign of digital services’, 2024. 
215 ADEME, ‘Ecolabelling’, 2025. 
216 ADEME, ‘Towards real Green IT’, 2022. 
217 Netherland Central Government, ‘Sustainable Digitalisation Action Plan’, 2024. 
218 TIEKE Finnish Information Society Development Centre, ‘Green Metrics for Public Digitalization Acquisitions – MitViDi’, 
2023. 

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3.4.3  Conclusion and way forward 

During  the  2024  Digital Decade  year,  the  EU  established  a  solid  foundation  of legislation,  strategic 
direction,  and  funding  to  accelerate  the  green  and  digital  transitions.  That  foundation  has  been 
translated  into  the  deployment  of  specific  instruments  –  such  as  the  Ecodesign  for  Sustainable 
Products  Regulation,  the  Digital  Product  Passport,  and  the  Cloud  and  AI  Development  Act  –  that 
directly  support  climate  goals  through  digitalisation.  The  EU  has  also  provided  interoperable 
infrastructures  and  data  ecosystems,  such  as  TwinEU  and  the  GDDS,  and  emerging  common  data 
spaces  for  energy,  mobility,  and  agriculture,  enabling  a  new  generation  of  AI-powered  tools  that 
contribute to circularity, emissions reductions, and environmental resilience. These EU-level efforts 
isolated  pilots  to  systemic 
have  shifted  the  focus  from  potential  to  delivery,  and  from 
implementation. 

Digital  technologies  –  when  deployed  under  the  right  conditions  –  have  provided  measurable 
benefits: digital technology can help cut global emissions by 20%, outweighing the current 2% to 4% 
of global emissions caused by the sector. Other benefits include emissions reductions of up to 25% in 
logistics  through  AI-driven  routing,  30%  water  savings  via  smart  irrigation  systems,  and  enhanced 
energy efficiency through virtualisation and smart grids. These benefits come not at the expense of 
social outcomes, but often in synergy with them – improving access, affordability, and transparency. 
Crucially,  methods  to  assess  their  net  climate  impact  are  now  available  and  maturing.  The  Net 
Carbon  Impact  Assessment  Methodology,  developed  by  the  European  Green  Digital  Coalition 
(EGDC), and the forthcoming AI energy/emissions label, along with Member State initiatives like the 
ADEME  (France)  lifecycle-based  tools,  provide  a  common  ground  on  which  to  evaluate  the  real 
contribution of digital solutions to environmental goals. 

At  national  level,  Member  States  have  begun  embedding  these  frameworks  in  tangible  reforms. 
Measures  such  as  Italy’s  Transition  5.0  Plan,  Luxembourg’s  National  Energy  Data  Platform,  and 
France’s Frugal AI standard  illustrate how EU support  has been translated into localised, impactful 
action. In total there are now more than 30 measures specifically designed for the objectives of the 
green transition. These initiatives reflect an increasing alignment between national strategies and EU 
ambitions and show how Member States have provided not just implementation capacity, but also 
innovation  leadership  and  best  practices,  in  particular  through  the  Digital  Decade  Best  Practice 
Accelerator. 

Looking  ahead,  the  way  forward  lies  in  scaling  up  these  successes,  anchoring  them  in  enforceable 
standards, and ensuring that  digitalisation contributes net-positive value  for the  climate. While the 
EU has provided the architecture, full alignment across levels of governance and a persistent focus 
on measurable impact, responsible innovation, and sustainability by design are still needed. 

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4 Coherence and synergy: aligning digital 
policies and funding at different levels 

The  Digital  Decade  includes  a  joint  commitment  to  ensure  that  digital  policies,  measures  and 
programmes which are  relevant  to the EU’s digital transformation are considered in  a coordinated 
and  coherent  way  in  order  to  fully  contribute  to  the  Digital  Decade  objectives,  while  avoiding 
overlaps and minimising administrative burdens. 

This  chapter  offers  an  overview  of  the  EU’s  progress  towards  achieving  the  above-mentioned 
objectives, structured across four key dimensions. First, it examines the development of better and 
lighter  digital  legislation,  encompassing  efforts  to  eliminate  overlaps  and  unnecessary  burdens, 
simplify  existing  rules  (including  through  digital  solutions),  and  improve  governance.  Second,  the 
chapter analyses the effectiveness of digitalisation funding, identifying potential improvements and 
synergies between relevant programmes and instruments. Third, it reviews the implementation and 
dissemination  of  digital  policy  across  governance  levels,  emphasising  enhanced  collaboration 
between  the  Commission,  regions,  and  cities.  Finally,  it  outlines  the  EU’s  international  digital 
strategy,  detailing  how  the  EU  promotes  its  vision,  interests,  and  values  globally  while  fostering 
cooperation to strengthen its international standing in the digital arena. 

4.1  Better and lighter digital legislation 

4.1.1  Overlaps and unnecessary burdens 

The European Commission’s President, Ursula von der Leyen, has outlined in the ‘Political Guidelines 
for  the  next  European  Commission  2024-2029’  a  comprehensive  plan  to  ensure  prosperity  and 
competitiveness in Europe, with a focus on making business easier and deepening the Single Market. 

One  of  the  key  barriers  to  competitiveness  is  the  administrative  burden,  which  can  hinder  the 
growth of small and medium-sized enterprises. The Commission recognised that SMEs face too many 
complexities  and bureaucratic hurdles, which can limit their ability to scale  up and compete in the 
global market. 

According to the European Investment Bank's Investment Report 2024-2025, the cost of bureaucracy 
is a significant burden for EU firms, particularly for smaller enterprises. In turn, simplification is one 
of  the  key  drivers  to  consolidate  Europe  as  a  global  leader  in  new  technologies,  alongside  market 
integration  and  large-scale  investment  in  innovation.  The  EIB  Investment  Survey  (EIBIS),  which 
provides detailed information from more than 12 000 European companies, specifies that about 86% 
of EU firms employ staff specifically to deal with regulatory compliance, at an average cost of 1.8% of 
turnover. The cost increases to 2.5% of turnover for SMEs. As a comparison, EU firms’ spending on 
energy after the energy shock is equal to 4% of turnover. 

To  address  this  issue,  the  Commission  proposed  to  simplify  legislation,  reduce  administrative 
burdens,  and  introduce  a  new  category  of  small  mid-caps  to  support  innovative  companies. 
Moreover, 
Implementation, 
Simplification, and Interinstitutional Relations, whose task is to stress-test the entire EU acquis and 
eliminate any overlaps and contradictions, while instructing all Commissioners in their mission letters 
to  ensure  that existing  rules  are  fit  for  purpose  and focus on  reducing  administrative  burdens  and 

the  Commission’s  President  appointed  a  Vice-President 

for 

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simplifying legislation, with the goal of reducing reporting obligations by at least 25% – and for SMEs 
by at least 35%. 

Executive Vice-President (EVP) Henna Virkkunen was specifically tasked in her letter with deploying 
digital public infrastructure, notably by making the most of the EU wallet, to ensure businesses can 
fully  use  the  technology  enabling  them  to  speed  up  and  simplify  operations  and  reduce 
administrative costs. The EVP was also asked to present a European Data Union Strategy to ensure a 
simplified,  clear  and  coherent  legal  framework  for  businesses  and  administrations  to  share  data 
seamlessly and at scale, while respecting high privacy and security standards. 

The  Commission’s  2025  Work  Programme,  adopted  in  February  2025,  seeks  to  deliver  on 
commitments  outlined  in  the  Political  Guidelines  and  the  mission  letters.  It  was  accompanied  by 
the  ‘Communication  on  Implementation  and  Simplification’,  in  which  the  Commission  outlined 
actions and tools to improve the implementation of EU rules. This initiative introduces the Omnibus 
Simplification Packages, whose aim is to streamline and modernise regulatory frameworks across the 
EU, reduce unnecessary complexities and foster a more innovation-friendly environment. There are 
three  such  packages  in  the  Commission  2025  Work  Programme:  one  on  sustainability,  another  on 
investment simplification, and a third on small-caps. 

Regarding actions focusing on digital policy, the Programme announced a simplification package that 
will have an impact on EU companies by streamlining cybersecurity reporting requirements and data-
sharing  obligations.  It  will  include  a  review  of  the  Cybersecurity  Act  to  simplify  cybersecurity 
legislation, facilitating multipurpose reporting and avoiding duplications. In addition, the package will 
address existing data rules for the purposes of ensuring a coherent legal framework for data sharing, 
while respecting security and privacy standards. 

The Commission also proposed targeted changes to the General Data Protection Regulation (GDPR) 
as  part  of  the  small  midcaps  package.  These  changes  aim  to  ease  record-keeping  obligations  for 
SMEs and organisations with fewer than 750 employees, while maintaining the core objectives of the 
GDPR.  Further  discussions  with  stakeholders  are  planned  to  explore  potential  additional 
simplification  measures,  but  it  is  too  early  to  anticipate  whether  further  legislative  proposals  will 
follow later this year. 

The  2025  Work  Programme  also  included  a  fitness  check  on  the  legislative  acquis  in  the  digital 
policy  area  to  be  concluded  in  the  last  quarter  of  2025.  The  fitness  check  will  determine  if  the 
expanded  legal  framework  for  the  digital  environment  meets  the  needs  of  businesses,  particularly 
small and medium-sized enterprises (SMEs) and small mid-caps. 

As part of its 2025 Work Programme, the Commission published a list of 51 initiatives for this year 
and details of 37 pending files  it plans to withdraw, including the  AI Liability Directive.  The fitness 
check on the legislative acquis in the digital policy area is expected to conclude in the last quarter of 
2025. 

4.1.2  Digital solutions for burden reduction and simplification 

The potential of digital solutions for reducing administrative burdens is recognised in two key reports 
on EU competitiveness and the Single Market, published last year. The ‘Much more than a market’ 
report (also known as the ‘Letta report’), published in April 2024, advocates accelerated digitalisation 
in  authorisation  and  reporting  procedures,  because  it  will  significantly  reduce  the  administrative 
burden for businesses and workers engaging in cross-border activities. It will also reduce the amount 
of  paperwork  and  the  space  and  energy  required  to  store  and  move  it.  The  ‘Future  of  European 

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competitiveness’ report (also known as the ‘Draghi report’), published in September 2024, concurs by 
proposing the introduction of digital solutions for monitoring, reporting and verification processes in 
the case of importers and third-country producers and by linking them to existing supply chain and 
enterprise management systems. 

A key part of the Commission’s efforts to meet these expectations is the development of European 
Business  Wallets  as  a  cornerstone  of  doing  business  simply  and  digitally  in  the  EU,  providing  a 
seamless environment for economic operators to interact with all public administrations, as stated in 
the  Competitiveness  Compass.  The  use  of  digital  tools  and  AI  to  power  simplification  efforts  at 
government  level  must  be  facilitated,  with  full  cross-border  interoperability  among  public-sector 
bodies’ solutions. Wherever possible, reporting must move to digital formats based on standardised 
data. 

Building  on  the  EU  Digital  Identity  Framework,  the  European  Business  Wallet  will  be  a  horizontal 
enabler  of  Europe’s  competitiveness.  Conceptually,  the  Business  Wallet  will  emulate  and 
complement  the  key  benefits  of  the  European  Digital  Identity  Wallet  for  natural  persons.  The 
initiative  addresses  key  problem  drivers  –  fragmentation  of  national  portals, 
inefficient 
administrative  processes,  and  cumbersome  compliance  obligations  –  by  providing  a  single,  secure, 
interoperable,  cloud-based  identity  solution.  It  does  so  by enabling  economic operators  to  identify 
and authenticate themselves, share credentials, and receive official notifications across the EU using 
a  harmonised,  legally  recognised  identity  infrastructure.  This  will  ensure  efficient  reporting, 
accelerate transactions, and enhance trust in EU-wide digital operations that ultimately will support 
the effective functioning of the Single Market and increase European competitiveness. 

Another  key  initiative  of  the  Commission  is  the  implementation  of  the  Single  Digital  Gateway 
(SDG). The Your Europe portal – its interface and brand name – offers access to information about 
rights,  rules  and  e-Government  services  for  Europeans  to  navigate  and  simplify  their  cross-border 
activities  in  the  EU  single market.  This  includes  activities  such  as  studying,  living,  working  or  doing 
business.  The  ‘Only-Once  Technical  System’  (OOTS)  will,  on  top  of  this,  reduce  the  time  and  costs 
involved  in  dealing  with  cross-border  paperwork  by  automatically  mapping  the  (structured  or 
unstructured) documents or data needed for online procedures and by transferring them directly and 
securely from one authority to another across borders upon request. A 2024 study shows that using 
the OOTS will cut SMEs’ cross-border administrative costs and time by more than half219. 

The  forthcoming  European  Business  Wallet,  Single  Digital  Gateway,  the  OOTS  and  the  EU  Digital 
Identity Wallet will create a cohesive ecosystem of digital solutions that simplify various aspects of 
life for Europeans. 

Another  important  initiative  relying  on  digital  solutions  to  reduce  friction  and  cost  related  to  daily 
operation, while improving security and enhancing EU sovereignty, is the Digital Euro. The proposed 
legislation  will  allow  users  to  use  their  European  Digital  Identity  Wallets  to  verify  their  identity, 
confirm their payments, and grant permissions with ease, enabling seamless digital euro transactions 
and opening accounts. Moreover, the integration of the digital euro with these wallets will provide 
users with a secure and private gateway to access a range of digital services, both public and private, 
while also reducing operational costs for businesses. 

219 OOTS,‘ EU SMEs and  self-employed workers could save time and money when expanding abroad thanks to the Once-
Only Technical System ’. 2024. 

123 

 
  
 
The Single Market is progressively evolving into a space for paperless and document-free interactions 
between citizens and public authorities, facilitated by the harmonisation of data formats across the 
EU.  This  digital  transformation  significantly  impacts  public  procurement,  where  digital  solutions 
simplify  processes.  The  Public  Procurement  Data  Space  (PPDS),  activated  in  September  2024,  has 
become  a  crucial  tool  for  understanding  the  Single  Market  and  assists  reporting  and  monitoring 
within the public procurement domain. 

Finally, a significant step towards simplifying and reducing administrative burdens, particularly for 
SMEs,  will  be  made  with  the  implementation  of  the  VAT  in  the  Digital  Age  legislation,  which  was 
adopted  on  11 March  2025.  This  legislation  enables  automated  VAT  reporting  through  e-invoicing, 
simplifying  the  extraction  and  processing  of  VAT-relevant  data  from  electronic  invoices.  This 
streamlined  approach  not  only  applies  to  cross-border  transactions  but  can  also  potentially  be 
applied  by  Member  States  to  domestic  transactions.  In  addition,  the  European  Commission  is 
expanding the utility of e-invoicing to encompass sustainability reporting. 

Following  the  sustainability  reporting  standards  published  by  the  European  Financial  Reporting 
Advisory Group (EFRAG) in December 2024, the Commission has initiated exploratory work on how 
leveraging 
e-invoicing  can  enhance  the  efficiency  and  accuracy  of  sustainability  reporting, 
automatically extracted data from electronic invoices. This effort aligns with the Commission’s policy 
on reusing existing data for compliance requirements, underscoring a broader move towards digital 
efficiency. The upcoming Business Wallet will also support the efforts to expand e-invoicing. 

4.1.3  Simplification through improved governance 

The Digital Decade Board (DDB) is the main forum for exchange of views and cooperation between 
the  European  Commission  and  the  Member  States  regarding  the  Digital  Decade.  While  its  remit  is 
even broader and covers all digital transformation issues and relevant legislation, policies, measures, 
actions  and  reports,  the  European  Commission  has  also  set  up  several  other  expert  and  special 
groups focusing on more specific aspects of the digital transformation. 

There are 40 such bodies through which the European Commission works with and seeks assistance 
from  the  Member  State  authorities  (almost  75%  of  cases),  as  well  as  individual  experts  and 
representatives of different organisations, including trade organisations and enterprises. They often 
play  a  role  in  implementing  important  legislation,  such  as  the  AI  Act,  the  Digital  Services  Act,  the 
Cyber  Resilience  Act,  the  Cyber  Security  Act,  the  eID  Act,  or  the  Chips  Act,  the  European  Media 
Freedom  Act  or  connectivity  and  spectrum  legislation.  They  act  as  coordination  and  governance 
bodies  and  provide  an  area  for  the  exchange  of  views  and  cooperation  to  develop  implementing 
measures.  There  are  also  groups  that  work  on  policy  areas  such  as  the  digitalisation  of  health 
records, digitalisation of the energy system or safer internet for children. 

Some Member States’ representatives on the DDB raised concerns about the number and diversity 
of such groups, pointing to the potential overlaps and difficulty in ensuring proper follow-up of their 
activities  given  the  limited  resources  of  the  national  administrations.  During  the  meeting  of  the 
Board  on  6 March 2025,  members of  the  DDB  recognised  its  central  role  in  fostering  coordination, 
reducing  fragmentation,  and  aligning  measures  with  the  capabilities  of  Member  States,  but  some 
also highlighted the importance of collaboration between expert groups. 

This matter will be explored further by the Commission and – as a first step – the Member States in 
the DDB will be informed about the various bodies established by the European Commission in  the 
digital  transformation  to  make  sure  that  they  have  complete  information  and  to  help  in  internal 

124 

 
  
cooperation.  In  the  future,  this  matter  may  be  included  in  the  scope  of  the  review  of  the  Digital 
Decade policy programme (DDPP), which should be completed by June 2026. 

The DDPP provides a framework for the exchange of best practices between Member States, so they 
can learn from their experience and apply tried-and-tested solutions to common problems. There is 
no  best  practice  cluster  yet  focusing  on  administrative  burdens  and  simplification,  but  during  the 
above-mentioned  meeting  of  the  Board  several  Member  State  representatives  took  the  floor  to 
share ideas on how the DDPP and the DDB can play a transformative role in simplifying processes for 
businesses  and  the  public  by  addressing  regulatory  fragmentation,  enhancing  coherence,  and 
reducing administrative burdens, particularly for SMEs. 

Many  emphasised  the  need  for  interoperable  digital  governance  tools  to  simplify  compliance  and 
support  small  and  medium-sized  enterprises  (SMEs).  The  Czech  Republic  (CZ)  and  Italy  (IT)  were 
among  the  advocates  for  this  approach,  proposing  the  development  of  a  Single  Digital  Compliance 
Platform  and  a  Single  Digital  Rulebook,  respectively,  to  collate  EU  regulations  and  provide  a  user-
friendly  dashboard  for  businesses.  Both  countries  also  highlighted  the  importance  of  consolidating 
and codifying the EU’s digital regulatory framework, with IT proposing a Pre-Legislative Consistency 
Check mechanism to prevent contradictions in new laws. 

Other Member States, such as Belgium (BE) and Germany (DE), shared similar views on the need for 
digital  transformation  and  regulatory  simplification.  BE  proposed  reusing  existing  digital 
infrastructure solutions across Member States to reduce costs, while DE emphasised the importance 
of  reducing  reporting  burdens  for  businesses  and  aligning  digital  tools  with  the  specific  needs  of 
Member States. 

The Netherlands (NL)  and Finland (FI)  also contributed to the discussion, with NL underscoring the 
DDB’s  role  in  participating  in  the  fitness  check  of  the  digital  rulebook  and  FI  highlighting  the 
importance of fostering synergies between EU boards to streamline activities and reduce duplication. 
Many Member  States also  emphasised  the  need  for improved  coordination  and  support  for  SMEs, 
with  IT  proposing  Digital  Regulatory  Sandboxes  to  enable  SMEs  to  test  solutions  under  regulatory 
supervision.  BE  and  NL  emphasised  improving  the  visibility  and  accessibility  of  EU  funding 
programmes for SMEs, with NL proposing EU-wide retail investment products and IT advocating fiscal 
incentives and private co-investment funds. 

Hungary  (HU)  suggested  leveraging  stakeholder  networks  like  Eurochambres  and  the  Enterprise 
Europe Network to promote DDPP goals. Overall, there is a strong consensus among Member States 
on  the  importance  of  regulatory  coherence,  collaboration,  and  support  for  SMEs  in  achieving  the 
goals  of  the  DDPP.  The  Commission  has  acknowledged  these  suggestions  and  reaffirmed  its 
commitment to exploring new procurement policies and ensuring a coherent application of State aid 
rules. 

4.2  EU funding for the Digital Decade: state of play 

4.2.1  Digital transition in the EU budget: update of the digital tracking 

The digital transition is one  of the top political priorities of the  Commission, streamlined in the EU 
budget.  An  updated  stocktaking  exercise  across  all  EU  spending  programmes  for  the  2021  to  2023 
period highlights the substantial support the EU budget – including NextGenerationEU – is providing 
to all key aspects of the digital transition. The latest figures indicate that EUR 205.5 billion from the 
EU budget, representing nearly 17.5% of the total budget, was allocated to digital transition efforts 

125 

 
  
over  that  period.  A major share  of  this  investment  came  from  the  Recovery  and  Resilience  Facility 
(RRF), which in the same period dedicated 24% of its total budget to digital-related investments and 
reforms. 

Figure  35:  Estimated  contributions  to  the  digital  transition  of  the  EU  budget  programmes, in  2021-2023 
(cumulatively) (in EUR million)220221 

Source: Digital tracking – European Commission 

The  overall  amount  is  likely  to  be  greatly  underestimated  at  this  stage222.  However,  keeping  this 
caveat  in  mind,  the  results  show  that  almost  all  programmes  that  are  part  of  the  EU  budget 
contribute to the digital transition. 

220 For readability purpose, the scale is broken: the RRF provides more than 10 times more support to the digital transition 
than the most contributing programme making the greatest contribution. 
221  The  abbreviations  used  stand  for:  RRF  –  Recovery  and  resilience  facility;  HORIZONEU  –  Horizon  Europe;  NDICI  – 
Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe;  DIGITALEU  –  digital  Europe 
programme;  ESF  PLUS  –  European  Social  Fund+;  JTM  –  Just  Transition  Mechanism;  SPACE  –  EU  Space  Programme;  CEF  – 
Connecting  Europe  Facility;  IPA  III  –  Instrument  for  Pre-accession  Assistance  III;  IBMF  –  Integrated  Border  Management 
Fund; ISF – Internal Security Fund; CREATIVEEU – Creative Europe Programme; CAP – common agricultural policy; EMFAF – 
European  Maritime,  Fisheries  and  Aquaculture  Fund;  SECURE  CONNECTIVITY  –  EU  Secure  Connectivity  Programme;  TSI  – 
Technical  Support  Instrument;  ESC  –  European  Solidarity  Corps;  OCT  –  Decision  on  the  Overseas  Association,  including 
Greenland; RIGHTS – Citizens, Equality, Rights and Values Programme; TCC – Turkish Cypriot community. 
222 Constraints on data availability allowed digital-relevant expenditure for the 2021-2023 period to be tracked for only 30 
spending programmes (out of 48 with EU budget implemented in 2023). 

126 

 
  
 
 
In  terms  of  thematic  concentration,  the  EU  budget  is  primarily  supporting  government  and  public 
bodies in  digitalising key sectors, in particular health systems and transport. Significant  efforts are 
also being made to support the digitalisation of businesses, to help the acquisition of (advanced and 
basic)  digital  skills  and  to  support  research  and  innovation,  along  with  key  advanced  digital 
infrastructure and technologies (such as quantum computing, artificial intelligence and cloud/edge 
computing)223.. 

4.2.2  The contribution to the Digital Decade targets: estimates 2025 

The  Joint  Research  Centre  (JRC)  examines  the  contribution  of  selected  EU  funding  instruments  to 
each  of  the  Digital  Decade  targets224.  This  exercise  considers  the  following  programmes:  the 
Recovery and Resilience Facility (RRF), Connecting Europe Facility (CEF Digital), Horizon Europe, the 
Digital Europe Programme (DEP) and Cohesion policy. As such, the analysis represents only a part of 
the broader EU budget and potential investments relevant to digital technology. 

The estimates presented are indicative, but they offer valuable insights into the direction and scale of 
support provided to each Digital Decade target225. 

The  results  show  that  the  mapped  programmes  play  an  important  role  in  supporting  the 
achievement  of  the  Digital  Decade  targets.  According  to  the  mapping  for  2021-2027,  a  total  of 
EUR 177.5 billion from these five programmes is directly aligned with the Digital Decade targets. An 
additional EUR 29.6 billion support broader digital objectives, bringing the total estimated effort to 
EUR 207 billion. 

The table below and the following charts depict the funding distribution across various instruments 
and Digital Decade targets. 

Table 1. EU relevant budget for the Digital Decade targets (2021-2027 MFF, incl. RRF 2020-26, EUR million) 

Recovery 
and 
Resilience 
Fund226 

Total 

Cohesion 
Policy227 

Horizon 
Europe 

Digital 
Europe 
Programme 

Connecting 
Europe 
Facility 
Digital 

– 

Total budget 

973 195 

655 531  

264 066  

43 667  

8 124228  

1 806  

223 For all data reported in this paragraph, please see European Commission, ‘Digital tracking’, 2021. 
224  European  Commission:  Joint  Research  Centre,  Nepelski,  D.  and  Torrecillas,  J.,  ‘Mapping  EU  level  funding  instruments 
2021-2027  to  Digital  Decade  targets  –  2025  update’,  Publications  Office  of  the  European  Union,  Luxembourg,  2025, 
JRC141966. 
225  The  amount  of  funding  considered  under  each  programme  and  the  distribution  of  funds  across  targets  is  strongly 
determined by the nature of the target and the assumptions made in the allocation. 
226  Including  measures  in  the  Repower  EU  chapters  contributing  to  the  digital  transition.  It  should  be  noted  that  those 
measures are considered in the analysis in this report but do not contribute to the achievement of the 20% digital target set 
by the Regulation establishing the Recovery and Resilience Facility (see also the Guidance on Recovery and Resilience Plans 
in the context of REPowerEU). Data were extracted on 10 March 2025.  
227 While the overall Cohesion Policy funds total is EUR 392 billion, only the following funds are included in the mapping and 
subsequent  estimations:  the  European  Regional  Development  Fund  (ERDF),  the  Cohesion  Fund  (CF),  and  the  European 
Territorial Cooperation Fund (Interreg), including the digitalisation investments from the REPowerEU chapters. 
228  This  amount  is  the  sum  of  the  planned  budget  per  topic  from  all  DIGITAL  work  programmes.  It  does  not  take  into 
account the budget actually committed or the redistribution of available funds throughout the years. 

127 

 
  
 
 
Recovery 
and 
Resilience 
Fund226 

Total 

Cohesion 
Policy227 

Horizon 
Europe 

Digital 
Europe 
Programme 

Connecting 
Europe 
Facility 
Digital 

– 

Total 
budget 

Digital 

Budget  for  other 
DD objectives 

Total  DD  target-
relevant budget 

207 067 

149 813  

29 594  

17 730  

8 124  

1 806  

29 577 

14 070  

4 256  

9 640  

1 234  

376  

177 490 

135 743  

25 338  

8 090  

6 890  

1 430  

Basic digital skills  15 303 

14 209  

ICT specialists * 

10 887 

9 450  

951  

634  

38  

112  

Gigabit  network 
coverage 

14 158 

11 287  

2 158  

0  

5G coverage * 

3 010 

1 967  

115  

446  

105  

683  

6  

6  

Semiconductors 
* 

18 423 

14 836  

Edge nodes * 

621 

-  

Quantum 
computing * 

1 982 

878  

-  

-  

-  

2 426  

1 161  

390  

789  

Cloud computing 
services * 

8 419 

6 023  

1 578  

407  

Data analytics * 

7 514 

4 722  

1 578  

745  

Artificial 
intelligence * 

10 684 

Digital 
adopters * 

late 

19 817 

5 282  

1 578  

1 876  

1 870  

14 166  

4 733  

338  

Unicorns * 

19 481 

14 170  

4 733  

306  

Digital 
services * 

public 

31 339 

Electronic  health 
records 

15 184 

24 675  

6 112  

6  

13 610  

1 168  

201  

eID 

670 

466  

-  

9  

224  

279  

341  

420  

579  

271  

546  

205  

194  

-  

8  

707  

476  

-  

7  

36  

70  

50  

78  

-  

-  

-  

-  

-  

Note: The Digital Decade targets indicated in the table with an asterisk (*) benefit from HPC funding. 
This funding not only supports computing research and infrastructures (e.g. quantum, cloud, AI) but 
also  the  training  of  specialists,  the  development  of  hyper-connectivity  (5G,  edge  nodes)  and 

128 

 
  
 
semiconductors and the adoption of HPC or Big Data by SMEs. In total, HPC funding amounts to EUR 
3.7 billion, channelled mainly through the EuroHPC Joint Undertaking (EUR 2.6 billion of the Digital 
Decade  Target-relevant  budget),  RRF  (EUR 950 million),  DIGITAL  (EUR  135  million)  and  Horizon 
Europe (EUR 9 million). Source: JRC calculations 

The following figures provide further visual representation of the support received by the different 
Digital Decade targets. 

Figure 36. Digital Decade-relevant budget (billion EUR) by DD target 

Source: JRC Calculations 

129 

 
  
 
Figure 37. Digital Decade-relevant budget (%) by DD target 

Source: JRC Calculations 

The  Recovery  and  Resilience  Facility  (RRF)  is  the  primary  contributor,  with  EUR 149.8  billion 
dedicated to digital priorities, of which EUR 135.7 billion is considered to be contributing directly to 
the  targets.  This  represents  more  than  70%  of  the  total  identified  budget  contributing  to  digital 
technology and to the targets specifically. The RRF plays an especially significant role in supporting 
basic digital skills (contributing to over 90% of the funding in this area) and ICT specialists (87%), as 
well in gigabit connectivity, digital public services, semiconductors, and  e-Health (in all cases above 
75%). 

CEF Digital plays an important role in the development of the digital infrastructure, focusing on 5G, 
including cross-border backbones and stand-alone 5G for smart mobility, cities, and health. 

The  Digital  Europe  Programme  significantly  supports  the  deployment  of  AI,  cloud  computing, 
quantum, edge nodes, and eID, with a strategic focus on high-impact areas. 

Horizon Europe is a key driver of digital innovation, covering especially advanced technologies such 
as quantum computing, edge, AI and semiconductors. 

4.2.3 

Investment needs for the digital transition 

Estimates of the investment needs 

There is a general consensus that a sharp increase in investment is essential for the EU to meet its 
strategic  policy  objectives  in  terms  of  competitiveness,  digital  leadership,  and  resilience.  In  recent 
years, several sector-specific analyses have been carried out to estimate specific investment needs. 
Although  estimates  vary  and  are  subject  to  a  certain  degree  of  uncertainty  and  to  an  evolving 
landscape, they give important indications on the magnitude of the gaps. 

130 

 
  
 
The Draghi report estimates that there will be a need for an additional EUR 750-800 billion per year 
by 2030, of which EUR 150 billion will be needed for ‘becoming a leader in digital technologies’ and 
EUR 100-150 billion for ‘boosting productivity through breakthrough innovation’229. 

A  recent  study  by  the  European  Parliamentary  Research  Service  (EPRS)230  corroborates  the 
magnitude of this gap. It estimates investment needs per year (more detailed indications are given 
by analysis estimating the gaps sector by sector) of between: 

•  EUR 55  billion  and  EUR 154  billion  (of  which  public  investment  can  be  placed  between 
EUR 10 billion and EUR 46 billion) for the EU to increase  digital RDI spending and remain a 
leader  on  AI,  quantum  computing  and  other  high-tech  digital  innovation  (HTDI).  These 
estimates  draw  on  the  gap  with  other  economies  like  US  and  China,  which  is  especially 
alarming in strategic sectors such as artificial intelligence, where the EU’s share was at 10.2% 
in 2021, as opposed to China’s 26% and the US’s 29.6%. 

•  EUR 157  billion  and  EUR 227  billion  (of  which  EUR 24  billion  to  EUR 68  billion  of  public 
investment)  for  additional  annual  investment  in  key  digital  technologies,  skills,  digital 
connectivity and infrastructure. 

The  box  below  offers  an  overview,  drawing  on  the  EIB  Investment  Report  2024/2025231  and  other 
sources. 

Connectivity networks: 

Substantial  investments  are  needed  in  digital  infrastructure  to  meet  Europe’s  connectivity  targets. 
According to the Commission’s White Paper and underlying estimates232: 

•  EUR 148  billion  is  needed  to  achieve  fixed  Gigabit  coverage  using  Fibre-to-the-Premises 

(FTTP), with EUR 43 billion requiring public funding. 
‘Full 5G’233 deployment will require EUR 33.5 billion. 

• 
•  Between EUR 26 billion and EUR 79 billion is needed for main transport corridor connectivity, 

depending on deployment options. 

Overall, total digital infrastructure investment could reach EUR 200 billion by 2030, depending on the 
options considered (i.e. a combination of mobile, fixed wireless access (FWA), Fixed). 

According to another study234, achieving 91.5% FTTP coverage across the EU27 by 2030 would entail 
an  additional  cost  of  EUR 61.9  billion.  An  additional  EUR 29.2  billion  would  be  required  to  achieve 
99% coverage. For 5G coverage using midband spectrum, a further EUR 25-30 billion is necessary. 

Data centres for AI and cloud capacity 

Investments  needs  in  cloud  computing  and  edge  (data  centres  and  the  associated  technology  and 
service  provision)  are  increasing  quickly.  Europe  today  has  ca.  8-10  GW  of  installed  data  centre 

229 Draghi, M., ‘The future of European competitiveness’, 2024. 
230 EPRS, ‘Benefit of an EU strategic innovation agenda – Cost of non-Europe’, 2025. EPRS_STU(2025)762853. 
231 EIB, ‘Investment Report 2024/2025: Innovation, integration and simplification in Europe’, 2025. 
232 European Commission, White Paper - How to master Europe's digital infrastructure needs?, 2024, COM(2024) 81 final; 
M. Ockenfels, F. Eltges, T. Plueckebaum, I. Godlovitch, ‘Investment and funding needs for the Digital Decade connectivity 
targets’, 2023. 
233 Standalone 5G. 
234 Connect Europe, ‘State of Digital Communications 2025’, 2025. 

131 

 
  
 
capacity,  amounting  to  roughly  a  third  of  the  installed  capacity  in  the  US  and  half  of  the  installed 
capacity of China235. According to industry, Europe’s capacity will double by the end of the decade. 
Other forecasts indicate that Europe’s capacity, as well as that of China, will grow by 70%  between 
now and 2030. But despite these increases, due to Europe’s low-capacity starting point, the gap with 
the US will continue to grow as the US is poised to increase its data centre capacity by 100%236. Some 
analysts  and  market  research  predict  that  demand  for  data  centre  services  is  expected  to  grow 
significantly  in  the  next  years,  potentially  widening  Europe’s  computing  capacity  gap  relative  to 
global competitors237. Filling this gap will require significant investments. 

Cybersecurity 

A study from 2022 provides an extensive analysis of the investment landscape in cybersecurity in the 
EU and other major economies, and gives insights into the size of the gaps. It estimated that, in 2021, 
EU  venture  capital  in  the  sector  reached  EUR 814  million  –  far  behind  the  US  (EUR 15  billion)  and 
Israel (EUR 2.5 billion). Moreover, 70% of EU cybersecurity venture capital is concentrated in France, 
Germany,  Italy,  and  Spain,  with  minimal  cross-border  investment,  limiting  the  growth  of  larger 
funds238. 

Investment needs must  be addressed by a combination of private and public funding, where  the 
intensity  of  public  support  is  likely  to  depend  on  the  sector  and  the  specific  needs  in  terms of  de-
risking and incentives for private involvement. 

In general terms and across all sectors, mobilising private funding and creating the right conditions 
has  emerged  as  an  imperative  for  EU  competitiveness,  sustainability  and  social  and  economic 
resilience. 

In the EU, capital markets are underdeveloped. As recently highlighted by the ECB President, there 
are several barriers: a large share of European household savings is held in low-yield bank deposits 
rather  than  being  invested  in  productive  assets  (entering  capital  markets);  capital  tends  to  remain 
within national markets, limiting cross-border investment flows and reducing the overall efficiency of 
capital  allocation  across  the  EU  (expanding  through Europe);  the  EU  lacks  a  robust  venture  capital 
ecosystem, which means that innovative and high-growth companies – especially start-ups – struggle 
to access the financing they need (exiting into innovative sectors)239. 

Well-functioning capital markets are particularly crucial for investments in innovative technologies. 
There  is a positive correlation between investment in innovative technologies and financial market 
development,  explained  by  the  important  role  played  by  market-based  financing  in  supporting 

235  Hintemann,  R.,  Hinterholzer,  S.,  Progni,  K.,  ‘Data  centres  in  Germany  -  Current  market  developments  2024’,  (2024a), 
Berlin: Bitkom e.V. Retrieved from Bitkom e.V. website..  
236 Ibid. 
237 The results of an ongoing study are expected to provide more granular data and empirical evidence to assess current 
and future needs of Cloud computing and Artificial Intelligence (AI) in the EU. The findings will enable the Commission to 
identify  and  quantify  both  existing  capacity  and  future  needs  for  general-purpose  and  AI-optimised  infrastructure 
computing, also in terms of investment needs. 
238 EIB, European Commission, ‘European Cybersecurity Investment Platform’, 2022. 
239 Speech by Christine Lagarde, President of the ECB, at the 34th European Banking Congress: ‘Out of the Comfort Zone: 
Europe and the New World Order’, November 2024 (Follow the money: channelling savings into investment and innovation 
in Europe). 

132 

 
  
 
 
investments  in  high-risk,  intangible  and  innovative  assets  that  traditional  bank  financing  might  not 
adequately  support240.  Yet,  compared  to  the  US,  EU  start-ups  and  scale-ups  face  limited  access  to 
venture and risk capital. The EU accounts for only 5% of global venture capital fundraising, while the 
US  attracts  52%  and  China  40%.  This  funding  gap,  combined  with  lower  growth  expectations  and 
higher  perceived  risks  for  EU  start-ups,  diminishes  their  appeal  to  investors.  As  a  result,  many 
European innovators seek financing abroad – often relocating to the US to access broader markets 
and customer bases241. 

Leveraging the EU budget to support private investment, create synergies and maximise impacts 

In  this  context,  a  substantial  element  is  the  need  for  the  EU  budget  to  be  better  leveraged  to 
support private investment through different types of financial instruments and more risk appetite. 

Joint  Undertakings  (JUs)  and  public  private  partnerships  (PPPs)  are  geared  to  leverage  and  pool 
resources, in particular from industry. In the area of semiconductors, the Chips JU will raise EUR 11 
billion  in  RDI  investment  by  2030.  However,  the  leveraging  across  partnerships  and  Joint 
Undertakings (JUs) is highly variable and not always sufficient242. 

EU  financial  instruments  have  a  potentially  high  leveraging  effect  to  attract  private  funds  and 
investments.  EU  programmes’  contributions  could  effectively  be  used  as  blending  in  combination 
with  the  InvestEU  programme,  to  de-risk  projects,  stimulating  private  investments.  Nevertheless, 
financial  instruments  are  not  sufficiently  mainstreamed  in  programmes243  and  still  have  limited 
investment portfolios composed mainly by demand and only indirectly by policy steer. Depending 
on  the  level  of  technology  readiness,  leveraging  factors  from  financial  instruments  are  currently 
around  3  for  early-stage  deep-tech  companies  (European  Innovation  Council  Fund  equity)  and 
around  5.62  from  the  InvestEU  guarantee244.  EU  budgetary  guarantees  such  as  InvestEU  have 
demonstrated  advantages  through  higher  multiplier  effects  and  the  ability  to  support  innovative 
projects, such as deep-tech and critical technologies that may otherwise not be sufficiently funded 
by national schemes or that may not attract private capital due to the high risk involved. 

The InvestEU programme 

The InvestEU Programme is supporting digital investments and ecosystems across Europe through a 
combination  of  financing  and  advisory  services.  As  per  March  2025,  investment  supporting 
digitalisation amounts to EUR 15.88 billion. Of that amount, EUR 2.6 billion correspond to financing 
and investment operations in digital connectivity infrastructure, technologies and services, resulting 
(amongst other impact indicators) in 2 120 000 additional households, enterprises or public buildings 
with  broadband  access  of  at  least  100  Mbps  upgradable  to  gigabit  speed,  or  the  number  of  Wi-
Fi hotspots created.  

Many of the digital transformation objectives under the InvestEU programme are closely aligned with 

240 EIB, ‘Investment Report 2024/2025: Innovation, integration and simplification in Europe’, 2025, pages 62-63. 
241 Competitiveness Compass for the EU, COM(2025) 30 final. 
242 Staff Working document (SWD) on Horizon Europe mid-term evaluation 2024 
243 As an example of the flexibility needed, the EIC blended finance allows successful companies to decouple the timing of 
the grant and equity finance, without the need to go through a new application process when the time is ripe (e.g. when co-
investors  have  been  found).  See  also  Mundell,  ‘The  Ecosystem:  European  Innovation  Council  uncouples  grant  and  equity 
funding for start-ups’ (23 January 2024) | ScienceBusiness. 
244 European Commission, InvestEU interim evaluation, 2024, SWD(2024) 228 final. 

133 

 
  
 
the EU’s digital targets for 2030: 

•  Strengthening  Europe’s  presence  in  key  parts  of  the  digital  supply  chain  (semiconductors, 
data  technologies,  5G  and  quantum  technologies  which  are  of  particular  importance  for 
security and strategic autonomy). 

•  Supporting  digital  transformation  ecosystems  and  businesses  by  equipping  them  with  the 

• 

necessary digital tools. 
Improving connectivity and bandwidth to ensure appropriate services for health, education, 
transport, logistics and media as well as reducing the geographical digital divide. 

•  Driving investments in audiovisual and media domains essential for democracy and cultural 
diversity,  particularly  in  innovative  media  content  and  technologies,  to  improve  long-term 
capacity to produce and distribute content and to compete globally in such areas. 

•  Contributing to a sustainable, climate-neutral and resource-efficient economy through digital 

investments and green digital technologies. 

•  Developing and deploying digital technologies such as supercomputing, artificial intelligence, 

blockchain, cloud data, and Internet of Things.  

Overall,  EU  financial  instruments  and  budgetary  guarantees  have  a  strong  potential  to  catalyse 
private investment – particularly in high-risk, high-impact areas such as deep-tech – and are effective 
in  scaling  up  innovation  and  supporting  market-driven  projects.  Other  aspects  of  the  digital 
transition,  however,  require  sustained  public  investment  and  targeted  policy  action,  for  example 
when  it  comes  to  promoting  an  inclusive  digital  transition,  monitoring  of  digital  inequalities,  and 
tailored  support  for  vulnerable  populations.  This  also  holds  true  at  local  level,  with  many 
municipalities  lacking  the  necessary  financial  and  human  resources  to  implement  effective  digital 
inclusion strategies or assess local needs through data-driven approaches245. 

Another  crucial  aspect  is  ensuring  an  impactful  EU  budget  and  coordinated  action  across  the  EU. 
The 2024 State of the Digital Decade report called for stronger collaboration between Member States 
and the European Commission to enhance synergies across EU funding programmes and to focus on 
high-impact projects, geared towards common objectives and with a strong cross-border dimension 
to pool resources and help accelerate progress toward the Digital Decade objectives. 

Initiatives  like  EDICs,  IPCEIs,  and  Joint  Undertakings  are  proving  essential  in  coordinating  multiple 
funding  sources  and  pooling  resources,  becoming  scalable  models  for  coordination.  However,  in 
general  terms,  the  practical  implementation  of  synergies  across  programmes  remains  complex, 
particularly for SMEs lacking the resources to navigate opportunities effectively. 

There is also room to tailor funding programmes more closely to the EU priorities. For example, a 
recent European Court of Auditors report on the contribution of the Recovery and Resilience Facility 
to the digital transition recommended to strengthen the link between EU funding schemes and the 
main  digital  needs  identified.  The  Court  recommendation  requires  the  Commission  to  ‘target  the 
allocation of funding more effectively, such as by requiring a clear link to the EU’s digital transition 

245 Eurocities, ‘Digital Divide Observatories by European cities’, 2022. 

134 

 
  
 
 
strategy and prioritising the funding of the previously identified digital needs’246. These conclusions 
will be used, in particular, in the preparation of the next multiannual financial framework. 

Addressing  these  issues  is  at  the  core  of  recent  policy  action,  starting  from  the  Competitiveness 
Compass247 and its proposed competitiveness tool, and the Communication on the next long-term EU 
budget,  which  calls  for  ‘strong  mechanisms …  to  guarantee  that  the  funds  deliver  on  EU  policy 
priorities’248. 

4.3  Cooperation  with  cities  and  regions  as  a  tool  for  implementing 

and disseminating digital policy 

To  meet  the  demographic  challenges  facing  our  workforce  and  preserve  our  prosperity,  the 
European  Union  faces  a  critical  challenge:  ensuring  that  digitalisation  drives  productivity.  In  the 
context  of  the  Digital  Decade,  the  digitalisation  of  businesses,  particularly  SMEs,  is  central  to  this 
effort. However, one of the key issues highlighted by the State of the Digital Decade 2024 report – 
the dissemination of digital technologies – remains uneven. 

While metropolitan  areas often  act  as  innovation  hubs,  many regions  lag  behind,  creating  a  digital 
divide  that  hinders  Europe’s  overall  competitiveness.  Strengthening  cooperation  between  the 
Commission, Member States,  and their cities, especially from innovation hotspots to smaller  cities, 
can play a crucial role in addressing this gap. By enabling technology spillovers, cities can thus help 
disseminate  digital  tools  to  businesses  across  all  regions,  enhancing  productivity  and  resilience. 
Beyond  their  role  in  such  dissemination,  cities  are  also  at  the  heart  of  ecosystems  that  merge 
technology,  sustainability,  and  European  values.  Smart  urban  planning  allows  cities  to  integrate 
green initiatives – such as sustainable transport and clean energy networks – with digital innovation, 
creating  environments  that  safeguard  democracy,  protect  privacy,  and  enhance  the  well-being  of 
residents.  Thus,  as  cities  are  the  closest  level  of  public  administration  to  citizens  and  have  a 
particularly good understanding of the needs and constraints of their residents and SMEs, placing a 
focus on them is a great opportunity for the EU to tackle the priorities of the new Commission. 

In  this  context,  the  Commission  is  planning  to  put  forward  an  ambitious  policy  agenda  for cities. 
This agenda, for which Executive Vice-President Raffaele Fitto is responsible, should provide a clear 
vision for the  future  of the  cities,  looking at issues  such as housing, climate  action, mobility, social 
inclusion,  equality,  mobility  and  digitalisation249.  Within  this  framework,  the  Digital  Decade  Policy 
Programme presents a valuable opportunity to provide guidance and support for shaping this agenda 
for future cities, promoting key priorities for action and various tools. 

4.3.1  The need for data to monitor public policies 

First,  in  order  to  drive  effective  digital  transformation  and  ensure  data-driven  policy,  improving 
measurement tools is essential in the context of the Digital Decade 2030, building on local initiatives, 
such as the Living-in-EU movement and the LORDIMAS tool. Such monitoring plays a crucial role in 

246  ECA,  ‘Support  from  the  Recovery  and  Resilience  Facility  for  the  digital  transition  in  EU  member  states,  A  missed 
opportunity for strategic focus in addressing digital needs’, 2025. 
247 Competitiveness Compass for the EU, COM(2025) 30 final. 
248 The road to the next multiannual financial framework, COM(2025) 46 final. 
249 European Commission, Raffaele Fitto - Mission Letter, 2024 

135 

 
  
 
tracking digital maturity at the regional level, enabling policymakers to adapt their strategies to the 
needs of each area. 

To understand the complexity behind the interplays between EU policy objectives and the  realities 
and  the  context  on  the  ground,  we  need  data.  However,  there  are  very  few  harmonised  and 
comparable indicators being collected or produced that cover the local level across the bloc. Much of 
the  current  monitoring  of  digital  transformation  is  carried  out  only  at  regional  or  national  level.  A 
strategic  and  targeted  approach  to  monitor  and  measure  what  is  happening  at  local  and  regional 
levels is still largely missing. This first report on LORDIMAS seeks to partially address this knowledge 
gap  by  utilising  LORDIMAS  data  to  provide  insight  into  the  state  of  digital  maturity  of  subnational 
public administrations. 2024 was the first full year of LORDIMAS data collection, encompassing data 
from  approximately  one  hundred  local,  metropolitan,  and  regional  governments.  It  features  an 
analysis of digital maturity based on the LORDIMAS self-assessments conducted in 2024 by 99 local, 
metropolitan and regional authorities. 

To  enhance  the  representativeness  of  data  and  strengthen  the  evidence  base  for  European 
policymaking, LORDIMAS aims to increase the number of participating administrations year-on-year. 
The number of participating local and regional administrations continues to rise in line with ongoing 
outreach campaigns (status 30 March 2025: 184 entries). 

Developing  digital  twins,  in  particular  through  the  LDT-CitiVERSE-EDIC,  provides  cities  with  a 
common EU-wide digital infrastructure including powerful tools for key urban challenges (e.g. urban 
development, Net Zero Cities, New European Bauhaus (NEB) implementation) under the first SIMPL-
based  EU  Data  Space.  This  EDIC,  set  up  by  a  Commission  Decision  in  February  2024,  was  officially 
launched in Valencia, Spain, in December 2024. It aims to establish a shared EU-wide infrastructure 
for data and services, to be used by the 100 cities expected to join the CitiVERSE EDIC during 2025. 
The project then aims to establish EDIC joint agreements with relevant players, such as the European 
Digital  Innovation  Hubs  (which  will  receive  funding  in  2025  for  developing  their  data  strategies), 
Scalable Cities, and the NEB hubs that will empower this EDIC with other very important EU-funded 
results and facilitate the process of scaling up the digital EU Cities ecosystem. 

In  the  future,  EU  cities  participating  in  EDIHs,  Scalable  cities  and  AI-based  twinning  (through  HPC) 
could  develop  more  advanced  Local  Observatories,  building  on  the  experience  of  similar  existing 
Observatories,  to  monitor  digital  transformation  and  efficiently  allocate  resources  (including 
emergency  response  and urban  resilience  under  NEB  principles)  and measure  progress  toward the 
Digital Decade objectives. 

Regarding Digital Capacity Building for cities, the LDT-CitiVERSE-EDIC will develop a new node for the 
New  European  Bauhaus  Academy  facilitating  technical  support  for  the  creation  of  new  SMEs 
supporting the digital component of the EU Cities ecosystem. 

4.3.2  Building comprehensive and resilient digital ecosystems 

Resilient  digital  transformation  relies  on  robust  ecosystems  that  integrate  skills  development, 
connectivity  infrastructure,  and  enterprises’  support,  especially  for  SMEs.  In  2023,  only  55.6%  of 
Europeans  possessed  basic  digital  skills,  with  significant  disparities  between  urban  and  rural  areas 
(63% of people living in cities compared with 48% of people living in rural areas) and a gender gap in 
digital professions. To address these discrepancies, it is crucial to enhance ICT specialist training and 
encourage  digital  skills  development  from  an  early  age,  particularly  by  motivating  young  people, 
especially girls, to enter STEM fields. 

136 

 
  
SMEs  need  resources  to  adopt  advanced  technologies  (AI,  cloud,  IoT),  which  strengthens  their 
competitiveness  and  supports  an  inclusive  digital  economy.  Actions  encouraging  SMEs  to  adopt 
advanced  technologies,  such  as  AI,  IoT,  and  cloud  computing,  should  therefore  be  explored,  with 
assistance  in  assessing  needs,  implementing  solutions,  and  navigating  EU  funding  opportunities.  A 
good  way  forward  to  promote  the  dissemination  of  technologies  would  also  be  to  streamline 
procedures for accessing EU funding, particularly for smaller municipalities and SMEs. 

European  Digital  Innovation  Hubs  (EDIHs)  are  instrumental  in  advancing  digital  transformation 
within  cities  across  Europe  by  providing  essential  services  such  as  training,  testing  facilities,  and 
partnerships with technology providers. For example, the majority of EDIHs are actively collaborating 
with  cities  to  implement  smart-city  projects  and  facilitate  the  testing  and  deployment  of  digital 
solutions. 

The  AI  Testing  and  Experimentation  Facilities  (TEFs)  are  large-scale  reference  sites  that  allow 
technology providers  across  Europe to test  advanced AI solutions in real-world settings.  CitCom.ai, 
the  TEF  focused  on  smart  cities  and  communities,  targets  sectors  like  energy,  mobility,  and 
connectivity, aiming to test AI and robotics before they are deployed in public spaces. This includes 
technologies such as self-driving vehicles and telecom data software. CitCom.ai functions as a bridge 
between  technologies,  infrastructure,  and  everyday  life,  with  three  super  nodes  (Nordic,  Central, 
South)  and  satellites  across  11  EU  countries.  Co-funded  by  the  Digital  Europe  Programme,  this 
EUR 40 million project began in January 2025. 

It  is  also  fundamental  to  prioritise  investment  in  the  Digital  Decade  connectivity  targets,  e.g.  for 
high-speed  internet,  in  particular  5G  and  fibre  for  underserved  areas,  ensuring  that  all  cities, 
regardless of their size, have the infrastructure to support digital innovation. Funding pilot projects 
in  smaller  cities  is  also  a  priority  to  demonstrate  the  benefits  of  digital  technologies  in  urban 
management. 

Reinforcing sovereign and secure public digital services within cities is essential to ensure access to 
quality  services  and  to  protect  European  technological  autonomy.  In  this  regard,  the  Connecting 
Europe Facility (CEF) Digital programme plays a key role in supporting and catalysing investments in 
digital connectivity infrastructure. Among its actions, CEF Digital co-finances projects such as 5G for 
Smart  Communities,  which  funds  rapid  deployment  and  uptake  of  5G  for  smart  communities  and 
innovative  applications.  EUR 128  million  has  already  been  committed  to  finance  41  projects 
advancing 5G connectivity, smart infrastructure, and digital transformation across Europe, including 
municipality-led  projects  such  as  High  Connectivity  via  5G  in  Toulouse,  France  (EUR 2.8 million), 
enhancing smart traffic management and surveillance, and 5G4LIVES in Riga, Latvia, and Turin, Italy 
(EUR 2.9 million), focusing on emergency risk prevention and disaster management. The CEF Telecom 
programme  facilitates  cross-border  interactions  between  public  administrations,  businesses,  and 
citizens, deploying digital service infrastructures and broadband networks. Additionally, WiFi4EU has 
supported  more  than  7 200  European  municipalities  in  installing  over  93 000  free  public  Wi-Fi 
hotspots, making digital access more inclusive for local communities. 

4.3.3  Anchoring actions to digital rights and principles 

Cities  are  essential  actors  in  implementing  the  DDPP-monitored  European  Declaration  on  Digital 
Rights  and  Principles,  which  offers  a  framework  to  ensure  that  the  digital  transition  is  ethical, 
inclusive, and respectful of fundamental freedoms. 

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The  Commission’s  monitoring  of  digital  rights  and  principles  aims,  in  particular,  to  pay  closer 
attention  to  the  initiatives  of  cities  and  local  actors,  and  emphasise  their  role  in  the  promotion  of 
digital rights. 

In  addition,  local  actions,  such  as  the  Brussels  Digital  Rights  Charter  or  Leipzig’s  Hardware  for 
Future  initiative,  actively  contribute  to  strengthening  digital  inclusion  and  equitable  access  to 
technology. The  DDPP  works  in partnership  with the Cities Coalition for Digital Rights, supporting 
initiatives  across  the  EU,  and  serves  as  a  model  for  local  mobilisation  in  favour  of  digital  rights, 
reinforcing public trust and protection in digital services. The local level also presents opportunities 
to promote key technology regulations, such as the AI Act, the DSA and the DMA, among the public. 

The  2025  Eurocities  Digital  Forum:  Digital  Rights  at  the  Heart  of  Cities,  hosted  by  Bordeaux 
Métropole  at  the  beginning  of  April,  brought  together  city  leaders  and  experts  to  shape  digital 
innovation 
inclusion,  dignity,  and  democratic  resilience.  Amid  rising  concerns  over  AI, 
misinformation,  and  shrinking  civic  space,  cities  reaffirmed  their  role  as  defenders  of  democratic 
values, calling for stronger EU-local cooperation and people-centred digital policies. 

in 

4.3.4  Launching (or building on existing) concrete cooperations at EU level 

The landscape where EU policies and initiatives will have to have an impact is fragmented, complex 
and diverse. There are approximately 90 000 local and 250 regional governments in the EU and EFTA 
countries, each tasked with providing similar services and support to the public, and each with their 
own  –  largely  duplicated  –  digital  infrastructure  and  processes.  Hence,  digital  transformation 
necessitates 
scalability, 
interoperability, and cost-effectiveness. Collaboration is essential for optimising resource utilisation, 
facilitating  the  sharing  of  knowledge  and  best  practice  and  promoting  the  seamless  exchange  of 
digital  infrastructure  and  services.  By  working  together,  public  administrations  can  avoid  the 
inefficiencies and costs associated with duplicating efforts or reinventing solutions that already exist 
elsewhere. 

strong  cooperation  between  public  administrations 

to  achieve 

Succeeding in the digital and ecological transitions must rely on strong cooperation between cities, 
Member  States,  and  the  Commission.  Designated  programmes  like  the  DDPP’s  EDIC  CitiVERSE 
consortium, but also the New European Bauhaus, Digital Innovation Hubs (EDIHs) and the European 
Smart Communities Data Space, will provide additional resources and platforms for cities and regions 
to drive environmentally focused digital transformation efforts. 

The  EU  Cohesion  Policy  Fund  and  the  European  Urban  Initiative,  launched  in  2023,  support  the 
development  of  inclusive  and  sustainable  digital  services,  especially  in  regions  with  limited  private 
investment. 

The  Commission  seeks  to  maximise  the  impact  of  local  initiatives  by  strengthening  cross-border 
collaboration and encouraging the sharing of best practices, as on the Digital Skills and Job Platform. 
The  suggestion  proposed  by  the  Cities  Coalition  for  Digital  Rights  to  establish  EU-funded  city 
consortia  for  the  dissemination  of  good  practices  to  combat  digital  inequalities  could  be  explored. 
Mapping  local  initiatives  through  observatories  provides  a  baseline  for  monitoring  progress  and 
would allow regional and national actions to be aligned more closely with the EU digital strategy. 

Moreover,  the  Horizon  Europe  Mission  on  Cities  (Cities  Mission)  is  another  ongoing  leading  EU 
initiative on the digital and ecological transitions, with a strong engagement of cities. It involves local 
authorities,  the  public,  businesses,  investors  as  well  as  regional  and  national  authorities  to  deliver 

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100 climate-neutral and smart cities by 2030 and to ensure that these cities act as experimentation 
and innovation hubs to enable all European cities to follow suit by 2050. 

As  set  out  in  its  implementation  plan,  the  Cities  Mission  takes  a  cross-sectoral  and  demand-led 
approach, creating synergies between existing initiatives and basing its activities on the actual needs 
of cities. 

Combining  efforts  at  all  levels  can  build  a  truly  human-centred  and  sustainable  digital  society.  The 
DDPP aims to foster multiscale cooperation, in consultation with all stakeholders. 

Best practice: Portugal – Smart Territories National Strategy (ENTI) 

Launched  in  August  2024,  Portugal’s  Smart  Territories  National  Strategy  (ENTI)  presents  a 
comprehensive  approach  to  transforming  territorial  governance  through  data-driven  innovation. 
Anchored  in  sustainability,  transparency,  and  interoperability,  the  strategy  fosters  more  efficient 
public  service  delivery  and  supports  climate  resilience  by  integrating  digital  tools  such  as  digital 
twins, policy dashboards, and urban management platforms. Funded by the Recovery and Resilience 
Facility with a budget of EUR 60 million, ENTI promotes collaborative innovation across municipalities 
and  sectors,  enhancing  the  use  of  real-time  data  for  decision-making.  Key  success  factors  include 
improved regional development, digital inclusion, and smarter infrastructure planning, particularly in 
addressing  urban-rural  disparities.  The  strategy  aligns  with  EU  digital  rights  and  principles  by 
prioritising  inclusivity,  environmental  monitoring  with  the  deployment  of  smart  grids,  and  5G 
connectivity.  It  offers  a  scalable  model  for  Member  States  seeking  to  enable  smart,  green,  and 
connected territories through coherent national action. 

4.4  The international dimension of the Digital Decade 

International aspects of digital policies are intrinsically linked to internal ones. Building on the EU’s 
strengths  and  internal  policies  and  actions,  the  International  Digital  Strategy  for  the  European 
Union250  seeks  to  (i)  boost  the  EU’s  tech  competitiveness  through  economic  and  business 
cooperation with trusted partners (ii) promote a high level of security for the EU and its partners and 
(iii) shape global digital governance and standards in line with the EU values-based approach.  

To  safeguard  economic  interests,  the  EU  has  implemented  measures  such  as  the  EU  Economic 
Security  Strategy,  promoting  cooperation  with  key  partners  in  emerging  technologies.  These 
measures aim to balance economic openness with strategic interests and increase the EU’s resilience 
in critical sectors. 

Instruments  like  the  European  Declaration  on  Digital  Rights  and  Principles  have  influenced 
international  agreements  such  as  the  OECD’s  Declaration  on  a  Trusted,  Sustainable  and  Inclusive 
Digital Future and discussions for a UN Global Digital Compact. The EU has laid the foundations for 
digital  diplomacy  through  Council  Conclusions251,  and  aims  for  a  stronger,  more  strategic  and 

250 An International Digital Strategy for the European Union, JOIN(2025) 140 final.  
251 Council Conclusions on EU digital diplomacy of 18 July 2022 and 26 June 2023, and Council Conclusions of 18 April 2024 
which further emphasised the importance if the international dimension of EU digital policies. 

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coordinated approach to digital coalition building and diplomatic outreach, allowing the EU to lead 
the way in global digital governance. 

The international dimension of digital policies is closely intertwined with the EU’s internal regulatory 
framework. A key aspect of international cooperation in this field is the promotion of the EU’s digital 
standards beyond its borders. In this context, the EU is actively working to extend the Roam-Like-At-
Home (RLAH) Regulation to candidate countries such as Moldova. 

The EU has developed international digital partnerships, building on our strong ties with like-minded 
partners. Such partnerships are structured across three levels: 

1.  Trade and Technology Councils, Digital Partnerships and Digital Trade Agreements 
2.  Digital Dialogues 
3.  Partners we cooperate with through the Neighbourhood Policy, Global Gateway and regional 

alliances 

The  EU’s  international  digital  partnerships  correspond  to  the  four  pillars  of  the  Digital  Compass  – 
skills, infrastructure, transformation of business and transformation of public services – and build on 
a ‘cooperation toolbox’ including regulatory cooperation, RDI and industrial cooperation, investment 
in secure digital infrastructure, capacity building and skills and cooperation in international forums. 

4.4.1  Trade  and  Technology  Councils  (TTCs),  digital  partnerships  and  digital  trade 

agreements 

The  Commission  has  continued  to  develop  its  network  of  international  digital  partnerships, 
developing cooperation on research collaboration, regulatory policy and standardisation. 

The EU has discussed cooperation in key areas such as artificial intelligence, emerging technologies, 
secure and resilient connectivity at the sixth EU-US TTC ministerial meeting which took place on 4-
5 April 2024 in Leuven, Belgium252. 

During  the  2nd  TTC  meeting  with  India,  held  on  the  margins  of  the  unprecedented  College  visit  to 
India in February 2025, both India and the European Union reaffirmed the importance of deepening 
their  digital  cooperation  in  line  with  their  shared  values  through  the  TTC  Working  Group  1  on 
Strategic Technologies, Digital Governance, and Digital Connectivity. 

The European Union is committed to advancing the common tech agenda with India, with a focus on 
key  digital  technologies  such  as  artificial  intelligence,  semiconductors,  digital  public  infrastructure, 
5G/6G and high-performance computing, as well as facilitating the exchange of skilled professionals 
and talent. 

Over  the  course  of  2022,  three  digital  partnerships  with  key  East  Asian  countries  –  Japan,  South 
Korea and Singapore – were launched. These partnerships showcase the EU’s strategic engagement 
in the digital field with this pivotal region of the world.  They aim to provide an overall framework 
for bilateral cooperation on (i) digital policy and regulatory matters (such as data free flow with trust, 
online  platforms, cybersecurity  and  AI),  (ii)  our  positions on  digital matters  in  international  forums 
and  (iii)  research  and  investment  opportunities  in  cutting-edge  technologies  such  as  HPC, 

252 Sixth EU-US TTC Ministerial meeting, ‘EU and US continue strong trade and technology cooperation at a time of global 
challenges’, 2024. 

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semiconductors and 5G/6G. In 2024, Digital Partnership Councils were held with both Japan and the 
Republic of Korea  to  further  cooperation on  AI,  semiconductors, 5G/6G,  digital  identities  and  trust 
services,  quantum  and  high-performance  computing,  Arctic  connectivity,  data  governance,  online 
platforms and cybersecurity. 

The  EU  has  launched  new  joint  projects  with  its  partners  to  reinforce  mutual  economic  resilience, 
increase the EU’s  excellence  in RDI and boost  competitiveness. A key project  is to deploy a secure 
and direct submarine cable between the EU and Japan and the rest of the region through the Arctic. 

Following the successful start of the partnerships in East Asia, the EU launched a digital partnership 
with Canada on 24 November 2023 on the occasion of the EU-Canada summit. It covers issues such 
as AI, quantum computing, cybersecurity, digital identities, arctic connectivity and online platforms. 
The Partnership was implemented in 2024 through expert exchanges. 

The  EU  also  already  has  a  growing  portfolio  of  free  trade  agreements253  and  digital  trade 
agreements254, which was expanded most recently with agreements with Japan, Singapore and the 
Republic  of  Korea,  which  set  high-standard  digital  trade  rules  in  line  with  EU-values  that  ensure  a 
secure  and  safe  online  environment  for  consumers,  bring  transparency,  predictability  and  legal 
certainty  for  companies,  and  prevent  or  remove  unjustified  barriers  to  digital  trade  including  for 
cross-border data flows.  

4.4.2  Digital dialogues 

The  EU’s  international  digital  partnerships  are  underpinned  by  a  growing  programme  of  bilateral 
digital dialogues with key partners around the world. 

In the Latin America and Caribbean (LAC) region, bilateral digital policy dialogues have been set up 
with Brazil (which took place on 12 February 2025), Argentina (which took place on 21-22 June 2023) 
and  Mexico.  These  are  complemented  with  bi-regional  policy  dialogues  established  under  the  EU-
LAC  Digital  Alliance  on:  Data  governance,  cybersecurity,  e-governance,  connectivity  and  inclusion, 
artificial intelligence. 

In Asia, the EU held a second High Level Dialogue on Digital with China on 18 September 2023. The 
dialogue  addressed  problems  EU  companies  encounter 
ICT 
standardisation  bodies,  and  cross-border  data  flows.  Further  to that,  a  China-EU  ICT  Dialogue  took 
place on 29 February 2024. 

in  China,  such  as  access  to 

The  Digital  Dialogue  with  Australia  was  successfully  relaunched  on  12 June  2024  following  a  four 
years  pause.  The  Dialogue  included  exchanges  on  AI,  data  economy,  cybersecurity  and  agreed  on 
increased and systematic cooperation on platforms. 

4.4.3  Global Gateway and regional alliances 

The  programme  of  policy  dialogues  is  accompanied  by  a  growing  number  of  digital  cooperation 
initiatives,  supported  by  instruments  such  as  NDICI-Global  Europe,  the  Connecting  Europe  Facility 
and Horizon Europe, in addition to Team Europe initiatives which bring together the contributions of 
Member States. 

253 EU Trade agreements, European Union.  
254 Digital Trade Agreements, European Union.  

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The Global Gateway initiative focuses on digital infrastructure investment to bridge the global digital 
divide  and  increase  the  security  of  digital  connections  between  Europe  and  its  partners.  The 
Commission is in particular supporting the deployment  of secure 5G networks provided by trusted 
vendors in non-EU countries, notably in the LAC region and the EU neighbourhood. It is also working 
on supporting the security and resilience of submarine cables, supporting the EU’s digital resilience 
and reducing dependencies. 

To  promote  a  ‘Team  Europe’  approach,  the  Commission  and  Member  States  joined  forces  to 
implement  a  coordination  platform  aimed  at  strengthening  the  EU’s  global  role  in  support  of  a 
human-centric model of digital transformation: the D4D Hub. 

4.4.4  Candidate countries 

The  Commission  has supported  digital  transformation  efforts  in  enlargement  countries  and the  EU 
neighbourhood, including by granting them the status of association with EU programmes like Digital 
Europe and the Connecting Europe Facility. Association agreements to the Digital Europe programme 
were signed with Montenegro and Türkiye. 

The Commission held its third Regulatory Dialogue on digital policies with Western Balkans countries 
on  18 October  2024  in  Brussels.  The  Dialogue  focused  on  issues  such  as  AI,  the  DSA  and  DMA, 
cybersecurity (including the 5G cybersecurity toolbox) and digital identity. 

Since the start of Russia’s invasion of  Ukraine, the EU has substantially stepped up support for the 
country’s digital transformation, focusing both on emergency and long-term measures. The voluntary 
agreement  between  several  EU  telecom  operators  and  Ukraine’s  operators  to  ensure  affordable 
connectivity for Ukrainian refugees has been extended for a fifth time until 9 July 2025. At the same 
time, the EU has continued to work, through the EU-Ukraine Association Agreement, towards a long-
term roaming arrangement with Ukraine. The third EU-Ukraine cyber dialogue took place on 15 July 
2024.  In  December  2024,  Ukraine  formally  expressed  its  interest  in  participating  in  the  EU 
Cybersecurity Reserve. In the  same month, the  amendment of Ukraine’s Association Agreement to 
Creative Europe was signed to allow Ukraine to participate in all the actions of the MEDIA strand of 
the programme. 

A similar approach for roaming is being followed with Moldova, where efforts towards a long-term 
arrangement through the EU-Moldova Association Agreement are being complemented by a short- 
to  medium-term  voluntary  agreement  between  operators  on  both  sides.  The  EU  has  supported 
Moldova by ensuring the integrity of the country’s Presidential elections, which took place in October 
2024. 

Between  March  and  December  2024,  the  Commission  and  Switzerland  negotiated  on  a  broad 
package  of  agreements  to  deepen  and  expand  the  EU-Switzerland  relations.  The  conclusion  of 
negotiations was announced by Commission President von der Leyen and Swiss President Amherd on 
20 December  2024.  The  outcome  of  the  negotiation  fulfils  the  Council  mandate  and  reflects  the 
balance described in the Common Understanding, a political document in which the Commission and 
Switzerland mapped out the overall package and landing zones. The package includes an agreement 
on Switzerland’s regular and fair financial contribution to the EU’s cohesion, as well as an agreement 
on Switzerland’s association to EU programmes (e.g. Horizon Europe, Digital Europe, ITER, Erasmus+). 

4.4.5  Multilateral cooperation 

The EU has recorded significant success in multilateral forums. 

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In  2023,  G7  Leaders  endorsed  a  voluntary  code  of  conduct  for  AI  developers,  drawing  upon  key 
concepts from the EU AI Act. This initiative was further strengthened in 2024 when OECD countries 
also  endorsed  the  Code.  To  put  the  Code  into  practice,  a  monitoring  mechanism  and  a  logo  were 
developed.  The  Commission  continues  to  play  a  pivotal  leadership  role  on  the  multilateral  front, 
actively promoting the ‘Data Free Flow with Trust’ initiative, which reflects the idea (at the heart of 
the EU data regulations) that data protection is not a ‘restriction’ but an enabler to data flows, which 
increases trust in the digital economy. This is shaping the G7/20 discussions and supports the work of 
the OECD. 

In the OECD, the Commission is proactively promoting the EU model for the digital transformation. 
The EU brought to conclusion the  discussions on the first-ever international instrument setting out 
principles in the area of surveillance, the Declaration on Government Access to Personal Data Held by 
Private  Sector  Entities.  The  OECD  also  adopted  the  OECD  AI  principles  and  28  countries  joined  its 
Global  Partnership  on  AI  (GPAI).  In  the  area  of  data  free  flow  with  trust,  the  EU  successfully 
supported the Japanese proposal to set up a forum at the OECD called the Institutional Arrangement 
for Partnerships, dedicated to exchange, among like-minded countries. 

At  the  WTO,  the  EU  contributed  to  the  successful  renewal  of  the  Work  Programme  on  electronic 
commerce and the moratorium on customs duties on electronic transmissions at the 13th Ministerial 
Conference in February 2024 for a further two years, ensuring that the duty-free digital environment 
that  has  been  in  place  since  1998  was  maintained.  The  EU  also  played  a  major  role  in  the 
negotiations for a plurilateral eCommerce Agreement that concluded in July 2024. Once integrated 
into the WTO, the eCommerce Agreement will be the basis for global rules on digital trade among a 
broad range of WTO Members.  

In the  UN  context, the EU contributed to an ambitious  Global  Digital Compact (GDC), which  is the 
first  comprehensive  framework for global digital governance.  The GDC largely reflects EU priorities 
on  how  to  reconcile  human  rights,  democracy  and  the  rule  of  law  in  this  new  area  of  digital 
governance,  in  line  with  the  European  Declaration  on  Digital  Rights  and  Principles  and  the  human 
rights conventions, covenants, and treaties. 

143