without reforms, Europe threatened to stop against the United States

Differences arise between countries and threaten to create a real divide on the continent.

Europe is not digitizing fast enough. This is the message sent on Thursday by a report published by the European Investment Bank (EIB): “An integral part of business survival” since the pandemic, the digital transition of some European companies is too slow and threatens Europe. United States.

Without investment in digitization, “some European companies are at risk of being sidelined,” the bank warns in its report.

In the United States, nearly six in 10 companies (58%) have taken advantage of the health crisis to accelerate their digital transition, compared to just 46% of European companies, notes the EIB, which killed 13,500 European and US companies between April. polled and July 2021. In Central and Eastern Europe, as well as in France, the percentage actually drops to 37%, compared to 48% in the west and north of the old continent.

In terms of advanced technologies such as 3D printing or virtual reality, US companies are also one step ahead, with two-thirds of them using them in their operations, compared to 61% of European companies.

Consequences on the labor market

“When it comes to digitization, the overall divide between the EU and the US is mainly explained by the greater preponderance of small businesses in the European economy,” the report said.

Compared to large groups, “small businesses are less likely to adopt digital technologies,” adds EIB chief economist Debora Revoltella.

A discrepancy explained by “several factors”, such as “the difficulty of finding qualified staff and financing the transition,” said Désirée Rückert, an economist at the EIB. “In addition, small businesses in the United States are more digitized on average,” adds the Luxembourg-based bank. An important advantage, given the many benefits of digitization that emerge in the report.

“Companies that have adopted digital technologies have better managed the disruption caused by the Covid-19 pandemic,” the EIB said.

Since the start of the health crisis, their revenues have also fallen less than those of companies less committed to the digital transition. Finally, the leaders of the most advanced digitization companies are relatively more optimistic about their one-year outlook.

In addition to waving the carrot of digitization, the EIB is also waving the stick: the delay of certain companies “brings risks to the labor market”.

“In Europe, 31% of employees are associated with companies that don’t invest in the digital sphere” (22% in the United States), she says.

However, among those companies resistant to the digital transition, those that have reduced their workforces after the pandemic outnumber those that have increased them.

“Numerical Fraction”

In an effort to explain the digital backwardness of certain companies, the EIB identifies several brakes.

For example, nearly one in six European companies considers poor access to digital infrastructure a “major obstacle” in their digitization process. In addition, “many companies expect that robotization will lead to job destruction, a fear “particularly proven among companies in Central and Eastern Europe”.

Between the Finnish or Maltese digital champions and these hesitant companies, “Europe is facing a growing digital divide”, the EIB warns. And this gap could widen in the coming years, judging by the differing investment priorities of European companies over the next three years.

The most advanced in the digital transition say they want to develop their business, while the least committed focus on simply innovating their production tools. To help them catch up, the EIB provides targeted financial support to SMEs in particular.

“We are concerned about SMEs, the European economy is largely based on their dynamism,” emphasizes Christoph Weiss, EIB economist. “We need to find the right political instrument” to accelerate their digital transition, he concludes.

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