Digital Europe: Realizing the continent’s potential

Digital Europe: Realizing the continent’s potential

Digital Europe: Realizing the continent’s potential

Europe is operating below its digital potential. Accelerating digitization could add trillions of euros to economic growth in less than a decade.

Europe is in the midst of a digital transition driven by consumers, thriving technology hubs, and some world-renowned companies. But digitization is also about the extent to which firms and industries invest in and use digital. In these respects, Europe is much less advanced. Yet if its laggards double their digital intensity, Europe can add €2.5 trillion to GDP in 2025, boosting GDP growth by 1 percent a year over the next decade.

What do we mean by digital intensity? It’s the degree to which digitization drives sectors and firms. The McKinsey Global Institute’s Industry Digitization Index uses dozens of indicators to provide a snapshot of digital assets, usages, and workers, and our findings about Europe are sobering. Today, Europe operates at only an estimated 12 percent of its digital potential, compared with the United States’ 18 percent. In addition, there is enormous variation between Europe’s countries: while France operates at 12 percent of its digital potential, Germany is at 10 percent, and the United Kingdom is at 17 percent.

Read Also:
Top Reasons Why Big Data, Data Science, Analytics Initiatives Fail

Europe’s low overall level of digital intensity reflects huge gaps between leaders and laggards. The continent’s economy is digitizing unevenly, with large variations among sectors and firms: while the information and communications technology (ICT) sector is at the digital frontier, closely followed by media and finance, large traditional sectors are far behind (exhibit). Country effects explain one-third of the variation in digital capability across Europe, indicating that countries can influence the extent of digitization within their domestic economy. Sector effects explain the remaining two-thirds of variation in digital intensity across Europe.

Europe underperforms on its digital potential relative to the United States. The European digital frontier, represented by the ICT sector and its digitization of assets, uses, and labor, is only 60 percent as digitized as the US frontier. Some large sectors such as professional services, wholesale trade, and real estate are further behind the digital frontier in Europe than they are in the United States.

Read Also:
How hyperlocal journalists plug the democratic gap in regional elections

 



Data Science Congress 2017

5
Jun
2017
Data Science Congress 2017

20% off with code 7wdata_DSC2017

Read Also:
How to use predictive analytics to transform audience relationships

AI Paris

6
Jun
2017
AI Paris

20% off with code AIP17-7WDATA-20

Read Also:
Cybersecurity firms step up intel sharing despite issues of trust

Chief Data Officer Summit San Francisco

7
Jun
2017
Chief Data Officer Summit San Francisco

$200 off with code DATA200

Read Also:
New Directions for The New Hyperlocal: Mobile, Big Data Opens Up The Doors

Customer Analytics Innovation Summit Chicago

7
Jun
2017
Customer Analytics Innovation Summit Chicago

$200 off with code DATA200

Read Also:
Treating Information as an Asset

HR & Workforce Analytics Innovation Summit 2017 London

12
Jun
2017
HR & Workforce Analytics Innovation Summit 2017 London

$200 off with code DATA200

Read Also:
Life Time Fitness: Business Results with Hybrid Analytics

Leave a Reply

Your email address will not be published. Required fields are marked *