European digitalisation; the race is on

By Kleber Bacili, founder and CEO, Sensedia

Public and private sector leaders are increasingly improving their technology platforms so they can compete in our ever-expanding digital world. Digitalisation is a global priority for all; it has a major impact on economic growth and nearly all successful businesses embrace it.

Digitalisation is the key driver to a country’s competitiveness and productivity, across all industries and sectors, influencing its ability to create and improve innovative solutions and use them effectively.

According to the European Commission (EC) the digital economy is growing seven times faster than any other sector and it estimates a European digital single market could increase the European Union’s (EU) Gross Domestic Product by € 415 billion per year and create 3.8 million new jobs.

2030 targets

It is no surprise, therefore, to find the EC is focusing on change with a top priority to ensure all businesses and citizens can access digital solutions. In a bid to keep Europe ahead of the digital race, in the Commission’s A Europe fit for the digital age paper, it set ambitious goals for 2030.

By then the EC will require:

• Member states to fully digitise and provide online access to all basic public services
• Member states to teach 80% of citizens basic digital skills and give them digital identities
• 75% of EU companies to use cloud and big data technologies

These targets – starting with the digital education of the EU population and ending with boosting the digital capacity of businesses – are challenging, particularly as only one in four EU companies use artificial intelligence or cloud computing and a handful, 14%, use big data.

Digital adopters

In the Commission’s Digital Economy and Society Index (DESI), which measures and compares: connectivity, human capital, use of internet services, integration of digital technology and digital public services across 27 member states and 18 non-EU countries, it found Denmark, Finland, Sweden and the Netherlands have the most advanced digital economies in the EU today, followed by Ireland, Malta and Estonia.

Lithuania is 15th and Romania, Bulgaria and Greece have the lowest DESI scores. Over the past five years, Ireland and Denmark have made the most progress in digitalising their economy and society, and close behind are the Netherlands, Spain, Sweden and Finland. Bulgaria and Romania appear to be lagging behind and Lithuania’s progress is below the EU digitalisation average.

Data challenges

When businesses undergo a digital transformation and develop new, reliable technologies, they create new opportunities and challenges; namely for their IT teams to protect, retrieve and process data while finding that balance between digitisation, privacy and security.

According to IT analysts at the Information Data Corporation (IDC), by 2023, more than half of the world’s GDP will come from products and services provided by industries that have digitally transformed themselves. The advantages of digitalisation were clear during the pandemic, where those embracing new forms of technology thrived.

The future success of any business depends upon its ability to adapt to and match the pace of digitalisation; those who don’t will be left behind. The European Commission’s digital vision seeks to address this and create a fair and competitive digital economy that’s open to all businesses.

Low uptake

In the run-up to 2030, recognising the need for digital transformation and using new technology should be the basis and platform for all business models, products and processes. The EC however, reports the uptake of advanced digital technologies in the EU remains low.

It says large companies are more likely to adopt new technologies, while Small and Medium Enterprises (SMEs) make limited use of e-commerce. Only 17% of SMEs sell online, compared to 39% of large companies, and only 8% sell online internationally, compared to 24% of bigger firms.

Digitalisation of business processes, particularly with SMEs, is vital for greater efficiency and competitiveness. Successful companies are already able to respond to change; they are flexible, fast to react and have accrued the intellectual, human, knowledge and social capital needed to initiate, create and implement the digital innovations needed to compete and thrive in their sectors.

The rules of survival have changed – it’s no longer the survival of the strongest, but the survival of the quickest to adapt. So how can businesses gain that competitive advantage in our ever-evolving digital economies?

Technology tools

Application Programming Interfaces (APIs) are one of the key technology tools businesses need as they allow applications to exchange data. Growing in importance and popularity, APIs are quickly being recognised as the engine that powers the digital economy.

APIs fundamentally change the value chain – they force businesses to rethink their strategies and consider moving into new markets or collaborating with new partners and joining new ecosystems so they can provide products/services that add value to their business.

An API ecosystem has a number of elements:

• A business ecosystem where partners, individuals, starts-ups and customers can access services from a digital platform
• A business ecosystem where a partner creates a new service-based solution and offers to provide/sell it through an organisation’s digital marketplace, with access to customers
• An organisation that offers its solutions to other partners’ digital marketplaces or platforms

Many of the devices in our digitally-connected world, such as the virtual assistant that plays music over home speakers from a Spotify account, or the car navigation system that finds a less congested route recommended by Google Maps, would be impossible without APIs connecting companies with partners, vendors and customers.

Businesses need to consider their future role and the potential ecosystems they can create and be part of. It will be impossible to operate in isolation.

Fintech solutions

In the payment sector, for example, retailers are already competing to see who will be first to offer digital wallets and financial services to the large number of consumers who already interact with them, and yet are underserved by the traditional financial system.

APIs, and the interconnected journeys they create, help retailers close this gap.

Reinforcing the important role APIs play in helping companies secure and stabilise connections between applications, US tech firm F5 in its Continuous API Sprawl paper estimates there’ll be around 1.7 billion active APIs by 2030.

As the challenges for digital businesses increase, leaders will have to ensure APIs are firmly in their armoury; with these weapons they can easily create new businesses and ecosystems, and drive innovation, helping the EC meet its targets.

About the Author

Kleber Bacili is the founder and CEO of Sensedia – a modern connectivity and integration expert that helps businesses become more digital, connected and open. Whether integrating channels, facilitating partner ecosystems or creating modern multi-cloud/hybrid architectures, innovative companies rely upon Sensedia for API and microservices management, to provide expert services and rapidly integrate their legacy systems.

More information at www.sensedia.com