What is the Digital Economy and Society Index?

What is the Digital Economy and Society Index?

The Digital Economy and Society Index (DESI) is an online tool to measure the progress of EU Member States towards a digital economy and society. As such, it brings together a set of relevant indicators on Europe’s current digital policy mix.

The DESI is composed of five principal policy areas which represent overall more than 30 indicators:

·         Connectivity: how widespread, fast and affordable broadband is,

·         Human Capital/Digital Skills: the digital skills of the population and workforce,

·         Use of Internet: the use of online activities from news to banking or shopping,

·        Integration of Digital Technology: how businesses integrate key digital technologies, such as e-invoices, cloud services, e-commerce, etc. and

·         Digital Public Services: such as e-government and e-health. 

To calculate a country's overall score, each set and subset of indicators were given a specific weighting by European Commission experts. Connectivity and digital skills ('human capital'), considered as foundations of the digital economy and society, each contribute 25% to the total score (maximum digital performance score is 1). Integration of digital technology accounts for 20%, since the use of ICT by the business sector is one of the most important drivers of growth. Finally, online activities ('use of Internet') and digital public services each contribute 15%.

The DESI online tool is flexible and allows users to experiment with different weightings for each indicator and see how this impacts overall rankings.

The DESI was first calculated in 2015 for two years: DESI 2015 (containing mostly data from 2014) and DESI 2014 (referring mostly to data from 2013). Today's DESI 2016 refers mostly to data from 2015.

A more detailed overview of the data included in the DESI 2016 can be found in the annex. 

How can it help the EU to improve its digital performance?

The DESI aims to help EU countries identify areas requiring priority investments and action, in order to create a truly Digital Single Market – one of the top priorities of the Commission. Building on the DESI findings and in parallel to the European Semester, in May 2016, the Commission's Digital Progress Report will give an in-depth assessment of how the EU and Member States are progressing in their digital development and will recommend potential steps to help improve national digital performance. Over 2016, as part of its Digital Single Market Strategy, the Commission will present a number of initiatives to remove obstacles which prevent the EU and its Member States to make the most of digital opportunities. The Investment Plan for Europe can also help the EU meet its broadband targets by supporting deployment of digital infrastructure. 

How are EU countries ranked?

This year, the Commission has combined the score of each country with the pace of their growth compared to the EU average.

This gives a more dynamic overview of their performance.

·         Running ahead: Austria, Estonia, Germany, Malta, the Netherlands and Portugal score above the EU average and their score grew faster than that of the EU over the last year. These are countries that perform well and that have been developing at a pace that allows them to further distance themselves from the EU average.

·         Lagging ahead: Belgium, Denmark, Finland, Ireland, Lithuania, Sweden and the UK score above the EU average but their score grew more slowly than that of the EU over the last year. These countries are good performers, but their development is now slow and, as such, they are lagging in comparison to the progress of the EU as a whole.

·         Catching up: Croatia, Italy, Latvia, Romania, Slovenia and Spain are those that score below the EU average but whose score grew faster than that of the EU over the last year. These countries are developing faster than the EU as a whole and are thus catching up with the EU average.

·         Falling behind: Bulgaria, Cyprus, the Czech Republic, France, Greece, Hungary, Poland and Slovakia score below the EU average and their development over the last year was slower than that of the EU as a whole. By showing such a slow growth they are distancing themselves further from the rest of the EU. 

It can be noted that the difference between the best performer (Denmark: 0.68) and worst performer (Romania: 0.35) got narrower than last year (the difference is now 0.33, whereas in DESI 2015 it was 0.36). 

How does the EU compare to other digitalized countries worldwide?

Some preliminary results of the International DESI (I-DESI) can be found below. The I-DESI will compare the EU to other top world digital economies and societies. The full data set will be available mid-March 2016. The I-DESI will provide a benchmark of how the EU as a whole, as well as individual Member States, performs in comparison to its top worldwide peers. Preliminary results show that the top EU countries (such as Denmark Sweden and Finland) are also top worldwide performers in digital.

·         European countries lead the way in the adoption of digital technologies by businesses, compared to Japan and South Korea, which are either below or around the EU average.

·         Denmark, Finland and Norway are world leaders with regards to digital public services.

·         South Korea is world leader in connectivity, followed by Japan, Denmark, Switzerland and the UK.

·         On human capital, South Korea leads the way, before Sweden and Finland. 

However, the EU as a whole needs to significantly improve in order to catch up with its best performers as well as with the most digitised countries in the world (Japan, South Korea and the USA) all score above the EU average.  

What are the main findings of the DESI regarding the five main dimensions?

1. Connectivity

Broadband is available to all Europeans and 71% of European homes can access high-speed broadband (at least 30 Mbps).

The coverage of high-speed broadband has been growing at an average pace of 7 percentage points per year since 2011.

72% of European homes subscribe to fixed broadband, but only 30% of those connections are high-speed.

2. Human Capital/Digital skills

76% of Europeans go online regularly (at least once per week), but the progress in this figure was small when compared to 75% last year.

In spite of this, 45% of Europeans still don’t even have basic digital skills.

The EU has also improved slightly in the number of Science, Technology and Mathematics (STEM) graduates, with 18 such graduates for each 1000 people aged 20 to 29 years old in 2013 (17 in 2012).

3. Use of Internet

The percentage of internet users that engage in various online activities, such as reading news online (68%), using the internet to perform video or audio calls (37%), or using online banking (57%), remained stable over the last year.

However, there was a considerable increase in the number of European internet users that use social networks (from 58% to 63%) and that shop online (from 63% to 65%).

4. Integration of Digital Technology

European businesses are increasingly adopting digital technologies, such as business software for electronic information sharing (from 31% to 34% of enterprises), or using social media to engage with customers and partners (from 14% to 18% of enterprises).

7.5% of European SMEs are selling online cross-border (to other EU member states), an increase from 6.5% two years ago. However, these are still less than half of the SMEs that sell online.

5. Digital Public Services

The quality of European online public services improved, with an increase in the number of public services available online (score increase from 75 to 81), and in the reuse of user data already known to the public administration as a way of facilitating the delivery of online services (score increase from 45 to 49).

This improvement in the supply of online public services is contrasted by stagnation in the percentage of internet users interacting with the public administration. In 2015, only 32% of internet users returned filled forms online to the public administration (i.e. have used online public services for more than just obtaining information). 

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