The digital transition is one of the top political priorities of the Commission, as identified in recent strategic papers and in the Recovery and Resilience Facility, including due to it being a necessary contributor to what is known as ‘open strategic autonomy’. The digital transition implies an evolutionary and transformative process whereby the EU seeks to attain global leadership in the digital field in a fair and democratic manner. It is a key driver for the EU’s prosperity, economic recovery and resilience and a critical enabler of innovative solutions to address global challenges.
It is therefore important to quantify the amount of EU budget expenditure that contributes to the digital transition across all EU spending programmes, as is already done for other key horizontal priorities (such as the climate, biodiversity and gender equality).
On 9 March 2021, the Commission presented its vision for the EU’s digital transformation by 2030, with a digital compass for the EU’s digital decade that evolves around four digital dimensions:
- skills;
- secure and sustainable digital infrastructure;
- digital transformation of businesses;
- digitalisation of public services.
On 14 December 2022, the co-legislators adopted the Digital Decade Policy Programme taking up the digital compass and its vision, setting up quantitative EU targets for the four cardinal points to be reached by 2030, and establishing a cooperation mechanism with the Member States to progress towards these targets.
Tracking of digital expenditure in the EU budget should measure expenditure that contributes to advancing the EU’s digital transition along one or more of these four digital dimensions.
ICT Specialist:
20 million + gender convergence
Basic Digital Skills:
min 80% of population
Tech up-take:
75% of EU companies using Cloud/AI/Big Data
Innovators:
Grow scale-ups & finance to double EU Unicorns
Late adopters:
More than 90% of SMEs reach at least a basic level of digital intensity
Connectivity:
Gigabit for everyone, 5G everywhere
Cutting edge Semiconductors:
Double EU share in global production
Data – Edge & Cloud:
10 000 climate neutral highly secure edge nodes
Computing:
First computer with quantum acceleration
Key Public Services:
100% online
e-Health:
100% of citizens having access to medical records
Digital Identity:
80% of citizens using digital ID
What do we do?
In 2023, a first stocktaking exercise across all of the EU spending programmes was conducted for the years 2021 and 2022, with the objective of gaining a better understanding of each programme’s contribution to the digital transition. The findings of the stocktaking exercise, presented in Section 4.1.2. below, show that the EU budget, including NextGenerationEU, is channelling significant contributions to all of the digital transition’s key dimensions.
This stocktaking exercise is a crucial stepping stone towards a dedicated tracking methodology for digital expenditure. The Commission’s ambition is to build on the findings of the stocktaking exercise concerning the concrete contribution of the EU budget towards the digital transition to develop a fully fledged, robust methodology to be applied consistently across all programmes and providing a solid aggregate contribution, including a projection for the full 2021-2027 multiannual financial framework.
How much do we spend?
In the context of the stocktaking exercise, the contributions of individual programmes presented in the following chart were identified:
First estimated contributions to the digital transition of the EU budget programmes including NextGenerationEU in 2021 and 2022 (cumulatively) in EUR billion (left scale) and in percentages of their total implementation during the same years (right scale). 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.
Source: European Commission based on the first stock-taking.
Almost all programmes that are part of the EU budget contribute to the digital transition. However, constraints on data availability only allowed digital-relevant expenditure for the 2021-2022 period to be tracked for 27 spending programmes (out of 48). Among them are programmes that are likely to have substantial contributions, like in particular the Innovation Fund and the European Defence Fund. Furthermore, the digital contributions of some programmes is likely to be largely underestimated at this stage: this is the case of the Common Agricultural Policy as well as InvestEU.
Therefore, and given that no fully fledged tracking methodology for the digital contributions of the EU budget has yet been developed, any aggregation of the contributions of the individual programmes at this stage should be interpreted with caution, since the methodologies used by individual spending programmes may not be strictly comparable. Such aggregation would still provide a rough idea of the total contribution of the EU budget, however.
Based on the findings of the stocktaking exercise, EUR 131.9 billion of the EU budget (including NextGenerationEU) was dedicated to the digital transition in 2021 and 2022, which represents almost 17.4% of the total EU budget. It is noteworthy that the Recovery and Resilience Facility is making a substantial contribution, with national recovery and resilience plans contributing 26% of the facility’s allocations to the digital transition, which is significantly beyond the legal target of 20%.
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 digital skills (advanced and basic) and to support research and innovation, along with key advanced digital infrastructure and technologies (such as quantum computing, artificial intelligence and cloud/edge computing). More information are provided in next section.
Overview of the first digital stocktaking exercise
The objective of the stocktaking exercise launched for 2021 and 2022 was to gain a deeper understanding of the different dimensions in which the EU budget contributes to the promotion of the digital transition and provide a first rough estimate of the EU budget’s monetary contribution to this effort.
One of the main programmes for which a methodology to track digital expenditure has already been developed is the Recovery and Resilience Facility. This methodology is described in Annex VII to the Recovery and Resilience Facility regulation. It provides a list of intervention fields, each with its associated EU digital coefficient. There are three such coefficients (0%, 40% and 100%) and they are used to ‘weigh’ the amounts of the estimated costs each measure to establish the total amount contributed to the digital goals by each recovery and resilience plan. Member States’ authorities are requested to classify each investment and reform envisaged in their recovery and resilience plans accordingly.
The list of intervention fields in the Recovery and Resilience Facility is derived from the list in the common provisions regulation and, to date, 11 EU spending programmes are already able to track their digital-relevant expenditure based on this methodology: the Recovery and Resilience Facility, the regional policy programme, the European Social Fund Plus, the Just Transition Mechanism, the Connecting Europe Facility, the Space programme, the Integrated Border Management Fund, the Internal Security Fund, the Fiscalis programme, the justice programme and the citizens, equality, rights and values programme.
The intention is to build a consistent methodology to track digital-relevant expenditure for the coming years based on the abovementioned Annex VII, expanding its use to all programmes relevant to the digital transition.
For shared management programmes and the Recovery and Resilience Facility, the digital contribution can be calculated for the entire implementation period of the programme, i.e. not at the level of individual year. The amount presented for each year is obtained by comparing the total digital contribution over the entire implementation period to the share of the programme envelope committed for that year.
Based on this first stock-tacking, it was already possible to provide estimated break-down of the programmes contribution to key digital dimensions: support to the digitalisation of businesses and public services (including the digitalisation of transport, of energy network, of health and justice systems), support to digital skills, support to connectivity (including broadband and 5G), Investment in digital capacities and deployment of advanced technologies and support to research. Only a few programmes could not be included in these estimates, because a methodology is not used or is very different from the Recovery and Resilience Facility one: the Common Agricultural Policy and external action programmes:
First estimated contributions to the digital transition of the EU budget programmes including NextGenerationEU in 2021 and 2022 in EUR billion by key digital dimensions. External actions programmes and the Common Agricultural Policy could not be taken into account for methodological limitations.
Source: European Commission based on the first stock-taking exercise
Digitalisation of businesses and public services
The result of the 2023 first stock-taking exercise shows that the EU budget (including NextGenerationEU) is making a significant contribution to the digitalisation of the private and public sectors. Our first estimates for 2021 and 2022 set at EUR 42.3 billion the support of the EU budget to e-government (including the digitalisation of health and justice systems, or of transport and energy network) and at EUR 22.8 billion the support to the digitalisation of businesses. The Recovery and Resilience Facility and Regionals funds are important contributors to these investments. Based on Member States programmes, more than 12% of the planned EU amounts from regional funds will be used to finance interventions that advance the digital transition, in particular supporting small and medium size companies.
First estimated support of the EU budget including NextGenerationEU to the digitalisation of public services. These amounts are the result of the first stock-taking exercise conduced for the years 2021 and 2022, and exclude the external action programmes and the Common Agricultural Policy for methodological limitations.
Source: European Commission.
The EU budget is also contributing significantly to the digitalisation of transport system, with an estimated EUR 7 billion dedicated to it in 2021 and 2022, of which almost EUR 6 billion from the Recovery and Resilience facility and EUR 0.7 billion from the Connecting Europe Facility.
Supporting the development and deployment of digital technologies as well as research
In 2021 and 2022, first estimates indicate that the EU contributed with EUR 13.3 billion to investment in digital capacities and deployment of advanced technologies, and EUR 12.8 billion in Research, including EUR 9 billion from Horizon Europe. The main contributing programmes are the Recovery and Resilience Facility, Horizon Europe, the Space programme, the Regional Funds, the Just Transition Mechanism and the Digital Europe Programme.
In 2022, the Digital Europe Programme supported the development and deployment of key digital technologies such as artificial intelligence, blockchain, and cybersecurity, to accelerate the digital transformation of businesses and industries. In particular, the programme supported the deployment of common data spaces built on innovative, secure and energy efficient cloud-to-edge capabilities. It promoted the testing and adoption of trustful artificial intelligence technologies with world-class testing and experimentation facilities. It invested in the area of cybersecurity, including by deploying a secure quantum communication infrastructure (EuroQCI).
Investing in digital skills
In 2021 and 2022 the EU budget including NextGenerationEU is also making a significant contributions to digital skills, basic and advanced, estimated at EUR 21.1 billion. The main programmes contributing are the Recovery and Resilience Facility, Erasmus+ (EUR 1.1 billion) and the European Social Fund + (EUR 1.1 billion), as well as the Digital Europe Programme in particular for advanced skills (estimated at EUR 0.2 billion for the 2 years).
Enhancing digital connectivity
The EU budget including NextGenerationEU is enhancing digital connectivity, which will give all citizens and businesses new opportunities to benefit fully from the digital single market and accelerate economic growth. Amounts dedicated to connectivity, including investments in very high-capacity broadband network and 5G network coverage, are estimated to have reached EUR 13.8 billion for 2021-2022.
The main programmes contributing are the Recovery and Resilience Facility (with EUR 13 billion), the Regional Funds and the Connecting Europe Facility. The Common Agricultural Policy is also playing a key to improve broadband access in rural areas, by supporting broadband infrastructure, improved and access to e government. Based on the latest rural development programmes, over the course of the current programming period, the Common Agricultural Policy will have helped nearly 13 million people living in rural areas to benefit from improved access to information, communication and technological services and infrastructure.
Some examples of what we have achieved
Under the Recovery and Resilience Facility, in 2022, disbursements were made for the fulfilment a total of 93 milestones and targets in the field of the digital transition. These included the adoption of a new 2021-2025 plan on the digitalisation of small and medium-sized enterprises and a digital competences plan by Spain and the development of broadband infrastructure in Latvia.
Some important reforms have already made progress during the first 2 years of implementation of the facility, in particular reforms to digitalise public administration (Slovakia) and ensure cybersecurity (Romania).
In addition, the Recovery and Resilience Facility supplements structural reforms with key investment. Some of the major investments with key steps already completed include the purchase of 600 000 new laptops to lend to teachers and pupils, and the selection of digital innovation hubs to support companies in their digitisation efforts (Portugal, EUR 600 million), the digitisation of public administration towards simple, inclusive and secure public services for citizens and businesses (Portugal, EUR 170 million) and the development of broadband infrastructure (EUR 4 million) and the setting-up of investments to close the digital divide for socially vulnerable learners and educational institutions in Latvia.
In total, more than 9.2 million dwellings had gained access to very-high-capacity internet networks, including 5G networks and gigabit speed, through measures under the Recovery and Resilience Facility by the end of 2022, and 123 million users were using new and improved public digital services, products and processes thanks to Recovery and Resilience Facility support by the end of 2022(1).
Under the regional policy, 6.3 million households were provided with broadband access of at least 30 megabits per second between 2014 and 2021 and 550 000 additional energy users were connected to smart electricity grids between 2014 and 2021.
Some 2 800 digital solutions were made available to governments in 2021-2022 on the ‘Joinup’ platform funded by the digital Europe programme. This platform receives 500 000 visits per year. Additionally, 2 000 misleading price announcements were detected with the help of eLab, which was also funded by the 2021-2022 digital Europe programme.
47% of Erasmus+ cooperation partnerships supported the digital transition in 2021. Also, throughout 2022, Erasmus+ continued to implement ‘Self-reflection on effective learning by fostering the use of innovative educational technologies’ (known as ‘SELFIE’), which has by now been used by 4.6 million users in 33 829 schools in 84 countries. The European digital education hub was launched on 23 June 2022.
The European Social Fund 2014-2020 supported the Maltese project One Tablet per Child. As its name suggests, the project has allowed Malta’s Ministry for Education and Employment to provide every Year 4, 5 and 6 student with a tablet computer and to create a sustainable, robust framework for digital teaching and learning. The project was an especially critical tool for students and teachers to continue learning and teaching during the COVID-19 school closures. But also beyond, the project is a powerful tool to enhance teaching and learning in primary schools and supports Malta’s efforts to reduce early school leaving and advance higher education (EU contribution: EUR 9.6 million, project duration: 2016-2021).
Under the Connecting Europe Facility, 106 electric locomotives were equipped with European rail traffic management system on-board equipment and certified for commissioning in Belgium in 2022. Additionally, 90 kilometres of European rail traffic management system trackside infrastructure was deployed in Czechia and Denmark. By the end of 2022, 92 570 WiFi4EU hotspots had been made available to EU citizens through networks deployed by municipalities, supported by the telecommunications strand of the previous programme phase, the Connecting Europe Facility I.
Under the space programme, 3.8 billion Galileo-enabled devices were in use in 2022, and this number continues to grow. The positioning accuracy performance of Galileo is three times better when compared to other global navigation satellite systems, with excellent availability. In 2022, 28 Galileo and seven Copernicus satellites were in orbit. During the year, 7.9 petabytes of Copernicus satellite observation data were published, and 160 000 registered users of the Copernicus Climate Change Service had access to about 76 terabytes of quality-controlled climate data per day.
(1) The same person can use the service multiple times, in which case they would be counted multiple times.
Towards aggregate result indicators for the digital agenda
In addition to the stocktaking exercise to quantify the monetary contribution, the Commission has initiated a pilot project to develop a methodology for aggregating available information into aggregate result indicators for the four key dimensions of the digital agenda.
This approach involves reviewing the available data on the effects of individual programmes to assess the extent to which they can be aggregated across programmes using common units of measurement. It faces constraints and limitations that must be considered when evaluating the results of the proposed aggregation methodologies.
The most significant constraint is the need to rely exclusively on existing data. For many programmes, in particular those implemented under shared or indirect management, the set of performance data reported to the Commission is codified in the relevant basic acts and/or specific agreements. Moreover, different programmes have different types of indicators (output/result/impact) and measure different things, partly reflecting different areas of activity.
The choice of the common unit of measurement in the various dimensions has been informed by two main criteria: (1) being close to the result/impact end of the spectrum; (2) allowing the aggregation of as much information as possible for as many programmes as possible.
On this basis, the following aggregate result indicators have been chosen:
- participants who have received training to acquire digital skills (for the dimension ‘digital skills’);
- additional households and enterprises with internet access provided via very high-capacity networks (for the dimension ‘secure and sustainable digital infrastructures’);
- private entities supported in their digital transformation (for the dimension ‘digital transformation of businesses’);
- users of new and upgraded public digital services, products and processes (for the dimension ‘digitalisation of public services’).
This exercise has also allowed key data gaps to be identified that prevent more comprehensive aggregation. For example, a key limitation when quantifying the results of the digital skills training provided by the various EU spending programmes is the failure of the reported data to identify the topics of the training activities provided. Today it is therefore not possible to quantify the number of participants supported solely by digital training.