European State of the Union: what about digital?

by Bridget Cosgrave - Corporate Governance, Public Policy, Digital Transformation & Innovation
| minutes read

Understandably maybe, in light of the current major crises facing the EU, Europe’s digital transformation did not feature strongly in this year’s State of the Union address by Commission President Ursula von der Leyen. In fact, you might even be forgiven for thinking it did not feature at all. But does this mean that digital is no longer a top priority for this European Commission?

The State of the Union address is given to the European Parliament every September by the President of the European Commission. While presenting the main goals for the coming year, the President also outlines the Commission's approach to the most urgent issues facing the EU as well as suggestions on how the EU should develop in the future.

Digital and green go hand in hand

Not surprisingly, in her third State of the Union speech, Ursula von der Leyen focused heavily on the ongoing war in Ukraine, sanctions against Russia, and the long-term prospect of European Union membership for Ukraine. In relation to that, she also talked at length about the need to defend and strengthen our democracies. Equally unsurprisingly, the President dedicated a substantial part of her speech to her Commission’s proposals to tackle the rising energy prices and achieve energy independence, first and foremost from Russia.

Digital initiatives were effectively absent from this year’s State of the Union address, with the term “digital” only popping up a handful of times during a speech that lasted close to an hour. Strikingly, and tellingly maybe, on the few occasions the term did pop up, it was invariably accompanied by a term referring to the European Commission’s green initiatives. Von der Leyen spoke, for instance, about the need to “finance the transition to a digital and net-zero economy”, about “the strength of our social market economy” that “will drive the green and digital transition”, and about “the great challenges of this century, such as climate change and digitalisation”. It seems therefore safe to assume that the twin poles of digital and green go hand in hand with the EU’s political priorities for the future.

Staying the digital course

If digital initiatives were noticeably absent from the Commission President’s speech this year, they did feature in the accompanying letter of intent she submitted to the President of the European Parliament and the Prime Minister of the Czech Republic, which currently holds the Presidency of the Council of the EU. In that letter of intent, von der Leyen details the actions the Commission intends to take in the following year by means of legislation and other initiatives.

When it comes to digital transformation, she starts, rather conservatively, by stressing the need “to stay the course on the plan we commonly set out for this mandate”. In other words: “implementing what has already been agreed. This includes implementing the landmark agreements on the Digital Markets Act and the Digital Services Act which saw the EU take global leadership in regulating the digital space to make it safer and more open.”

Key new digital initiatives for 2023

More interestingly, Ursula von der Leyen also points out in her letter that digital transformation, if anything, has become even more important in light of the recent health and geopolitical crises. “The major digital and green transformations we embarked on together have only taken on additional importance,” she claims, “as we have grappled with pandemics, lockdowns, and now a war on our border.” On a more ambitious note, she promises that the Commission “will continue looking at new digital opportunities and trends, such as the metaverse” – without going into further detail at this point, unfortunately.

Apart from this promise of an as yet unspecified initiative on virtual worlds, the Commission President also outlined a number of other key new initiatives at the end of her letter of intent. Some of these initiatives seem specifically designed to support and promote Europe’s digital transformation process 

  • an initiative on a Cybersecurity Skills Academy,
  • a legislative proposal on the digitalisation of travel documents to facilitate travel,
  • an initiative on Data Access in financial services,
  • legislative proposals on establishing the digital euro,
  • an EU space strategy for security and defence.

These initiatives, all planned for next year, are of special interest to all who, like me and my colleagues here at Sopra Steria, are dealing on a daily basis with the challenges of digital transformation. Which includes, it feels safe to say, most every company or organisation these days.

Digital budget increase

Looking at this list of new initiatives, we clearly needn’t fear that digital transformation is no longer top of mind for this European Commission. That conclusion becomes even clearer when we take a look at the full report on the State of the Union. Not only does the term “digital” appear even more in it than last year, but just like last year it also contains a whole chapter dedicated to Europe’s different transitions, digital included.

More importantly, while digital spending as part of NextGenerationEU, Europe’s historic recovery plan worth over EUR 800 billion, was targeted at 20% in last year’s report, it has now been raised to 26%. This speaks volumes about the importance of digital investments for the EU. And it confirms what last year’s State of the Union report already stated: “Digital is the make-or-break issue. And the Member States share that view.”

What are your thoughts on Europe’s digital transformation strategy and spending? Do you feel sufficiently supported by the EU in your process of digital transformation? Or does your specific business require more and/or other efforts?

Don’t hesitate to contact us and enter the discussion.

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