KOMISJONI TEATIS - COM(2026) 288, SWD(2026) 154, SWD(2026) 155, SWD(2026) 156, SWD(2026) 157

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

COMMITTEE AND THE COMMITTEE OF THE REGIONS

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

State of the Digital Decade 2026: Closing structural gaps and

mobilising investments for

2030 and beyond

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1. Introduction

In 2026, the EU is facing a combination of longstanding and emerging challenges to its economic and

societal prosperity, competitiveness and strategic independence. Rapid technological change,

intensifying global competition, geopolitical tensions and rising security risks are increasing the strategic

importance of digital policy. Digital transformation is no longer only a matter of innovation and

productivity; it is also increasingly tied to resilience, security and democratic stability in line with EU values.

Meeting these challenges will largely depend on the success of a whole-of-society digital transformation,

underpinning competitiveness, resilience and security while reducing excessive dependencies and

strengthening the EU’s technological sovereignty. This requires action across the full digital chain: from

education, foundational research and innovation to industrial scale-up, infrastructure deployment,

adoption across the economy, effective public sector digitalisation and development of the skills and

safeguards needed to ensure that digital transformation works for people.

The 2026 State of the Digital Decade Communication goes beyond stocktaking and identifies structural

factors at the root of EU’s digital performance, priority reforms and investments. It concludes that, while

tangible progress has been achieved since 2022, it remains insufficient to meet the EU’s objectives and

address the above-mentioned challenges. The EU has advanced in a number of areas, including basic

connectivity, business digitalisation and the deployment of common digital infrastructures. However,

significant gaps persist in foundational technologies, computing capacity, cybersecurity, advanced digital

uptake, digital skills and scale-up capacity, as well as inclusiveness and accessibility of digital technologies.

These gaps point to four main aspects necessary to increase the EU’s digital leadership: consolidating the

strategic technology base; strengthening the security and resilience of digital ecosystems; accelerating

the diffusion and adoption of digital technologies across society and the economy; and ensuring that

digital transformation works for people by increasing democratic resilience, digital skills levels and social

inclusion.

A central message of this report is that delivery depends as much on investment and implementation as

on strategy. Closing existing structural gaps will require a change in both the scale and coordination of

investment and reforms. The coming period will therefore require a more coherent framework linking

reforms, national delivery, EU funding instruments and private investment. This, in turn, will require, the

EU, industry, Member States, industry and investors to join forces.

Since its adoption in 2022, the Digital Decade Policy Programme (DDPP)1 has emerged as a strategic

anchor for identifying gaps and priorities and as an operational framework for delivering on Europe’s

digital ambitions through a robust governance mechanism that drives recommendations, initiatives and

coordinated action across the digital policy landscape (Figure 1). The DDPP combines common objectives

and targets with a continuous monitoring cycle, Member States’ involvement, notably through National

1 European Parliament and Council of the European Union, Decision (EU) 2022/2481 of 14 December 2022 Establishing the 2030 Policy Programme "Path to the Digital Decade"’, OJ L 323, 19 December 2022.

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Digital Decade Strategic Roadmaps (national roadmaps) and EU-level coordination with Member States

through the Digital Decade Board. The proposed framework for the next Multiannual Financial

Framework (MFF) 2 has further recognised the role of the Digital Decade in supporting Europe’s

sustainable prosperity, competitiveness and technological sovereignty by providing that measures

financed through the National and Regional Partnership Plans (NRPPs) should contribute to the

implementation of recommendations issued under the Digital Decade Policy Programme, while digital

investments supported by the forthcoming European Competitiveness Fund (ECF) should address the gaps

and priorities identified in the State of the Digital Decade reports.

Figure 1: The Digital Decade objectives and targets and how they translate into EU policies and actions

Further detailed analyses are presented in the annexes and in the supporting documents of this

Communication, which together constitute the 2026 State of the Digital Decade Report. This

Communication is accompanied by Annex 1 with horizontal recommendations and Annex 2 including the

country-specific recommendations, which present a focused and evidence-based set of substantiated

priorities for action for the next programming period3. Together, they are intended to support a more

2 European Commission, A European budget fit for Europe’s ambitions: Multiannual Financial Framework 2028–2034, legislative package adopted on 16 July 2025. 3 The Digital Decade Report issues recommendations under Decision (EU) 2022/2481. Article 3 defines its general objectives, including resilience, reducing the digital divide, technological sovereignty, digital capability deployment, digital empowerment, cybersecurity, and sustainability.

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coordinated, sustained and operational digital policy response capable of strengthening Europe’s

competitiveness, technological sovereignty, resilience and capacity to act.

Finally, this report also lays the groundwork for the review of the DDPP later in 2026, with possible

proposals for changes to targets, objectives and governance in light of recent technological and EU policy

developments.

2. Tracking the overall progress of the EU’s Digital Decade

2.1. The strategic context: technology rivalry, AI acceleration and the

competitiveness imperative

In 2025, three developments raised the strategic stakes of the EU’s digital transformation.

First, intensifying technological rivalry 4 , the continued consequences of Russia’s war of aggression

against Ukraine, the de-risking of relations with China, and renewed transatlantic tensions exposed a core

vulnerability: Europe’s dependence on external actors for critical digital infrastructure, technologies, and

services. Semiconductor supply chains, cloud capacity, AI ecosystems, and connectivity have become

matters of economic and national security for Member States. At the same time, the cybersecurity threat

landscape has worsened in both scale and sophistication, with AI amplifying adversarial capabilities and

increasing systemic vulnerabilities. Digital technologies have also become key force multipliers in defence,

with civilian innovation, notably AI, advanced connectivity, cloud, and autonomous systems increasingly

enabling security and defence capabilities.

Second, 2025 marked a further step-change in AI, both in deployment and impact, and the EU is now

better equipped than at any point since 2022 to play a leading role in this transformation. AI is shifting

from experimentation to widespread adoption across the economy and society, with investment surging

to unprecedented levels and AI capturing a very large share of global venture capital in 20255. There has

been an historic increase in IT global investments, up 13.5% from 2025 and reaching some USD 6.31 trillion

in 20266, notably related to AI with focus on data centres and software (model development). This has led

to unprecedented pressure on primary resources, notably chips, storage and high-bandwidth memory.

Disruptive advances, including highly autonomous agentic systems capable of tasks such as vulnerability

discovery and cyber operations, carry systemic economic, security and strategic implications. Against this

backdrop, the EU has substantially strengthened its readiness to compete: the AI Continent action plan,

the Apply AI Strategy, the rollout of AI factories and the planned AI Gigafactories, the Cloud and AI

Development Act, and the trust framework set by the AI Act together provide a coherent foundation that

Article 4 sets specific targets for Member States in areas such as skills, infrastructure, and the digitalisation of businesses and public services. Article 6 mandates the Commission to assess annual progress toward these objectives and targets, and to recommend actions for Member States. Article 7 lays down national Digital Decade strategic roadmaps as the main tool for implementing these recommendations. 4 OECD, Science, Technology and Innovation Outlook 2025, 28 October 2025. 5 OECD, Venture Capital Investments in Artificial Intelligence through 2025, OECD Policy Briefs No 50, February 2026. 6 Gartner, Gartner Forecasts Worldwide IT Spending to Grow 13.5% in 2026, Totalling $6.31 Trillion, 22 April 2026.

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few other jurisdictions can match in scope. This readiness is matched by societal demand: more than half

of EU citizens already use AI tools (59% in their personal lives; more than one third in their work7), while

around four out of five Europeans support the development of EU-owned AI tools and believe that AI

should be carefully regulated for safety, even if this slows down developers8.

Third, the competitiveness and resilience imperative has acquired new urgency. The EU’s labour

productivity gap relative to the United States remains close to 20%, driven primarily by gaps in the

production and adoption of digital technologies9, while structural pressures on energy systems, capital

markets and industrial supply chains are reshaping the conditions in which European firms compete

globally. Recent assessments by the European Investment Bank (EIB), the Centre for Economic Policy

Research (CEPR) and the Annual Single Market and Competitiveness Report converge on the need for a

transformative shift in the scale and coordination of investment in digital and complementary

technologies. Without such a shift, the EU risks missing the productivity dividend that digital

transformation could unlock and deepening its structural dependencies in critical inputs and

infrastructures.

The above developments are reflected in the results of the Digital Decade Eurobarometer 202610:

- 82% of European citizens think that the EU should reduce its dependencies on digital technologies from non-

EU countries; 85% of respondents think the EU should prioritise investments in digital services that are

developed and controlled in Europe. 58% of Europeans would be willing to switch to an EU-based digital service

provider even if it means slightly higher costs.

- 79% of Europeans consider that digital policy should be a priority for the EU’s future and 80% think it is

important to make the EU a global leader in technological infrastructures.

- 87% of citizens agree that online manipulation, including disinformation, foreign interference, AI-generated

content and deepfakes pose a threat to democratic processes.

- 92% of Europeans think that strengthening the protection of children and young people online should be a

priority for the EU.

2.2. What the 2025 metrics reveal about the EU’s digital trajectory

Against this background, the 2025 metrics show a mixed picture. The EU has performed strongly in 2025

in business digitalisation and the deployment of basic connectivity infrastructures. Overall technology

adoption (cloud/AI/data) accelerated, withAI recording a 48% increase between 2024 and 2025. The

digital intensity of SMEs also continued to improve. Basic 5G coverage has nearly been achieved and

fibre to the home (FTTH) deployment has maintained a steady, albeit insufficient, expansion. Moreover,

Europe continues to lag behind in terms of take-up of gigabit connectivity, mid-band and 5G standalone

7 GONZALEZ VAZQUEZ, I., FERNANDEZ MACIAS, E., WRIGHT, S. and VILLANI, D., Digital Monitoring, Algorithmic Management and the Platformisation of Work in Europe, Publications Office of the European Union, Luxembourg, 2025 8 Special Eurobarometer 572] https://data.europa.eu/doi/10.2759/3200731 9 European Commission, Annual Single Market and Competitiveness Report 2026, COM(2026) 46 final, 30 January 2026. 10 https://data.europa.eu/doi/10.2759/3200731 .

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(SA).In digital public services, services for both citizens and businesses are projected to reach only around

90% of the target by 2030.Progress in basic digital skills has been strong, bringing the 80% target within

close reach by 2037. However, the ICT specialists target has stagnated.

Figure 2: Taking stock of KPIs' progress towards 2030 1112

At the same time, significant structural gaps persist, notably in human capital, advanced technologies,

and scale-up capacity. The shortage of ICT specialists remains severe, as policy efforts made at EU and

11 The current KPI for the 5G target does not reflect the actual quality of service experienced by users. It monitors areas where a 5G signal is available, regardless of the network performance. Therefore, the current stage of 5G deployment can be considered only as ‘basic 5G’. Regarding quantum, data is based on: Strategic Advisory Board of the European Quantum Flagship, Key Performance Indicators for Quantum Technologies in Europe, March 2025. By the end of 2025, the EuroHPC Joint Undertaking had procured six quantum computers, two of which were inaugurated in 2025, and two additional analogue quantum simulators were inaugurated under the HPCQS project. 12Full details on the KPIs are in the DESI 2026 Methodological note at https://digital-strategy.ec.europa.eu/en/news-redirect/938549

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Member-State level have not yet materialised, and is compounded by persistent gender imbalances.

Several weaknesses also persist in the deployment of sovereign critical infrastructures, notably in

semiconductors, cloud and AI.

TheEU holds only 9% of the global

semiconductor market, far from the 20%

target, and it continues to underperform

globally when it comes to unicorn-sized

companies, both in absolute terms and

relative to the size of its economy.

Figure 3 shows how the key Digital Decade

indicators at EU level have developed

between 2021 and 2025, putting the current

situation into a four-year perspective. To see current progress towards the 2030 targets, Figure 4 below

tracks the progress of KPIs toward the corresponding EU targets, benchmarking achievement levels

against projected timelines.

Figure 4: Tracking KPIs progress and expected timeline based on trajectory projections (European

Commission’s calculation)

2.3 . From data to implementation

Over the past year, cooperation between Member States has translated into more tangible progress,

with concrete joint investments and operational initiatives accelerating the deployment of shared digital

infrastructures and capabilities across the EU. Through multi-country projects, Member States and the

Commission are scaling joint investment in shared digital infrastructures. Two new European Digital

Figure 3: Progress over 4 years by KPI at EU level

KPI DESI2022

(year 2021) DESI2026

(year 2025) 4-year progress

(%)

VHCN 69.7% 85.5% 22.7

Fibre to the premises (FTTP) 49.7% 74.1% 49.3

Basic 5G 65.8% 96.8% 47.1

Semiconductors 8.6% 8.8% 2.3

SMEs basic digitalisation 54.8% 71.4% 30.2

Cloud take-up 34.0% 46.7% 37.3

AI take-up 7.7% 20.0% 160.8

Unicorns 223 324 45.3

Basic digital skills 53.9% 60.4% 12.0

ICT specialists 4.5% 5.0% 11.1

Digital public services citizens 74.6 84.6 13.4

Digital public services businesses 81.7 88.6 8.4

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Infrastructure Consortia (EDICs) have been set up this year, a further pipeline of new EDICs is advancing,

and the Important Projects of Common European Interest (IPCEI)programme is being implemented in

microelectronics, cloud and healthcare (including AI-enabled solutions). By operationalising a robust

public-private partnership, the AI Gigafactories initiative developed under the EuroHPC Joint

Undertaking demonstrates how coordinated action of EU, industry, and Member State efforts can help

the EU bridge the gap between digital targets and the necessary scale of implementation. Together, these

mechanisms are helping to build strategic capacities that no single Member State could deploy alone.

Snapshot of the tangible benefits of digitalisation:

In healthcare for example, AI can support faster and more accurate diagnosis by helping clinicians detect early signs

of disease in medical images. It can also automate routine administrative tasks, freeing up medical staff time to focus

more directly on patient care.

However, the development of trustworthy AI solutions depends on access to high-quality and representative datasets.

In this respect, EUCAIM (the European Federation for Cancer Images) funded under the Digital Europe Programme

(DIGITAL) illustrates the value of building a pan-European infrastructure for cancer imaging and associated clinical

data. As of September 2025, EUCAIM connects 83 imaging datasets across nine cancer types (around 107 000

subjects) and provides 50 AI tools to users (researchers, innovators and healthcare professionals) in 16 countries. By

the end of 2026, it is expected to exceed 60 million images and to bring together at least 30 distributed data holders

from 15 countries, enabling secure and privacy-preserving collaboration for the development of innovative imaging-

based AI solutions.

Progress has also been supported by stronger action and closer collaboration with and between

Member States. The Digital Decade Board (DDB) has played a key role in catalysing action. The Board

advanced the alignment of the DDPP with the future MFF, prepared the ground for the DDPP review,

coordinated updates to national roadmaps, and followed up on the 2025 recommendations. More

broadly, the DDB is increasingly functioning as the main national experts’ forum for structured exchange

on implementation challenges, coordination needs and simplification.

National roadmaps remain the main vehicle through which this collective effort is translated into

national commitments. Through them, Member States are collectively committing to a total of 1 934

measures, representing an overall investment of EUR 289.3 billion, including EUR 205.9 billion from public

budgets (equivalent to 1.09% of EU GDP). Member States are also demonstrating their commitment to

collective action through the implementation of annual Digital Decade recommendations. In 2025,

Member States addressed 64% of the 186 country-specific recommendations issued by the Commission,

either through significant policy changes (11%) or making some changes (53%) through new measures. 19

Member States addressed at least half of their recommendations. At EU level, approximately 55% of

recommendations show notable (52.2%) or significant progress (2.4%), with particularly strong advances

in areas such as uptake of advanced technologies and ICT specialists. However, 45% of recommendations

have seen only limited progress.

While momentum is building in several areas, further structured and more ambitious policy efforts remain

necessary to accelerate progress. As Annex 1 shows, the gaps in achieving the 2030 targets do not stem

from isolated policy shortcomings or short-term cyclical factors. Rather, they point to deeper structural

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challenges that are closely linked to the EU’s capacity to strengthen its digital leadership. In many cases,

these challenges arise in areas where the scale, complexity or cross-border nature of the issues has

exceeded the capacity of existing instruments to deliver the necessary coordination and an adequate level

of investment. The following section summarises these challenges and their underlying causes. They are

also analysed in light of the EU’s strategic priority of establishing Europe as a true AI continent, requiring

a comprehensive set of assets, capabilities, and infrastructures, from advanced skills to robust ethical

frameworks.

3. Shaping EU’s Digital leadership and technological sovereignty in the

AI continent era

In this report, ‘digital leadership’ refers to Europe’s capacity to remain at the technological frontier, shape

the development and uptake of digital technologies and infrastructures, and influence the direction of the

global digital transformation. It reflects the EU’s ability to leverage the Single Market, innovation,

investment and regulation to foster the development, deployment and governance of critical digital

capabilities, while promoting international standards and approaches that are aligned with European

values and interests.

Achieving this requires coordinated action across several fronts:

• boosting homegrown industrial capacity and autonomy at key steps of the supply chain of digital

technologies, progressing towards a full European technology stack while increasing the choice

for consumers in the Digital Single Market;

• securing the supply of digital technologies underpinning Europe’s competitiveness by mitigating

dependencies on a single or a limited number of non-EU suppliers;

• gaining control over data infrastructures and critical data while developing the capacity to

leverage them effectively;

• setting the standards for key strategic technologies, addressing jurisdictional risks for data and

digital service provision, and safeguarding the EU’s capacity to regulate in line with its values and

standards; and

• strengthening the talent pipeline. The structural gaps identified in this section concern precisely

those domains where this capacity is most at risk.

3.1 Technological sovereignty: closing the R&I and infrastructure gap

The EU still faces the critical challenge of securing control over the full digital innovation chain, from

foundational research to large-scale industrial deployment. As part of the Tech Sovereignty Package, the

Communication on European Tech Sovereignty 13 outlines the EU’s approach and defines technological

sovereignty as Europe’s ability to develop, control and scale the critical technologies, infrastructure,

13 COM(2026) 503

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services and data, including digital ecosystems, that underpin its economy, security and society, while de-

risking and diversifying supply chains and technological exposure to reduce strategic dependencies and

resist foreign interference.14

3.1.1. Accelerating innovation in digital technologies

European companies continue to lag in digital R&D, particularly in AI. This gap is clearly visible in research

and investment trends 15 . EU corporate R&D grew by only 2.9% in 2024, the lowest rate since the

pandemic 16 . A persistent sectoral imbalance further disadvantages digital technologies: recent R&D

investment increases have been concentrated in energy (+19.8% one year growth rate) and health (+13%),

while ICT-related sectors remain comparatively underdeveloped. This situation is exacerbated by the

limited number of large ICT firms in Europe, which constrains private R&D, weakens innovation

ecosystems and slows the commercialisation of digital technologies.

Global R&D investment is becoming increasingly concentrated among a small number of US technology

giants 17 - Amazon, Alphabet, Meta, Microsoft and Apple - particularly in AI, cloud and advanced

computing. Over the past decade, these five companies have nearly doubled their share of global R&D

spending among the world’s top 2 000 firms, now accounting for around 15% of the total. Without a

decisive step-change in investment, coordination and support for scaling European firms, the EU risks

further deepening its dependence on external technology providers, with severe consequences for

European competitiveness, sovereignty, and security and falling even further behind in the global digital

race.

Addressing the scale-up gap requires not only financing instruments but a structural reform of the legal

environment in which European digital companies operate. The fragmentation of company law across

twenty-seven national jurisdictions creates compliance costs, investor friction and governance complexity

that may disadvantage EU-incorporated companies relative to their third country counterparts.

The proposal for a Regulation establishing the 28th regime corporate legal framework (‘EU Inc.’) 18 ,

adopted by the Commission on 18 March 2026, directly addresses this structural barrier by introducing a

harmonised, digital-first and cost-effective set of corporate rules and procedures to facilitate the

creation and scaling-up of companies across the single market. A new EU central interface will enable

founders and companies to complete incorporation and filing procedures without having to navigate 27

different national systems. The framework will build on existing national business registers and their EU-

level interconnection through the Business Registers Interconnection System (BRIS). Realising these

benefits will depend not only on the formal adoption of the 28th regime, but also on its consistent

14 JRC Publications Repository - Open but Not Powerless: Towards a Common Understanding of EU Digital Sovereignty. 15 The EU leads in high-impact research in only three of the 74 critical technologies; Australian Strategic Policy Institute (ASPI), Critical Technology Tracker, 2025. 16 European Commission Joint Research Centre, The 2025 EU Industrial R&D Investment Scoreboard, December 2025. 17 Ibid. 18 Regulation (EU) 2026/74 of the European Parliament and of the Council on the 28th regime corporate legal framework, 'EU INC.'

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operational implementation across Member States, including through clear company formation rules,

well-functioning national registries and predictable cross-border enforcement, so that it provides genuine

simplification and practical usability for the scale-ups it is intended to serve.

Open-source software constitutes a further under-exploited sovereignty instrument. Estimated to

contribute between EUR 65 and EUR 95 billion to EU GDP and underpinning at least 70% of all code19, it

reduces dependency on proprietary non-EU systems, lowers barriers for SMEs and start-ups, and can be

embedded in public procurement and funding at marginal cost. As its source code is publicly available, it

can be freely used, modified, redistributed, and audited. Aligning a greater share of public digital spending

with EU open-source development would represent a high-return, low-risk sovereignty dividend. In this

regard, the EU Open Source Strategy20, published on 3rd June, will review the current state of play and put

forward a set of actions to be rolled out in the coming years by the public sector at European and Member-

State level, as well as by the private sector and the open-source communities themselves.

3.1.2. Mastering the digital stack: from semiconductors and connectivity to AI

infrastructure

Europe’s competitiveness, resilience, and security increasingly depend on its ability to develop and

integrate the most advanced layers of the digital technology stack. At the core of this sovereign stack are

semiconductors, high-performance computing, cloud and edge computing, AI, quantum technologies,

secure connectivity networks, backbone infrastructures, trusted data ecosystems and security-by-design

infrastructures. These technologies no longer evolve in isolation. They are tightly integrated and interact

closely, shaped by technological progress and the evolving needs of science, industry, public services and

defence, including energy efficiency.

In semiconductors, the EU’s share of global value chain revenues stands at about 9%, against a Digital

Decade target of 20% to be reached in 2030, in a market where the US, China, South Korea and Taiwan

are investing on a scale that risks further entrenching existing asymmetries. This puts the EU in a situation

of extreme dependency, as past crises have demonstrated. The Chips Act21 has so far catalysed thirteen

major investment announcements for a total of EUR 32 billion, and, building on its experience, the

proposal for a Chips Act 2.022 has been adopted to further boost the chips industry, reduce strategic

dependencies and support advanced chip production in the EU.

In computing, the EU accounts for only 20% of global data centre capacity, while demand for colocation

space is outstripping supply for the third consecutive year, pushing up costs for businesses. The Cloud and

19 Open Forum Europe, cited in: Blind, K. et al., The Impact of Open Source Software and Hardware on Technological Independence, Competitiveness and Innovation in the EU Economy, Final Study Report, European Commission, September 2021. Open-source software is estimated to contribute between EUR 65 and EUR 95 billion to the EU’s GDP and underpins approximately 70% of all code. 20 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Tech Sovereignty, accompanied by an EU Open-Source Strategy, COM/2026/503 final 21 Regulation (EU) 2023/1781 of the European Parliament and of the Council of 13 September 2023 establishing a framework of measures for strengthening Europe’s semiconductor ecosystem and amending Regulation (EU) 2021/694 (Chips Act) 22 COM(2026) 504 final

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AI Development Act proposal23 aims to triple EU data centre capacity within five to seven years. However,

achieving this objective depends on resolving the EU’s persistently higher electricity costs relative to the

United States and China, which constitute a structural barrier to data centre investment that the Act alone

cannot address.

Quantum technologies are transitioning from research and pilot activities to integration in strategic

infrastructures and industrial deployment. The EU is already deploying quantum computers and

simulators-integrated with supercomputing centres-through the European High-Performance Computing

(EuroHPC) Joint Undertaking. It is also advancing the EuroQCI as a secure quantum communication

infrastructure spanning the entire EU, including its overseas territories, and preparing quantum chip pilot

lines, design facilities, and quantum internet testbeds. The short-term challenge is to accelerate the move

from research excellence to operational capabilities across quantum computing and simulation,

communication, sensing, and metrology. This requires support in industrialisation, standards, testing and

certification, trusted supply chains, skills development, and demand-side instruments such as public

procurement and first-user deployment.

Connectivity remains one of the most critical enabling layers of Europe’s sovereign digital stack and a

persistent structural challenge for competitiveness, resilience and security. Despite continued progress

in basic 5G and fibre rollout, the EU still lags behind global frontrunners in deploying high-capacity

infrastructures, notably full-fibre networks, 5G standalone (SA) and resilient backbone connectivity. The

slow transition to 5G SA is a structural constraint, limiting the EU’s capacity to deliver the low-latency,

high-reliability services that advanced industrial and AI applications require.

Strategic dependencies in backbone, satellite and submarine cable infrastructures further increase

Europe’s exposure in critical data routes, while digital service delivery as a large share of capacity remains

under the control of a handful of non-EU operators. Combined with the risk of satellite sabotage or

deactivation, this threatens the EU’s economic and security interests. Without accelerated investment,

deployment and greater regulatory convergence, these bottlenecks risk undermining the EU’s capacity to

scale the next generation of digital, AI and quantum-enabled services on European terms.

The AI dimension adds urgency and acts as the overarching driver of Europe’s digital strategy. While the

adoption of AI by businesses has accelerated sharply, reaching 20% in 2025, the EU remains heavily

dependent on a handful of non-EU providers for foundational model infrastructure, cloud execution

environments and the semiconductor architectures on which AI systems run. Building an AI continent

therefore requires simultaneous and tightly coordinated progress across all layers of the digital stack.

The AI Continent action plan24 provides the strategic framework for this capacity-building effort. In this

context, AI Gigafactories - large-scale, shared computing facilities accessible to European researchers,

start-ups, and SMEs - are designed to tackle a key bottleneck: the shortage of high-performance compute

23 COM(2026) 502 24 European Commission, AI Continent Action Plan, COM(2025) 165 final, 9 April 2025.

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infrastructure at the scale, the affordability, and security needed for cutting-edge AI development within

the EU. Beyond simply providing raw computing power, these facilities are expected to integrate

advanced data storage, energy-efficient supercomputing, and secure cloud environments, enabling users

to train and deploy large AI models while keeping sensitive data within European jurisdiction. By pooling

resources and lowering entry barriers, AI Gigafactories aim to accelerate innovation, support industrial

applications and strengthen Europe’s technological leadership in the global AI race. The timely delivery of

such ultra-scale sovereign AI compute infrastructure in Europe is a prerequisite for the credibility of the

EU’s broader AI strategy, including the sectoral focus of Apply AI Strategy25. The EU is also pursuing a

comprehensive strategy to strengthen its technological stack: the core objective of the Tech Sovereignty

Package26 adopted on 3 June is meant to strengthen the EU’s capabilities across the entire value chain,

moving towards a fully integrated European technology stack.

Five structural factors cut across these technology domains. First, fragmentation: twenty-seven national

regulatory and investment frameworks prevent the EU from pooling resources and deploying technology

infrastructure at the scale required to compete globally. Spectrum policy, semiconductor R&I funding, and

AI compute investment all suffer from the same underlying problem of insufficient coordination. Second,

investment asymmetry: in each of these sectors, the EU’s existing instruments, while significant, have not

yet been organised around a coherent technology investment logic tied to sovereignty objectives, leaving

European support less unified and targeted than what competitor regions have. Third, private-sector

underinvestment and more generally the lack of mobilisation of private finance to support the

development of the European digital ecosystem, reflecting structural conditions including fragmented

capital markets, a weak scale-up ecosystem, and insufficient demand-side incentives for innovation.

Fourth, overly concentrated supply chain and dependencies: across chips, network equipment, cloud

infrastructure and AI systems, the EU remains dependent on a limited number of external suppliers for

components and services that are increasingly treated as strategic assets by competitor nations, and

control of them is a lever for geopolitical influence. Fifth, administrative bottlenecks underline the need

to accelerate and simplify infrastructure development through facilitated permitting.

Addressing those challenges requires simultaneous and coordinated action across technology policy,

investment mobilisation and industrial strategy. Together, the proposals for the Chips Act 2.0, the Cloud

and AI Development Act, the Digital Networks Act, and the upcoming Quantum Act proposal will provide

an appropriate legislative framework once adopted and implemented. The AI Continent action plan

provides the strategic architecture for Europe’s AI capacity-building, with the Gigafactories as its

operational centrepiece alongside AI factories, Testing and Experimentation Facilities, and the European

Digital Innovation Hubs being repositioned as AI Experience Centres.

25 Encompasses the public sector and 10 key industry sectors: healthcare and pharmaceuticals, mobility, transport and automotive, robotics, manufacturing, engineering and construction, climate and environment, energy, agri-food, defence, security and space, electronic communications and cultural, creative and media sectors 26 The Tech Sovereignty package consists of 2 legislative proposals (the Chips Act 2.0 and the Cloud and AI Development Act, the EU Open-Source Strategy and a Strategic Roadmap for Digitalisation and AI in Energy

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Dependency risks also extend to the financial sector. International card schemes account for over 64% of

electronically initiated card-based transactions in the euro area27, while mobile payments are largely

dominated by non-European technology firms, particularly as regards digital wallets. These dependencies

create both geopolitical and cybersecurity exposure which could have spillover effects on the financial

and economic sector. The digital euro, currently in the interinstitutional legislative process28, is a strategic

response that will strengthen Europe’s monetary sovereignty and increase the resilience of its payment

infrastructure.

Concerns about technological sovereignty also extend to the use of digital technologies in the education

sector. European schools and training institutions depend overwhelmingly on non-EU providers for their

digital infrastructure - from cloud and operating systems to AI-powered learning tools and learning

management systems. The Commission is supporting preparatory work with Member States to set up

multi-country projects and collaboration among Member States to strengthen technological sovereignty

for schools and training institutions.

Promoting the ethical development and adoption of AI in the cultural and creative sectors is essential to

preserving Europe’s cultural sovereignty. AI should be designed and trained in ways that support Europe’s

cultural and linguistic diversity, drawing on diverse and representative datasets that reflect the richness

of European cultures, while respecting creators’ rights. As announced in the AI Continent action plan, the

Apply AI initiative and the Culture Compass29, the Commission is preparing a strategy that promotes the

development and use of AI in ways that uphold genuine creation, European cultural and linguistic diversity

and inclusion.

Legislative and strategic frameworks need to be strengthened by a step-change in investment scale and

coordination. The next MFF will play an important role in steering resources towards EU technology

priorities, in particular with the proposed European Competitiveness Fund (ECF) and its Digital Leadership

window and the new Research and Innovation Framework Programme. The conditions for private R&I at

scale must also be improved structurally - through the Savings and Investments Union, the Capital Markets

Union, simplified regulatory requirements for R&D-intensive firms, and stronger demand-side incentives

including public procurement, as reflected in the Tech Sovereignty Package. The specific investment

priorities emerging from this strand are set out in Section 4.

3.1.3 Fostering synergies with defence

The accelerated integration of digital technologies such as AI, advance connectivity or cloud computing

into European defence capabilities has emerged as a defining trend of 2025-2026. Technologies

27 Volume share of international card schemes in total electronically initiated card payments with cards issued in the euro area, first half of 2023. Based on data collected under Regulation (EU) No 1409/2013 of the European Central Bank on payments statistics (ECB/2013/43), as amended. 28 Lane, P.R., ‘The Digital Euro: Maintaining the Autonomy of the Monetary System,’ keynote speech at the University College Cork Economics Society Conference, European Central Bank, 20 March 2025; the Commission’s legislative proposal on the digital euro was adopted in June 2023 and continued interinstitutional negotiations in 2024; see: European Commission, Proposal for a Regulation of the European Parliament and of the Council on the Establishment of the Digital Euro, COM(2023) 369 final, June 2023. 29 A Culture Compass for Europe COM(2025) 785 final

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originally developed for civilian applications are increasingly dual-use and/or adapted for defence

purposes. This ’spin-in’ dynamic means that the EU’s digital industrial capacity and its defence

technological capacity are now closely interlinked: both are constrained by weaknesses in semiconductors,

computing and cloud infrastructure, AI and secure connectivity.

The EU responded with solid policy and funding architecture in 2025-2026. The Defence Readiness

Roadmap 2030, adopted in October 2025, pointed to cyber, AI and electronic warfare as one of nine

priority capability areas identified by Member States. The Defence Industry Transformation Roadmap30

consolidated this direction, framing software-defined warfare, dual-use spin-in and engagement with

SMEs and start-ups as cornerstones of Europe’s defence industrial transformation. On the funding side,

the European Defence Fund, with a budget of close to EUR 8 billion for the period 2021-2027, is the

Commission’s flagship programme in support of defence R&D. As part of it, the EU Defence Innovation

Scheme (EUDIS) supports defence innovation and non-traditional defence actors. The AGILE programme,

proposed on 25 March 2026 31 , will complement these efforts, with a particular focus on the rapid

development and delivery of disruptive defence products and technologies. The European Defence

Industry Programme (EDIP) adopted at the end of 2025, delivered its first work programme and launch of

calls for proposals at the beginning of 2026. The Security Action for Europe (SAFE), adopted in May 2025,

which includes AI and electronic warfare among its eligible procurement categories, has approved

national investment plans covering EUR 38 billion of the EUR 150 billion available, with the first

disbursements expected in 2026.

Moreover, the mid-term review of cohesion policy32 (October 2025) enabled cohesion funds to be

channelled towards defence and civil preparedness projects. By the same token, the Regulation on

incentivising defence-related investments in the EU budget (December 2025) broadened the scope of the

Digital Europe Programme to dual-use across all objectives, extended the European Innovation Council

(EIC) Accelerator scope to support dual-use innovation, and opened the STEP Scale-Up Scheme to defence.

The Commission has proposed that these efforts should continue and be further increased as part of the

proposed European Competitiveness Fund (ECF) under the next MFF33.

Three structural factors continue to shape the EU’s ability to translate civilian digital investment into

defence capability. First, the alignment of strategic priorities between civilian and defence programmes

could be further improved across the EU: while EU instruments increasingly recognise dual-use, Member

States have yet to systematically embed this convergence in their national roadmaps and national

investment planning, and the structural separation between civilian digital and defence innovation

communities persists at national level. Second, the industrial base remains concentrated and partly

30 European Commission, EU Defence Industry Transformation Roadmap, COM(2025) 845 final, 19 November 2025. 31 European Commission, Proposal for a Regulation Establishing the Programme for Agile and Rapid Defence Innovation (AGILE), COM(2026) 135 final, 25 March 2026. 32 European Commission, A modernised cohesion policy: The mid-term review, COM(2025) 163 final 33 European Commission, Proposal for a Regulation Establishing the European Competitiveness Fund (ECF), Including the Specific Programme for Defence Research and Innovation Activities, COM(2025) 555 final, 2025.

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dependent on non-EU providers in semiconductors, cloud and AI. This exposes EU systems to supply

disruption and limits the scope for a fully sovereign defence digital supply chain. Third, the security culture

and reporting standards across the civilian digital sector are not yet sufficiently developed to make full

use of the funding pathways opened by recent regulatory changes. Addressing these challenges requires

complementary action and approaches on strategic priorities and on funding-level synergies including

across future ECF policy windows,so that investments in computing capacity, connectivity resilience,

cybersecurity and AI can consistently support both civilian competitiveness and defence preparedness.

Member States are also invited to reflect on dual-use considerations in their updated national roadmaps,

and to make use of relevant defence instruments and promote them among their national industrial

ecosystems, to participate actively in Capability Coalitions, and to make systematic use of SAFE, EDIP,

EUDIS, the dual-use scope of the Digital Europe Programme, the EIC Accelerator and the AGILE

programme.

3.2. Strengthening the security and resilience of digital ecosystems

The resilience of the digital ecosystem is central to EU’s technological sovereignty as cybersecurity

threats becomes more complex, large-scale and systemic. Recent EU data highlight the scale and

accelerating nature of cyber risk across the EU: nearly 4 900 significant cybersecurity incidents were

recorded in a single year (July 2024-June 2025), pointing to a persistent and evolving threat environment.

These attacks are increasingly high-impact, with over 80% of cybercrime incidents involving ransomware,

often combined with data theft and multi-layered extortion34. Cyber operations are now embedded in

state strategies, targeting government, defence and critical infrastructure, while the line between state-

sponsored actors and cybercriminals continues to blur through shared tools and infrastructure. Attacks

are also becoming more targeted: more than half affect essential entities, while public administrations

account for over one third, which means the attacks are increasingly focused on critical sectors such as

energy, healthcare, transport and telecommunications, as well as core state functions. At the same time,

attacks are becoming more sophisticated and harder to detect, increasingly leveraging AI and combining

multiple techniques. Supply chain attacks have emerged as a major systemic risk, whereby a single breach

can cascade across multiple organisations due to dependencies on third-party providers and widely used

software. This risk is particularly acute for public administrations, which rely on interconnected systems

to deliver essential services. Together, these trends illustrate not only the rising frequency of cyber

incidents, but also their increasing severity and implications for the EU’s economic security and resilience.

The EU has developed a broad and increasingly robust cybersecurity framework, anchored in NIS2, the

Cyber Resilience Act and the proposed revision of the Cybersecurity Act (CSA2)35. As part of a wider

cybersecurity package, these measures aim to strengthen capabilities and resilience, prevent

fragmentation in the digital single market and enhance the security of EU ICT supply chains by ensuring -

34 European Union Agency for Cybersecurity (ENISA), ENISA Threat Landscape 2025, October 2025. 35 European Commission, Proposal for a Regulation on the European Union Agency for Cybersecurity (ENISA), the European Cybersecurity Certification Framework, and ICT Supply Chain Security, and Repealing Regulation (EU) 2019/881 (Cybersecurity Act 2), COM(2026) 11 final, 2026.

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through a simplified certification framework - that products placed on the market are secure by design.

They also seek to facilitate compliance with existing EU rules and increase the role of the EU Agency for

Cybersecurity (ENISA) in supporting Member States and the EU in managing cyber threats. In addition, the

Cyber Solidarity Act, in force since February 2025, further strengthens collective detection and response

capacities at EU level.

However, five structural factors continue to shape the EU’s vulnerability to the evolving cyber threat

landscape and limit the effectiveness of its regulatory response. First, implementation fragmentation:

while the NIS2 Directive and the Cyber Resilience Act set common requirements, transposition of the NIS2

Directive and enforcement of rules remain uneven across Member States, creating resilience gaps within

the single market. Progress also remains uneven across Member States when it comes to restricting high-

risk suppliers and preparing for emerging challenges such as post-quantum cryptography. Second,

industrial dependency: continued reliance on non-EU vendors (including persistence exposure to high-

risk suppliers in critical areas such as 5G networks) exposes the EU to jurisdictional risks and external

strategic decisions. Third, a persistent cybersecurity skills deficit, constrains organisations’ ability to

operationalise requirements, particularly as AI-enabled threats accelerate. Fourth, AI asymmetry:

adversaries are deploying AI faster than it is being integrated into EU defensive systems, creating a

structural imbalance not fully addressed by existing frameworks. Fifth, and linked to AI asymmetry, the

fundamental shift in cybersecurity brought by the most advanced general-purpose AI models. As these

models show unprecedented cyber capabilities, notably in identifying vulnerabilities, and operate at a

speed and level of automation that outpaces traditional defensive cycles, we need to stay ahead and

ensure our own capacity to use AI as a first line of defence against the possible misuse of such capabilities.

Addressing these gaps requires sustained investment in implementation support, EU-wide

interoperability standards, the cybersecurity skills base, and shared detection and response capabilities

at EU level. This must be accompanied by full and consistent transposition and enforcement of the NIS2,

the Cyber Solidarity Act and the Cyber Resilience Act, the structured phase-out of high-risk suppliers from

critical infrastructure and the establishment by Member States of stable, multiannual national funding

mechanisms for cybersecurity aligned with EU strategic priorities.

3.3. Making digitalisation work for competitiveness: adoption, simplification

and decarbonisation

The third structural challenge for digital leadership is to build wider ecosystems and ensure the diffusion

of digital technologies across the economy and society. It means ensuring that the digital capabilities

being developed in the EU are effectively deployed where they are needed, across businesses, public

authorities and society at large, at the speed and scale required by intensifying global competition. Such

efforts are critical: so far, the EU has failed to fully capture the gains of the internet revolution, which has

led it to lag both in the development of key technologies and in the uptake of digital solutions by public

administrations and businesses.

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3.3.1. From access to use: accelerating technology diffusion and adoption

Digitally enabled transformation of private and public activities is a catalyst for EU competitiveness.

Digitalisation is a key driver of growth and productivity in the EU, and recent evidence points to strong

macroeconomic returns on digital investments. The productivity dividend of digital transformation is

substantially larger than what the EU is currently capturing, as can be seen in the estimate that 39% of US

growth in 2025 was linked to AI technologies36. The limited productivity gains from digital investments

compared to the US stem not only from differences in ICT capital, but also insufficient investments in

intangible assets, such as skills, organisational capacity and management practices, which are essential

for the diffusion of digital technologies: between 2009 and 2020, ICT capital accounted for 11.7% of US

productivity growth, compared with 3.3% in Europe; over the same period, total factor productivity (TFP),

which captures efficiency gains from organisational change and improved resource allocation, contributed

32% in the United States but was negative in Europe37.

Broad-based adoption by the general public, enterprises (especially SMEs) and public authorities

therefore remains a central challenge. As the KPI data in Section 2 show, AI adoption stands at 20% of

enterprises against a 2030 target of 75%, the cloud gap between large firms and SMEs is 36 percentage

points, and on current trends the data analytics gap will not close until 2047, while the adoption of gigabit

connectivity fast fixed broadband is still low, representing only 27% of subscriptions in the EU in 2025.

The main barrier is not only technological availability but access, simplicity and organisational capacity

for change. The digital transformation of public services shows similar patterns: while performance at

national level is strong (services for the public: 84.6/100; business services: 88.6/100), persistent

structural gaps remain in cross-border availability, AI deployment in public administration and the

cybersecurity of public digital infrastructure. More than one third of EU government websites are hosted

on servers controlled by operators whose ultimate beneficial ownership lies outside EU jurisdiction, and

more than half of governmental email domains rely on non-EU operators, creating systemic security

exposure and trust concerns that the digital public service agenda alone cannot resolve.

Adoption at scale continues to be constrained by a set of structural factors. A persistent deficit in skills

and intermediation limits the capacity of enterprises, in particular SMEs, to identify relevant use cases,

ensure compliance and integrate digital technologies into core operations. This is compounded by the

limited availability of trusted intermediaries capable of providing integrated technical, legal and business

support. At the same time, the pace of organisational transformation remains insufficient. Digital

investment does not translate into productivity gains without accompanying changes in business

processes, management practices and workforce skills, and evidence indicates that such transformation

remains less developed in the EU. Uneven implementation across Member States - in terms of governance,

investment levels and delivery capacity - continues to create disparities in adoption.

36 Rubinton, H. and Patro, B.A., ‘Tracking AI's Contribution to GDP Growth,’ On the Economy, Federal Reserve Bank of St. Louis, 12 January 2026. 37 JRC Report (upcoming).

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Public administrations face comparable barriers. While progress at national level is notable, gaps persist

in cross-border service provision, the deployment of AI and the security of digital infrastructure. While

digitalisation of public services offers significant benefits and opportunities to increase growth through

efficiency gains and cost savings for Member States, businesses and individuals, it also requires

considerable investment both from the EU and the Member States at the national level to overcome

technical difficulties and delays in the delivery of national and cross-border judicial services, as illustrated

in the case of digitalisation of justice. Finally, continued reliance on non-EU providers in critical areas

creates vulnerabilities affecting both resilience and sovereignty.

Addressing these challenges requires coordinated action across several dimensions. Strengthening skills

and intermediation is essential, including through increased investment in digital and AI training and the

repositioning of European Digital Innovation Hubs as integrated AI Experience centres linked to AI

factories, testing and experimentation facilities and upcoming sandboxes. Greater emphasis must also be

placed on organisational transformation, providing the possibility for public support instruments to

combine technology uptake with investments in management practices, process redesign and workforce

reskilling. Increasing trust requires the development and uptake of secure and sovereign digital

infrastructures, including EU-based cloud solutions for public administrations. The EU, Member States,

regions and cities should increasingly and systematically leverage public sector demand as a driver of

diffusion, notably through strategic public procurement, the deployment of digital public services, and the

use of government as a lead customer to create markets, scale solutions and accelerate adoption across

the wider economy. Finally, national delivery frameworks should be strengthened through clear

governance, dedicated funding and measurable targets, to ensure consistent implementation across

Member States, supported by the DDPP.

3.3.2. Simplification: removing the regulatory and infrastructure barriers to adoption

Simplification is itself a critical enabler of technological uptake. Regulatory complexity - particularly the

interaction of regulatory obligations, sector-specific requirements and varying national implementations

including the introduction of national requirements exceeding those provided for under EU legislation-

has been identified by enterprises as one of the primary barriers to digital deployment, especially for SMEs.

The Digital Omnibus initiative, which aims to streamline existing data and digital legislation, addresses this

directly and is therefore a legislative precondition for accelerating the uptake of digital technologies by

enterprises. Moreover, digital, data-driven and AI-enabled solutions for reporting, monitoring and

compliance can help reduce this burden, enabling companies to meet regulatory requirements more

efficiently while turning compliance into a source of trust, competitiveness and differentiation in global

markets.

The European Digital Identity Wallets and European Business Wallets are a central pillar of this strand.

By integrating digital verifiable credentials, trusted data sharing, and enabling AI-driven compliance

checks, the forthcoming EU Business Wallets will significantly ease how businesses interact with

regulators and their customers. Using them will create the conditions for fully digital cross-border

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interactions - for individuals authenticating to public services and other use cases, for businesses

conducting cross-border transactions including e-invoicing, digital contracts and the secure exchange of

verified data - and the reduction of administrative burden. All Member States are required to make the

Wallet available to private individuals by end-2026. Six large-scale pilots involving over 550 stakeholders

across all Member States together with Norway, Iceland, and Ukraine have demonstrated the technical

feasibility of cross-border use cases in multiple sectors. Yet deployment remains uneven and the pace of

national implementation risks undermining the Wallet’s potential: the certification schemes based on the

Cybersecurity Act have not yet been finalised, blocking national deployment timelines; the obligations of

the parties relying on the schemes - particularly in the private sector - are still not sufficiently enforced,

limiting incentives for the public to adopt the schemes. Accelerating deployment requires the following

parallel actions: finalising the certification scheme without further delay; and enforcing relying party

obligations systematically, including through the Digital Omnibus where necessary.

Simplification is also much needed to accelerate connectivity whichremains structurally insufficient to

support the AI Continent agenda. Regulatory fragmentation with twenty-seven distinct national

frameworks for spectrum assignment, network authorisation and different paces of legacy networks

migration creates inconsistent investment conditions, prevents operators from achieving the economies

of scale required for advanced network deployment and generates legal uncertainty that delays both

private investment and public co-financing decisions. The continued operation of legacy copper networks

in the majority of Member States negatively impacts demand for full-fibre services, reducing investment

incentives, and delaying the migration of users and services to the infrastructure required for next-

generation digital applications. Therefore the absence of binding national copper switch-off timelines in

most Member States has become a structural rather than a transitional problem. In addition, the absence

of long-term and predictable conditions for investments - in particular on spectrum licence duration and

renewal - prevents operators from committing capital at the scale and over the time horizons required

for 5G SA and 6G deployment. It also limits the ability of public instruments to leverage private co-

investment effectively.

For enterprises, especially SMEs, the main barriers to AI and advanced digital adoption are linked to the

difficulty of translating interest into deployment safely, lawfully and at an acceptable cost. Fragmented

and poor-quality data, weak interoperability with legacy systems, lack of in-house skills, the complexities

of aligning early compliance investments with the shifting implementation details of the AI Act, and the

absence of trusted intermediaries capable of providing integrated technical, legal and business

transformation support remain the proximate constraints behind the SME adoption gap. The operational

priorities are fivefold.

• First, the European Digital Innovation Hubs, repositioned as AI Experience Centres and linked to

AI factories and Testing and Experimentation Facilities, need to reach their full potential in

providing SMEs with integrated technical, legal and business transformation support.

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• Second, the deployment of common European data spaces, linked to AI factories and data labs,

must be accelerated: access to high-quality, interoperable data is a prerequisite for SMEs to

innovate and scale on a more equal footing with large platforms.

• Third, the Digital Omnibus must move rapidly from proposal to implementation, with Member

States ensuring consistent national transposition and the Commission monitoring simplification

outcomes against measurable benchmarks.

• Fourth, sustained investment in cross-border digital public service infrastructure - including EU

Wallet deployment, the Once-Only Technical System, interoperability frameworks and digital

identity building blocks, digital verifiable credentials, data exchange mechanisms, trust services -

is required to close the gap between national and cross-border service availability, reducing

administrative burden for the public and businesses across the single market.

• Fifth, the Digital Networks Act, currently under negotiation, should preserve its ambition on

indefinite spectrum licences, harmonised authorisation conditions and an investment-friendly

regulatory architecture as a structural response to the regulatory fragmentation identified above.

At the same time, the copper switch-off, in other words the planned EU-wide migration from legacy

copper to full-fibre infrastructure, must be accelerated across all Member States. Targeted public

investment must also complement regulatory reform by addressing market failures in underserved areas,

particularly rural and remote regions, where private deployment alone will not deliver the coverage

required by 2030.

3.3.3. Responsible digitalisation for competitiveness, resilience and decarbonisation

Digital technologies - including AI, digital twins, smart grids and sensor networks - can deliver decisive

gains in industrial productivity, energy efficiency, grid optimisation and resilience and circular business

models, lowering input costs for EU firms, easing pressure on imported energy and critical raw materials,

while accelerating the transition to a more autonomous and resilient industrial base. In a sector as

strategic as energy, preserving the Union’s capacity to develop, control and operate these critical digital

technologies and infrastructures is an important component of Europe’s technological sovereignty,

economic security and long-term resilience.

These positive contributions need to overcome the major resource constraints associated with the

expansion of digital infrastructure. Digital infrastructure is increasingly affecting water availability, land

use and energy systems at regional level. By 2030, data centre electricity consumption in Europe is

expected to rise towards 115 TWh, an increase by at least 45 TWh compared to 2025, driven primarily by

AI demand38. The EU currently recovers less than 1% of rare earth elements from end-of-life digital

equipment and remains highly dependent on external suppliers for several critical raw materials used in

digital technologies.

38 IEA, Table A.4: Data Centres Electricity Consumption by Region, p. 110, Key Questions on Energy and AI, International Energy Agency, April 2026.

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These developments are taking place against a backdrop of tightening energy constraints. The

mainstreaming of AI is driving a rapid rise in electricity demand for computing power and data

infrastructure39. With rising geopolitical tensions, the EU also faces persistently higher electricity costs

than the United States, which benefits from lower-cost domestic energy sources, and China, which relies

on state-supported supply. Without swift and sufficient expansion of affordable, low-carbon energy and

grid capacity, these energy constraints risk undermining the EU’s ability to deploy advanced AI systems

at the scale required to maintain competitiveness in the global digital economy.

The EU has set a policy framework to address the digital-green nexus. The proposed clean digitalisation

targets - covering data centre energy consumption, net ICT emissions and the contribution of digital

solutions to greenhouse gas reductions - provide a necessary basis for making this nexus measurable and

operational. The Strategic Roadmap for Digitalisation and AI in the energy sector40 plans measures to

prepare for the increased complexity of the future energy system, including both challenges and

opportunities linked to the integration of data centres in the EU energy system and the large-scale AI

deployment across the energy value chain. Complementary instruments - including the Cloud and AI

Development Act, the Digital Product Passport41 and the EU Codes of Conduct on Data Centres42 and on

telecommunications sustainability 43 - further strengthen this framework. However, while the policy

framework is largely in place, its translation into coherent investment signals, governance mechanisms

and measurement systems remains incomplete.

This gap reflects four structural factors limiting the alignment between digital transformation and

decarbonisation. First, a governance lag: digital technologies, especially AI, evolve faster than regulatory

and investment cycles, delaying the management of their environmental impacts. Second, a growing

tension between compute capacity and energy sustainability, as expanding data centre infrastructure

increases electricity demand and requires closer alignment between digital, environment and energy

policies, including in rural areas. Third, persistent dependencies on critical raw materials, combined with

limited recycling capacity, create structural vulnerabilities not yet fully integrated into investment

strategies. Fourth, insufficient measurement frameworks: the lack of harmonised EU methodologies to

assess both the footprint of digital infrastructure and its contribution to emissions reduction limits

effective investment and progress tracking. Addressing these structural factors requires the adoption of

new clean digitalisation targets, the development of harmonised metrics, and stronger coordination

between digital, energy and environmental policies, with the aims of enhancing EU competitiveness and

reducing dependencies on energy and critical materials.

39 IEA, Energy Demand from AI, in Energy and AI, International Energy Agency, April 2025. EU data centre electricity consumption is projected to grow from around 70 TWh in 2024 to approximately 115 TWh by 2030. 40 COM(2026) 501 final 41 Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024 establishing a framework for the setting of ecodesign requirements for sustainable products, amending Directive (EU) 2020/1828 and Regulation (EU) 2023/1542 and repealing Directive 2009/125/EC 42 https://joint-research-centre.ec.europa.eu/jrc-news-and-updates/eu-code-conduct-data-centres-towards-more-innovative-sustainable-and- secure-data-centre-facilities-2023-09-05_en 43 https://publications.jrc.ec.europa.eu/repository/handle/JRC144975

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3.4. Ensuring digital transformation works for people

Ensuring that the digital transformation works for people is a core objective of the Digital Decade. The

benefits of digital technologies should be accessible to all, while preventing the emergence of new forms

of exclusion and protecting citizens and democratic societies from online harms, including disinformation,

manipulation and other forms of abuse of digital technologies.

In this respect, digital skills are both a sovereignty asset and an adoption enabler, and the EU’s shortfall

in both dimensions, basic skills and ICT specialists, is acute.

Despite significant national investment commitments, the EU remains off-track to meet the 2030 target

for basic digital skills (80% of the population), which is currently projected to be reached in 2037. Basic

digital skills stand at 60% in 2025 and are forecast to reach only 68% by 2030. The shortfall is concentrated

among older individuals, those with low educational attainment, and people in rural areas, precisely the

groups for whom digital exclusion carries the highest economic and social costs. A first structural challenge

relates to the limited reach of existing provision systems. Current delivery mechanisms do not adequately

reach the groups most at risk of lacking basic digital skills - including older people, persons with disabilities,

marginalised groups facing discrimination, individuals with low educational attainment, those in rural

areas who may face additional challenges linked to limited broadband access. These are largely centred

on formal education and workforce-based training, while those most lacking in digital competence are

also the least connected to the institutions capable of providing support at scale. A second challenge

concerns the effectiveness and level of ambition of current investments. Member States have

collectively committed around EUR 24 billion and 349 measures to basic digital skills. However, progress

remains below the pace required to meet the target, indicating that while the current distribution of

investment, predominantly focused on formal education and general digital inclusion, remains essential,

it does not sufficiently address the specific barriers faced by hard-to-reach groups. A third challenge arises

from the rapid development of digital technologies. The current target was defined against a pre-

generative AI baseline, while the widespread use of such technologies, around 64% of young people aged

16-24 in 2025, is redefining the skills needed for effective and safe participation in the digital environment,

indicating the increasing need for AI literacy. This creates a risk that even achieving the target may not

create the level of competence required in practice by 2030.

Under the Union of Skills and the Council Recommendation on Human Capital44, Member States are

encouraged to strengthen basic skills in education and expand training and lifelong learning. The action

plan on basic skills recognises digital skills as crucial in modern society and everyday life, and includes

them in the basic skills, alongside literacy, mathematics, science and citizenship. The STEM Education

Strategic Plan highlights the importance of increasing the talent pipeline in STEM subjects and proposes a

5% enrolment target in doctoral programmes in ICT by 2030 - including a sub-target for female enrolments.

The Commission will propose measures to support digital skills development and the digital readiness of

44 https://data.consilium.europa.eu/doc/document/ST-6081-2026-REV-1/en/pdf

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schools in the context of its education package. It will also develop guidance on digital skills assessment

to improve the provision of skills in school education. The AI Skills Academy supports the workforce

dimension of the AI adoption agenda, while the AI literacy framework for primary and secondary

education developed in cooperation with the OECD outlines the main skills young people need to develop

at school in order to benefit from the AI transformation in a critical and responsible manner. The Digital

Competence Framework was updated in November 2025, particularly to take account of competences

required in the face of new emerging technologies such as AI and integrate AI competence across all areas

of digital competence.

The ICT specialist gap is even more pronounced, with 10.5 million employed in 2025, just 52% of the 2030

target of 20 million in a context where skills requirements are evolving rapidly, reflecting the pace of

technological change and the accelerating diffusion of digital technologies across the economy. The

proportion of women among ICT specialists has increased only marginally compared to 2015. Closing this

gap requires a response commensurate with its scale: including dedicated investments, as well as national

interim targets in the updated national roadmaps.

A number of structural factors continue to constrain the EU’s capacity to expand its ICT workforce at

the pace required. First, the supply of new entrants remains insufficient. In 2023, the EU produced only

2.7 tertiary ICT graduates per 1 000 young people, compared to 3.7 in the United States and 4.6 in the

United Kingdom. This gap cannot be compensated for through upskilling and reskilling alone and points

to the need for sustained, long-term investment in initial education systems at a scale not yet reflected in

current national commitments.Second, the rapid development of technological requirements is creating

persistent mismatches between labour market needs and available skills. The growing importance of

areas such as AI, cloud security and data engineering is outpacing the capacity of education and training

systems to adapt curricula and programmes. This is further compounded by the increasing role of vendor-

specific certifications, which can limit skills portability and reduce overall labour market flexibility.Third,

progress in addressing the gender imbalance in ICT professions remains limited. This reflects structural

barriers across the entire education and career pathway, from participation in STEM education to entry

into and retention within ICT careers, indicating that more comprehensive and coordinated measures are

required.Finally, demand for advanced digital skills is expanding rapidly beyond the ICT sector itself.

The diffusion of digital technologies, in particular AI, across sectors such as healthcare, manufacturing,

logistics and public administration is generating additional demand that exceeds current workforce

projections. Addressing this challenge requires a broader, economy-wide approach to skills development,

going beyond sector-specific policies. It also requires making the EU a global magnet for ICT talent. The

launch of the European Legal Gateway Office pilot in India - in February 2026 - is a first concrete step in

that direction. Furthermore, the launch of the STEM Education Strategic Plan in March 2025 lays the basis

for anchoring STEM as a priority in the EU education and skills policies and provides a policy and funding

framework for advancing the quality of STEM education and participation in these sectors.

Ensuring that digital transformation works for people also requires protecting them in the online

environment and preserving democratic resilience. Exposure to disinformation, hostile content and

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online harm is increasing across all age groups: In 2025, 2 out of 3 young Europeans reported exposure to

untrue or doubtful content online45. This trend affects democratic processes and public health, with

generative AI amplifying their scale and sophistication. It also brings the responsibility of digital actors -

particularly AI providers and online platforms - to the forefront, raising issues of accountability and

liability.46 There is increasing recognition of the role of design choices-such as algorithms, decision systems,

default settings, and user interaction mechanisms-in shaping societal outcomes. While often framed as

technical or commercial decisions, these choices warrant regulatory attention to ensure safer and more

trustworthy digital environments. The EU's response is anchored in the enforcement of the Digital Services

Act (DSA), with the first DSA fine issued in December 2025. It is complemented by broader policy initiatives,

notably the European Democracy Shield, adopted on 12 November 2025, and the Cyberbullying Action

Plan adopted in February 2026. These frameworks provide an important basis for addressing online risks

and strengthening democratic resilience. The priority now is to ensure their effective implementation,

consistent application where relevant, and adequate resourcing, in particular for the European

Democracy Shield, while continuing to assess whether additional measures may be needed to address

emerging AI-enabled manipulation techniques.

4. Bridging the funding and reforms gap

The structural challenges identified in the previous sections are reflected in the horizontal and country-

specific recommendations addressed to Member States in Annexes 1 and 2 to accelerate collective

progress toward Digital Decade objectives and targets. These recommendations converge around a

limited set of priority areas intended to shape the EU’s digital agenda including through the next MFF, up

until 2034.

Priorities include the accelerated deployment of strategic digital infrastructures: AI compute capacity, full-

fibre coverage, 5G SA networks, backbone infrastructures such as submarine cables and resilient

semiconductor value chains; the reduction of the advanced technologies adoption gap in enterprises,

particularly for SMEs and in key sectors such as manufacturing, healthcare and public administration; the

strengthening of digital skills, both in basic literacy and in the development of ICT specialists; the

completion of the Digital Single Market’s interoperability architecture, including the deployment of the

European Digital Identity Wallet and the Once-Only Technical System; and the reinforcement of

cybersecurity across critical sectors and public administrations.

Those structural challenges require a strengthened and coordinated policy response, combining reforms

and investments at EU, national and regional level.

45 Eurostat, ICT usage in households and by individuals, 2025. Available at: Eurostat, ICT Usage in Households and by Individuals – Evaluating Data, Information and Digital Content, 2025. 46 K.G.M. v. Meta Platforms et al., Los Angeles County Superior Court, judgment of 25 March 2026, finding social media platforms liable for harm linked to addictive design features. Liability was based on platform design (addictive features), not just user-generated content The court held that design features (e.g. infinite scroll, autoplay) were a “substantial factor” in causing harm.

25

4.1. Public digital funding is a powerful driver of economic growth,

productivity and resilience across the EU

With around EUR 133 billion allocated to digital measures in the Recovery and Resilience Plans (RRPs) as

of early 2026, Member States have significantly scaled up investments in digital infrastructures, skills,

public services and business transformation. These investments are not only supporting progress

towards the Digital Decade targets but are estimated to generate substantial macroeconomic gains across

the EU economy by 2030

By 2030, digital Recovery and Resilience Facility (RRF) investments are expected to generate a cumulative

economic impact of EUR 219 billion within the EU, rising to around EUR 302 billion at global level47. This

corresponds to a multiplier of 1.5 within the EU and 2.0 globally, significantly higher than the average

impact of RRF spending overall. These strong returns reflect the concentration of digital investments in

high-productivity sectors and their capacity to enhance innovation, efficiency and competitiveness. In

particular, investments in digital skills and in the digitalisation of public services show the highest

multiplier effects, underlining their critical role in enabling the effective uptake and diffusion of digital

technologies across the economy.

Figure 5: Macroeconomic impact of digital RRF investments (in EUR bn)

EU27 RRF

envelope

Direct Impact

EU

Spillover Impact

EU

Total impact

EU

EU multiplier

Spillover Impact Non-EU

Total impact Global

Global multiplier

Total 653.4 543.9 139.0 682.9 1.0 205.9 888.8 1.4

Total Digital 148.8 168.3 50.9 219.2 1.5 83.1 302.3 2.0

Digital Infrastructure 29.8 33.1 11.6 44.6 1.5 19.7 64.3 2.2

Digital skills 23.6 33.7 8.9 42.6 1.8 14.2 56.8 2.4

Digitalisation of businesses 45.0 53.7 15.9 69.7 1.5 25.9 95.6 2.1

Digitalisation of Public Serv. 38.1 51.9 13.5 65.4 1.7 22.1 87.5 2.3

Other digital 12.3 22.4 7.5 29.9 2.4 11.4 41.3 3.4

Source: Commission Services. The macroeconomic modelling results are based on RRF data available as of 30 November 2025, corresponding to EUR 148.8 billion in digital RRF investments. This differs from the latest monitoring figure of around EUR 133 billion as of early 2026, following subsequent revisions of the RRPs48.

The economic benefits of digital investment extend well beyond national borders, highlighting the

importance of coordinated action at EU level. Of the total EU impact, around EUR 168 billion stems from

direct domestic effects, while a further EUR 51 billion arises from cross-border spillovers through trade

and value chain linkages. In several Member States, these spillovers significantly amplify national gains, in

some cases doubling or tripling the impact of domestic investments. This demonstrates that the single

47 Michels, A., Ferreira, V., Annoni, P., Burton, J., Pedauga, L., Rueda-Cantuche, J. M. & Kušen, M., European Economy. Discussion Paper 249: Digital Measures under the Recovery and Resilience Facility: Economic Impacts at Macro, Sectoral and Country Levels, European Commission, Directorate-General for Economic and Financial Affairs, 2026.

26

market remains a key transmission channel for digital investment, reinforcing economic convergence

and collective resilience.

Digital RRF investments also generate broad-based gains across all sectors of the economy. While the

largest impacts are observed in manufacturing, ICT services, professional services, trade and construction,

the benefits extend to sectors that do not receive direct funding, through supply-chain linkages, increased

demand and productivity improvements. This confirms the role of digital technologies as a general-

purpose driver of growth, enabling efficiency gains and innovation across the entire economic system.

These estimates capture the effects of digital investments only. Accompanying digital reforms, including

in administrative simplification, network deployment and labour market modernisation, are not modelled,

although they are likely to strengthen the effectiveness and long-term impact of RRF digital investments.

The figures should therefore be understood as estimates of the investment channel rather than of the full

macroeconomic impact of the digital dimensions of the RRF.

The evidence points to four conditions for maximising the impact of digital investment. First, prioritising

high-impact areas such as digital skills, advanced digital infrastructures and the digitalisation of public

services is essential to unlock productivity gains. Second, investments in infrastructure must be

accompanied by measures supporting adoption and diffusion, in particular among businesses and public

administrations, so that technological capacity translates into economic value. Third, coordinated

planning and implementation across Member States enhances spillover effects and strengthens the

overall impact of investment at EU level. Finally, effective governance and timely implementation of

funding programmes, building on the experience of the RRF’s performance-based framework, are critical

to delivering results.

Importantly, a substantial proportion of the economic benefits generated by digital investments under

the RRF accrues to non-EU economies, reflecting both the EU’s openness and its continued dependencies

and integration in key segments of global digital value chains. Estimates indicate that around EUR 83

billion of the total impact leaks outside the EU, with China capturing approximately 27% and the United

States around 16% of these spillovers. This reflects the EU’s reliance on external suppliers for critical

components and services, including semiconductors, cloud infrastructure and advanced ICT equipment.

While openness remains a strength of the EU economy, these patterns underline the need to better align

the demand generated by public investment with the development of domestic industrial and

technological capacities. Strengthening this articulation is essential to ensure that a greater proportion

of public funding translates into value creation within the EU, thereby improving Europe’s technological

sovereignty, competitiveness and resilience.

27

4.2. Scaling up reforms and investments to accelerate delivery

At the midpoint of its Digital Decade, this report - together with a growing body of recent analysis from

the EIB, CEPR, and independent research institutions48 - confirms that the EU’s digital objectives will not

be achieved without a transformative shift in its investment landscape. The scale of the challenge is

well-documented and the figures referenced below draw on a range of recent estimates produced by

different institutions, with varying scopes, methodologies and time horizons. While they are not directly

additive or fully comparable, they point in the same direction: meeting the EU’s digital objectives will

require significantly more investment, stronger coordination and improved mobilisation of both public

and private capital.

The Draghi report estimated the additional annual investment needed for digital technologies at around

EUR 150 billion. More recent assessments, based on a wider set of assumptions-including geopolitical

developments and defence spending, suggest that overall EU strategic investment needs could be

substantially higher, potentially approaching EUR 1 200 billion annually through 2031. 49 The size of

investment required to achieve EU’s ambitions in areas critical to EU technological sovereignty points to

a clear need for public and private capital to be mobilised to unprecedented levels.The strengthening

the EU’s semiconductor ecosystems alone will require EUR 120 billion. Expanding data centre capacity

will require around EUR 200 billion by 2036, plus another EUR 100 billion for the full realisation of the

Cloud and AI leadership initiatives, as well as the deployment of AI Factories and Gigafactories. Finally, for

all measures under the open-source strategy, an estimated EUR 2 billion will need to be mobilised over

the next 7 years. For energy, the annual investment gap is estimated at EUR 400 billion.50 The 2026 Annual

Single Market and Competitiveness Report confirms that the EU’s labour productivity gap relative to the

United States remains 20%, driven primarily by gaps in the production and adoption of digital technologies,

and estimates that achieving the EU’s digitalisation targets would unlock economic gains equivalent to

1.8% of GDP51. According to estimates by the EPRS, advancing high-tech digital innovation alone across

Europe will require between EUR 212 and EUR 380 billion annually, more than triple the EU’s current

yearly total investment in digital technologies and infrastructure52.

The digital transition is a core element of the Commission’s investment strategy to boost

competitiveness. Between 2021 and 2025, EUR 229 billion of the overall EU budget (including

NextGenerationEU) was dedicated to the digital transition, representing almost 14.5% of the total EU

48 See: European Investment Bank, Investment Report 2025/2026: Capitalising on Europe’s Strengths, March 2026; EIB Investment Survey 2025, October 2025; Buti, M. et al., ‘How large is the investment gap in the EU and how to close it?’, CEPR Policy Insight No. 141, 2025; Zettelmeyer, J., ‘Draghi on a shoestring: the European Commission’s Competitiveness Compass’, Bruegel Analysis, March 2026; European Parliamentary Research Service, Cost of Non-Europe in High-Tech Digital Innovation, July 2024; Draghi, M., The Future of European Competitiveness, 2024. For the private investment gap, see McKinsey Global Institute / WEF, Transforming Europe: Bold Moves to Lift a Continent, January 2026. 49 Buti, M. et al., ‘Time to be strategic: how public money could power Europe’s green, digital and defence transitions’, CEPR VoxEU, July 2025. 50 COM(2026) 503

51 European Commission, Annual Single Market and Competitiveness Report 2026, COM(2026) 46 final.

52 European Parliamentary Research Service, Cost of Non-Europe in High-Tech Digital Innovation: Investment Needs and Economic Benefits, July 2024, pp. 56-57 and 60-61. This remains the most recent EPRS estimate; an updated analysis is expected in the context of the MFF 2028-2034 debate.

28

budget for that period 53 . A significant share of the public spending comes from the Recovery and

Resilience Facility, which dedicates EUR 133.1 billion to digital measures as of April 2026. Of this,

EUR 120.4 billion is estimated to contribute directly to achieving Digital Decade targets54.

The most acute near-term risk is the emergence of a significant investment shortfall. It is expected that

nearly half of the public budget of the measures included in national roadmaps will be phased out by

2026, with 58% by 2027. This potential gap of one to two years between the expiry of RRF-funded

measures and the operational deployment of ECF and NRPPs instruments could substantially reduce

investment momentum in key digital priorities. The loss of predictable investment signals in ecosystem

building and strategic technology development would carry significant costs for Europe's competitiveness

and technological leadership. Building on this report, the Commission will help identify the areas most

exposed to such investment gaps and seek to develop a bridging framework thereby enabling Member

States to maintain implementation momentum.

Mobilising private investment at scale is a central priority. Closing the investment gap will require

stronger synergies between public and private resources, co-investment models and innovative financial

instruments, building on successful examples such as EU leadership in high-performance computing (HPC)

and the rapid scale-up enabled by AI Gigafactories. The scale of the private financing gap is stark: the EU

accounts for only 5% of global venture capital fundraising in innovation, compared to 52% for the United

States and 40% for China55. European AI start-ups raised approximately EUR 11 billion in venture capital

in 2024, one-sixth of what their US counterparts raised56. For cybersecurity alone, EU venture capital

totalled EUR 814 million compared to EUR 15 billion in the United States57. Closing this gap requires the

deepening of the Savings and Investments Union, the simplification of Initial Public Offering (IPO)

pathways, and the deployment of risk-sharing instruments58, particularly for deep-tech investment where

traditional bank financing remains structurally insufficient and ensuring that both private and public

operators can internalise digital sovereignty as a measurable risk dimension.

However, relying solely on market forces will not be sufficient: all major economies are deploying large-

scale public funding, including sovereign investment and equity participation in strategic sectors. Japan’s

support for semiconductor initiatives in its first development phase illustrates the scale and strategic

nature of such interventions59. Europe must respond with a funding strategy that is similarly targeted and

53 European Commission, Digital Tracking, accessed 2026. 54 Torrecillas, J. (2026). RRF April 2026 Update. JRC146664, European Commission. 55 European Commission, Competitiveness Compass for the EU, COM(2025) 30 final, 29 January 2025. 56 Dealroom.co, Opening moves in global AI - AI, startups & venture capital, AI Action Summit, Paris, February 2025. 57 2025 SDD report cites: European Commission, European industrial technology roadmap for the next generation cloud-edge offering, 2021 (used for 2024 comparative data). For a more current source, see EIB Investment Report 2024/2025: Innovation, integration and simplification in Europe, 2025, which documents structural cybersecurity financing gaps in comparable terms. Recommend verification before publication. 58European Commission, Savings and Investments Union: A Strategy to Foster Citizens' Wealth and Economic Competitiveness in the EU, COM(2025) 124 final, March 2025. 59 Center for strategic and international studies: Japan Seeks to Revitalize Its Semiconductor Industry, 2023. Also Foreign Policy, Japan Wants Semiconductor ManufacturingBack Home to Frustrate China, 9 January 2023.

29

sufficiently large to be efficient, focused on addressing market failures, crowding in private investment

and fostering cooperation with SMEs and start-ups, while preserving sustainable public debt levels

Strategic public procurement constitutes one of the most direct and under-exploited demand

instruments available to Member States. The forthcoming revision of the Public Procurement Directives,

combined with GovTech approaches60 and the proposed Cloud and AI Development Act61, will provide

the regulatory basis for public administrations to systematically integrate security of supply, strategic

dependency and resilience considerations into the procurement of critical digital solutions, notably for

cloud infrastructure, AI systems and cybersecurity.

The next MFF (2028-2034) provides a critical opportunity to support reforms and investment in digital

policy and accelerate delivery. Structural reforms were already a central and legally required component

of the Recovery and Resilience Plan (RPP) framework62.The RRF demonstrated the value of combining

investment with reform: of approximately 2 500 digital milestones and targets in recovery plans, around

24% qualify as structural reforms63, covering network deployment, cybersecurity frameworks, labour

market modernisation, capacity building investments and the once-only principle.National and Regional

Partnership Plans will help the EU achieve its policy objectives more efficiently by linking EU funding to

reforms, thereby enhancing the EU’s leverage to encourage and assist Member States in overcoming

institutional and regulatory obstacles that hinder the fulfilment of EU policy priorities. Reforms can also

help to increase the positive impact of investments, hence increasing the value of each euro spent. Such

Plans will support the digital transformation towards the Digital Decade targets and objectives set out in

the Digital Decade Policy Programme 2030. The ECF will also play a central role in supporting the digital

transformation of the Union.

As proposed by the Commission, the link between the DDPP and the investment architecture of the

next MFF could not only be strategic but also operational. Through its monitoring and gap analysis, the

DDPP can help identify, - in complementarity to the European Semester and other relevant policy analyses,

such as the post-2027 Common Agricultural Policy recommendations and National Energy and Climate

Plans - investment and reform priorities that should be reflected in both EU-level instruments and national

plans.

Figure 6: EU-relevant budget for the Digital Decade targets (2021-2027 MFF, incl. RRF 2020-26, EUR million, cut-off date April 2026 for RRF and March 2025 for all the other instruments) 64

60 The forthcoming revision of the Public Procurement Directives is listed in the Commission’s work programme for 2025-2026. GovTech refers to public sector engagement with start-ups and SMEs to procure innovative solutions (as defined in the 2025 SDD Communication, footnote 27). 61 Cloud and AI Development Act (CADA): Commission proposal to triple EU data centre capacity within 5-7 years, ensuring EU-based, sovereign cloud capacity for critical public sector applications. 62 Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility, Article 18(4), requiring recovery and resilience plans to contribute to addressing challenges identified in country-specific recommendations. 63 Recovery and Resilience Facility Scoreboard; see also 2025 SDD Communication, section on public and private investment levels. 64 The figures include 5 main funding instruments: Recovery and Resilience Facility, Cohesion Policy, Horizon Europe, Digital Europe Programme and Connecting Europe Facility-Digital. Torrecillas, J. (2026). RRF April 2026 Update. JRC146664, European Commission. See also Torrecillas, J. and Nepelski, D., Update of Mapping of EU funds to Digital Decade targets 2021-2027, Publications Office of the European Union, Luxembourg, 2025, https://data.europa.eu/doi/10.2760/4123945, JRC141966.

30

The analysis across Digital Decade KPIs and objectives can help inform the targeting of investment, by identifying areas of structural underperformance where EU-level action offers the greatest added value. Moreover, the Digital Decade recommendations will provide Member States with an evidence-based basis for shaping national programming for digital issues - fostering complementarities and synergies between EU and national level efforts. The Digital Decade tools will also contribute to inform the work of the Competitiveness Coordination Tool (CCT), through which the EU, Member States and industry are already joining forces to strengthen strategic EU-wide value chains within common competitiveness priorities. This new way of working, which is currently being used to deploy AI Gigafactories, should maximise impact through coordinated investments and reforms.

National roadmaps are the key instrument for translating these priorities into concrete commitments.

They set out how Member States plan to deliver on Digital Decade targets, ensure continuity of

investment beyond the Recovery and Resilience Facility, and contribute to both national and EU-level

priorities. Following the DDPP rules, Member States are required to update their national roadmaps by

December 2026, explicitly linking adjusted and planned measures to Member State-specific

recommendations. Member States will also be encouraged to indicate whether, and to what extent, the

planned measures are aligned with ECF priorities and could potentially benefit from the future NRPPs to

facilitate and prepare the ground for the future MFF. These updates should take due account of the

recommendations set out in Annex 2 and contribute to a more coherent, sustained and impactful

implementation across the EU.

4.3. The local and regional dimension: a governance gap to close Cities and regions are central to the delivery of the Digital Decade, as they deploy infrastructure, provide

digital public services and translate EU policies into tangible outcomes for people in the EU. However,

the current governance framework does not fully reflect this role. Local and regional authorities are not

systematically involved in national roadmap design/update processes and territorial data remains

insufficiently integrated into monitoring. Meanwhile, limited administrative and digital capacity at local

level continues to be a key implementation constraint.

This gap has direct implications for delivery. Evidence from the Commission’s November 2025 workshop

on the role of cities and regions, as well as from initiatives such as the LORDIMAS framework and national

mapping processes involving thousands of municipalities, indicates that the main barriers to local digital

transformation lie in governance arrangements and funding structures, rather than in political

31

commitment or innovation potential. At the same time, initiatives such as the CitiVERSE EDIC demonstrate

the benefits of structured cooperation when appropriate frameworks are in place.

Moreover, recent analytical work at subnational level confirms that digital divides are increasingly

multidimensional and cannot be fully captured by national averages. Regional disparities persist not only

in infrastructure but also in capabilities, usage and socio-economic outcomes65.

The forthcoming review of the DDPP and the proposal for the next MFF provide a key opportunity to

address these shortcomings. The Commission will work to strengthen the role of local and regional

authorities in governance processes, improve the integration of territorial data into monitoring, and

ensure that EU and national funding instruments adequately support local and regional digital capacity.

5. Conclusion and next steps

The 2026 State of the Digital Decade report marks a turning point in the EU’s digital governance

framework, as the analytical work of previous years is now potentially matched by new, stronger

operational tools to act on it, notably in the context of the next MFF

However, acting on it effectively requires three commitments from all involved. First, a commitment to

scale: the investment levels required to close the structural gaps identified in this report are of an order

of magnitude that neither individual Member States nor EU instruments can deliver alone, and that can

only be achieved through genuine coordination and co-financing, including both private and

public funding. Second, a commitment to speed: the pace of technological change means that instruments

designed for a 2022 context must be recalibrated for a 2026 one, and the forthcoming DDPP review is the

vehicle for that recalibration. Third, a commitment to coherence: the three structural challenges

identified in this report - building strategic technologies, deploying them widely, and ensuring they work

for people - must be addressed simultaneously, not sequentially. The stakes of delivering on these

commitments are significant: an ambitious and coordinated digital policy response achieving the set

ambitions, could raise EU GDP by up to 1.8%, reflecting gains in productivity, more efficient public service

delivery, and a strengthened innovation ecosystem66. This would require significantly scaled-up EU-level

investment capacity, stronger coordination of public investment and RDI, reduced fragmentation, higher

investment efficiency and improved mobilisation of public and private funding.

Delivering on these objectives requires renewed collective commitment from Member States, EU

institutions and stakeholders at all levels. Particular attention must be paid to the risk of a severe

investment shortfall. Since about half of the public budget of the digital measures currently included in

national roadmaps is expected to be phased out by the end of 2026, and about six out of ten by the end

of 2027, Member States and the Commission must jointly act to avoid a significant public funding gap and

65 ESPON, DigiReg – Territorial Perspectives of Digital Transition in European Regions, 2024. 66 European Parliamentary Research Service (EPRS), Benefit of an EU Strategic Innovation Agenda – Cost of Non-Europe, EPRS Study PE 762.853, February 2025.

32

preserve momentum in support of EU’s digital leadership, competitiveness and technological sovereignty.

The December 2026 revision of the national roadmaps is the political window to address this issue.

The revision of the National Digital Decade Strategic Roadmaps in December 2026 provides the first

opportunity for Member States to translate the priorities set out in the SDD2026 package into concrete

national commitments and prepare a pipeline of mature projects for implementation under the next

Multiannual Financial Framework. The Commission calls therefore on all Member States to use the

December 2026 revision of their national roadmaps as the central political vehicle for closing the gaps

to their 2030 targets, ahead of the preparation of, and for synergies with, the next MFF. Each revised

roadmap should respond to recommendations of Annexes 1 and 2 with concrete measures detailing

reforms or investments, timelines, impacts, and budgets while building on existing strategies, fostering

synergies with the ECF, and integrating local and regional dimensions67. The Commission stands ready to

support Member States throughout this process, notably through the Digital Decade Board, and will

report in the 2027 State of the Digital Decade on the collective progress achieved based on the revised

national roadmaps.

The evidence gathered in this report should also inform the forthcoming review of the DDPP. This will be

a key opportunity to adapt the framework to technological developments, streamline its instruments, and

strengthen its governance, notably by strengthening the link between strategic priorities, funding

mechanisms and implementation tools.

67 In line with the Commission’s Roadmap guidance: Guidance to the Member States on the preparation of the national Digital Decade strategic roadmaps C(2023) 4025 final.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 1

ANNEX

to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

COMMITTEE AND THE COMMITTEE OF THE REGIONS

State of the Digital Decade 2026 Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

State of the Digital

Decade 2026: State of EU digital transformation in 2026 Progress and EU-level recommendations

1

3. Contents

1. Introduction ............................................................................................................................. 3

2. Reinforcing technological sovereignty, digital leadership, security and competitiveness ..... 8

2.1. Cutting-edge technological capacities ............................................................................ 8

2.1.1 Semiconductors .............................................................................................................. 9

2.1.2 Quantum ....................................................................................................................... 13

2.1.3 High-performance computing, AI Factories and AI Gigafactories ................................ 16

2.1.4 Edge nodes and computing capacity deployment ....................................................... 17

2.2. Supporting innovative companies with digital tools and resilient network ................. 24

2.2.1. Connectivity .......................................................................................................... 24

2.2.2. Digitalisation of SMEs and uptake of digital technologies by EU enterprises: AI,

Cloud and data analytics ........................................................................................................ 38

2.2.3. Open Source .......................................................................................................... 47

2.2.4. Unicorns ................................................................................................................ 49

2.3. Ensuring security for competitive growth .................................................................... 54

3. Protecting and empowering people, reducing burdens and harnessing digitalisation for

sustainability ................................................................................................................................. 58

3.1. Digital skills for smart society and competitive economy ............................................ 58

3.1.1. Basic digital skills ................................................................................................... 59

3.1.2. ICT Specialists ........................................................................................................ 62

3.1.3. Protecting people, in particular minors, in the online space ............................... 65

3.2. Efficient public services and administrative burden reduction .................................... 68

3.2.1. European Digital Identity and business wallets .................................................... 69

3.2.2. Digital Public Services for Citizens and businesses ............................................... 70

3.2.3. e-Health ................................................................................................................. 74

3.3. Digital for decarbonisation and sustainable technologies ........................................... 78

2

3.3.1. Sustainable digitalisation for competitiveness, resilience and net positive impacts

78

3.3.2. Rising environmental concerns: electricity, water and material demand for digital

transition 79

3.3.3. EU actions to unlock the twin green digital transition ......................................... 80

3.3.4. Member State actions towards the twin green and digital transition ................. 82

3.3.5. Reforms and investments needed to accelerate the green and digital transition82

4. Funding the Digital Decade.................................................................................................... 84

5. International .......................................................................................................................... 89

3

1. Introduction

This Annex forms an integral part of the State of the Digital Decade 2026 report. It covers in particular

technological sovereignty, security and competitiveness; the protection and empowerment of people; the

role of digitalisation in the green transition; and a strengthened horizontal dimension on coherence,

efficiency and simplification across policies and instruments. It also includes horizontal recommendations.

Recommendations issued under the Digital Decade policy programme may address all dimensions of the

Programme: not only the Digital Decade targets, but also the general objectives set out in Article 3 (e.g.

sovereignty, resilience, competitiveness, security, fighting digital divides) taking into account the digital

principles and rights of the European Declaration. Each recommendation is intended to be operationalised

by Member States through the updated National Roadmaps to be submitted by December 2026, in

accordance with the coherence framework set out in Section 4 of the Communication.

Member State-specific recommendations complement these horizontal recommendations and are

included in Annex 2. The identification of recommendations takes into account the Member States’

performance for these areas (as measured by KPIs or other evidence for areas without KPI) plus a

comprehensive policy assessment of the measures taken and/or planned by the Member States for that

specific areas informed notably by dedicated bilateral exchanges with administrations, civil society and

national regulators taking into account structural factors specific to each Member State, the follow-up to

the recommendations issued in 2025 and the measures set out in National Roadmaps with the Programme.

The key objective of the recommendations is to enable collective progress and achievement of DD

objectives, requiring two complementary and mutually reinforcing approaches: they address gaps where

progress is insufficient, and they leverage strengths identified in a Member State - in line with the

cooperative approach of the Programme. Reinforcing and scaling up national strengths can support the

European Union as a whole to reach the common Digital Decade targets and objectives (for instance,

leadership in technologies which are critical for EU’s sovereignty, e.g. AI, semiconductors or quantum).

The Member State-specific recommendations focus on a limited number of structural priorities - about

five per Member States, are designed to be actionable and future-oriented, and are prioritised on a scale

according to expected impact and relevance in the MS context. This targeted approach ensures that

recommendations concentrate on the areas with the greatest potential impact on the basis of its expected

contribution to the collective achievement of the Union's Digital Decade objectives and targets.

The recommendations of the State of the Digital Decade report operate alongside the digital dimension

of the Country-Specific Recommendations adopted under the European Semester and other relevant

documents, such as the CAP recommendations. These instruments are complementary. On the one hand,

the Digital Decade recommendations aim at achieving the EU-level targets and objectives for the digital

transformation of the EU On the other hand, the European Semester can identify digital-specific

shortcomings with macro-economic, employment or social impact and address recommendations about

digital reforms and investment needs in these areas. These elements are also mirrored in the Digital

Decade analysis and recommendations, where applicable with additional elements. The Digital decade is

also focusing on advanced digital infrastructures deployment linked to EU’s industrial policy and capacities

4

(e.g. semiconductors, quantum) and cybersecurity. The two tracks have been prepared in close

coordination to ensure consistency and complementarity.

The 2026 horizontal recommendations also build on the assessment of the implementation of the 2025

EU-level recommendations, carried out under Article 6 of the Digital Decade Policy Programme Decision1

and presented in the accompanying Staff Working Document. Recommendations assessed as showing

limited progress in 2025 are carried over in updated form, while areas showing notable or significant

progress give rise to recommendations focused on consolidation, scaling and uptake.

The analysis provides a comprehensive overview of the state of play, identifying key areas of progress and

acceleration, as well as persistent gaps, structural weaknesses, and emerging risks. It highlights the

Union’s strengths to build on and pinpoints the main bottlenecks requiring reinforced reforms and public

and private investment. It also includes updates on the comprehensive monitoring of the Declaration of

digital rights and principles undertaken in 2025. The assessment primarily relies on monitoring through

the Digital Economy and Society Index (DESI), complemented by relevant studies, expert analysis and the

National Digital Decade Strategic Roadmaps submitted by Member States, with a view to informing

targeted policy action, improved coordination and stronger collective delivery.

In parallel to investment and capacity-building efforts, the Union has continued to strengthen the

regulatory framework underpinning the digital economy, with a view to ensuring fair and contestable

markets. In particular, the Digital Markets Act addresses structural imbalances in platform ecosystems by

limiting the ability of large digital gatekeepers to act as bottlenecks and by ensuring that digital businesses

have opportunities to grow and innovate and together with users can benefit from greater choice,

interoperability and access to digital services across the Single Market.

According to the Digital Decade Eurobarometer 2026, three out of four Europeans believe that the

digitalisation of public and private services is making their lives easier. Digital health technologies and

green digital technologies (e.g. energy-saving tech) are selected by at least half of the respondents when

asked which technologies are likely to have a positive impact over the next ten years.

1 European Parliament and Council of the European Union, Decision (EU) 2022/2481 of 14 December 2022 Establishing the 2030

Policy Programme "Path to the Digital Decade", OJ L 323, 19 December 2022.

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Box: Approach to the 2026 Recommendations

The following sets out the methodology used to identify Member State-specific and EU-level

recommended policies, measures and actions under the Digital Decade Policy Programme.

I. Legal basis

The recommendations set out in the 2026 State of the Digital Decade Report are based on the provisions

of Decision (EU) 2022/2481 of the European Parliament and of the Council establishing the Digital

Decade Policy Programme 2030. The relevant provisions are the following:

Article 3 sets out the general objectives of the Programme, covering, in particular, collective resilience,

bridging the digital divide, fostering digital sovereignty, the deployment and the use of digital

capabilities, the digital empowerment of citizens, cybersecurity, and a sustainable digital

transformation.

Article 4 sets out the digital targets to be achieved collectively by Member States by 2030, covering

digital skills, digital infrastructure, the digitalisation of businesses, and the digitalisation of public

services.

Article 5 requires the Commission to monitor progress towards the general objectives and the digital

targets based on Member States’ Key Performance Indicators (KPIs), also compared to Union-level

projected trajectories, for each of the digital targets established in close cooperation with Member

States.

Article 6 requires the Commission to assess, in its annual Report on the State of the Digital Decade, the

progress of the Union’s digital transformation against both the general objectives and the digital targets,

and to identify significant gaps and shortages and recommend policies, measures or actions to be taken

by Member States in areas where progress was insufficient to achieve the general objectives and digital

targets.

Article 7 establishes the national Digital Decade strategic roadmaps as the main implementation

mechanism through which Member States respond to the recommendations and set out the measures

they intend to take to address identified gaps, also taking into consideration the latest country-specific

recommendations issued in the context of the European Semester.

II. Scope and main factors informing recommendations

Recommendations may address digital targets set out in Article 4 and general objectives set out in

Article 3, taking into account the digital principles and rights enshrined in the European Declaration on

Digital Rights and Principles.

The identification of recommended policies, measures and actions draws on multiple factors: the performance of each Member State as measured by the relevant KPIs or, where no KPI data is available on Member State level, by other available evidence; a comprehensive policy assessment of the measures taken and planned by the Member State in the relevant area in their national Digital Decade

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strategic roadmap and beyond; structural factors specific to each Member State; the follow-up to recommendations issued in 2025.

Recommendations can address both gaps where progress is insufficient and suggest leveraging existing

strengths at Member State level. In line with the cooperative approach of the Programme, reinforcing

and scaling up national strengths can support the Union as a whole in reaching the common Digital

Decade targets - for instance, leadership in technologies critical for EU digital sovereignty such as

artificial intelligence, semiconductors or quantum communications.

Member State-specific recommendations are complemented by the EU-level recommendations set out in Annex 1, which adopt a Union-wide perspective and are addressed to all Member States, as applicable.

III. Prioritisation logic for Member State-specific recommendations

In the 2026 State of the Digital Decade Report, Member State-specific recommendations concentrate on a limited set of structural priorities with the greatest potential to accelerate progress towards the Union’s Digital Decade objectives and targets. The recommendations are actionable, forward-looking and presented in an indicative order of priority based on their expected impact and relevance, taking into account the specific national context (see heat map below). This prioritisation is intended to help focus efforts on those areas where reforms, investments and policy measures may have the most significant contribution to Europe’s digital transformation.

IV. Reflection of these elements across the 2026 State of the Digital Decade report package

Member State-specific and EU-level recommendations are reflected across 2026 State of the Digital

Decade report package as follows:

The Communication presents the Union-wide assessment of the digital transformation: it measures

collective progress against the Article 4 digital targets and the Article 3 general objectives, analyses the

key performance indicators against their 2030 trajectories, and sets out the additional measures and

investment priorities to be pursued at Union level.

Communication Annex 1 develops this Union-level analysis in detail, presenting the state of play for

each target and general objective, together with the EU-level recommendations addressed to all

Member States, as applicable.

The country reports (short country reports, including recommendations, are grouped together as

Communication Annex 2) translate the assessment to national level. Per Member State, for each

thematic area, they are based on an assessment as described under II (see above), including the

assessment of 2025 Member-State recommendation progress, which may result in 2026 Member State-

specific recommendations.

The Staff Working Document on the monitoring of the 2025 EU-level recommendations reviews the

progress made by the Commission and the Member States in implementing the 2025 recommendations

grounded in actionable measures such as legislative initiatives, dedicated funding, the adoption of

strategies and the implementation of joint projects.

7

The Staff Working Document on the monitoring of the 2025 EU-level recommendations and the 27

Country reports specifically discharges the Article 6 requirement to report on progress regarding

previously recommended policies, measures and actions.

Heatmap of the Member State-specific Digital Decade recommendations and complementarity to

European Semester Country-specific recommendations

This heatmap provides an overview of the 2026 Member State-specific Digital Decade recommendations and their relative prioritisation over different policy areas, with regard to their contribution to achieving DD objectives and targets. Cells outlined in black indicate a corresponding country-specific recommendation issued under the 2026 European Semester Spring Package, illustrating the complementarity between the European Semester and the Digital Decade agenda. Please note that the heatmap is structured according to the Digital Decade targets and general objectives only. As a result, the display of European Semester country-specific recommendations should be regarded as illustrative and intended to provide a broad indication of areas of alignment.

8

2. Reinforcing technological sovereignty, digital leadership, security

and competitiveness

The EU’s ability to develop, deploy, and maintain control over critical digital technologies is increasingly

proving fundamental to its long-term competitiveness, technological sovereignty, and strategic resilience.

These dimensions are closely interlinked: sustained productivity gains from digital technologies,

particularly AI, can only be secured if Europe reduces its strategic dependencies and strengthens the

security of its digital ecosystem. In several critical areas, including cloud computing, advanced computing,

semiconductors, and high-performance connectivity, the limited availability of competitive European

alternatives continues to constrain substitutability.

This increases risks related both to security of supply and to the jurisdiction applicable to data and services

when providers or controllers are not established in the EU. Such dependencies weaken the Union’s

capacity to regulate and enforce its rules effectively, while exposing key infrastructures and services to

external vulnerabilities.

Addressing these risks requires sustained investment in critical technologies, a systematic reduction of

strategic dependencies, clear solutions to jurisdiction and enforcement issues for data and services

controlled from outside the Union, and robust cybersecurity across the digital value chain - from hardware

and infrastructure to applications and services as well as reinforcing international cooperation as

appropriate (e.g. to ensure access to markets, secure alternative supply lines, etc). The deployment of

critical technologies must be matched by their effective uptake and diffusion across the economy and

society, in particular among SMEs, which remain central to unlocking productivity gains and ensuring

broad-based benefits from digitalisation. For SMEs and startups to take up opportunities and innovate,

rigorous enforcement of the Digital Markets Act is needed to tackle structural imbalances in digital

markets, where a limited number of large platforms controls SMEs’ access to end users.

While progress has been made in certain areas, the EU continues to underperform globally in several

strategic domains. International competitors are consolidating their own sovereignty and leadership

through scale, investment and integrated market dynamics, with global leadership in critical technologies

increasingly concentrated in the US and China2. Bridging these gaps will require reinforced coordination

between the Union and the Member States, together with better alignment of reforms, investments and

governance frameworks.

2.1. Cutting-edge technological capacities

Europe’s ability to compete globally rests on its command of the foundational technologies that underpin

modern computing: semiconductors, quantum systems, and edge and computing infrastructures. These

2 Australian Strategic Policy Institute (ASPI), Critical Technology Tracker, December 2025.

9

domains are deeply interlinked: advanced semiconductors drive HPC, quantum and edge systems, edge

nodes bring computing capacity closer to where data is generated, and quantum technologies promise to

redefine computational limits.

Progress across these three areas remains uneven. The EU’s share of global semiconductor revenues

stands at 8.8%, well below the 20% target set for 2030 in the Digital Decade Decision. Quantum has met

its Digital Decade milestone, but deployment is held back by fragmentation and by the scale of investment

needed to move beyond NISQ systems3. Meanwhile, while edge node deployment is on track to meet the

2030 Digital Decade target ahead of schedule, overall computing capacity still lags significantly behind

demand and remains well below US levels.

The stakes attached to these KPIs are both economic and strategic: gaps in these areas translate into

critical dependencies on non-EU providers, higher costs for businesses and public services, and a

diminished capacity to develop and deploy the next generation of digital technologies on European terms.

A defining trend of 2025-2026 has also been the accelerated integration of digital technologies into

European defence capabilities. Digital technologies are no longer peripheral to defence: they increasingly

act as core force multipliers, reshaping how capabilities are developed, deployed and integrated across

domains. Artificial intelligence, advanced connectivity including in space, cloud computing, cybersecurity

tools and autonomous systems, originally developed for civilian applications, are now being systematically

adapted for defence purposes, strengthening command and control, situational awareness and electronic

warfare. This structural shift from civilian to military innovation, often described as "spin-in", has emerged

as a key driver of capability development, and is likely to deepen further as operational lessons from

recent conflicts continue to inform technology adaptation and procurement priorities across Member

States.

2.1.1 Semiconductors

The global semiconductor race has intensified further over the past year. Chips are at the centre of

competitiveness, security and resilience strategies worldwide, as they underpin artificial intelligence,

cloud and edge computing, future communications networks, software-defined vehicles, industrial

automation, medical devices, defence systems and the wider digital and green transitions. The economic

and strategic relevance of semiconductors therefore continues to grow, and with it the pressure on

governments to secure access to critical technologies and strengthen trusted supply chains. These

dynamics are reshaping the semiconductor market with AI emerging as a pervasive end application. AI-

related components are expected to drive growth and account for more than 70% of the total

semiconductor market by 2030. Over the past two years, market growth has been driven by chips for AI

data centres, notably processors and memory, while most other segments have remained stagnant.

3 Noisy Intermediate-Scale Quantum (NISQ) refers to current, near-term quantum computers with 50–1000+ qubits, which are

powerful but lack full error correction.

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The European Union occupies a distinctive position in the global semiconductor ecosystem. Its role is not

primarily defined by scale in the most volume-driven segments of leading-edge logic and memory

manufacturing, but rather by strong capabilities in strategic parts of the value chain, including equipment,

materials, research and technology infrastructures, specialty manufacturing, and semiconductor devices

for automotive, industrial, power, sensing and secure applications. This profile reflects the structure of EU

industry. The EU hosts leading integrated device manufacturers and specialty foundries, globally relevant

equipment and materials suppliers, and major research organisations. As a result, it plays an enabling role

well beyond its own regional demand, especially in applications where reliability, energy efficiency, safety,

long product lifecycles and system integration are more important than pure scaling at the smallest

geometry.

Against this background, EU semiconductor value-chain revenues have increased almost steadily, from

EUR 53 billion in 2019 to an estimated EUR 93 billion in 2025, as shown in the figure below which displays

the EU's semiconductor value chain market in absolute values and the EU's share from 2019 to 2030. This

growth is expected to continue, almost linearly, to EUR 143 billion in 2030.

In 2025 the EU's share of global value chain revenues is estimated at 8.8%, still far from the 20% target to

be reached by 2030. This share is projected to remain relatively stable in the coming years, in a context of

sustained large-scale investments in other regions of continued expansion in the global market which is

now projected to exceed EUR 1.6 trillion in 2030. The EU market continues to grow in absolute terms.

Although the EU share values are not increasing, the value of the EU27 semiconductor market has

increased by 9.4% since 2024, compared with 8.0% growth in global market revenues (Figure1). EU

semiconductor value-chain revenues have also increased by 4.5%, from 89 in 2023 to 93 billion euro in

2025.

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Figure 1: EU semiconductors value chain revenues (on the left axis in billion EUR) and global market share (on the right axis in %).

The EU market shares are shown in the black labels (Data source: International Data Corporation)4.

In their National Roadmaps, in 2025 Member States committed to investing EUR 50.2 billion in

semiconductors, accounting for 17% of the roadmaps’ total budget across all targets. Private sources are

expected to contribute EUR 8.6 billion to this investment. The 53 measures reported in the roadmaps

mainly focus on supporting R&D and on boosting production capacity and industrial deployment of

semiconductors. Roughly one-third of the measures are dedicated to each of these areas, pointing to a

balanced approach to growth and innovation. These areas also remain a priority in the Member States’

roadmap adjustments.

The European Chips Act 5 has established a framework to attract investments from semiconductor

manufacturers into first-of-a-kind EU facilities. Since the launch of the initiative, already 13 projects have

been announced representing more than EUR 32 billion in investments, with other promising projects

upcoming. The Important Project of Common European Interest on Microelectronics and Communication

Technologies (IPCEI ME-CT) is now fully operational. It brings together 14 Member States and 47

companies, channelling around EUR 20 billion from both private and public sources into 57 collaborative

projects across several countries, out of the 68 projects initially envisaged (due to some withdrawals or

early conclusion). In parallel, the proposed new IPCEI on Advanced Semiconductor Technologies (IPCEI

AST) is expected to enter the notification phase shortly.

The Chips Act, through the Chips for Europe Initiative, has also launched a set of initiatives aimed at

building technological capacity and accelerating the transfer of innovation from research to industrial

4 Updated foreign exchange calculations can retroactively change historical data. While base market figures remain the same,

their currency conversion and normalisation are adjusted every year. 5 Regulation (EU) 2023/1781 of the European Parliament and of the Council of 13 September 2023 establishing a framework of

measures for strengthening Europe’s semiconductor ecosystem and amending Regulation (EU) 2021/694 (Chips Act)

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deployment. State-of-the-art pilot lines, supported by a total of EUR 3.7 billion funding, offer shared,

industrial-scale environments where new technologies can be tested, validated and prepared for

production in key areas such as beyond 2nm leading-edge system-on-chip, fully depleted silicon-on-

insulator applications, advanced packaging, wide-bandgap materials, and photonic integrated circuits.

The design platform focuses on reinforcing the EU’s capabilities in chip design, enabling companies

(particularly SMEs and start-ups) to develop more complex and system-level products. Competence

centres serve as entry points to expertise, training and technology support, anchoring knowledge in

regional ecosystems, and facilitating access to infrastructure and skills across Member States.

Competence centres may also support regions within each Member State in developing long-term

strategy to host, attract and expand semiconductor-related investments to the benefit of the local

ecosystems. Quantum chip pilots prepare Europe for emerging computing and sensing technologies by

creating pathways from frontier research to manufacturable components, while the Chips Fund

complements these infrastructures by improving access to risk finance and scale-up capital.

For the European Union to compete globally in the semiconductor sector, it is essential that each Member

State develops national semiconductor strategy providing strategic objectives, priorities and relevant

roadmaps, to substantially increase investments and to continue commitment to the leading value chain

areas, including semiconductor equipment, chips design, analogue components, sensors, photonics, while

also securing a strong entry into emerging markets such as computing and AI-oriented silicon. With this

aim in mind, the Commission has started the formal review of the Chips Act, targeting the Chips Act 2.0

announcement in Q2 2026 with a clear support from industry, and Member States.

Public funding must also strike the right balance between predictability and flexibility, while crowding in

the much-needed private investment and avoiding distortions of competition in the internal market. A

stable and predictable trajectory is essential for budget planning, but the pace of technological

development also requires the capacity to respond swiftly to emerging priorities. In this respect, Joint

Undertakings (JUs) are comparatively well equipped, as their procedures allow work programmes to adapt

more rapidly when new needs arise. By pooling public and private resources at scale, JUs have played a

pivotal role in aligning strategic agendas, and fostering robust ecosystems around key EU policy priorities,

thereby strengthening Europe’s competitiveness and technological sovereignty. However, Member States’

financial planning has not always been sufficiently flexible to accommodate emerging needs and changing

priorities. In addition, due to the complexity of rules applicable to the blending of funding, Member States’

departments responsible for R&I funding in JUs must ensure close coordination with state aid experts, a

process that can lengthen administrative timelines before final decision making.

Recommendation:

Member States should accelerate the development of the EU semiconductor value chain, in line with

the Chips Act and in view of the forthcoming Chips Act 2.0, by:

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(i) developing semiconductor strategies and inserting relevant policy measures in their National

Roadmaps reflecting their contributions towards the objectives and provisions of the proposed

Chips Act 2.0;

(ii) stimulating their national fabless ecosystem by promoting start-ups and scale-ups and investing

in design centres;

(iii) strengthening the ability of companies in their territory to develop, integrate, and use

semiconductor technologies, by promoting competence centres and skills development;

(iv) identifying and supporting European regions that demonstrate a credible long-term strategy to

host, attract and expand semiconductor-related investments;

(v) streamline permitting procedures and reduce time for granting permits for semiconductor

facilities; and

(vi) mobilize national and regional investment to support relevant semiconductor initiatives.

Member States participating in the Chips Joint Undertaking should:

(i) ensure predictable and rapid national co-funding for projects under the Chips Joint

Undertaking, including pre-allocation of dedicated national budgets, automatic match-funding

mechanisms for selected proposals, and simplified national approval procedures;

(ii) anticipate national budget planning to accommodate multi-annual work programmes and

several call launch dates within a single calendar year;

(iii) reinforce State aid expertise in national administrations responsible for R&I funding, in

coordination with national representatives in the Chips Joint Undertaking.

2.1.2 Quantum

The starting value for this KPI was 0 in 2022 and it reached and surpassed the target in 2024 as the first two

quantum simulators were deployed in France and Germany, see trajectory (Figure 2). Additional quantum

computers are expected to be deployed before the end of the decade, as several procurements are

currently ongoing. Given the specific nature of this target, no baseline trajectory has been established.

In their National Roadmaps, Member States reported investing EUR 4.1 billion in quantum computing (1.4%

of the total budget of the National Roadmaps), of which EUR 358 million comes from private sources. The

62 measures reported mainly focus on supporting R&D and the deployment of quantum technologies, with

roughly one third of the measures dedicated to each area. In their adjustments, Member States primarily

focused on R&D for quantum technologies.

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Figure 2: Number of quantum computers in the EU. Trajectory towards 2030.

The target for the Quantum KPI has been reached and the KPI has currently a value of 6, expecting to

reach 10 by the end of the decade.

The main challenge for the EU in this area remains fragmentation. Globally, in 2025, it is estimated that

there were more than 100 quantum computers6. Europe overall hosts around 40% of these systems

distributed across more than 20 vendors. However, all these systems are Noisy intermediate-scale

quantum (NISQ) systems with a low number of qubits (< 1000) and error rates that do not allow

computations demonstrating a clear quantum advantage.

For the EU to lead in this field, Member States need to coordinate their efforts and investments to support

the scaling up of the technology. Building a fault-tolerant quantum computer (FTQC), will require a very

substantial investment by the EU and the MSs (hundreds of millions EUR7), together with private and

venture capital. Such a computer, operating with stable logical qubits, will be capable of running

algorithms that demonstrate a quantum advantage.

6 Donovan, Quantum computers: 100+ Estimated by 2025, March 2025. 7 Bao Tran, How Expensive Is It to Run a Quantum System? (Stats Inside), April 2026.

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2022 2023 2024 2025 2026 2027 2028 2029 2030

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estimated number of quantum computers 2025 target

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Progress towards this stage will therefore depend on joint cooperation and sustained investment focused

on carefully selected technological priorities. Other countries, notably the United States have launched

such initiatives8 including ones that are also open to foreign companies. If the EU does not act in time,

there is a risk that European companies will develop and commercialise their technologies outside the

Union or be acquired by foreign competitors, with the related technology and intellectual property

subsequently developed outside the EU.

The recently published Quantum Europe Strategy9 sets out the objectives in this area while the upcoming

Quantum Act will provide the legal and budgetary framework for reaching them.

Finally, Europe also needs to increase its share of private investment in quantum technologies. While the

EU still leads in terms of the number of investments, in 2025, out of the USD 4.36 billion invested globally

in quantum technologies, companies in Europe attracted only 23% of the global amount invested (USD

1.014 billion), compared to 64% attracted by companies based in the United States10. Moreover, these

private investments in the EU represent only 10% of the total public investments (MS and the EU

combined)11.

In the domain of quantum communications, the global leader is China with rapidly expanding ground

optical quantum networks as well as multiple quantum communication satellites. The EuroQCI12 initiative

aiming at deploying a secure quantum communication infrastructure across Europe is an ambitious

European response, encompassed in the IRIS2 Secure Connectivity regulation.

Recommendation:

Member States should strengthen their investments and support in quantum technologies, in line with

the Quantum Europe Strategy and the forthcoming Quantum Act, by:

(i) aligning and coordinating national quantum strategies and Roadmaps with the EU quantum

roadmap

(ii) supporting the scale-up and deployment of critical quantum infrastructures, such as quantum

computers and simulators, quantum chip pilot lines and design facilities, EuroQCI terrestrial and

space secure communication networks, quantum internet testbeds and quantum sensing/PNT

(positioning, navigation and timing) capabilities;

(iii) strengthening the quantum ecosystem, by supporting the further development of national and

regional competence centres, promoting innovation procurement in favour of start-ups, scale-

8 DARPA, QBI: Quantum Benchmarking Initiative, March 2026. 9 European Commission, Quantum Europe Strategy, July 2025. 10 Zenodo, Quantum Technologies Investment Report 2025, March 2026. 11 JRC Publications, Future Directions for Quantum Technology in Europe, October 2025

12 European Quantum Communication Infrastructure - EuroQCI | Shaping Europe’s digital future

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ups, adopting public-sector first buyer measures, and fostering standards, benchmarking, and

trusted quantum supply chains and

(iv) developing the corresponding talent pool in quantum in coordination with the future European

Quantum Skills Academy.

2.1.3 High-performance computing, AI Factories and AI Gigafactories

Since its establishment in 2018, the EuroHPC Joint Undertaking (EuroHPC) has built one of the most

powerful infrastructures for high-performance computing (HPC) and artificial Intelligence (AI) worldwide.

Together with its participating states, the EuroHPC has acquired nine supercomputers, including three

systems-JUPITER (#4), LUMI (#9), and LEONARDO (#10)-ranked among the ten most powerful

supercomputers in the world. In September 2025, JUPITER, the first European supercomputer to reach

the exascale frontier, was inaugurated. A second exascale supercomputer (Alice Recoque) is to be

deployed within 2027. Several additional mid-range EuroHPC systems are currently being installed. These

efforts have contributed to the development of a world-leading, secure, and interconnected

supercomputing ecosystem, broadening HPC use, and strengthened the skills base for European science

and industry.

The EuroHPC Joint Undertaking is rolling out 19 AI Factories and 13 Antennas across Europe, with an

overall investment of around EUR 2.6 billion. This involves the procurement of 15 new AI-optimised

supercomputers, increasing Europe’s AI computing power fivefold. AI Factories and Antennas will

cooperate as a federated network ensuring seamless integration, efficient resource sharing, and secure

cross-border access, thereby advancing Europe’s strategic autonomy in critical digital capabilities.

A major scientific success story of 2025 was the advancement of the Destination Earth initiative, which

performed frontier high resolution climate simulations primarily using the LUMI supercomputer and its

new AI Factory capabilities.

Europe stands at a pivotal moment to convert recent progress in HPC and AI into durable leadership,

technological sovereignty, and broad-based impact. Expanding AI computing capacity within the EU

remains a top-tier strategic priority to strengthen competitiveness and technological sovereignty. Building

on the concept of AI Factories, AI Gigafactories are intended to take this a step further by integrating

massive computing power in large-scale facilities designed to develop, train, and deploy the next

generation of the most complex AI models at an unprecedented scale.

AI Gigafactories will be selected through an official Call, based on joint procurement between EuroHPC

and its participating states. These infrastructures are essential if Europe is to compete at the global level

and strengthen its strategic autonomy in science and in critical industrial sectors. Given the scale of

investment required, AI Gigafactories are expected to be implemented through public-private

partnerships.

17

A critical factor in the HPC/AI ecosystem remains the strong dependence on third-party sources, notably

for HPC and AI chips. For a sovereign ecosystem to thrive, the EU must develop indigenous building blocks

(i.e., the necessary hardware and software) to power these supercomputing infrastructures. Europe has

strong engineering talent in the field, but producing competitive European alternatives-spanning

semiconductor design, packaging, integration, and optimised software stacks-will require sustained

funding and industry partnerships well placed to bring these capabilities from prototype to volume

deployment.

Recommendation:

Member States should reinforce their HPC and AI infrastructure investments to ensure that businesses, researchers and public administrations have access to the computing resources required for serving their AI developments and services, including the specific needs of model fine-tuning and inferencing, notably by:

(i) leveraging the network of AI Factories and Antennas fostering services –including Data Labs–

which target the specific needs of their national AI developers and innovators;

(ii) supporting and promoting the development, deployment and operation of AI Gigafactories;

(iii) developing quantum-enhanced machine learning applications;

(iv) investing in EU-sourced HPC and AI hardware and software to attain strategic autonomy and

guarantee public and industrial security;

(v) developing the corresponding talent pool in HPC and AI, in coordination with the EU Digital

Skills Academies.

2.1.4 Edge nodes and computing capacity deployment

Edge computing is emerging as a critical complement to traditional cloud infrastructure. While the current

wave of artificial intelligence-particularly generative AI-relies heavily on centralised, high-performance

computing resources hosted in hyperscale cloud environments and High-Performance Computing (HPC)

centres, an increasing share of data processing is shifting closer to where data is generated. Edge nodes

enable low-latency processing, real-time analytics, and more efficient data handling by reducing the need

to transmit large volumes of data to distant cloud facilities. In this architecture, cloud and edge operate

in tandem: the cloud provides the large-scale computational power required for training and orchestrating

AI models, while edge infrastructure supports inference and time-sensitive applications at or near the end

user. Beyond incremental optimisation, there is also an evolution towards “native AI,” which requires

embedding AI directly into system design rather than layering it onto existing architectures. Although

more complex, this approach unlocks significantly greater performance gains-much like 5G standalone

delivers far higher capabilities than non-standalone 5G despite sharing the same label.

In 2025 the Edge Observatory methodology has been significantly improved based on the lessons learnt

in the previous years of the analysis. The updated methodology is based on a Computer-Assisted

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Telephone Interviewing - CATI - survey of more than 430 validated respondents across all the EU Member

States. The respondents are selected amongst IT infrastructure decision-makers surveyed in their local

language. The stratified sample is selected according to geographical distribution, type of industry

(according to Eurostat’s official classifications NACE Rev. 2), and company size. The platform

DataCentreMap13 is used to monitor public edge nodes. On-premise node figures, limited to enterprises

with 250+ employees, are derived on the basis of Eurostat’s enterprise statistics combined with site-to-

node ratios by the Germany's Federal Statistical Office, used as a proxy in the absence of equivalent EU-

wide data. A series of validation interviews with both CATI respondents and external experts are carried

out to cross-check the results, supported by multi-source triangulation and outlier disqualification to

ensure statistical robustness. For these reasons, 2025 data cannot be compared with previous years

(break-in-series)14.

Figure 3: Edge node estimated deployment (EU projection to 2030).

As of end-2025, the Edge Observatory for the Digital Decade estimates that 7 451 climate-neutral and

highly secure edge nodes15 are deployed across EU, spanning four categories: on-premise, far edge, near

edge, and in-country edge data centres. Private on-premise near edge (295 nodes), and far edge (67

nodes).

Despite representing only 6% of nodes in 2025, in-country data centres account for the large majority of

total edge capacity - potentially up to 92% of aggregate MW if nodes operate at maximum rated capacity.

13 Data Centre Map website, search tool, https://www.datacentermap.com/. 14 Edge Observatory for the Digital Decade, D3 – Edge Nodes Taxonomy and Monitoring Methodology 2024; D4 – Edge Nodes

Deployment Progress Report; D6 – Edge Nodes Deployment Progress Report. 15 A climate-neutral and highly secure edge node is a compute node designed and operated to achieve net-zero carbon impact

while ensuring both physical and cyber security for uninterrupted operation and data safety. See Edge Observatory for the

Digital Decade Edge nodes taxonomy definitions in Edge Observatory for the Digital Decade – Edge Computing for full detail.

19

On-premise nodes, by contrast, despite constituting 89% of all nodes, represent a comparatively modest

share of total capacity, given the small footprint of each individual deployment (approximately half a rack).

When sustainability and security criteria are set aside, the total on-premise edge population alone

exceeds 17,000 nodes, indicating a large share of deployments that do not yet meet climate-neutral and

security standards.

Edge node deployment across the EU27 remains heavily concentrated in larger, high-GDP economies, with

Germany leading both on-premise and public edge deployments. In 2025, Germany leads with 1 771

carbon-neutral and secure on-premise edge nodes, followed by France (737), Italy (629), Poland (536),

and Spain (529). For public edge nodes, Germany, France, and the Netherlands together account for 51%

of all public edge nodes in the EU27, with regional hotspots in West-Nederland (Amsterdam), Hessen and

Nordrhein-Westfalen (Frankfurt area), and Île-de-France (Paris), all areas with established colocation and

hyperscale data centre infrastructure. Deployments strongly favour metropolitan and industrial zones,

while rural areas and transport hubs remain the lowest priorities. Future expansion is expected to broaden

geographic and service zone coverage, although targeted rural deployment remains the least anticipated

growth dimension.

The total number of climate-neutral and highly secure edge nodes deployed across EU27 Member States

is projected to reach approximately 14 000 by 2030, representing an 88% increase relative to the

estimated 7 451 nodes deployed at end-202516. On this basis, the Digital Decade target of 10 000 nodes

is projected to be reached in 2028, two years ahead of the 2030 deadline.

It is expected that on-premise nodes will retain structural dominance throughout the period, although

their relative share is forecasted to decline modestly from 89% to approximately 84% as near edge

infrastructure scales more rapidly. Public edge infrastructure (in-country data centres, near edge, and far

edge combined) is projected to more than triple from around 1,032 nodes in 2025 to over 3 500 nodes by

2030. This is expected to translate into a significant expansion of aggregate compute capacity at the edge

by 2030.

The expansion of edge nodes must be analysed and contextualised within the broader context of cloud

infrastructure, which continues to underpin the overall availability of computing capacity. The rapid

advancement of AI is fuelling an unprecedented surge in demand for computing power17; not only for

edge nodes needed to low-latency solutions, but also for the broader computing capacity, i.e. the total

16 Edge observatory for the Digital Decade (Consortium analysis and projections based on CATI survey and DataCentreMap,

December 2025. 17 CSET Issue Brief, AI and Compute: How Much Longer Can Computing Power?, January 2022.

McKinsey Quarterly, The cost of compute: A $7 trillion race to scale data centers, April 2025.

Bain & Company, How Can We Meet AI’s Insatiable Demand for Compute Power?, September 2025.

Goldman Sachs AI to drive 165% increase in data center power demand by 2030, February 2025.

HAI Stanford, The 2025 AI Index Report, 2025.

20

volume of processing resources available, required to support fine-tuning of models and inference.

Beyond AI, the adoption of cloud computing and other digital services continues to accelerate, further

intensifying the pressure on available infrastructure. In this regard, the current investigations opened

under the Digital Markets Act18 in relation to the cloud computing sector are exploring the need and

possibility to unlock opportunities and support fairness and contestability in the provision of cloud

services. In addition, interested Member States are designing an Important Project of Common European

Interest (IPCEI) focusing on the deployment of a Compute Infrastructure Continuum (CIC), namely a

distributed and federated network of digital infrastructure, aiming to further increase compute capacity

availability in Europe and enable functionalities, including but not limited to AI. In 2025, per Eurostat, EU

business cloud uptake stood at 46.7% - still far from the 2030 target of 75%. As more European businesses

adopt cloud and AI computing services, demand for data centres is therefore expected to rise further. In

2025, the EU’s computing capacity was estimated at approximately 12 GW19.

The EU continues to lag behind other regions in both the scale and ownership of digital infrastructure20.

Despite comparable GDP levels, the EU accounted for only 20% of global data centre capacity in 2025,

while the US held 42%. Although this capacity is expected to grow in the coming years, the gap relative to

projected needs is also expected to widen. Market evidence points to tightening conditions for capacity

expansion, with demand for colocation space in Europe exceeding new supply despite investments21. In

2025, demand for new data centre capacity in Europe reached a record of 854 MW, outstripping new

supply for the third consecutive year. Across EU-27, the expansion of data centre capacity is therefore not

able to keep up the pace with the rapidly growing demand22 . Since 2022, average asking prices in

European colocation markets have surged by 51% for 100 kW leases.

While cloud and AI computing services can be technically delivered cross-border, regions with a low data

centre presence are disadvantaged by the existing geographic imbalance in infrastructure deployment, as

reflected in higher prices in regions with low data centre capacity 23 . Moreover, the lack of nearby

computing capacity drives up latency, limiting the availability and quality of low-latency services, thus

placing local end-users at a competitive disadvantage compared with regions that have better access to

18 European Commission, Commission launches market investigations on cloud computing services under the Digital Markets Act, 18 November 2025. 19 Data centre capacity is typically expressed in megawatts (MW) or gigawatts (GW) because power availability plays a key role

for both the operation of the servers and the cooling systems. The estimated capacity is based on the Technopolis Group,

Wavestone, Timelex, STL Partners, OpenForum Europe and KAPA Research (2025), "Study: Cloud and AI". The methodology is

based on all known commercial data centre sites listed in the Data Center Map, additional sites identified through the survey

and any publicly known hyperscalers sites. The figures do not include private enterprise sites. 20 Groupes D’Etudes Géopolitiques, International comparisons and the state of AI infrastructure strategies, February 2025. 21 Data Centres | CBRE, Rents will continue to increase, January 2025. 22 Savils, Costs on the rise, May 2024. 23 ServerMania, Cloud Server Pricing Guide: Transparent Costs & Comparisons for 2026, January 2026.

21

DC capacity24. Some of the identified key bottlenecks slowing down the deployment of computing capacity

across the EU include regulatory fragmentation, permitting procedures, limited land availability, and

increasingly, constraints of energy supply. The current regulatory environment remains fragmented, with

different rules and permit requirements across Member States, creating uncertainty and delays for data

centre operators. Permitting procedures are often lengthy and inconsistent, with multiple stakeholders

and decentralised decision-making. Additionally, access to suitable land, affordable energy, and grid

capacity is a significant challenge, particularly as energy prices in Europe are significantly higher than in

other regions25.

Insufficient computing capacity in the EU could slow innovation and the diffusion of cloud and AI services,

increase dependence on non-EU providers, and limit the ability of businesses and public services to meet

growing demand for digital services. There is no direct quantification of the consequent direct impact on

innovation, but literature suggests that AI adoption can generate significant gains in productivity meaning

that any capacity gap would risk delaying or displacing these gains. This impact would not only concern AI

deployment but also digital services that are heavily reliant on cloud infrastructure. Stakeholders,

including Mistral AI, have warned that insufficient data capacity would become a roadblock for developing

and applying AI in Europe. Over time, persistent disparities risk slowing digital transformation in affected

member states, widening gaps in terms of digital adoption and deployment and thus undermining the

competitiveness of the Digital Single Market.

Against this background, the Commission's Cloud and AI Development Act aims to triple EU data centre

capacity within the next years, with a focus on sustainable infrastructure. Looking ahead, regular

monitoring of this capacity would be beneficial, yet a significant challenge will be ensuring consistent

measurement throughout the EU, as differences in definitions, metrics and scope currently complicate

precise comparisons.

24 Taking the Azure network round-trip latency statistics (June 2026), round-trip latency (the time it takes for a data pack to

travel from one point in the network to another and back again) from Poland (Central Europe) to Frankfurt (Western Europe) is

ca. 10–15ms, and latency from Poland to Amsterdam or London is ca. 15–20ms. By contrast, latency within Western Europe

(e.g. Frankfurt to Amsterdam) is typically <5ms. A fintech business in Warsaw thus faces significantly higher latency than a

competitor in Western Europe. 25 IDC, IDC Report Reveals AI-Driven Growth in Datacenter Energy Consumption, Predicts Surge in Datacenter Facility Spending

Amid Rising Electricity Costs, 2024; See also: CERRE, From Gridlock to Grid Asset: Data Centres for Digital Sovereignty, Energy

Resilience, and Competitiveness, September 2025, pp. 13–15.

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Focus box: Member States’ computing capacity deployment – first monitoring exercise

This first data centre monitoring exercise compares Member States’ estimated data centre capacity using data centre capacity per 100 000 people. The EU benchmark used is the EU average excluding Ireland, because the country is a clear per capita outlier. On this basis, the benchmark is 2.43 MW per 100 000 people26. This evidence on data centre capacity comes from the results of the Cloud and AI Study for the Impact Assessment preceding the Cloud and AI Development Act27. The study collected information on colocation and hyperscale datacentre facilities both in cloud and edge installations. It did not cover enterprise data centres, including in-house facilities operated directly by companies or public administrations for their own use28.

Ireland’s position reflects the very high concentration of hyperscale infrastructure hosted in the country, linked to its role as a European base for major technology companies, as well as its strong transatlantic connectivity and attractiveness for foreign direct investment in digital services29.

The Netherlands also stands out from the rest of the EU27, once Ireland is treated separately as an outlier, with a very high data centre capacity per 100 000 people. This suggests a highly developed data centre market and a very strong domestic infrastructure base. Denmark, Sweden, Finland and Luxembourg also perform well above the EU average in per capita terms and have relatively strong domestic capacity bases. The remaining challenge for these countries focuses therefore mainly on

26 Population figures are based on Eurostat 2025 population data; Eurostat estimates the EU population at 450.4 million

inhabitants on 1 January 2025.

27 Technopolis et al. (2025), “Study: Cloud and AI”. The study figures are presented in the Impact Assessment for the Cloud and

AI Development Act: https://ec.europa.eu/newsroom/dae/redirection/document/129113 28 As a result, the figures should be interpreted as an estimate of the commercial and hyperscale data centre capacity captured

by the monitoring exercise, rather than a complete inventory of all data processing infrastructure in each Member State. This

scope limitation is particularly relevant for Member States where a larger share of capacity may be hosted in enterprise or

public sector facilities. Moreover, the chart shows data centre capacity in operation or planned for the near future and thus

may not capture major projects under construction or announced investments (e.g. Greece’s Microsoft’s Attica data centre, or

Portugal’s Sines data centre campus). While the results should thus be interpreted with caution, they still provide a useful basis

for identifying potential capacity gaps and policy needs. 29 Why So Many Data Centres Are Being Built In Ireland?

23

sustainable management of further growth. Germany, France and Estonia appear close to, or slightly above, the EU average, suggesting continued pressure to keep pace with growing cloud, AI, public sector and industrial needs.

Malta, Slovenia, Italy and Spain fall below the EU per capita average, but their situations differ in scale and maturity. Spain and Italy already have significant absolute data centre capacity and growing markets, with remaining challenges around sustainability and uneven regional distribution. Slovenia and Malta have smaller domestic markets and could benefit from ensuring sufficient and resilient capacity for critical public services and strategic workloads.

Belgium, Poland, Austria, Romania and the Czech Republic, also appear below the EU average despite having strategic geographic or economic advantages. Key challenges include leveraging existing connectivity infrastructure into domestic capacity, keeping pace with cloud, AI and cybersecurity demand, and navigating constraints such as grid access, permitting and coordination. Slovakia, Cyprus, Latvia and Croatia have relatively small domestic capacity bases, raising questions about resilience, business continuity and strategic autonomy. Given their small market size, the challenge for these countries centres on establishing a minimum secure and reliable domestic capacity base for more critical workloads.

Greece, Portugal and Lithuania show very low current capacity in the monitoring exercise and could benefit from converting strategic geographic positions and submarine cable connectivity (notably Portugal’s Atlantic links and Greece’s eastern Mediterranean role) into domestic capacity and strategic autonomy. Bulgaria and Hungary appear among the weakest performers in the dataset, with Hungary recording the lowest capacity overall, reflecting possible limited market demand or infrastructure gaps. This could pose strategic autonomy risks as future needs grow for cloud adoption, AI readiness, public sector digitalisation and industrial data.

This monitoring exercise will be further structured and refined in the coming years as part of the implementation activities foreseen under the Cloud and AI Development Act.

Recommendations:

Member States should support the deployment of secure, sustainable and sovereign cloud and edge

data centre infrastructure across the Union, in line with the principles of the proposed Cloud and AI

Development Act, by:

(i) supporting the development and deployment of advanced data centre technologies that power edge and cloud computing infrastructures incorporating energy- and resource-efficiency principles by design and throughout operations with a view to achieve large-scale sustainability;

(ii) supporting the development and deployment of secure, resilient and performant open cloud and AI stack technologies able to operate cloud and edge computing infrastructures and services with a view to build European technological autonomy and safeguard the Union’s digital sovereignty;

24

(iii) facilitating the deployment of AI compute infrastructure across Europe to close the capacity gap and meet the Union's needs;

(iv) engaging with the Commission, in the context of the upcoming review of the Digital Decade Policy Programme, on the establishment of a new target to monitor and benchmark edge, cloud and AI data centre infrastructure across Member States to measure needed capacity to prevent gaps, ensure balanced access, and build robust European AI capabilities.

Member States should develop national cloud and AI strategies (strategies). The strategies should address Member States approach to expanding cloud and data centre capacity as well as at advancing AI capabilities. Where Member States have identified gaps in possible existing strategies, Member States should update them accordingly. The strategies should be aligned with the targets on the adoption of cloud computing services, big data and AI by at least 75% of Union enterprises for their business operations, and the deployment of at least 10 000 climate-neutral highly secure edge nodes in the Union, while ensuring low latency. In that context, the measures adopted under the national strategies should inform the national digital decade strategic roadmaps.

Where Member States are deploying data centre capacity on their territory, they should designate data centre acceleration zones (zones). Within the zones, the development, expansion and modernisation of data centres may be facilitated through coordinated planning and streamlined administrative procedures. The designation of such zones should contribute to closing the capacity gap and improving the Union’s competitiveness and technological resilience, while ensuring compliance with applicable Union law, including requirements relating to energy efficiency and environmental protection.

Member States should carry out risk assessments to analyse public sector activities and their sensitivity with respect to sovereignty of cloud and AI services underpinning such activities. The risk assessments should help Member States to establish the degree of sovereignty required from cloud and AI services procured and used by entities entrusted with such activities. The Commission will provide guidance to assist Member States in carrying out their risk assessments.

Member States should consider participating in future initiatives aimed at federating and interconnecting their cloud infrastructures with other Member States, to offer cloud- and AI-enabled public services in an efficient, scalable and portable manner. Member States are also encouraged to define their public sector cloud and AI policies in a way that accounts for future frameworks allowing for such a public sector cloud federation to emerge.

2.2. Supporting innovative companies with digital tools and

resilient network

2.2.1. Connectivity

Connectivity is a fundamental enabler of the EU’s long-term competitiveness, determining how

enterprises and public services can share data, innovate and deliver value. High-quality, secure cross-

border connectivity enables companies to leverage cloud and AI services, scale up and collaborate in EU-

25

wide value chains. Strong connectivity also improves the Union’s resilience and preparedness by ensuring

continuity and flexible reconfiguration of business and public service operations, including critical ones,

in the event of disruption.

According to the Digital Decade Eurobarometer 2026, 81% of Europeans consider it important for the EU

to ensure access to high-speed internet for all EU citizens, while 83% of respondents think the EU should

cooperate with Member States to build an independent European digital infrastructure (including

broadband, 5G, cloud, semiconductors).

Modern connectivity is evolving from a combination of separate technologies - fixed, mobile, satellite

networks or submarine cables - towards a more integrated ecosystem. To respond to the growing

demand for critical, low-latency applications, such as connected and automated mobility (CAM) and

human-machine interaction, increasing volumes of data 30 need to flow seamlessly across all these

domains, so that disruptions in one domain do not undermine the performance and security of the system

as a whole. Demands on cross border backbone connectivity are also increasing exponentially: currently,

cables worldwide transmit over USD 10 trillion in financial transactions on a daily basis31 and capacity

needs are expected to increase with AI and cloud applications.This evolution requires a global approach,

spanning satellite, terrestrial and subsea infrastructures as part of a unified, resilient, and globally

optimised system. Full fibre coverage, accelerated deployment of stand-alone 5G as a stepping stone to

the development of 6G, and sufficient multi-orbit satellite capacity are the foundations for this approach.

Increasing attention is paid not only to coverage, but also to the security and resilience of networks, as

well as to integrated connectivity systems, as means of ensuring redundant and reliable connectivity.

The Council conclusions of 6 June 202532 call for a comprehensive approach to the development of a

reliable and resilient network infrastructure, including via network diversification, interoperability and

further deepening of the Single Market. They also called on the Commission to assess the possibility of a

coordinated initiative for planning and developing a reliable and resilient network of digital infrastructures

and capacities, including backbone terrestrial, submarine and satellite networks, across the Union and

with international partner countries, for example by using the Trans-European Networks framework.

In their National Roadmaps, submitted in 2025, Member States reported devoting a significant portion

(approximately 28%) of their measures’ total budget to gigabit fixed connectivity, amounting to EUR 80.9

billion (with EUR 56.6 billion coming from private sources). The 106 measures reported mainly focus on

regulatory actions to facilitate network deployment, as well as financial support for non-viable and

commercially unattractive areas and strategic infrastructure, including cross-border 5G corridors,

submarine cables, and secure backbone networks. Around one third of the measures are dedicated to

30 Statista, Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2023, with forecasts

from 2024 to 2028, 2025. 31 FSISAC, FS-ISAC Releases Critical Guidance on Subsea Cable Risks for Financial Firms, December 2024. 32European Council, Transport, Telecommunications and Energy Council Conclusions, June 2025.

26

each of the two areas. In their roadmap adjustments, Member States maintained a strong emphasis on

regulatory actions to facilitate network deployment.

In terms of 5G investments, Member States reported investing EUR 6 billion (with EUR 2.9 billion coming

from non-public funds), which accounts for approximately 2% of the total budget of their measures. The

39 measures for 5G focus on spectrum management, as well as financial support for non-viable and

commercially unattractive areas, and strategic parts of the network. There is equal emphasis on each of

the two areas. In their roadmap adjustments, Member States placed a significant focus on increasing

financial support for 5G networks.

However, recent territorial analyses indicate that improvements in connectivity do not translate uniformly

into digital performance across regions. While infrastructure gaps persist in rural and peripheral areas,

new divides are increasingly driven by differences in digital capabilities, usage patterns and local socio-

economic conditions33.

Fixed access networks

The next five years will be characterised by a progressive shift from the current fixed access networks

towards ubiquitous, full-fibre infrastructures (from fibre-to-the-premise to fibre-to-the-room), offering

symmetrical multi-gigabit speeds, ultra-low latency, high reliability and much lower energy consumption.

Fibre is increasingly viewed as a strategic, future-proof asset, capable of supporting data-intensive

applications such as cloud and edge computing, AI, Augmented and virtual reality (AR/VR), remote

healthcare, smart grids and cities, and industrial automation. The growing need for symmetrical capacity

will require significant infrastructural upgrades towards large scale multi-gigabit architectures.

Despite these increasing stakes, the current pace of evolution in FTTH rollout remains insufficient.

The percentage of households with fibre connection rose by 4.9 percentage points, from 69.2% in 2024

to 74.1% in 2025, representing a year-on-year increase of 7.1%. According to the forecast along the

baseline trajectory, 90.1% of the target is expected to be achieved by 2030 (Figure 4). In 2025, the FTTP

coverage stood at about 80% of the ideal value along the digital decade trajectory (74.1% instead of

94.0%). The full target - 100% of households covered - is forecast to be reached only in 2050 if no further

actions are taken. Only 62.6% of households living in rural areas were reached by fibre in 2025, up from

58.8% in 2024 (+6.5%).

33 ESPON, DigiReg – Territorial Perspectives of Digital Transition in European Regions, 2024.

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Figure 4: FTTP coverage in the EU. Historical data, Digital Decade (DD) trajectory and revised baseline trajectory towards 2030.

Take-up rates for high-speed fibre (FTTH) also vary significantly across Member States, remaining below

30% in some of them. Low adoption rates have reduced operators’ returns on investment, particularly for

smaller fibre providers without an established customer base, consequently reducing incentives for

further investments.

To accelerate the transition from copper to fibre, the Digital Networks Act proposal34 sets an EU-wide

copper switch-off objective for 2035. This would however be subject to strict conditions on fibre coverage

(95%) and availability of comparable retail offers. The proposal is also accompanied by several safeguards

and supporting regulatory measures, regarding, in particular, the deployment of the last part of the fibre

network connecting the end-user.

The investment needed to achieve 100% FTTP coverage - the Digital Decade target for 2030 - is estimated

at EUR 40 billion, or EUR 29 billion if 5G Fixed Wireless Access (FWA) is used for remote areas. Therefore,

in order for the Digital Decade target to be achieved, it will be necessary to continue supporting fibre

rollout, through the transition away from legacy copper networks.

Mobile networks

In the coming five to ten years, mobile networks are expected to evolve from basic 5G to advanced 5G

standalone (5G SA) and to 6G, delivering much higher capacity, ultra-low latency, and native support for

AI-driven and immersive applications. They will become increasingly software-defined, virtualised, and

smart, as AI is embedded in network management, optimisation, and security. Mobile networks will also

be tightly integrated with fixed fibre networks to support dense small-cell deployments and with non-

terrestrial networks to ensure ubiquitous connectivity. Beyond consumer connectivity, future mobile

networks will increasingly serve industrial, public-sector, and mission-critical use cases. This will enable

automation, smart infrastructure, and real-time services, with a stronger focus on energy efficiency,

34 European Commission, The Digital Networks Act | Shaping Europe’s digital future, January 2026.

28

resilience, and security as strategic requirements. Mobile data usage per mobile connection in Western

Europe is projected to rise to 49 Gb per month by 2030, compared to approximately 15.3 Gb per month

in 202435.

Convergence with fixed networks is expected to deepen, as fibre becomes essential for 5G SA/6G backhaul

and fronthaul. Functional convergence with satellites is also progressing, with important implications for

mobility and industry verticals and the connection of remote areas. 6G is expected to enable the seamless

integration of terrestrial and non-terrestrial networks (NTNs), including satellite systems, into a unified

architecture. This will support the scaling of direct-to-device (D2D) connectivity and enable ubiquitous,

resilient and high-performance connectivity across both ground-based and space-based infrastructures.

In this context, satellite connectivity is expected to become a native component of 6G networks, marking

a shift from its traditional role in backhaul towards direct connectivity for end users.

Nevertheless, the EU’s progress towards this transition remains very slow, not when it comes to basic

5G coverage, but with regard to the 5G networks able to deliver transformative services.

Member States are indeed very close to full basic 5G coverage (96.8% of households) with substantial

coverage increases, including in rural areas; all EU Member States have basic 5G household coverage

above 90%, except Romania. However, basic 5G coverage is insufficient, given its technological limitations,

to support the EU goals in the area of competitiveness.

Mid-band deployment - which is associated with high-capacity, high reliability and low latency - remains

a bottleneck. 5G mid-band coverage in the 3.4-3.8 GHz spectrum band is substantially lower than general

5G coverage in many Member States (74.8% overall household coverage). Rural mid-band coverage is

particularly weak. The EU27 average of 5G rural household coverage in the 3.4-3.8 GHz band remains at

around 33%, indicating that progress is largely confined to urban areas.

This gap is closely linked to delays and modalities in the assignment of all three 5G pioneer bands. The

process of authorising 5G pioneer spectrum across the EU has been lengthy, fragmented and insufficiently

predictable, spanning more than a decade. In particular, most national auctions for the 3.4-3.8 GHz took

place over a relatively long period, between 2017 and 2024. Member States that assigned spectrum earlier

reached higher population coverage more quickly than later movers36.

This gap in high-capacity 5G deployment limits the ability to deliver quality-assured services and

advanced use cases, such as industrial automation, connected mobility and other mission-critical

applications, and risks undermining Europe’s competitiveness in next-generation digital services.

35 GSMA, The Mobile Economy Europe 2025, 2025. 36 Commission Staff Working Document – Impact assessment report accompanying proposal for a Regulation on Digital

Networks (Digital Networks Act).

29

Across Member States, 5G deployment remains predominantly based on Non-Standalone (NSA)

architecture, which relies on existing 4G core37. 5G SA deployment (measured as 5G SA base stations

as % of all mobile base stations) stands only at 20.9% in the EU, below US (36.2%), China (34.8%), Japan

(26.3%) and South Korea (26.2%)38. Other sources estimate that only around 40% of the EU territory is

covered by high capacity 5G SA, compared to 91% in North America and 45% in Asia-Pacific, highlighting

once again a significant infrastructure gap.

Most EU countries launched NSA networks between 2019 and 2021, enabling early market rollout.

However, the transition to 5G SA, which introduces a fully virtualised 5G core and enables advanced

capabilities such as network slicing, ultra-low latency, and 5G SA private network services, i.e. capabilities

that are important for competitiveness of EU industry, has been more gradual and uneven in the EU than

in other advanced economies.

Europe is also significantly lagging behind in take-up as in “basic” 5G take-up (measured as a share of

5G SIM cards among all SIM cards), the EU stands at (28.1%), which again places the region behind the

leading developed countries. The US (56.7%), Japan (54.7%), South Korea (41.0%) and China (39.6% all

have higher rates39. As of Q4 2025, only around 2.8% of 5G users in Europe are connected via SA networks,

compared with approximately 30% in the United States, and far behind India and China, which have

reached around 52% and 81% respectively40.

The slow rollout of mid-band 5G, combined with the low pace of 5G SA adoption in Europe has direct

repercussions for user experience. The EU27 average download speed of 69.9 Mbps remains below that

of South Korea (162.2 Mbps), the US (129.3 Mbps), and China (100 Mbps)41. This performance gap is

economically significant, as empirical evidence shows that improvements in mobile broadband

capabilities - particularly speed - are associated with higher productivity and GDP42. Supporting evidence

suggests that a 10% increase in mobile broadband speed is associated with a 0.2% increase in labour

37 Connect Europe (2025), State of Digital Communication 38 European Commission, European 5G Observatory 2026, 2026 (based on 2025 data published by operators and regulators,

verified through interviews and complemented by IDATE estimates, as needed). 39 European Commission, European 5G Observatory 2026, 2026. 40 Ookla/Omdia, A Global Evaluation of Europe's Digital Competitiveness in 5G SA, February 2025; updated figures from Ookla,

5G SA Global Tracking, Q4 2025, February 2026. 41 MedUX, Status of 5G Quality and Experience in Europe, Report prepared for the European Commission, Q1 2025. 42 Briglauer, Wolfgang; Cambini, Carlo; Gugler, Klaus, Sabatino, Lorien (2025): Economic benefits of new broadband network

coverage and service adoption: evidence from OECD member states, Industrial and Corporate Change, January 2025. See also:

Edquist, H., "The Economic Impact of Mobile Broadband Speed," 23rd Biennial Conference of the International

Telecommunications Society (ITS), June 2021; and Oxford Economics, The Global Economic Potential of 5G-Enabled Technology,

March 2023.

30

productivity in the subsequent period43. In this context, Europe’s comparatively weaker 5G performance

may limit the realisation of potential productivity and economic growth gains.

In addition, the EU trails other regions in the deployment of private networks, which are early (industrial)

adopters of 5G SA. Globally, 1489 private mobile network deployments have been identified, of which

only 694 (47%) use 5G 44 . Manufacturing remains the leading sector for such networks, with 298

deployments recorded, of which around 60% include 5G. Asia-Pacific countries such as Japan and South

Korea have progressed more rapidly, supported by more favourable policy frameworks and coordinated

industrial strategies.

Relative to leading global markets, the EU remains less advanced in 5G investment intensity45. Its 51%

5G allocation share is solid (measured as % of all mobile investments), but below China (72%), South Korea

(67%), the US (62%), and Japan (58%).

Achieving high-quality 5G SA coverage is estimated to require EUR 33.5 billion for network densification,

with an additional EUR 26-79 billion needed to cover main transport paths46. The Digital Networks Act

(DNA) proposal identifies disincentives and fragmentation in spectrum regulation as one of the main root

causes of insufficient investments by European telecom operators in mobile networks. Other contributing

factors include limited financial capacity and attractiveness for investors (itself due to low ARPUs, low

predictability, etc.), low demand for advanced connectivity and unexploited economies of scale. For

example, spectrum costs represent 7% of mobile service revenues and 35-40% of capital expenditure,

reducing financial flexibility for 5G/6G investments. Additionally, fragmented and short-lived regulatory

regimes act as disincentives.

A series of regulatory responses, essentially tackling the supply side, are offered in the DNA proposal,

notably on spectrum policy. In particular, the DNA proposal simplifies and streamlines the regulatory

framework that affects 5G and 6G rollout, with a view to reducing fragmentation across Member States

and creating more predictable conditions. In doing so, it lays the groundwork for telecom innovation,

particularly for emerging technologies such as 6G and satellite connectivity.

These proposed measures include unlimited spectrum licence duration by default and facilitated renewal

procedures, affecting around 500 licences set to expire across Europe between 2025 and 2035, combined

with safeguards such as periodic reviews, the possibility of revocation (e.g. in case of breach of conditions),

and strong “use it or share it” obligations. They also include a pro-investment auction design, greater EU-

level coordination through mandatory spectrum scrutiny and harmonised authorisation conditions (i.e.

ex-ante Spectrum Single Market mechanism to ensure that auctions align with the objectives of the DNA)

43 Edquist H. “The Economic Impact of Mobile Broadband Speed”, 23rd Biennial Conference of the International

Telecommunications Society (ITS), June 2021. 44 Global Mobile Suppliers Association (GSA), Private Mobile Networks Summary Report, September 2024. 45 European Commission, European 5G Observatory 2026, 2026. 46 WIK-Consult, Investment and Funding Needs for the Digital Decade Connectivity Targets, 2023.

31

as well as faster and more predictable authorisation of future 6G spectrum to enable timely deployment.

These measures are accompanied by other proposed measures on authorisation and governance,

designed to facilitate larger scale operations and unlock the full potential of the single market.

The DNA also introduces a Union radio spectrum strategy to guide long-term spectrum planning, identify

future needs, and ensure the availability of spectrum for key services and technologies.

It will, however, remain important to sustain public intervention in mobile access networks, including on

supply side measures (i.e. public support to 5G/6G rollout) targeting areas of market failure in order to

meet the Digital Decade targets, support cohesion and ensure that the Union’s full industrial potential is

fully exploited. Further actions remain necessary to support the ongoing implementation of the EU 5G

Cybersecurity Toolbox and once adopted, to facilitate alignment with the trusted ICT supply chain security

framework pursuant to the revised Cybersecurity Act.

Moreover, in order to address the root causes identified above, regulatory and funding measures may be

complemented by demand-side stimulation, with a particular focus on enabling innovative business

models, including the bundling of infrastructure deployment with edge cloud and AI integration and with

concrete use cases.

Since 2021, the digital part of the Connecting Europe Facility programme (CEF Digital) has co-funded 5G

deployments integrated with edge-cloud computing and enabling innovative use cases such as remote

surgery, virtual reality for learning, drone-based monitoring and more. So far, a total of EUR 327 million

were invested in 78 projects, including 47 projects for 5G Smart Communities and 31 projects for transport

corridors. This funding has helped pave the way for the future development of vertical use cases for

sectors considered as strategic for the economy.

In 2026, the Commission unveiled EURO-3C, a EUR 75 million project meant to develop the EU’s first

large-scale federated Telco-Edge-Cloud infrastructure47. Financed via Horizon Europe, this landmark

project, which brings together over 70 partners, will showcase the EU's ability to deliver cutting-edge

digital services entirely through its own connectivity infrastructure, reducing reliance on third country

providers. Telco-edge-cloud combines telecommunication networks, edge computing and cloud

infrastructure into a single, integrated platform, bringing high speed, secure computing power closer to

end-users.

EU’s leadership in 6G will not be determined solely by leadership in radio technologies, but by its capacity

across the converged digital communications stack, from advanced semiconductors to AI-driven network

orchestration and cloud-edge integration.

47 European Commission, Commission announces €75 million EURO-3C Project to build a federated Telco-Edge-Cloud

infrastructure for digital sovereignty, March 2026.

32

The EU approaches the transition to 6G with a mix of structural strengths and growing dependencies48.

It benefits from globally competitive vendors, strong radio access network (RAN) engineering capabilities,

and recognised leadership in energy-efficient networks, supported by a coordinated research and

standardisation framework, notably through the Smart Networks and Services Joint Undertaking (SNS JU)

as well as large national 6G initiatives to promote European capacities in 6G and related technologies in a

number of Member States (in particular Germany, Ireland, Spain, France, Italy, Netherlands, Finland,

Sweden) 49 . These assets strengthen the EU’s ability to influence global standards and ensure

interoperability. However, challenges persist, including weaknesses in hyperscalers cloud services and AI

development, reliance on external semiconductor supply chains, risks of diminished value capture in

increasingly software-driven architectures, and exposure to geopolitical tensions and market

fragmentation.

As value shifts toward cloud management software and AI orchestration, the EU risks losing ground in

higher-margin segments if these capabilities remain externally dominated.

In conclusion, public investment - covering inter alia R&I, supply chain, network deployment, and fostering

the take-up of advanced services - must continue to complement the new rules put in place with the

proposed Digital Network Act, once adopted. Based on the lessons learnt from the current MFF, it will be

essential to support 5G and 6G across the innovation journey, coupling network deployments with use

cases and with the necessary edge, cloud and computing resources.

Satellite connectivity

Satellite systems provide broad regional and global coverage and, by their nature, can support a pan-

European (or global) reach, unlike terrestrial mobile networks, which remain bounded by national

deployment. As direct-to-device (D2D) connectivity is emerging, complementing terrestrial mobile

services, as well as machine-to-machine services, including in underserved areas, the current EU

framework - based on national authorisation regimes and national spectrum allocation - creates barriers

to the provision of pan-European services. It also forces satellite operators to comply with divergent

national rules and conditions across Member States in which they operate.

In particular, Low Earth Orbit (LEO) constellations supporting hybrid terrestrial-satellite systems or Non-

Terrestrial Networks (NTN) are emerging as the modern equivalent of traditional mobile communication

towers. They enable D2D connectivity and are expected to become an essential component of future 6G

networks. Integration with terrestrial mobile networks (5G SA/6G) is expected to become central to future

communications systems, enhancing resilience and ubiquity of connectivity. D2D satellite connectivity is

rapidly emerging and may play a strategic role for mobile network operators (MNOs) and smartphone

equipment manufacturers (OEMs). It presents a valuable opportunity to stand out in a saturated market,

48 European Commission, European 5G Observatory 2026, 2026.

49 European Commission, European 5G Observatory 2026, 2026.

33

improve customer retention, and build long-term value. A global survey by Analysis50, covering 18 500

respondents across 18 countries, highlights strong demand for D2D satellite messaging, showing that an

early adoption of satellite D2D may be leveraged to attract and retain subscribers. Notably, 82% of

subscribers considering switching providers within the next six months expressed interest in such services

while 30% said they would be willing to pay for them.

Satellite infrastructure is also critical for ensuring equitable access to high-speed internet, especially in

underserved and remote areas, while also strengthening the EU’s capabilities in critical communications,

including emergency and defence services. Although Europe was once a frontrunner in satellite

communications, it has been slower to anticipate the innovation potential of this market and to invest in

LEO constellation deployment and now lags behind the US and China. This increases the risk that the EU

becomes dependent on non-EU providers of this critical infrastructure, with implications for both

competitiveness and digital sovereignty, especially in a context of geostrategic uncertainty. According to

a European Commission study51 on Mobile Satellite Services in the 2 GHz band, as of March 2025 the EU

has only 773 LEO satellites launched and 3 120 planned, compared with 220 launched and 27 198 planned

in China and 7 633 launched and 33 397 planned in the US.

Looking ahead, the number of authorisations is expected to increase significantly, raising compliance costs

for operators and enforcement costs for authorities. The coexistence of twenty-seven national

authorisation regimes also contributes to coverage gaps and slows the rollout of pan-European satellite

services.

The proposed DNA and MSS (Mobile Satellite Services) 52 Regulations introduce a single EU-level

authorisation for satellite services ensuring EU-wide access to spectrum under harmonised conditions.

This framework aims to create a level playing field, enable European operators to scale up, and support

the development of innovative satellite services, such as D2D connectivity, which are increasingly critical

for EU security and resilience. It also aims to strengthen the global competitiveness of EU operators and

is expected to unlock further investment in satellite infrastructure. However, given the capital-intensive

nature of satellite deployments and prolonged revenue realisation timelines, structured public-private

partnerships, and strategic Union initiatives, remain key to accelerating this transformation and securing

independent European infrastructure capabilities.

Backbone networks

The growing traffic in access networks, combined with rising data flow from and to edge, cloud, AI

capacities and Content Delivery Networks, will require massive scaling of backbone networks.This will

rely on advanced optical technologies such as coherent transmission, higher-order modulation, and open

line systems, enabling multi-terabit capacities per fibre. Backbone networks will increasingly interconnect

50 Analysys Mason, MNOs and OEMs need to adapt D2D now, June 2025. 51 Detecon International GmbH, Study on Mobile Satellite Services (MSS) in the 2 GHz Band in the EU – Implementation of the

Current Regulatory Framework and an Overview of the Satellite Connectivity Market, European Commission, 2025. 52 COM(2026) 311 final

34

distributed data centres and edge nodes, reduce latency and support real-time and mission-critical

services.

Backbone architectures will also become more software-defined and automated, as resilience, security,

and redundancy become increasingly strategic priorities. This includes route diversification, protection

against physical and cyber threats, and greater focus on submarine and cross-border terrestrial links as

well as related deployment, maintenance and repair capacities (e.g. multi-purpose, modular vessels). The

migration process to Post Quantum Cryptography shall safeguard the continuity of services, availability of

data, and use of applications, and require coordinated action also across different types of networks, given

the many interdependencies and interfaces. Quantum communications technologies will be integrated

into critical backbone networks to support highly secured, mission-critical applications (e.g. QKD between

Member States or banking companies).

The rollout of future backbone networks will not only be driven by cross-border and intercontinental

connectivity needs but also by the deployment of data centres and computing capacities in geostrategic

and areas where renewable energy is abundant, located close to clean power sources (e.g. solar or

hydropower plants).

In particular, the total value of submarine communication cables’ global sales was estimated at USD 3.8

bn in 2024 and is expected to reach at least USD 7 bn by 203453. In November 2024, Analysys Mason

predicted even higher figures, up to USD 10 bn in 2029.

While the EU has good presence and strengths in the submarine/backbone networks market, it faces

strong and increasing pressure from global competitors. Current market trends show a steady decline in

European investment, leading to the exit of European actors and a loss of EU market share54. Meanwhile,

the US continues to invest in high-capacity backbone networks, driven largely by hyperscalers, content

providers, and cloud companies.

Between 2019 and 2023 the amount of international submarine cable capacity deployed by GAFAM

(Google, Apple, Facebook, Amazon, Microsoft) quadrupled. Today, Google, Meta, and Amazon own 59

international submarine cables, up from just 20 in 2017, meaning that the bulk of capacity is now held by

non-EU controlled companies.

In terms of cable manufacturing and deployment, the main US player, SubCom, has the greatest market

share worldwide, followed by French-owned Alcatel Submarine Networks (ASN) and Japan’s NEC. China’s

Huawei Marine Networks (HMN) is lagging behind but is gaining market share rapidly. Additionally, the

US and Japan have recently announced massive investments in deployment capacities (including

53 FSISAC, Critical Guidance report on Subsea Cable Risks for Financial Firms, 2024. 54 Future Market Insights report, Submarine Communication Cables Market Size & Growth 2034

35

icebreaker vessels). The EU Risk Assessment published by the Commission in October 2025 provides a full

analysis of the market and stakeholder ecosystem55.

Given their criticality and of the rapidly evolving markets that determine network topography, capacity,

but also resilience, security and control, the EU has paid increasing attention to backbone networks and

in particular submarine cables, proposing a comprehensive policy approach, including regulatory and

funding measures.

On the policy side, the EU Action Plan on Cable Security has outlined a series of coordinated actions to

address risks and enhance the security and resilience of data and power submarine cable infrastructures,

across the full resilience cycle: prevention, detection, response and recovery, and deterrence 56 . To

support the implementation of the 2024 Cable Recommendation57 and 2025 Action Plan, the Commission

set up the Submarine Cable Infrastructures Expert Group and published in October 2025, its EU risk

assessment (based on threats, vulnerabilities and dependencies), including mapping and stress test

guidance on the security and resilience of EU submarine cable infrastructures58.

Furthermore, on 5 February 2026 the Commission published the Cable Security Toolbox, which

recommends a set of mitigation measures to address the identified risk scenarios, as well as a list of Cable

Projects of European Interest (CPEIs), i.e., areas to be prioritised for public funding59.

On the funding side, to date the EU invested over EUR 600 million in more than 70 Digital Global

Gateways projects through the Connecting Europe Facility Digital programme (CEF Digital). While a

number of satellite-terrestrial links and cross border terrestrial backbone projects have been funded, the

vast majority of the funding was dedicated to submarine cable projects (59 projects for EUR 548 million).

These projects are enabling significant improvements in the coverage of islands and remote territories,

reduce vulnerabilities and risks, while increasing the overall resilience and redundancy of connectivity

systems within the EU and linking the EU to the world, contributing to strategic objectives such as the

connection of Europe to Asia through the Arctic, including Greenland’s and other areas identified in the

CPEI list.

In line with the EU Action Plan on Cable Security, the Commission amended the CEF Digital Work

Programme, in February 2026, allocating EUR 347 million to fund strategic submarine cable projects60.

These calls will support the CPEIs, including to enhance the EU's cable repair capacity, and equip

submarine cables with smart capabilities.

55 European Commission, Security of Cables: Commission publishes landmark report and funding for Cable Hubs, October 2025.

56 European Commission and High Representative of the Union for Foreign Affairs and Security Policy, Joint Communication to

Strengthen the Security and Resilience of Submarine Cables, JOIN(2025) 9 final, 2025.

57 European Commission, Commission Recommendation (EU) 2024/779 of 26 February 2024 on Secure and Resilient Submarine

Cable Infrastructures, 26 February 2024. 58 European Commission, Security of Cables: Commission publishes landmark report and funding for Cable Hubs, October 2025. 59 European Commission, Submarine Cable Security Toolbox and Cable Projects of European Interest, February 2026. 60 European Commission, Commission increases submarine cable security with €347 million investment and new toolbox, 2025.

36

In 2026, two funding calls worth EUR 60 million will support cable repair modules, alongside a separate

EUR 20 million call for SMART cable system equipment. These are sensors and monitoring components

integrated into submarine telecommunications infrastructure to gather real-time ocean and seismic data.

Additionally, two calls for new CPEI cables are planned for 2026 and 2027, with a total budget of EUR 267

million.

However, while CEF has already intervened in the CPEI areas, and will continue to do so in an increasingly

focused manner, the remaining funding capacity of CEF Digital remains modest compared to the total

investments needs. This gap is also reflected in the increasingly high oversubscription rates in CEF Global

Gateway calls61. Cost estimates for deploying CPEI projects exceed EUR 10 billion62. Other studies suggest

that at least a threefold increase of the current level of funding per annum for submarine cables (i.e. EUR

200 million) will be needed to maintain the current level of European ownership in the cable market and

give greater scope and ambition to address market fragilities and critical capability gaps.

It is therefore important that support continues for the deployment, upgrade and maintenance of

submarine cables to preserve competition and foster increased reliability and security standards.

Deploying submarine cables and equipping them with advanced security monitoring and rapid-repair

capabilities remains vital and requires continued public funding in the next MFF. In line with the Cable

Security Toolbox, this intervention must focus on routes that are strategic for the EU (CPEI areas) and

reduce reliance on non-EU suppliers.

In parallel, the DNA introduces new provisions concerning the resilience of electronic communications

networks and services. These include cooperation and coordination of resilience and preparedness

actions, data collection, early warning, networks’ resilience mapping and networks’ capabilities to ensure

the redundancy through different types of networks’ backups. The purpose is to identify potential

bottlenecks where resilience-enhancing measures are needed at Union level, including strategic

investments to support redundancy, in particular, for trans-European digital networks.

In this context, the newly proposed Office for Digital Networks (ODN) will be tasked, once the DNA

proposal is adopted, with ensuring a coherent, cross-border approach for electronic communications

networks and services, among others by preparing the Union Preparedness Plan for Digital

Infrastructures, which will include a comprehensive assessment and an overview of network topology at

Union level, identify route diversification, potential bottlenecks or points of failure and areas where

resilience-related measures, such as strategic investments to support redundancy, are needed.

Such information, especially on integrated connectivity covering a wide range of terrestrial and non-

terrestrial communications networks, can support a wider analysis, complementing the one which led to

the Cable Projects of European Interest, and thereby ensuring an updated, integrated prioritisation of

61 European Commission, Progress Report on the Implementation of the 2021–2027 Connecting Europe Facility for the Years

2021–2024, COM(2025) 516 final, 24 September 2025.

62 European Commission, Submarine Cable Security Toolbox and Cable Projects of European Interest, February 2026.

37

critical investments in strategic backbone networks. Building on broader orientation set out in the Council

conclusions on Connectivity of 6 June 2025, the Council also invited the Commission to assess the

possibility of a coordinated initiative for planning and developing a reliable and resilient network of digital

infrastructures and capacities, including backbone terrestrial, submarine and satellite networks, across

the Union and with international partner countries.

Recommendation:

Member States should accelerate the deployment of secure and resilient connectivity infrastructure

across the Union, by:

(i) cooperating within the Cables Expert Group to implement the Cable Security Toolbox, to

advance the deployment of Cable Projects of European Interest, and assess future priorities;

(ii) building on the CPEI approach, analyse needs and links to other types of networks, taking into

account projected AI data centre and cloud needs and pooling funding resources at national

and EU level to deliver end-to-end resilient, secure and redundant connectivity infrastructure;

(iii) supporting the rollout of high-quality 5G stand-alone and 6G across the EU, including by

assigning, defining sharing conditions or renewing spectrum rights under investment-conducive

conditions, with particular attention to the 3.8-4.2 GHz band for local private networks;

(iv) should actively contribute to 6G development in Europe, in particular by promoting EU

capacities in 6G and related technologies (semiconductors, quantum, AI, cloud), supporting R&I

funding and pilots (together or in coordination with the European Commission and the SNS JU).

(v) supporting the coordinated deployment of low-latency and high-speed secure satellite

connectivity in multiple orbital layers, as a resilient and secure complement to terrestrial

connectivity;

(vi) continuing the expansion of fibre networks through coordinated funding and regulation, with

particular attention to underserved and rural areas, and actively promoting the switch-off of

copper networks where FTTH coverage has reached around 95% and comparable retail offers

are available;

(vii) strengthening joint efforts to improve network coverage by supporting, via targeted funding

and appropriate regulatory intervention, as appropriate, end users’' connections.

38

2.2.2. Digitalisation of SMEs and uptake of digital technologies by EU

enterprises: AI, Cloud and data analytics

While building cutting-edge capacity and infrastructure is a necessary condition for digital

competitiveness, the diffusion and deployment of advanced technologies across businesses is key to

ensure that technological leadership translates into competitiveness gains.

The broad diffusion of technologies across firms, sectors and regions is therefore a second fundamental

challenge facing the EU, and a key driver for productivity growth and economic transformation. The data

on cloud, data analytics and AI up-take confirm that headline adoption figures are moving in the right

direction, but progress is too slow relative to 2030 targets, and SMEs consistently lag behind large

enterprises.

The percentage of SMEs with at least a basic level of digital intensity, according to version III of the Digital

Intensity Index, rose by 13.5 percentage points in two years, from 57.90% in 2023 to 71.38% in 2025. This

reflects a year-on-year increase of 11.0%.

According to the forecast along the baseline trajectory, the target is expected to be achieved and

surpassed by 2030, with an estimated 92.08% of SMEs having at least a basic value of the digital intensity

index by then (Figure 5). The revised baseline trajectory is fully in line with the ideal trajectory. In

2025, the observed and ideal values overlap almost perfectly.

In their National Roadmaps, 165 measures corresponding to a total of EUR 48.4 billion were reported as

supporting the digitalisation of SMEs. The measures primarily focus on facilitating the uptake and

deployment of digital technologies, as well as strengthening the broader ecosystem through activities

such as information sharing, knowledge exchange and collaboration on digital technologies.

Figure 5: Digital Intensity Index ver. III. Digital Decade (DD) trajectory and revised baseline trajectory towards 2030.

39

The percentage of enterprises using at least one of the three technologies (Cloud, Data Analytics or AI)

rose by 8.5 percentage points, from 54.7% in 2023 to 63.20% in 2025. This represents a substantial year-

on-year increase of 7.5%.

According to the forecast along the revised baseline trajectory, 95% of the target is expected to be

achieved by 2030, with 71.5% of enterprises expected to use at least one of the three technologies by

then (Figure 6). In 2025, the value of this KPI aligns perfectly with the ideal trajectory, reaching a value

of 63.2%. The target of 75% of enterprises using at least one of the three technologies is expected to be

reached in 2033 if no further actions are taken.

Figure 6: Percentage of enterprises using AI or cloud computing or data analytics in the EU. Historical data, Digital Decade (DD)

trajectory and baseline trajectory towards 2030 (same speed of diffusion parameter as in cloud baseline trajectory).

Artificial Intelligence

According to Eurostat data, the percentage of enterprises using AI technologies rose by 6.5 percentage

points in one year, from 13.5% in 2024 to almost 20.0% in 2025. This represents a substantial year-on-

year increase of 48%, however lower than the 67% year-on-year increase of 2024.

In EU companies, the most widely used AI technologies are those for analysing written language (11.8%),

which also saw the strongest increase since 2024. They are followed by AI for generating images, videos

or audio (9.5%), producing written or spoken language (8.8%), and converting speech into machine-

readable format (7.2%). According to the forecast along the baseline trajectory, 72% of the target is

expected to be achieved by 2030, with 54.28% of enterprises expected to adopt AI by then (Figure 7). In

2025, this KPI reached a level slightly above half of the ideal value defined by the ideal trajectory (at

almost 20.0% instead of 39.1%). The target of 75% of enterprises using AI is expected to be reached not

earlier than 2035 if no further actions are taken.

In their National Roadmaps, Member States reported investments of EUR 10.9 billion to support the

uptake of AI, cloud or data analytics - representing approximately 3.8% of the total budget across

roadmaps and covering 199 measures in total. Among these, roughly 34 measures specifically target AI,

accounting for EUR 1.4 billion. Measures supporting the uptake of AI, cloud and data analytics are evenly

40

distributed across measures to enhance the ecosystems and knowledge exchange, establish enabling

framework conditions and develop capabilities across these technologies. However, AI-specific measures

place a stronger emphasis on building AI capabilities. This focus is also reflected in Member States’

roadmap adjustments.

Figure 7: Percentage of enterprises using AI in the EU. Historical data, Digital Decade (DD) trajectory and revised baseline

trajectory towards 2030.

These figures indicate that, despite strong recent progress, including on policy making at EU and national

level, the EU remains below the Digital Decade target. Reaching 75% of enterprises by 2030 will require

targeted support, especially for SMEs and for sectors and regions that lag behind. They also show that

large firms still adopt AI much faster than SMEs, even if smaller firms are accelerating.

For European SMEs, the evidence suggests that the main obstacle is no longer basic awareness of AI but

the difficulty of turning interest and pilots into broad business deployment. Eurostat’s latest statistics

support this analysis. Among EU enterprises that had considered using AI but did not adopt it, the main

reasons reported were lack of relevant expertise (70,89%), lack of clarity about legal consequences

(52,52%) and concerns regarding violation of data protection and privacy (48,83%). For many firms the

issue is no longer whether AI matters, but whether they can implement it safely, lawfully and effectively.

Concretely, for SMEs, the most recurrent bottlenecks are fragmented and poor-quality data, weak

interoperability systems, lack of in-house skills, uncertain returns on investments and difficulties in

integrating AI in core business processes. These barriers are compounded by organisational and

compliance difficulties, with many SMEs not having the internal capacity to identify viable use cases, adapt

workflows, assess risks, or manage legal uncertainty around data use and AI deployment.

The main challenge is therefore one of scale and broad-based diffusion across industrial sectors with

particular focus on the strategically important ones.

41

For instance, the OECD Study63 - indicates that in manufacturing, AI uptake is still “modest and highly

fragmented”: the share of manufacturing enterprises using at least one AI technology rose from 7% in

2021 to 11% in 2024, but the technology is still not well integrated into core production processes. The

most common uses are still language-based and administrative tasks, while uptake remains lower for

functions more directly tied to production, such as image recognition, robotic process automation and

machine-learning-based optimisation.

In public transport and logistics, the report finds that many deployments remain at pilot or early

implementation stage and that SMEs often struggle to keep pace because of limited access to expertise,

infrastructure and funding.

Across sectors, the OECD repeatedly identifies fragmented datasets, poor interoperability, integration

into legacy systems, compliance complexity and weak internal skills as persistent constraints on scaling.

For SMEs, de-risking adoption has become essential: they need trusted intermediaries, simpler access to

expertise, and support that combines technology, compliance and business transformation rather than

addressing these issues separately. This is consistent with the direction already taken by the Apply AI

Strategy, which includes the role of the European Digital Innovation Hubs (EDIHs) as Experience Centres

for AI and as key partners helping SMEs to “test before invest”, identify funding for their AI projects or

network within the AI ecosystem of AI factories, Testing and Experimentation Facilities (TEFs) and future

national sandboxes.

At the national level, by the turn of 2026, the vast majority of Member States have already adopted

and/or revised their own national AI strategies. However, the national implementation remains uneven

in terms of dedicated budget allocated, measurable KPIs or regular evaluation.

For instance, funding AI at national level is highly uneven and often difficult to isolate because many AI

measures are combined with wider digitalisation plans. This creates a divide between countries with

operational governance, measurable follow-up and financing mechanisms for AI and those where AI

remains embedded in broader agendas without a strong delivery architecture. Moreover, some member

states do not use well-defined KPIs for AI strategies, using instead broad digital transformation

frameworks.

At European level, stronger coordination is needed to connect strategy, infrastructure and deployment.

The AI Continent Action Plan provides the upper-level framework for the infrastructure and enabling layer,

notably through AI factories, high-quality data access and compute capacity. The Apply AI Strategy is

particularly important for the uptake objective, as it is explicitly the EU’s overarching sectoral AI strategy

and is designed to boost adoption and innovation across Europe, especially among SMEs. In this

architecture, EDIHs are meant to function increasingly as AI Experience Centres linked to AI Factories,

63 OECD Study - Progress in Implementing the European Union Coordinated Plan on Artificial Intelligence. Uptake in high-impact

sectors / volume 2

42

Testing and Experimentation Facilities (TEFs) and regulatory sandboxes, while the AI Skills Academy

supports the workforce dimension.

For AI uptake in EU companies, this EU-level coordination is critical: Member States on their own cannot

efficiently provide the full combination of compute, high-quality data, regulatory support, testing

infrastructure, skills and cross-border market scale needed for rapid AI uptake. Related to the regulatory

framework, national market surveillance authorities, which each Member State is required to designate

under the AI Act, are responsible for enforcing compliance with the rules applicable to AI systems,

including by proposing joint investigations with the European Commission. To the best of our knowledge,

10 Member States (Denmark, Finland, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Slovenia and

Slovakia) have designated their national market surveillance authorities64. The timely establishment of

these authorities, together with sufficient technical, financial and human resources, will be critical to

ensuring robust oversight and effective enforcement of the AI regulatory framework.

The urgency is clear when current performance is compared with EU ambitions. Reaching the AI targets

will depend on aligning reforms and investments across all levels of responsibility (European, national,

regional and local) around a key objective: making AI adoption easier, safer and more affordable for EU

companies, especially SMEs.

Recommendation:

Member States should support the development, deployment and wide uptake of AI through a

coordinated industrial, public-sector and governance strategy. In particular, they should:

(i) adopt and implement national AI strategies grounded in the “AI-first principle”, where

appropriate, as proposed in the Apply AI strategy, with clear priorities for industrial

competitiveness, public-service transformation and innovation diffusion;

(ii) strengthen investment in the development and deployment of AI models, systems and

infrastructure relevant to strategic sectors such as automotive, manufacturing, healthcare,

mobility and energy, while also addressing physical AI systems that integrate perception,

reasoning and action in real-world environments, including robotics;

(iii) support the real-life deployment of connected and autonomous vehicles, unmanned aerial

systems, drones and cooperative drone swarms, in collaboration with regional and local

authorities, and prioritise European technologies, while promoting EU initiatives such as

Autonomous Drive Ambition Cities and the Drones Action Plan

(iv) support European participation in and access to frontier AI development - including large-scale

advanced models and next-generation multimodal systems - by investing in computing

64 Cut-off date 27 April 2026.

43

infrastructure, and fostering public-private partnerships with AI developers, with national

contributions feeding into a coordinated EU-level effort;

(v) identify, pilot and scale high-impact AI use cases across the public sector, including open-source

applications made in Europe;

(vi) continue supporting the network of European Digital Innovation Hubs (“Experience Centres for

AI”), which play a key role in accelerating the uptake of AI and other digital technologies,

particularly among SMEs and public administrations;

(vii) ensure that national and regional AI initiatives are integrated into the broader EU AI ecosystem

- including Experience Centres for AI, AI factories, regulatory sandboxes, Testing and

Experimentation Facilities (TEFs), and EU Digital Skills Academies - to avoid duplication, pool

resources and ensure that European firms can access world-class infrastructure, expertise and

compute capacity;

(viii) put in place comprehensive measures to strengthen AI literacy and advanced digital

skills across society, including for workers, citizens and public administrations; and

(ix) operationalise the AI Act by establishing the necessary national governance and support

structures - including market surveillance authorities, single points of contact, regulatory

sandboxes, and accessible compliance guidance for SMEs - ensuring that conformity

assessment, post-market monitoring and incident reporting obligations are matched by

adequate national technical capacity.

Cloud computing services

The percentage of enterprises using sophisticated or intermediate cloud computing services rose

by 7.7 percentage points, from 38.97% in 2023 to 46.69% in 2025. This represents a year-on-year

increase rate of 9.5%. According to the forecast along the updated baseline trajectory, approximately

81% of the target is expected to be achieved by 2030, with 60.6% of enterprises estimated to adopt

sophisticated or intermediate cloud services by then (Figure 8). The target is expected to be reached not

earlier than 2040, if no further actions are taken.

44

Figure 8: Percentage of enterprises using intermediate and sophisticated cloud computing services in the EU. Historical data,

Digital Decade (DD) trajectory and revised baseline trajectory towards 2030.

Cloud computing remains critical for business digitalisation and is becoming an increasingly relevant

enabler for AI deployment and uptake. Around 53% of enterprises used paid cloud computing services in

2025, an increase of around 8 percentage points with respect to 202365. However, the most advanced end

of this adoption is less widespread, with approximately 41% of enterprises buying at least one

sophisticated cloud service. This demonstrates that adoption is growing but most firms are still using basic

services. Cloud uptake is advancing but too slowly relative to the ambition of the 2030 target, which makes

this recent acceleration not sufficient on its own.

One of the factors holding back progress is the persistent SME gap. In 2025, 46% of SMEs used cloud

services, compared with 60% for enterprise 50-249 employees and 78% of large enterprises. The

comparison across countries is equally significant, with Finland’s SMEs reaching 72% of average cloud

uptake while Romania, Greece and Bulgaria remaining below 25%.

To close this gap, policy support needs to target late adopters, especially SMEs, through practical support

and advisory services. Stronger enforcement and implementation of the switching rules under the Data

Act, entered into force in September 2025, could also help firms switch providers more easily and adopt

cloud with lower lock-in risks. Progress towards the target will depend both on demand-side incentives,

especially for these lagging groups and on whether the EU can build a sufficient, secure and sustainable

computing infrastructure to accompany this transition. Without this combination, cloud uptake may

continue to rise, but as shown above, too slowly to achieve the 75% target by 2030.

Finally, cloud can be considered an essential enabler for the uptake of data analytics and AI services,

detailed below. For this potential to materialise, more firms will have to move from basic cloud

consumption to more advanced data and AI-related uses.

65 Eurostat, Cloud Computing Statistics – Enterprises, 2026.

45

Data Analytics

The share of enterprises using analytics rose from 33.25% in 2023 to 39.85% in 2025, an increase

of 6.6 percentage points. Despite this progress, the EU remains off track to meet the Digital Decade target

by 2030: under the revised baseline trajectory, only 51.9% of enterprises are expected to use data

analytics by 2030, corresponding to around 69% of the target, and the target would be reached only

by 2047 in the absence of additional action.

Figure 9: Share of enterprises using Data Analytics in the EU. Historical data, Digital Decade (DD) trajectory and baseline trajectory

towards 2030.

The EU has laid important foundations for the data economy through the European Strategy for Data and

related key legislative instruments such as the Data Governance Act, the Data Act, and the Open Data

Directive. However, significant barriers continue to limit the wider uptake of data analytics by enterprises,

especially SMEs.

A first major challenge is data scarcity and limited access to high-quality datasets for data analytics and

AI development. Valuable datasets remain siloed within organisations, fragmented across sectors, or

difficult to access across Member States’ borders. This particularly affects start-ups and SMEs, which often

lack access to sufficiently large, high-quality datasets and the computing resources needed to use them

effectively. As global competition intensifies, broader and more reliable access to quality data becomes

increasingly important for innovation and competitiveness.

A second challenge is regulatory complexity and fragmentation. The EU has developed a broad

framework governing data access, sharing and protection, but interaction between horizontal and

sectoral rules, combined with uneven implementation across Member States, can generate legal

uncertainty and increase compliance costs. This is particularly burdensome for SMEs and emerging data

intermediaries and can slow the scaling-up of data-driven business models and European data ecosystems.

A third key challenge is the strategic and geopolitical dimension of data. Data has become a key economic

and security asset. Jurisdictional issues remain a critical concern. Data held by companies subject to non-

EU jurisdictions may be accessed by foreign authorities, including under extraterritorial legal frameworks

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such as the US Cloud Act. This raises questions about effective control, legal certainty and the

enforceability of EU rules, particularly for sensitive or strategic datasets. European firms must be able to

benefit from secure cross-border data flows and access to global data resources, while the EU must also

protect sensitive and strategic datasets and ensure that data governance remains consistent with

European values.

Addressing these barriers will require coordinated reforms and investment. Priority actions include scaling

up access to high-quality data for AI and innovation at large, notably through the further deployment of

common European data spaces and strengthening interoperability through open and modular solutions.

Linking data spaces with data labs and AI factories could help transform Europe’s data assets into

resources for trustworthy AI and advanced analytics.

Further efforts are needed to simplify and modernise the EU data regulatory framework, making it

clearer, more innovation-friendly, and less burdensome for businesses, especially SMEs. In this context,

the proposed Digital Omnibus aims to streamline existing data legislation by reducing overlaps, updating

certain rules (including on privacy and data use), and clarifying the implementation of key instruments

such as the Data Act, while preserving their core objectives.

Strengthening EU data sovereignty and fair international data flows also remains essential. This requires

enabling cross-border access to data, improving access to larger and more diverse datasets for businesses,

and addressing remaining barriers to data sharing. Such measures are critical to support the development

of advanced data analytics and AI applications and to enhance the global competitiveness of European

companies.

Recommendation:

Member States should support the uptake of cloud, AI and data analytics by enterprises, in particular

SMEs and start-ups and government services in line with the proposed Cloud and AI Development Act,

the Apply AI Strategy and the EU data acquis, by:

(i) ensuring a consistent and business-friendly implementation of EU data rules and improving access to high-quality data, computing resources, data labs and innovation support services;

(ii) accelerating the deployment of common European data spaces and strengthening interoperability through open and modular solutions, in particular through the relevant European Digital Infrastructure Consortia (such as ALT-EDIC, and the upcoming Mobility and Logistics EDIC and Agri-food EDIC);

(iii) reinforcing data sovereignty and secure cross-border data flows, in support of the development of trustworthy AI in the EU and the global competitiveness of European firms;

(iv) facilitating the adoption of secure, open and efficient cloud computing services by SMEs, companies in sectors of high criticality in line with NIS2, and government services through targeted support, resources and incentives that overcome barriers to adoption, including skills, resources and awareness.

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2.2.3. Open Source

Open source is a strategic enabler of the digital transformation of the European Union and the Digital

Decade goals as it underpins most modern digital systems and directly affects Europe’s competitiveness,

resilience and technological sovereignty. Open source makes up 70 to 90% of all code in the digital

economy66. A 2024 Harvard Business School study67 estimated the demand-side value of open-source

software at USD 8.8 trillion and found that firms would need to spend 3.5 times more on software if open

source did not exist. The EU starts from a position of strength, with more than 3 million open-source

contributors, more than 500 for-profit open-source companies and substantial EU support to open-source

actions across cloud, AI, cybersecurity, internet technologies and chips, estimated at around EUR 800

million in the current MFF. Yet these strengths are still not converted into sufficient market scale,

stewardship capacity or control over critical parts of the digital stack.

The main hurdles are structural. First, the EU still struggles to move from research and community

development to adoption at scale. Many promising projects lack financing for integration into real-world

environments, user experience improvements, security hardening, performance testing, legal compliance

and commercial deployment. Second, maintenance remains a major market challenge. Critical open-

source components are often widely used but maintained with fragile resources, creating both security

and continuity risks. Third, access to scale-up capital remains weak, particularly for European SMEs and

mid-caps building open-source business models. Fourth, public procurement frameworks still tend to

favour incumbent proprietary suppliers by focusing on short-term pricing, product bundles and vendor-

specific features rather than lifecycle cost, interoperability, exit costs and strategic control. Fifth, the EU

still lacks sufficiently strong stewardship, governance and trust organisations that can carry out

assessments, security attestations to make open software easier to buy and deploy in regulated or

mission-critical environments. These challenges are amplified by fragmentation across Member States

and by continued dependence on non-EU digital infrastructures and services, including software

repositories, code hosting platforms, cloud execution environments and trust services that remain outside

EU jurisdiction.

Investments and reforms are therefore needed to address this situation. Public procurement should

better recognise open standards, interoperability, reusability and total cost of ownership, including

switching and lock-in costs so that open software can compete on equal terms in tenders. Public

administrations should be supported with common guidance, model clauses and skills to be able to

migrate to open-source solutions with confidence. The EU should also strengthen trust and adoption

mechanisms by developing shared assessments and security assurances, promoting common catalogues,

66 Synopsys, Open Source Security and Risk Analysis (OSSRA) Report, 2024; Hoffmann, M., Nagle, F., and Zhou, Y. 67 "The Value of Open-Source Software," Harvard Business School Working Paper No. 24-038, 2024.

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rolling out interoperability frameworks and reusing open digital building blocks across borders. The open-

source licensing requirement for the EU Digital Identity Wallet and the launch of the Digital Commons

EDIC show that the EU already has practical anchors on which to build a more coherent adoption strategy.

Investment needs should be organised across the full lifecycle of open software. This includes R&I funding

for strategic open technologies, but also dedicated uptake and support, multiannual maintenance funding

for critical components, and financing for European stewardship structures. In this respect, the proposed

European Competitiveness Fund is highly relevant. With a budget of EUR 234 billion overall and

instruments designed to combine guarantees, financial instruments, blending, support to start-ups and

scale-ups, and advisory services, it could help address the current gap between technical excellence and

market deployment. For open software, priorities should include supporting deployment-ready sovereign

solutions in strategic domains; de-risking adoption by public administrations and SMEs; financing

maintenance and security of critical dependencies; and mobilising equity, quasi-equity, guarantees and

advisory support for European open-source firms and integrators. This would make open software easier,

safer and more attractive to deploy at scale across the Single Market.

EU Open-Source Strategy will review the current state of play and put forward a set of actions to be rolled

out in the coming years by the public sector at European and Member State level, as well as the private

sector and the open-source communities themselves.

Recommendation:

Member States should mainstream open source as a strategic sovereignty instrument, by:

(i) defining national open-source strategies and a monitoring mechanism to track implementation, as an instrument for joint development of pre-competitive digital building blocks among European industrial actors;

(ii) engaging in cross-border collaboration through the Digital Commons EDIC (DC-EDIC), in particular by developing joint mechanisms to enhance the reusability, interoperability and cost- effectiveness of open-source solutions;

(iii) raising awareness across national and local public administrations and developing technical and operational skills, in particular through Open-Source Programme Officers (OSPOs);

(iv) Striving for an 'open source first' principle in public procurement, and where relevant making publicly funded software available for reuse;

(v) mainstreaming open source in national R&I programmes and in school and university curricula;

(vi) assessing barriers to open-source uptake, including cultural resistance, skills gaps and resource constraints, and putting in place targeted measures to address them.

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2.2.4. Unicorns

The number of unicorns rose by 30 units (net increase), from 294 in 2024 to 324 in 2025, corresponding

to 64.8% of the EU target. This represents a significant year-on-year increase of 10.2%. According to the

forecast along the revised linear baseline trajectory, 88.0% of the target is expected to be achieved by

2030, with 440 unicorns expected to be active in the EU by then (Figure 10). The target of 500 unicorns,

set in the 2023 Communication on EU-level trajectories, is expected to be reached in 2033 if no further

actions are taken.

Figure 10: Number of unicorns in the EU. Historical data and revised baseline trajectory.

Newly released data confirms the post-2020 linear trend but also point to an acceleration in the

creation of new unicorns. In 2025 was almost twice as much than those created in 2024, the EU

recorded 30 new net unicorns in 2025 compared to 16 the previous year. The yearly rate of

progression has increased from 5.8% in 2024 to 10.2% in 2025 (Figure 11).

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Figure 11: Number of unicorns in the EU by year: annual net increase (births-deaths) and relative annual progress since 2009.

Comparing the performance of the EU’s startup ecosystem with that of its main global peers provides

useful context for assessing its relative strengths and areas where further progress may be

possible. Analysing the time series of unicorn creation since 2008 helps to place recent performance in a

longer-term perspective and to compare the evolution of the EU’s startup ecosystem with that of its main

competitors - Canada, China, Israel, Japan, South Korea, United Kingdom and United States (Figure 12).

Figure 12: Number of Unicorns in the EU and its main competitors from 2008 to 2025.

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The European Union expanded its unicorn base from 3 in 2008 to 324 in 2025, with growth accelerating

after 2015 and again after 2020. Despite this progress, the EU continues to lag well behind the United

States, which reached 1 886 unicorns by 2025 - almost six times the EU total - highlighting persistent gaps

in market scale and late-stage financing. China number of unicorns was 40% higher than that of the EU in

2025 (452), while the United Kingdom alone accounts for more than half of the EU’s unicorn total.

Meanwhile, competitors such as Israel and Canada have scaled rapidly within large or well-integrated

domestic markets.

Normalising the unicorn ecosystem by economic size confirms the EU’s underperformance (Figure 13).

Measured as the number of unicorns per USD 100 billion of GDP (2025 values)21, the European Union

records 1.54, well below Israel the top performer (7.04), the United States (6.16), the United Kingdom

(4.45), Canada (3.24), China (2.33), and South Korea (1.99), while remaining above Japan (0.37). The gap

with leading ecosystems such as the U.S. and Israel is sizeable, while the distance to countries such as the

UK and Canada, though smaller, also remains noticeable. With an economy of around two-thirds the size

of the U.S., the EU generates fewer than one-fourth as many unicorns per unit of GDP. It is also worth

noting that the strong performance of the U.S. is highly concentrated geographically. California plays a

disproportionate role in driving the U.S. unicorn ecosystem. Despite accounting for around 13% of U.S.

GDP (40.5k billion in 2024, most recent available year22), California recorded 892 unicorns in 2025,

representing almost half of all U.S. unicorns (1 886). This concentration highlights the importance of dense

venture capital markets, leading technology hubs, and strong innovation networks, in shaping ecosystem

performance.

Figure 13: Number of unicorns (2025) per economic size (GDP in US $ 100

billions).

Overall, the international benchmarking analysis points to a significant margin for improvement in the

EU’s ability to convert economic capacity into large-scale, high-growth firms if it is to narrow the

performance gap with its global peers.

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Tracking the outflow of EU-founded unicorns’ relocation to third countries provides an important

indication of the EU’s capacity to retain high-growth innovative firms and to scale them within its own

market22. The data show a gradual improvement in the EU’s capacity to retain innovative scale-ups with

respect to the U.K. and the U.S. over the past decade (Figure 14). Between 2016 and 2019, around one in

five EU-founded unicorns relocated to the US or the UK, with percentages fluctuating between 21% and

22%. This indicates a relatively stable but significant outflow during that period. From 2020 onwards, the

percentage of relocating companies declined more clearly and reached 16% in 2025. Other potential

destination countries were also examined (Canada, China, Israel, Japan, South Korea), but no cases of

relocation of EU-founded unicorns were identified outside the U.K. and the U.S. over the period

considered.

The trend suggests a moderate but consistent strengthening of the EU’s ability to retain its innovative

scale-ups. While relocation remains a structural challenge, with roughly one in six unicorns still moving

abroad, the outflow has decreased by around five to six percentage points compared to the 2016-2018

peak.

Figure 14: Percentage of unicorns founded in the EU in the past decade that later relocated to either the United Kingdom or the

United States.

Challenges facing EU startups on the path to unicorn status

In the EU, the path from promising startup to unicorn presents obstacles that are often more pronounced

than in other competing regions. Three non-exhaustive challenges stand out in particular: the scale-up

funding gap, weak spinoff creation and tech transfer policies, as well as the difficulty startups face in

accessing public procurement markets.

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The most glaring obstacle is the lack of late-stage capital for startups seeking to raise EUR 100 million or

more. While early-stage funding has improved, EU startups frequently hit a wall when they need large-

scale investment to expand globally. Fund sizes in Europe are typically smaller than in the US, meaning

that fewer EU firms can access the EUR 100M+ cheques needed for rapid scaling. This was to be seen in

the period 2024-2025 when 54% of lead investors in late-stage VC investments in European AI Startups

were from American investors. A result of this is that many EU startups either up either accept lower

valuations or seek funding from non-European investors, too often resulting in relocation to the US.

Compounding this issue is the fragmentation of Europe’s capital markets that the EU’s Saving and

Investment Union Strategy seeks to address.

Another hurdle is Europe’s volume of spinoff creation and related tech transfer policies, which can

prevent groundbreaking research from reaching the market. The EU remains a global leader in R&D, with

world-class universities and corporate labs, but it still lags the US in commercialising innovation. Many

European universities have historically retained excessive ownership of intellectual property (IP)

developed by researchers, discouraging academics from launching spinoffs, although recent years have

seen encouraging progress in this area. When spinoffs do emerge, they often lack the funding, mentorship,

or business expertise needed to scale.

Progress on tech transfer is systematically measured by the European Startup Network Alliance (ESNA)

through its “Existence of Policies for Smooth Tech Transfer” indicator.

While ESNA’s indicator shows Member States progressing in the aggregate, towards a “full” policy

framework for spinoffs and tech transfer, there remain several opportunities to improve the conditions

for spin-off creation and subsequent market growth. For example, Member States could further enhance

conditions by:

• Mobilising government co-funding (grants, loan guarantees, or equity investments) for early-

stage spin-offs to reduce risk for private investors.

• Encouraging undertakings of all sizes to invest in spin-offs through tax incentives, government

grants, or direct partnerships

• Launching national or regional initiatives to encourage entrepreneurs (for example experienced

startup founders) to work more closely with university researchers and contribute their expertise

(including but not limited to mentoring of researchers open to entrepreneurial paths).

Another barrier is the difficulties EU startups face in accessing public procurement markets, which

represent a EUR 2 trillion annual opportunity. Despite their innovative potential, SMEs and startups win

less than 10% of public contracts, often because procurement rules and tender procedures are designed

in ways that favour large incumbents. In practice, these processes tend to reward companies with long

track records rather than younger and more agile firms.

Recommendation:

Member States should close the European scale-up gap, by:

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(i) actively addressing the shortage of European capital for large investment rounds (above EUR

100 million), through public funding allocated to existing or new investment vehicles, including

pan-regional funds, with EIB and EIF support, or by joining existing initiatives such as the

European Tech Champions Initiative (ETCI 2.0);

(ii) initiating public-private partnerships that offer partial guarantees or shared-risk models to

facilitate pension fund investment in start-ups and scale-ups;

(iii) accelerating spinoff creation and tech transfer, by mobilising government co-funding (grants,

loan guarantees, equity) for early-stage spin-offs, by encouraging national leading companies

and mid-caps to invest in the spin-off ecosystem (including via tax incentives), and by mobilising

experienced entrepreneurs to mentor researchers open to entrepreneurial paths.

2.3. Ensuring security for competitive growth The global cybersecurity landscape is being reshaped by growing geopolitical competition and

concentrated digital supply chains, which create systemic vulnerabilities across global markets.

Cybersecurity is moving toward AI-enabled attack and defence operations, with threat actors increasingly

using automation, generative AI, and large-scale exploitation of cloud - edge infrastructures. Meanwhile,

advances in quantum computing require an urgent global transition toward Post-Quantum Cryptography.

.

Similarly, the EU is facing a cybersecurity landscape shaped by the weaponisation of AI, ransomware,

growing dependence on untrusted suppliers and a chronic shortage of security expertise. Sophisticated

adversaries, including both state and non-state actors, are exploiting vulnerabilities in cross-border ICT

infrastructures, automated decision systems and emerging technologies. In addition, there is a clear and

urgent need to ramp up efforts on Post Quantum Cryptography transition.

Despite significant progress, Europe remains structurally dependent on non-EU cybersecurity suppliers,

and European companies are underrepresented in global cybersecurity leadership. The European market

continues to rely predominantly on non-EU industry actors.

According to the Digital Decade Eurobarometer 2026, 91% of Europeans think the EU should cooperate

with Member States to reinforce cybersecurity and protection from online threats. In addition, 86% of

respondents think the EU should prioritise investments in digital infrastructure and services that are

developed and controlled in Europe, and 58% of them would be willing to switch to an EU-based digital

service provider even if it means slightly higher costs, pointing to the greater security and reliability as the

main motivation for doing so.

In their National Roadmaps, Member States reported 39 measures contributing to increased cybersecurity.

Almost half of these measures are dedicated exclusively to cybersecurity, with a total budget of EUR 0.79

billion. The other measures have a broader scope, aiming to support several targets across all areas, with

a total budget of EUR 6.8 billion. These initiatives often involve developing national cybersecurity

strategies, establishing cybersecurity centres, boosting cybersecurity skills and strengthening

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cybersecurity capacities in businesses, public services and digital infrastructure. This focus is also reflected

in the Member States’ roadmap adjustments.

As geopolitical and economic tensions continue to intensify, cyber threats against the EU have further

evolved, with espionage, pre-positioning, and disruptive operations increasingly integrated into state

strategies. Cyberespionage targeting EU Member States and EU institutions remains persistent and

continuous, with threat actors maintaining long-term access to networks, particularly in government,

defence, and critical infrastructure sectors. The convergence between state-sponsored actors and

cybercriminal ecosystems has become more pronounced, with states leveraging criminal tools, access

brokers, and shared infrastructures to enhance deniability and operational reach.

Within the cyber threat landscape, ransomware remains one of the most impactful threats, but its

nature has continued to evolve. Attacks are now predominantly focused on data exfiltration and multi-

layered extortion, rather than encryption alone. SMEs are increasingly targeted due to weaker security

postures. While law enforcement actions disrupted major groups, the ecosystem has become more

fragmented and adaptive, with a proliferation of new ransomware actors and rebranded operations.

Critical sectors - including healthcare, transport, and public administration - continue to be heavily

affected, with ransomware incidents maintaining a high share of impactful disruptions across the EU.

Supply chain attacks remain a key systemic risk, as attackers exploit dependencies on third-party

providers and widely used software components to scale impact across multiple organisations. This risk is

compounded by continued reliance on non-EU vendors and complex digital ecosystems, increasing

exposure to vulnerabilities and external influence. Threat activity targeting cloud environments, managed

services, and open-source software has expanded, reinforcing the potential for cascading effects.

Together, these developments confirm a shift from isolated cyber incidents to a more interconnected,

systemic, and strategically driven threat landscape. Broader trends also point to growing pressure on

cyber resilience, including a persistent cybersecurity skills gap - still estimated in the hundreds of

thousands across the EU - and ongoing challenges in public awareness and incident reporting.

At EU level, several laws and initiatives are in place to address some of these challenges, mitigate their

impacts, or strengthen the level of cybersecurity across the Union. The proposal for a Cybersecurity Act

2 (CSA2 proposal), adopted on 20 January 2026, clarifies and strengthens the mandate of the European

Union Agency for Cybersecurity (ENISA); improves the European Cybersecurity Certification Framework

(ECCF) and addresses ICT supply chain security challenges. Specifically, with the trusted ICT supply chain

framework, the proposal aims at de-risking the Union’s critical ICT supply chains, starting with the

electronic communications sector. Anchored in the ICT supply chain framework, the new ECCF will deliver

trust for critical ICT technologies such as 5G and cloud.

The CSA2 proposal also aims to establish a mechanism to validate the skills and experience acquired by

cybersecurity professionals against a common set of criteria, defined at European level, and implemented

at national level. By developing a mechanism of European individual cybersecurity skills attestations, it

will facilitate skills portability and support the single market by supporting the emergence of new

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providers. The CSA2 proposal will have positive economic impacts by supporting cybersecurity

professionals’ mobility, reducing labour and skills shortages in cybersecurity. It will create a market of

cybersecurity attestations that are easy to understand for employers and learners, tailored to the

European Union labour market.

The NIS2 Directive strengthens the cyber resilience of critical sectors in the EU by requiring essential

and important entities in these sectors to take cybersecurity risk-management measures and to report

significant incidents. By ensuring organisational measures, such as supply chain security measures, the

Directive improves the cybersecurity baseline and supports the continuity of services that are essential

for the society. Moreover, the Directive requires Member States put in place national cybersecurity

strategies and coordination structures, supporting Member States’ overall cyber preparedness. At

European level, the Directive creates cooperation networks (NIS Cooperation Group, CSIRTs Network and

EU-CyCLONe), with the objective of promoting trust, confidence and cooperation between Member States.

By creating an overarching framework for cybersecurity in critical sectors, the NIS2 Directive also supports

the preparation of critical infrastructure sectors against emerging cybersecurity threats, such as

cryptographically relevant quantum computers (CRQC).

Concerning the cybersecurity of specific critical sectors, the Commission has continued the

implementation of the Action Plan on the cybersecurity of hospitals and healthcare providers, in

cooperation with ENISA, the European Cybersecurity Competence Centre (ECCC) and Member States.

The ECCC launched a call for proposals, allocating EUR 30 million to reinforce cybersecurity capacities in

hospitals and healthcare providers, while ENISA issued guidance on cybersecurity practices in September

2025. ENISA has set up a cybersecurity support centre for hospitals and healthcare providers, financed

under a Contribution Agreement through the Digital Europe Programme. Building on these and other

relevant actions, the Commission will put forward recommendations to further refine the Action Plan.

As regards the security of products with digital elements, the implementation of the Cyber Resilience

Act (CRA) will address insecure hardware and software products circulating in the internal market and

being integrated in ICT supply chains across sectors. Products lacking embedded cybersecurity

requirements expand the risk surface of SMEs and critical infrastructure as they present exploitable

vulnerabilities, creating risks of cascading disruptions and threats to the European economy and society,

as showcased by the recent Collins Aerospace incident targeting airline check-in and boarding software.

Enforcing mandatory security-by-design and lifecycle obligations will improve Europe’s cyber resilience

and make cybersecurity a market differentiator rather than an afterthought. Over time, the new EU

cybersecurity regulatory framework will strengthen the EU’s cybersecurity overall preparedness, reduce

dependencies on high-risk third-country suppliers and position the EU as a global standard-setter in secure

digital ecosystems.

Looking ahead, future cybersecurity investment needs to build on what has already been achieved and

focus on areas where strategic gaps remain. Key priorities relate to Europe’s preparedness, digital

sovereignty, support regulatory implementation, and enable resilience in the face of accelerating threats

and technological change. These priorities can be structured around three strategic investment pillars:

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• Pillar 1 - Knowledge & R&I - This pillar strengthens Europe’s technological foundations.

• Pillar 2 - Industrial scale-up & market uptake “Made in the EU” - This pillar consolidates a

competitive European cybersecurity industry.

• Pillar 3 - Resilience of the Digital Market and Infrastructures - This pillar strengthens operational

resilience.

Cybersecurity must also be treated as a cross-cutting priority. The resilience of digital infrastructures,

public services and sectoral systems depends on ensuring that capabilities developed under dedicated

cybersecurity programmes are consistently embedded across all investment areas.

Recommendation:

Member States should reinforce cybersecurity in critical sectors and across the digital value chain, by:

(i) taking measures to enhance cybersecurity in critical sectors commensurate to the level of risk,

ensuring effective cooperation between relevant national authorities, as mandated by the NIS2

Directive, ensuring timely implementation of the Cyber Resilience Act, and engaging with the

European Commission and the EU Agency for Cybersecurity (ENISA) on the new challenges

posed by the cybersecurity capabilities of the most advanced AI models;

(ii) de-risking ICT supply chains based on Union-level coordinated security risk assessments,

mitigating dependencies and phasing out high-risk suppliers from key ICT assets in critical

infrastructure, including in electronic communications networks;

(iii) establishing structured multi-annual national funding mechanisms for cybersecurity, aligned

with EU-level strategic priorities, to ensure the scale and continuity of investment required.

Member States should allocate stable national funding envelopes dedicated to actions, such as

the uptake of trusted European cybersecurity capabilities, the deployment of cybersecurity

infrastructures, and the development of advanced cybersecurity solutions including dual-use,

facilitating their access to later-stage capital. This coordinated investment effort should

maximise the impact of Union programmes, reduce fragmentation, and provide the necessary

critical mass to achieve strategic autonomy in key cybersecurity technologies. Similarly, strategic

EU investment in AI cybersecurity capabilities and acceleration of adoption across strategic

sectors will be critical to avoid a cyber offence-defence asymmetry in the near future;

(iv) continuing to develop the cybersecurity workforce by investing in skills on EU cross-border

projects, and making use of the European Cybersecurity Skills Framework;

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(v) putting in place measures to support the transition to Post -Quantum Cryptography in

accordance with the timeline set in the Coordinated Implementation Roadmap for the

Transition to Post Quantum Cryptography adopted in June 202568;

(vi) accelerating the actions foreseen in the Action Plan on cybersecurity of hospitals and healthcare

providers, including the distribution of Cybersecurity Vouchers;

(vii) establishing robust and timely conformity assessment and supervision capabilities,

providing targeted support - particularly to SMEs - to meet cybersecurity requirements, and

fostering cross-border information sharing to strengthen product cybersecurity across the

single market, notably in the context of the Cyber Resilience Act implementation;

(viii) developing sovereign, interoperable secure communications tools based on open-

source protocols in line with the Preparedness Union Strategy, ProtectEU Strategy and the

Council Recommendation for a Cyber Crisis Management Blueprint, to reinforce the EU’s

autonomy and strengthen the EU’s ability to manage crises and ensure operational resilience.

3. Protecting and empowering people, reducing burdens and

harnessing digitalisation for sustainability

Since its adoption in 2023, the European Declaration on Digital Rights and Principles has informed the

Digital Decade Policy Programme, serving as an anchor of the digital transformation of the EU towards its

human-centric vision. The principles support the Digital Decade’s targets and guide actions in areas such

as skills development, public services, solidarity and digital inclusion.

According to the Digital Decade Eurobarometer 2026, 51% of respondents consider that the EU protects

their rights well in the digital environment. In addition, 85% of Europeans think the EU should cooperate

with Member States to promote digital education and skills programs, while 84% think it is important that

the EU fulfils the objective of ensuring that all EU citizens have basic digital skills (including AI literacy).

3.1. Digital skills for smart society and competitive economy

Empowering citizens and equipping workers with digital skills is at the core of Europe’s digital

transformation, in line with the Declaration on Digital Rights and Principles. Digital skills are both a social

and an economic imperative. Basic digital skills are essential for meaningful participation in society, access

to services, inclusion, and democratic resilience, while the availability of highly skilled professionals,

68 A Coordinated Implementation Roadmap for the Transition to Post-Quantum Cryptography | Shaping Europe’s digital future

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particularly ICT specialists, is critical to Europe’s competitiveness, technological sovereignty, and capacity

to deploy advanced digital technologies.

This section therefore addresses both dimensions. It first examines progress and remaining gaps in basic

digital skills across the population, with particular attention to unequal access and evolving needs linked

to AI and cybersecurity. It then assesses the EU’s capacity to expand its pool of ICT specialists, a

prerequisite for innovation, secure digital infrastructure and the wider uptake of advanced technologies

across the economy.

In their National Roadmaps, Member States reported investments of EUR 24 billion in basic digital skills

(8% of the total budget). The 349 measures reported on the roadmaps primarily focus on improving digital

skills in formal education and promoting digital inclusion. This emphasis is also evident in Member States’

roadmap adjustments.

For the training of ICT specialists, Member States reported investments of EUR 11.9 billion (4.1% of the

total budget). The 208 measures on ICT specialists mainly focus on increasing the number of people with

advanced and highly specialised digital skills, with around one third of these measures targeting

individuals in formal education and approximately one quarter focusing on those already in employment.

This focus is also reflected in Member States’ roadmap adjustments, which include a sharp increase in

measures aimed at boosting advanced digital skills among women.

According to the European Declaration on Digital Rights and Principles, the digital transformation should

contribute to a fair and inclusive society and economy that leaves nobody behind. It should benefit

everyone, achieve gender balance, and include notably older people, people living in rural areas, persons

with disabilities, or marginalised, vulnerable or disenfranchised people and those who act on their behalf.

In this regard and according to the 2026 Eurobarometer on the Digital Decade, 90% of Europeans think it

is important for the EU to make digital tools more accessible for everyone (especially vulnerable groups,

older ones, people with disabilities, etc.). In addition, according to Eurostat, 24.9% of citizens across

Europe use the internet for civic or political participation.

3.1.1. Basic digital skills

Over the last two years, the level of basic digital skills in the EU has increased significantly. The

percentage of people with at least a basic level of digital skills rose by 4.8 percentage points, from 55.56%

in 2023 to 60.39% in 2025. This represents a year-on-year increase of 4.3%, significantly higher than

the yearly growth rate recorded between 2021 and 2023 (1.5%). Some Member States have made

significant progress, with year-on-year increases of more than 6%, including Denmark, Romania, Ireland,

Italy, Germany, Cyprus and Poland.

However, in 2025, the percentage of people with at least a basic level of digital skills still stood at only

92% of the ideal value of the Digital Decade trajectory (60.39% instead of 65.51%). According to the

forecast along the updated baseline trajectory, only 85.6% of the target will be achieved by

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2030, implying that only 68.48% of the population is projected to have at least a basic level of digital skills,

instead of the target of 80% (Figure 15).

At this pace of progress, it will take eight additional years from the digital decade deadline to reach the

full target, forecast to be reached in 2037 if no further actions are taken.

Figure 15: At least basic digital skills in the EU. Historical data, Digital Decade (DD) trajectory and revised baseline trajectory

towards 2030.

Basic digital skills are essential for meaningful and safe participation in today’s digital economy and society.

As shown by the Eurobarometer on Future Needs in Digital Education (2025)69, 89% of citizens agree that

digital skills are essential for participation in society while more than eight in ten respondents (86%) agree

that expanding digital skills training is important for improving the economy of their countries. Yet, a

substantial share of Europeans still faces difficulties in acquiring them. Older people, individuals with low

educational attainment, persons with disabilities, marginalised groups facing racial or ethnic

discrimination, and those who are unemployed or outside the labour market remain particularly at risk of

lacking basic digital skills. Disparities are also evident among younger generations: not all young people

benefit equally from digital opportunities and factors such as unequal access to digital tools and

infrastructure, as well as limited parental support, can significantly shape learning outcomes.

The barriers to acquiring digital skills go well beyond access to devices and internet connectivity. For older

people the transition to new technological tools can be intimidating, especially where there is limited prior

exposure, low confidence in using digital tools or a lack of age-appropriate training opportunities and

guidance. People with lower educational attainment may face a double disadvantage: they may lack both

foundational skills and the capacity for self-directed learning needed to improve their digital literacy. For

those outside the labour market, digital upskilling may be deprioritised in favour of other skills perceived

as more immediately relevant for re-entering employment. Language barriers can further restrict access

when learning resources are not available in accessible formats or in learners’ native languages. More

broadly, the rapid pace of technological change means that digital skills need to be constantly updated, a

69 European Union, Future Needs in Digital Education, Eurobarometer Survey, 2024.

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task that requires time and resources that many individuals may not have. Under the Union of Skills,

Member States are encouraged to strengthen basic skills provided in formal education and expand

training opportunities and participation in lifelong learning. The STEM Education Strategic Plan 70

highlights the importance of increasing the talent pipeline in STEM subjects, and among its actions

proposes a 5% enrolment target in doctoral programmes in ICT by 2030. The need to address skills

shortages in strategic sectors, including ICT and AI, is also reflected in the Council Recommendation on

Human Capital71. The Commission plans to adopt an education package, which will complement the Action

Plan on Basic Skills and the STEM Education Strategic Plan and will aim to establish a robust and inclusive

EU digital education ecosystem, which will help Member States support children and young people who

struggle with digital skills. Furthermore, the EU-OECD AI literacy framework for primary and secondary

education will put forward a common approach to the competences young people need to develop

already at school to understand and critically use AI.

Particular attention should be paid to the evolving nature of digital skills needs. The acceleration of AI

uptake is changing the skills profile required for full participation in society and the economy. People face

increasing concerns over the protection of their sensitive data, as well as the need to securely interact

with AI-based tools and services72. Education and training systems therefore need to adapt not only to

persistent gaps in basic digital skills, but also to new demands related to AI literacy and cybersecurity

awareness. This challenge is especially acute for disadvantaged groups, including people with low socio-

economic backgrounds, those living in remote areas, older people, persons with disabilities, and adults

outside the labour market, who often need more accessible, targeted and flexible learning pathways. It

also requires strengthening the capacity of education and training systems, including teachers, trainers

and local providers, to respond to changing skills needs in an inclusive and effective way.

Recommendation:

In line with the Digital Education Action Plan, Basic Skills Action Plan, the Apply AI Strategy, the STEM Education Strategic Plan, and the Council Recommendations on key enabling factors for digital education and training, improving the provision of digital skills and competences in education and training, and on human capital in the EU, Member States should prioritise coherent investments and policies to support digital education and skills, including:

(i) targeted policies and support for the most disadvantaged groups, including but not limited to people from low socio-economic backgrounds, those living in remote areas, those outside the

70 European Commission, A STEM Education Strategic Plan: Skills for Competitiveness and Innovation, COM(2025) 89 final, 5

March 2025. 71 Council of the European Union, Council Recommendation of 9 March 2026 on Human Capital in the European Union, 9 March

2026; Commission Regulation (EU) 2022/720 of 10 May 2022 on the Application of Article 101(3) of the Treaty on the

Functioning of the European Union to Categories of Vertical Agreements and Concerted Practices. 72 Eurobarometer on future needs in digital education (2025): the vast majority of respondents (85%) believes that digital skills

are necessary to use generative AI tools safely and responsibly. A bit less than two-thirds (63%) of Europeans agree that everyone

will need to be AI literate in 2030. This is particularly noticeable among younger people (66%-67% of aged 15-24 or 25-39 vs 62%

of older age groups) and those still in education (75%).

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labour market, older people and persons with disabilities marginalised groups facing racial or ethnic discrimination, as well as those insufficiently supported by formal education and workforce-based training;

(ii) actions to strengthen digital and AI literacy and basic cybersecurity skills across the population, including through regular assessment and tailored education and training.

3.1.2. ICT Specialists

The total number of ICT specialists in employment rose by 260 000, from 10.2 million in 2024 to around

10.5 million in 2025. This reflects a 2.6% year-on-year growth in the number of employed ICT specialists.

In 2025, ICT specialists still accounted for just 5.0% of total EU employment, substantially stable since the

previous year and far from the EU target of 10% of total employment by 2030.

According to the baseline trajectory, around 12.2 million ICT specialists are expected to be employed by

2030, meaning that only 61% of the target will be achieved by 2030 (Figure 16). In 2025, the value

reached by this KPI stood at around 78% of the ideal trajectory value, with around 10.5 instead of 13.4

million. The full target - 20 million ICT specialists in employment by 2030 - is forecast to be reached only

in 2052 if no further actions are taken.

Figure 16: ICT specialists in the EU. Historical data, Digital Decade (DD) trajectory and revised baseline trajectory towards 2030.

In 2025, women accounted for 19.5% of employed ICT specialists, a figure unchanged since 2024. Over

the past decade, the gender gap in ICT employment has remained pronounced, with men consistently

outnumbering women by around 60 percentage points-women’s representation fluctuated between

16.2% and 19.5%, while men’s ranged from 80.5% to 83.8% (Figure 17).

Despite a brief decline between 2013 and 2015, the share of women in ICT roles has grown gradually

since 2012, albeit at a slow pace (Figure 17, left). In contrast, the proportion of men peaked in 2014-2015

and has since declined, yet it still exceeds women’s representation by more than fourfold (Figure 17,

right).

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Figure 17: Percentage of individuals employed in ICT specialists’ occupations in the EU by sex (2012-2025). The solid line shows

the time trend since 2012. Left-hand side: percentage of women in total ICT specialists; right-hand side: percentage of men in total

ICT specialists. Please note that the range of the y-axis is different in the two charts.

The need for ICT specialists is rising sharply. As the architects of Europe’s digital future, these

professionals play a central role in deploying advanced technologies, increasing productivity, and

delivering secure and efficient digital services.

The analysis of Online Job Advertisements (OJA) 73 reveals rapid shifts in specific skill requirements.

Demand remains strongest for Data Science and Cybersecurity profiles, while cloud security skills are also

rising significantly. The successful deployment of AI requires a complex mix of expertise in data

management, cybersecurity, systems engineering and software development.

The rapid uptake of digital technologies across sectors, combined with replacement demand linked to

retirement will put further pressure on the ICT workforce in the coming years. Shortages and mismatches

are unevenly distributed across Member States, regions, sectors and firms, with stronger digital

ecosystems generally better placed to attract and retain talent. Combined with the persistently low share

of women among ICT specialists, this means that the European economy is still not making full use of its

available talent base.

A number of structural challenges help explain this gap:

• There is a considerable mismatch of ICT skills in the European labour market. Many companies

report difficulties in finding people with the required profile, a challenge made harder by rapidly

changing skills demands linked to AI, the evolving data economy, and growing cybersecurity needs.

• There are key drop-off points (‘leaky pipeline’) for girls and women in ICT fields notably between

secondary STEM education and specialised ICT studies, and between ICT qualifications and

employment. This suggests that increasing girls’ participation in STEM alone will not be sufficient to

close the gender gap. Evidence points to persistent barriers for women in the ICT workplace (‘leaky

pipeline after entry’), including gender bias in recruitment and promotion, unequal recognition and

73 ZENODO, LEADSx2030 Advanced Digital Skills State-of-Play report, November 2025.

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pay, limited access to leadership roles, and greater caregiving responsibilities leading to more

frequent career breaks.

• The relatively low number of new ICT graduates (tertiary and initial VET) entering the labour market

presents a major challenge to reach the Digital Decade target. In 2023, the EU produced only 2.7

tertiary ICT graduates per 1 000 young people, compared to 3.7 in the US and 4.6 in the UK. Although

Member States are seeking to adapt Higher Education Programmes to changing skills demands and

increase the attractiveness of ICT careers, current efforts remain insufficient.

• Another challenge lies in the upskilling of existing ICT specialists. Businesses must ensure that their

employees remain up to date with the latest ICT skills requirements, which requires substantial

investment. In addition, a growing number of sector specialists such as healthcare professionals

using AI-powered screening tools, need advanced digital skills to use digital technologies effectively.

This increases competition for talent and calls for more dedicated approaches to ICT education,

enabling workers with non-technical backgrounds to interact efficiently and safely with advanced

digital technologies.

• The concentration of the ICT ecosystem around individual vendors also presents considerable

challenges for upskilling and reskilling. As technologies become increasingly vendor-specific,

professionals are often required to obtain specialised skills and certifications tailored to particular

applications or platforms. Such dependencies may reduce the portability of skills across employers

and technologies, make training pathways more fragmented and costly and weaken workforce

adaptability and resilience.

Addressing these challenges will require stronger investment in the development and updating of

education and training provision, particularly in cooperation with Industry, as well as more flexible

learning pathways and netter translation of research outcomes into practical training content. It will also

require stronger efforts towards attract and retain women in ICT studies and careers, more support for

workforce and in-company upskilling and greater attention to the territorial and sectoral distribution of

ICT talent, so that regions and smaller firms are not left behind.

Recommendation:

In line with the STEM Education Strategic Plan, the Council Recommendation on human capital, the Council Conclusions on European Competitiveness in the Digital Decade and the AI Continent Action Plan, Member States should support the expansion of the ICT workforce by:

(i) supporting early exposure of young people, particularly girls, to STEM education, and promoting access of women to ICT careers throughout the entire education and career pathway;

(ii) promoting VET and lifelong learning in ICT and accelerating education and training course development in collaboration with industry, in particular through promoting and contributing to the EU Digital Skills Academies;

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(iii) expanding labour migration pathways to attract highly skilled ICT specialists from non-EU countries and incentivising the return of European ICT talent.

3.1.3. Protecting people, in particular minors, in the online space

Protecting citizens, in particular minors, from harmful and misleading content online remains one of the

most pressing challenges of the digital age. In 2025, 55.9% of EU citizens aged 16-74 declared having been

exposed to untrue or doubtful content online, an increase from 49.25% since 2023. This corresponds to

an annual growth rate of 6.5 percentage points. This trend is also observed in the younger population,

with 61.66% of individuals aged 16 to 24 exposed in 2023, increasing to 66.34% in 2025, reflecting an

annual growth rate of 3.7 percentage points. There is a notable gap favouring young people, with a

difference of 7.77 percentage points between those aged 16-24 and those aged 25-64. For the latter group,

the exposure increased from 51.7% in 2023 to 58.57% in 2025, with an annual growth rate of 6.4

percentage points.

Turning to online verification of information, the European Union saw an increase from 24.29% in 2023

to 29.16% in 2025 for all individuals aged 16-74, indicating an annual growth rate of 9.6 percentage points.

Among individuals aged 16 to 24, the percentage increased from 34.68% in 2023 to 39.49% in 2025, with

an annual growth rate of 6.7 percentage points. The gap between young people and those aged 25-64 is

9.09 percentage points. For individuals aged 25 to 64, the percentage rose from 25.18% in 2023 to 30.4%

in 2025, with an annual growth rate of 9.9 percentage points.

Regarding online exposure to hostile or degrading messages, the European Union experienced an increase

from 33.5% in 2023 to 39.72% in 2025 for all individuals aged 16-74, reflecting an annual growth rate of

8.9 percentage points. For those aged 16 to 24, the exposure increased from 47.54% in 2023 to 52.99% in

2025, with an annual growth rate of 5.6 percentage points. The gap between young people and those

aged 25-64 is 11.85 percentage points. For individuals aged 25 to 64, the exposure rose from 34.53% in

2023 to 41.14% in 2025, with an annual growth rate of 9.2 percentage points.

In summary, the data from the Eurostat surveys reveals a consistent increase in online exposure to both

untrue or doubtful content and hostile or degrading messages among EU citizens from 2023 to 2025, with

younger individuals particularly at risk. Encouragingly, this is accompanied by an increase in the practice

of information verification, again most pronounced among younger individuals. While these trends

suggest a growing awareness of online risks, the overall picture underlines the need for policymakers to

enhance digital literacy programmes and strengthen measures to protect EU citizens in the digital space.

The significant gaps between age groups should be considered when designing targeted interventions.

Preserving information integrity

With the digitalisation of the information space, citizens increasingly face challenges in accessing a

plurality of information from independent and reliable sources. The 2025 Media Pluralism Monitor shows

that there is a medium to high risk to media pluralism in 23 EU Member States. Additionally, online

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platforms and AI services increasingly capture news revenues, putting the news sector under significant

economic pressure, ultimately threatening media independence and pluralism. This shows the need to

strengthen financing mechanisms for news media, in ways that respect media independence, as well as

to support news organisations in better harnessing new technological tools.

To counter the escalating threats of disinformation, foreign interference, and algorithmic amplification of

harmful content, evidenced by the 6.5 percentage-point annual increase in exposure to untrue or doubtful

content (2023-2025) and the growing fragmentation of media pluralism, Member States must fully utilise

the EU’s existing legislative framework and non-binding instruments. These include the Digital Services

Act (DSA), the Political Advertising Regulation, the AI Act, and the European Media Freedom Act (EMFA),

as well as the voluntary Code of Conduct on Disinformation, which taken together form a cornerstone for

systemic resilience. Several measures under the European Democracy Shield (EDS) as well as the EDMO

Hubs provide important supportive frameworks, which complement efforts to ensure rigorous,

coordinated enforcement of relevant EU legislative frameworks, both at EU and national levels.

Generative AI represents another evolving challenge. According to the latest Eurostat data, there is

substantial uptake of generative AI tools, especially by the younger demographic. In 2025, 63.8% of young

people aged 16-24 in the EU used generative artificial intelligence (AI) tools compared to just 32.7% of

those aged 16-72. Reports have shown that foreign powers have been trying to poison LLM training data

through techniques such as AI grooming (one example of this is Russia’s Pravda network). Together with

other problems noted in AI chatbots such as hallucinations or sycophancy, this creates a risk of untrue or

doubtful content or even manipulation especially for the younger segment of the population.

Protecting children

According to the 2026 Digital Decade Eurobarometer survey, an overwhelming majority of respondents

(93%) think it should be a high priority for the EU to further strengthen the protection of children and

young people online.

With growing public concern over the risks children face in digital spaces, it is important to continue

enhancing their online safety and well-being through robust regulatory and enforcement measures. In

response to the demands by citizens, the Commission has been working on several streams to increase

the well-being and safety of children online.

The General Data Protection Regulation (GDPR) already recognises that children merit specific protection

regarding the processing of their personal data. Accordingly, organisations must implement child-specific

data protection measures to provide a higher level of protection against the risks that may arise from

children’s use of digital services. The GDPR also contains specific safeguards for minors, including the ‘right

to be forgotten’, and establishes age-of-consent requirements for the processing of personal data by

information society services, such as social media, online gaming and other digital platforms.

Further reinforcing these protections, Article 28 of the Digital Services Act (DSA) requires providers of

online platforms of all sizes accessible to minors to ensure a high level of privacy, safety and security for

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minors on their services. To further boost online safety for children and young people under the DSA, the

Commission adopted the Guidelines on the protection of minors in 2025. These guidelines set out a

benchmark that the Commission uses to determine compliance in this area and outlines a non-exhaustive

list of proportionate and appropriate measures to protect children from online risks such as grooming,

harmful content, problematic and addictive behaviours, as well as cyberbullying and harmful commercial

practices that may occur on online platforms accessible to minors. First enforcement actions have been

taken against the providers of TikTok, Facebook and Instagram as well as pornographic-content online

platforms. These investigations concern issues such as accessing age-inappropriate content, addictive

behaviour, account settings and appropriate age assurance methods. Additionally, Digital Services

Coordinators (DSCs) have started to enforce Article 28 of the DSA at the national level 74.

To strengthen protection for young audiences in an evolving digital landscape, the Audiovisual Media

Services Directive (AVMSD) imposes obligations on video sharing platforms providers to embed EU

content standards and child-safeguarding measures into their operations. Under the AVMSD, all video-

sharing platforms (VSPs) must include EU media content standards, notably those aimed at protecting

minors from harmful content, in their terms and conditions. Their providers are also required to take

appropriate measures (e.g. mechanisms to report or flag harmful content, age verification, parental

control and content rating systems) to prevent minors from viewing harmful content. The Commission

continues to monitor the implementation of the AVMSD by the Member States, including the provisions

pertaining to the protection of minors. In addition, the Directive’s ongoing evaluation and review planned

by Q3 2026 will assess whether more should be done to ensure that minors are protected when they view

audiovisual content online, including when made available by influencers when they qualify as audiovisual

media service providers.

In response to the growing epidemic of cyberbullying75 the Commission has adopted an action plan against

cyberbullying76. The initiative aims to strengthen the capacity to prevent, report and combat cyberbullying.

The plan was prepared through targeted and public consultations involving children, researchers, experts,

and the wider public.

The action plan is structured around three pillars:

• A coordinated EU approach to protection: The Commission will enforce existing laws while

strengthening their focus on cyberbullying and invites Member States to develop national policies

based on a shared understanding of the issue.

74 Authority for Consumers and Markets, ACM launces DSA investigation into Snapchat in connection with illegal sale of vaping

products to minors, September 2025, and, Authority for Consumers and Markets, ACM launches investigation into Roblox in

connection with risks that minors are facing, January 2026. 75 Joint Research Centre, Cyberbullying: Insights from science, policy and legislation - Publications Office of the EU, 2025. 76 European Commission, Action Plan against cyberbullying, February 2026.

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• Prevention and awareness: The plan promotes responsible digital habits from an early age and

will provide EU-level tools developed with input from key stakeholders.

• Reporting and support: The plan ensures clear and accessible reporting and support for all,

especially victims and bystanders. The Commission will support the rollout of an online safety app

across Member States to help children report cyberbullying, store evidence and access assistance.

Lastly, efforts to establish an EU-wide approach to age verification are advancing, with the release of the

blueprint for a secure, privacy-preserving and fully data-protection-compliant EU Age Verification

solution in July 2025. On 15 April 2026, the Commission presented the feature-complete EU age

verification solution. In parallel, and to accelerate progress across the EU, the Commission adopted a

recommendation on 29 April 2026 urging Member States to make use of the age verification blueprint

and draw up implementation plans to ensure swift adoption of national age verification solutions by 31

December 2026. The forerunner Member States (DK, FR, GR, IT, ES, CY and IE) are advancing with their

implementation of the Age Verification solution, and the first national solutions are expected to be

available mid-2026.

Recommendation:

Member States should reinforce the protection of people and minors in the online space, by:

(i) strengthening national implementation and enforcement of the Digital Services Act, including

with targeted strategies countering Foreign Information Manipulation and Interference (FIMI),

drawing on the FIMI Toolbox to integrate cross-sectoral coordination, dedicate funds to

research, fact-checking and media literacy initiatives, and implement secure information-

sharing mechanisms;

(ii) Member States should reinforce the protection of people and minors in the online space by

ensuring sufficient administrative capacity of the Digital Services Coordinators to effectively

enforce the Digital Services Act;

(iii) implementing the harmonised privacy preserving EU age verification solution in the national

EUDI Wallets or stand-alone applications, including systems for issuing proof-of-age

attestations, and accelerating the issuance of electronic means of identification to minors;

(iv) implementing the action plan against cyberbullying through coordinated national approaches,

prevention and awareness measures, and accessible reporting and support mechanisms;

(v) Member States should reinforce the protection of people and minors in the online space by

ensuring sufficient administrative capacity of the Digital Services Coordinators to effectively

enforce the Digital Services Act.

3.2. Efficient public services and administrative burden reduction

This section examines how the digital transformation of public services can improve efficiency, reduce

administrative burden, and enhance accessibility for citizens and businesses across the Union. Building on

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the Digital Decade principles, it focuses on key enablers such as secure digital identity, interoperable

services, and access to essential public services online. While progress is ongoing, further efforts are

needed to streamline procedures, strengthen cross-border functionality, and ensure that digital solutions

deliver tangible simplification benefits.

The European Digital Rights framework requires all Member States to offer citizens an accessible,

voluntary, secure and trusted digital identity. This should in turn allow people to access a range of online

services, including medical records and other healthcare data. According to the Digital Decade

Eurobarometer 2026, 79% of Europeans think EU should cooperate with Member States to develop

shared digital public services (e.g. digital ID, e-Health).

3.2.1. European Digital Identity and business wallets

The European Digital Identity (EUDI) Framework is a key enabler of Digital Decade targets. Electronic

identification77 allows people to securely verify their identity and access services across the EU. According

to 2025 data, 52% of people aged 16-74 in the EU stated that they had used their eID to access online

services for private purposes in the previous 12 months. Results vary significantly across Member States,

from over 90% in Denmark (99%), Finland (96%), the Netherlands (95%), Sweden (92%), and Estonia (91%)

to below 15% in Germany (15%), Slovakia (14%) and Bulgaria (12%). Some countries are showing rapid

progress, with Cyprus improving its score from above 9% (2024) to 57% (2025).

Under Regulation (EU) 2024/1183 establishing the European Digital Identity (EUDI) Framework, each

Member State is required to provide an EU Digital Identity Wallet by the end of 2026. All Member States

are actively developing their European Digital Identity Wallets.

The EU Digital Identity Wallets build on the national digital identity systems already in place in several

Member States. The new regulatory framework expands the functionalities and usability of national eIDs

and ensures their mutual recognition across the EU.

To ensure that EUDI Wallets are secure, each national EUDI Wallet must be certified in accordance with

the Cybersecurity Act complemented bynational certification schemes to ensure compliance with

functional and data protection requirements, in full respect of the GDPR.

Building on the EU Digital Identity framework, in addition to several other tools (the Single Digital Gateway,

the Once Only Technical System, the Digital Product Passport, the European Unique Identifier) European

Business Wallets are expected to provide a single, trusted digital infrastructure that allows businesses to

operate seamlessly across the EU by reducing administrative burden, simplifying compliance with EU

legislation both in a B-2-B or B-2-G, increasing legal certainty, and enabling secure data exchange.

European Business Wallets will help companies automate everyday time-consuming administrative tasks.

77 Eurostat, Digitalisation Dashboard, accessed in May 2026.

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Instead of repeatedly and manually filling in forms, sending documents, or verifying information,

businesses can reuse trusted data and complete processes automatically.

All limited liability companies registered in the EU have automatically been assigned a European Unique

Identifier (EUID) since 2017. It will be assigned to all EU commercial partnerships by July 2028. The

identifier allows, through a Business Registers Interconnection System (BRIS), public access to company

information – including information on branches in other Member States – via the European e-Justice

portal. The EUID is also used by the Beneficial Ownership Register Interconnection System (BORIS), where

the EUID is assigned to all relevant entities, not only companies. In accordance with Directive 2025/25,

BRIS will be linked with BORIS and the Insolvency Registers Interconnection System (IRI) by July 2028. The

European Business Wallet will also use the EUID as a unique identifier contained in the Business Wallet

owner identification data.

This means less back-and-forth, fewer errors, and faster execution - from onboarding partners to signing

contracts or meeting compliance requirements. In practice, it frees up time and resources, allowing

companies to turn compliance with EU legislation into competitive advantage and focus on growth instead

of administration.

Recommendation:

Member States should ensure the timely deployment and uptake of the EU Digital Identity Wallet and

prepare for the rollout of the European Business Wallet, by:

(i) ensuring the issuance of the Wallet by the December 2026 deadline and aligning national EUDI

Wallets implementation roadmaps, including security certification and cross-border use cases;

(ii) supporting the integration of the Wallets with key public and private services and use cases, in

order to maximise the uptake and the economic impact of the EUDI Wallets, building on the

continuing work of the large-scale pilots.

3.2.2. Digital Public Services for Citizens and businesses

In 2025, the EU made steady progress towards its Digital Decade targets for fully digital public services.

The digital public service score for citizens rose by 2.3 points, from 82.3/100 in 2024 to 84.6/100 in 2025.

This represents a year-on-year growth rate of 2.8%.

According to the forecast along the baseline trajectory, 92.3% of the target is expected to be achieved

by 2030 (Figure 18). In 2025, the score for citizens stood at about 87.6% of the ideal value along the

Digital Decade trajectory (84.6/100 instead of 96.6/100). However, the full target - a score of 100

corresponding to the process fully online for all the services - is forecast to be reached only in 2058 if no

further actions are taken. The score of cross-border online availability stood at 75.3/100 in 2025, up

from 71.3/100 in 2024, representing a year-on-year growth rate of 5.6% and reflecting continued

progress.

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In their National Roadmaps, Member States reported investing EUR 13.9 billion, representing

approximately 4.8% of the total budget, to drive the digitalisation of key public services. This investment

included a comprehensive set of 307 measures, of which more than half aim to increase the uptake,

interoperability and accessibility of digital public services and around one-quarter focus on strengthening

their security and resilience of these services.

Figure 18: Share of administrative steps that can be done online for major life events for citizens nationals and foreigners (0 = no

steps can be done online; 100 = the whole process can be done online). Historical data, Digital Decade and revised baseline

trajectory.

The digital public service score for businesses rose by 2.4 points, from 86.2/100 in 2024 to 88.6/100 in

2025. This represents a year-on-year growth rate of 2.7%.

According to the forecast along the baseline trajectory, 93.7% of the target is expected to be achieved

by 2030 (Figure 19). In 2025, the score for businesses stood at 91% of the ideal value along the Digital

Decade trajectory (88.6/100 instead of 97.4/100). However, the full target, a score of 100 corresponding

to the process fully online for all the services, is forecast to be reached not earlier than 2063 if no further

actions are taken. The score of cross-border online availability stood at 78.4/100 in 2025, up

from 73.8/100 in 2024, representing approximately a year-on-year growth rate of 6.2%.

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Figure 19: Share of public services needed to start a business and conduct regular business operations that are available online

for national and for foreign users (0 = no steps can be done online; 100 = the whole process can be done online). Historical data,

Digital Decade and revised baseline trajectory.

Member States, supported by a comprehensive EU policy framework, have undertaken significant

actions to develop secure, interoperable and user-centric digital public services. These collective efforts

have led to measurable improvements in availability and usability across the Union. However,

implementation remains uneven, with persistent gaps in cross-border service provision, interoperability

in practice, and emerging challenges related to security, advanced technologies and digital sovereignty.

In addition, territorial evidence highlights that the effectiveness of digital public services depends not only

on their availability but also on their accessibility, usability and integration into local contexts, which can

vary significantly within Member States78.

This is particularly important given emerging evidence that increasing digitalisation risks creating unequal

access to public services. While 68% of EU residents interacted digitally with public authorities in 2025,

significant disparities exist. According to Eurostat, there is a gap of 21 percentage points between 25–64

and 65–74 years old, and highly educated individuals are twice as likely to interact digitally with public

authorities as those with low educational attainment. Additionally, Eurofound79 research warns that

digital-by-default approaches can disadvantage those with lower digital skills, limited internet access,

disabilities, or complex needs. Member States have stressed the need for accessible and inclusive service

delivery models to avoid reinforcing existing inequalities80.Cross-border service provision remains the

main structural bottleneck. Despite progress, a substantial number of services still require further

development to meet Digital Decade targets. Key sectors affecting mobility, in particular health and justice

(for example, starting a small claims procedure) still struggle to provide fully online cross-border services

78 ESPON, DigiReg – Territorial Perspectives of Digital Transition in European Regions, 2024. 79 Eurofound (2025), https://www.eurofound.europa.eu/en/publications/all/digitalisation-social-protection 80 https://op.europa.eu/en/publication-detail/-/publication/56969910-beba-11f0-a612-

01aa75ed71a1/language-en

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for citizens. Beyond small claims, digitalisation of other cross-border judicial proceedings is underway, but

implementation is costly and takes time. Similarly, digitalising permits, official business certificates and

proof documentation remain most complex for businesses operating cross-border. This reflects the fact

that, while interoperability frameworks are well established at EU level, their implementation across

administrations is still ongoing. Core components, including cross-border data exchange and the once-

only principle, are not yet fully operational in practice and not implemented in all policy domains of the

public sector. In particular, the operationalisation of the once-only principle through the Once-Only

Technical System (OOTS) remains incomplete, with many authorities not yet fully connected. In addition,

while Member States increasingly rely on external providers for the development and delivery of digital

public services, public procurement is not yet systematically leveraged to steer the development and

uptake of secure, interoperable and sovereign digital solutions. A significant progress is expected under

Directive 2025/25 on upgrading the use of digital tools and processes in company law. This will allow

companies to obtain an EU Company Certificate from national business registers or through the system

of interconnection of registers (BRIS) for different purposes, including in administrative procedures before

national authorities or Union institutions and bodies, and in judicial proceedings in other Member States.

The EU Company Certificate will be issued and certified by national business registers and will include

essential information used by companies in cross-border situations, such as the company name, its

registered office, legal representatives or the object of the company. The electronic EU Company

Certificate will be authenticated by using trust services as referred to in Regulation (EU) No 910/2014 of

the European Parliament and of the Council. Company law acquis already provides for online formation,

registration and filing procedures, relying on the interconnection of business registers and covering cross-

borders corporate reorganisation operations (conversions, mergers, divisions). The proposal for a

Regulation on the 28th regime corporate legal framework ‘EU Inc.’ significantly streamlines cross-border

scaling-up through fully digital procedures accessible through the Business Wallets, and the development

of an EU central interface, based on the BRIS infrastructure.

Progress in local digital capabilities is currently foundational but limited, consisting mainly of isolated

pilots in cities. Although Member States and local and regional authorities are increasingly investing in

data-driven governance, these efforts remain largely fragmented and project-based, with limited cross-

border coordination. However, the transition from these experiments to large-scale, reusable digital

solutions is now being enabled through newly established legal and governance structures, notably the

Local Digital Twin (LDT) CitiVERSE EDIC. Involving 15 Member States, this consortium focuses on scaling

up advanced, AI-based urban planning simulations and generative AI, VR/XR applications to improve

citizen interaction, establishing a common infrastructure that directly supports the cross-border reuse of

proven digital public services across European cities.

Other EU-level instruments, including the Interoperable Europe Act, the Single Digital Gateway

Regulation and the European Digital Identity framework, provide additional foundation for cross-

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border data exchange and authentication. Their effectiveness, however, depends on sustained and

coordinated implementation by Member States.

Progress is also visible in enabling functionalities and user experience, notably through the increased

use of pre-filled forms to reduce administrative burden and the continued high performance of user

support and mobile-friendly services.

Common challenges persist in security, sovereignty and the uptake of advanced technologies. While

improvements have been recorded, uneven compliance with security controls and secure Internet

standards across public sector websites indicates the need for further efforts to strengthen trust and

readiness to face an evolving threat landscape. In parallel, reliance on non-EU network operators for the

hosting and network-level delivery of government websites and email services raises shared concerns

regarding digital sovereignty and long-term resilience. This underlines the need for a more strategic

approach to the development and deployment of sovereign digital solutions within the public sector,

including through choices made in service design, infrastructure and procurement.

Finally, while Member States are exploring artificial intelligence in public service delivery, including

through chatbots for user support, its deployment remains at an early stage, limiting its impact on

efficiency and user experience.

Overall, Member States have made steady progress, but achieving fully interoperable, secure and

sovereign cross-border digital public services by 2030 will require sustained and coordinated collective

action across the Union.

Recommendation:

Member States should step up coordinated investments and regulatory measures to develop and

deploy secure, sovereign and interoperable digital solutions for online public and government services,

including:

(i) accelerating the connection of competent authorities to the Once-Only Technical System

(OOTS) and the full implementation of the Single Digital Gateway Regulation;

(ii) making more systematic use of public procurement to support the development and uptake of

secure and sovereign digital solutions across the Union;

(iii) strengthening the cross-border dimension of public services through the Interoperable Europe

Act framework and engagement with the IMPACTS-EDIC.

(iv) engaging with multi-country initiatives, as the LDT CitiVERSE EDIC, to enable their cities and

regions to deploy AI-driven urban solutions and leverage reusable cross-border services.

3.2.3. e-Health

The conceptual framework of the e-Health indicator is focused on the availability of electronic health data

for European citizens and does not measure actual usage of online health data access services. The

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framework consists of four thematic dimensions, each including indicators that measure key aspects of

the availability of online access to electronic health record data. In total, there are 12 sub-indicators in

total at country level that describe:

1. the nationwide availability of online access to electronic health data;

2. the categories of accessible health data;

3. the availability of authentication schemes, type of front-end solutions and their coverage;

4. accessibility for certain categories of people, including vulnerable groups.

The composite e-Health indicator is an aggregate measure of the scores of each thematic dimension

calculated as an average of the 12 sub-indicators.

The baseline trajectory is estimated on the basis of the three available data points, from 2022 to 2025.

The observed points are well above the ideal path connecting the e-Health indicator value at the start of

the programme with its EU target value (100/100) (Figure 20). The access to eHealth indicator rose by

3.8 points, from 82.7 in 2024 to 86.5 in 2025. This represents a year-on-year increase of 4.6%. According

to the forecast along the baseline trajectory, the target is expected to be achieved by 2028 (Figure 20).

Figure 20: e-Health composite indicator. Historical data, Digital Decade and revised baseline trajectory.

Accelerating the digitisation of health systems to improve access to and sharing of electronic health

records (EHRs) is crucial for boosting EU competitiveness and technological sovereignty81. EU Member

States are taking significant steps in this direction by setting up public services to facilitate access to health

data for primary and secondary use as mandated under the European Health Data Space (EHDS)

Regulation. By leveraging a strong regulatory framework, collaborative resource pooling, advanced data

infrastructures, and high-performance computing facilities, health data can be harnessed to develop the

next generation of European AI models for personalised disease prevention and precision medicine.

81 European Commission, The future of European competitiveness: Report by Mario Draghi, September 2024,

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These solutions have the potential to address rising healthcare costs by promoting simplification and

efficiency, ultimately leading to better outcomes for citizens.

According to the OECD's live repository of AI strategies & policies, at least 19 EU Member States recognise

health as a crucial sector in their national AI strategies or related initiatives. However, AI adoption and

integration in healthcare across the EU remain limited and uneven. Although 94% of EU healthcare

providers are already using or planning to invest in AI within the next four years, challenges persist in

scaling up investment and integrating advanced technology into often under-resourced healthcare

systems82 .

In their National Roadmaps, Member States reported investing EUR 7.7 billion to support e-Health services

(all coming from public budgets), with approximately 98 measures, most of them focusing on accessibility

and uptake.

Addressing these issues requires targeted policy measures at national and European levels. The

Commission announced in the Apply AI Strategy four flagship initiatives to boost AI adoption in healthcare

and pharmaceuticals. The network of European AI-powered advanced screening centres will speed up the

introduction of innovative solutions for prevention, early detection and diagnosis in cancer and

cardiovascular diseases, while the European Network of Expertise on AI Deployment in Healthcare will

consolidate guidelines and best practices to safely and effectively integrate AI in healthcare settings.

EU Member States are progressing towards achieving universal citizen access to their EHRs by 2030, as

indicated by this year's e-Health indicator. Efforts are also ongoing to ensure that national, regional and

local health information systems are operational by March 2029 for health data to be processed in line

with the EHDS Regulation. This will provide robust governance and accelerate the implementation of

necessary infrastructures, ensuring continuity of care by connecting various providers, and enhancing

accessibility of health data for citizens and other authorised users. Moreover, mature health information

systems will support the deployment of AI solutions by enabling the safeguarded secondary use of

anonymised or pseudonymised health records.

However, progress remains uneven across Member States, reflecting differences in administrative

capacity, digital maturity, and investment levels. Insufficient funding, digital skills and readiness among

healthcare professionals, as well as inconsistencies in data quality and harmonisation across healthcare

providers limit interoperability and information exchange within and across health systems. The EHDS

Regulation provides an opportunity to address these issues. It mandates the establishment of Digital

82 European Commission, PwC, EEIG, Open Evidence, Study on the deployment of AI in healthcare, 2025.

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Health Authorities and health data access services for primary use, as well as Health Data Access Bodies

for secondary use by March 202783.

Finally, European initiatives are paving the way for the cross-border harmonisation, secure storage,

processing and analysis of health data for high-impact use cases, such as genomics and imaging-AI. The

Genomic Data Infrastructure (GDI) and Cancer Image Europe platform (EUCAIM) projects are developing

federated infrastructures and governance which aim to support and complement the implementation of

the EHDS. In GDI, more than half of EU Member States are expected to have operational federated

infrastructures by late 2026, advancing towards a secure and decentralised access to genomic and clinical

data across Europe. The Cancer Image Europe Platform already supports the optimisation of the use of

medical imaging and AI for personalised cancer care offering over 80 medical imaging datasets,

preprocessing tools, and capabilities for distributed AI algorithm training.

Building on the above, new investments in the digitalisation of health systems to facilitate the adoption

and integration of AI in healthcare are needed. This involves leveraging the EHDS and secure federated

health data infrastructures to ensure safe storage, processing, and analysis of health data, as well as

enhancing the digital skills and readiness of healthcare professionals.

Recommendation:

Member States should continue to cooperate and invest in the digitalisation of healthcare systems to strengthen the EU's competitiveness and strategic sovereignty while improving health outcomes for citizens, by:

(i) establishing the necessary public services and health information systems to enable universal citizen access to their electronic health records and to facilitate secure access to health data for secondary use, in line with the EHDS Regulation;

(ii) advancing the development and deployment of safe, trustworthy AI in healthcare by developing and implementing national strategies and roadmaps with monitoring frameworks;

(iii) accelerating cooperation on European health data infrastructures through EDICs and supporting the participation of healthcare organisations in the activities of the Apply AI Strategy's Network of AI-powered Advanced Medical Centres.

83 Primary use of data means using electronic health data, to treat or rehabilitate patients, prescribe or dispense medical products

and deliver associated social, administrative, or reimbursement services. In contrast, ‘secondary’ use refers to reusing existing

data that was collected during primary use for scientific research purposes, public interest, policy support.

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3.3. Digital for decarbonisation and sustainable technologies

Digitalisation can help decarbonise and make Europe’s economy more resource efficient, but these

benefits are not automatic. They depend on whether digital solutions deliver a measurable net positive

impact and whether the expansion of digital infrastructures remains compatible with energy, water and

material constraints. This section therefore looks at both sides of the equation: digital for sustainability,

and the sustainability of digital itself. When citizens were asked about the synergies between digital and

green transitions in the Digital Decade Eurobarometer 2026, 50% of them positioned the green digital

technologies (e.g. energy-saving tech) between the technologies that will have the most positive impact

on their daily life in the next 10 years. In addition, 78% of respondents think AI should be developed as a

priority in an environmentally sustainable way (e.g. using renewable and clean energy).

The revised Digital Decade National Roadmaps include 62 measures from 18 Member States contributing

simultaneously to the Digital Decade’s green and digital objectives. Of these 59 measures, 37 are

specifically designed to simultaneously address those green and digital objectives, with a total investment

of EUR 222.2 million.

3.3.1. Sustainable digitalisation for competitiveness, resilience and net

positive impacts

Sustainability is no longer only an environmental objective. It is increasingly a driver of industrial growth,

competitiveness, innovation and resilience. However, digital contribution to climate neutrality and

circular economy (clean industry) is not automatic. It depends on achieving a measurable net positive

climate impact and realising its potential in enabling circular, profitable and future proof business models.

A fundamental issue to ensuring such net positive impacts is the pacing problem: the speed of

technological change in digital markets, particularly AI and compute infrastructures, often exceeds the

speed of policy, permitting and reporting systems. This creates a growing need for faster monitoring,

comparable sustainability metrics, and earlier coordination between digital, energy and environmental

authorities.

The convergence of digital and green strategies can strengthen the EU’s competitiveness, sovereignty

and resilience while contributing to achieving climate goals. Enabling smart technologies and making

digital infrastructure more environmentally friendly reduces operational costs and encourages consumer

adoption. GreenTech development will depend heavily on digital capabilities such as connectivity, AI

infrastructure, cloud-edge systems, semiconductors, interoperable data systems and circular digital

hardware84. The digital layer enabling this transformation needs to be built, scaled and anchored in the

84 There is no single internationally agreed definition of green technology. The UN broadly defines it as technology with "the

potential to significantly improve environmental performance relative to other technologies." For the purposes of this report,

green technology (or "greentech") refers to technologies, products, and systems that measurably reduce environmental harm,

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EU, with the potential to optimise supply chains and creates profitable, circular business models. All these

factors contribute to decarbonisation and strengthen Europe’s position in the green technology sector.

The digital sector’s “hidden” material footprint remains a primary threat to European strategic

autonomy. The production of digital devices relies on significant volumes of raw materials, many of them

not found in the EU, energy, water and complex global supply chains, increasing the EU’s exposure to

external dependencies and resource risks.

AI is increasingly acknowledged as a transformative force for the green transition. It can serve as a key

enabler of system intelligence, improving renewable forecasting, grid balancing and predictive

maintenance, and enabling flexible demand that adjusts to variable solar and wind output. AI-based fault

detection can reduce outage durations by 30 to 50%, and remote sensors combined with AI-based

management could unlock up to 175 GW of additional transmission capacity without any new lines being

built, according to the IEA's Energy and AI report (2025) 85 . Much of AI's environmental footprint is

concentrated in a relatively small number of large, power-intensive data centres, with a typical AI-focused

facility consuming as much electricity as 100 000 households86 . This dual reality makes transparent

monitoring and proportionate governance increasingly important.

3.3.2. Rising environmental concerns: electricity, water and material

demand for digital transition

Despite the promising benefits of digitalisation for the green transition, the environmental footprint of

the digital economy is intensifying. In 2025, data centres in Europe consumed approximately 72 terawatt-

hours (TWh) of electricity, compared to 70 TWh in 2024, highlighting the sector’s substantial and rising

energy requirements. By 2030, electricity usage by data centres in Europe is expected to rise towards 115

TWh, an increase by at least 45 TWh compared to 2025.87 While data centres are major energy consumers,

they also have the potential to enhance system flexibility and demand response. Under the right

conditions, they can offer grid services through on-site battery storage, adaptable cooling systems, load

shifting, or by transferring computing tasks from one region to another as a form of sustained curtailment.

Water use is also becoming more relevant, particularly in regions facing water stress. Data centre cooling

technologies, site selection and reuse of waste heat and water should therefore be considered as part of

sustainable infrastructure planning.

improve resource efficiency, and support a more sustainable economy - spanning both hardware (e.g. batteries, heat pumps,

solar modules) and software (e.g. grid optimisation, climate analytics). The term lacks an officially adopted European

Commission definition; the closest legislative equivalents at EU level are the EU Taxonomy for Sustainable Activities and the list

of net-zero technologies under the Net-Zero Industry Act (Regulation (EU) 2024/1735 of 13 June 2024). 85 IEA, Energy and AI, International Energy Agency, 2025. 86 Ibid. 87 IEA, Table A.4: Data Centres Electricity Consumption by Region, p. 110, Key Questions on Energy and AI, International Energy

Agency, April 2026.

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Material circularity remains another strategic challenge. The EU currently recovers less than 1% of rare

earth elements from end-of-life products, while supply chains remain highly concentrated. In 2024, 95%

of EU imports of rare earth elements came from China, Malaysia and Russia combined88.

These developments underline the need for a system-level resource management approach, ensuring that

the deployment of digital infrastructure remains compatible with energy system constraints, water

availability and material sustainability, particularly in regions facing resource stress89.

3.3.3. EU actions to unlock the twin green digital transition

The EU is deploying a broad policy toolbox that addresses both digitalisation as an enabler of sustainability

and the sustainability of digital infrastructures themselves.

For instance, measuring and reducing the environmental footprint of telecommunications networks

requires dedicated policy instruments. To this end, the Commission published in January 2026 an EU Code

of Conduct (EU CoC) for the sustainability of telecommunications networks90, as announced in the 2022

Digitalising the Energy System Action Plan91. The Commission consulted telecoms stakeholders broadly

for the preparation of this EU CoC, which is voluntary. References to the EU CoC are included in the

Commission’s Digital Networks Act (DNA) proposal92, which is currently in inter-institutional negotiations.

Feedback from stakeholders that implement the EU CoC will generate data on sustainability in

telecommunications networks, as part of the broader ICT sector. Telecoms stakeholders are therefore

encouraged to implement the EU CoC and share their feedback.

In March 2026, the Commission proposed the Industrial Accelerator Act, providing a new set of measures

to increase the demand for low-carbon and European-made technologies and products. Building on the

Single Market, the proposal will boost sustainable manufacturing and accelerate industry’s shift to cleaner,

future-ready technologies.

In December 2025 the Commission also presented the European Strategy for Housing Construction, as

part of the European Affordable Housing Plan. The Strategy aims to strengthen the productivity and

innovation in construction and promoting advanced construction materials and methods, such as

digitalisation, to increase resource efficiency.

88 Euronews, Is Europe Losing the Race to Secure Rare Earth Materials?, January 2026; Eurostat, Imports of rare earth elements

saw 30% drop in 2024, April 2025. 89 IEA, Energy and AI, International Energy Agency, April 2025; IEA, Overcoming energy constraints is key to delivering on

Europe's data centre goals, November 2025. 90 European Commission, Environmentally sustainable telecommunications networks, January 2026. 91 European Commission, Digitalising the Energy System – EU Action Plan, COM(2022) 552 final, 18 October 2022. 92 European Commission, Proposal for a Regulation of the European Parliament and of the Council on Digital Networks (Digital

Networks Act), COM(2026) 16 final, 21 January 2026.

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The European Green Digital Coalition (EGDC) is an initiative of companies, supported by the European

Commission and the European Parliament, which works towards supporting the green transition through

digital technologies while reducing the environmental footprint of the ICT sector itself. In its first phase,

launched in 2021, the EGDC developed a methodology for assessing the net climate impact of digital

solutions. This helps policymakers and industry understand how digital technologies contribute to

emissions reductions and supports access to green finance.

The second phase of the initiative began in March 2025 and focuses on applying this methodology to real

world projects. Around fifty use cases across sectors such as energy, transport, agriculture and buildings

are currently being analysed to demonstrate how digital solutions can reduce emissions while

strengthening Europe’s industrial competitiveness.

In addition, the Green Deal Data Space (GDDS), backed by the Digital Europe Programme, is bringing

together over 500 datasets as well as implementing 10 use-cases 93 across the domains of climate,

biodiversity, pollution, and the circular economy, assisting stakeholders in their pursuit of Green Deal

objectives.

The Digital Product Passport (DPP) is a key instrument under the Ecodesign for Sustainable Products

Regulation and an important element of the EU’s circular economy framework. It introduces digital tools

that allow information about products, such as materials used, repairability, recyclability and

environmental performance, to be stored and accessed throughout the value chains. The DPP improves

transparency and traceability of materials, facilitates recycling and secondary markets, and enables

companies to demonstrate the sustainability performance of their products. It creates opportunities for

European digital companies to develop new data infrastructures and services supporting circular value

chains.

The Cloud and AI Development Act will address the urgent and growing data centre capacity gap, aiming

to at least triple the EU’s data centre capacity within the next five to seven years. It harmonises the

conditions for investment in data centres across the EU, with a focus on sustainable and innovative data

centres, ensuring their operators have access to land, finance and energy in the EU. Without strategic

energy planning and a focus on sustainable infrastructures, data centre expansion will particularly

challenge existing hubs and regions with high strain on natural resources, with a risk of crowding out

electrification objectives in other sectors and generating increasing public opposition. Policy intervention

is therefore essential to uphold consistency with the European Climate Law and ensure that possible

national data centre acceleration policies do not result in a race-to-the-bottom in terms of sustainability

and minimise environmental impacts and grid strain94.

93 Sage, the Data space for a sustainable Green Europe.

94 The Shift Project, Al, data, and computing: shaping infrastructures for a decarbonised world, November 2025.

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The Action Plan on Digitalising the Energy System continues to generate concrete policy outputs. Building

on it, the Commission's Affordable Energy Action Plan of February 2025 announced a Strategic Roadmap

for Digitalisation and AI in the Energy Sector, with a public consultation drawing over 300 contributions

between August and November 202595. The roadmap96 will build on the 2022 Action Plan and set out

measures to prepare for the energy system of tomorrow, including both challenges and opportunities

linked to large-scale AI deployment in the energy sector. Specifically, it will establish an EU coordination

framework to facilitate access to energy data and create a market for innovative services such as demand-

side flexibility and bidirectional EV charging, build on ongoing work on smart grid indicators and digital

twins for EU electricity networks, and improve the sustainable integration of data centres into EU

electricity grids, including through a classification system and possibly minimum performance standards.

3.3.4. Member State actions towards the twin green and digital transition

Several Member States are also developing national approaches. Examples include digital product

information tools supporting circularity, eco-design approaches for digital services, and national strategies

on sustainable digitalisation and resource efficiency.

France has taken a legislative approach, combining the 2021 Climate and Resilience Law with an eco-

responsible digital strategy and sector-specific measurement methodologies to reduce the environmental

footprint of digital services, including requirements applicable to public digital services from 2024 and

mandatory sustainable digital strategies for municipalities above 50 000 inhabitants from 202597. The

Netherlands is advancing the Sustainable Digitalisation Action Programme 2026-2028, with actions

supporting companies to make more sustainable decisions, and monitoring the impact of the digital sector

through an inventory of data. In Luxembourg, the Leneda platform, launched officially in March 2025 by

transmission system operator Creos, provides consumers, producers and businesses with access to

electricity and gas data, enabling monitoring of load profiles and consumption patterns, with energy

market processes progressively integrated from spring 2025. Designed to eventually incorporate water

and heat data, Leneda represents a concrete implementation of energy data space objectives at national

level.

3.3.5. Reforms and investments needed to accelerate the green and digital

transition

The Council conclusions on European Competitiveness in the Digital Decade of 5 December 2025 invite

the Commission to develop targets related to a greener digital transition and to incentivise the

95 European Commission, Digitalisation of the energy system. 96 European Commission, Strategic Roadmap for digitalisation and AI in the energy sector – consultations opened, August 2025. 97 République Française, Stratégie numérique responsable des collectivités : traduction opérationnelle du décret de l'article 35

de la loi REEN, July 2023.

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deployment of sustainable and innovative technologies for climate action. Against this backdrop, several

structural gaps need to be addressed.

Energy and water consumption data for the ICT sector remain fragmented and largely self-reported,

although harmonised metrics for measuring the net climate impact of digital solutions are available at EU

level as well as existing practices such as the Climate Neutral Data Centre Pact and the Energy Efficiency

Directive. The environmental impact of digital infrastructures is measured through several existing

frameworks, including the Energy Efficiency Directive delegated act for data centres, the WEEE Directive

for e-waste, the EU CoC for sustainable telecoms networks, and the European Green Digital Coalition

methodology for the net climate impact of digital solutions. However, implementation remains uneven

across Member States, and coverage beyond data centres and telecoms KPIs is still partial.

Coordination between digital, energy and environmental authorities is uneven across Member States, and

the alignment between EU research and innovation funding streams, Cohesion Policy and the European

Competitiveness Fund remain insufficient.

Circularity of digital hardware is critically underdeveloped. Sovereign computing capacity, particularly for

local AI inference within European jurisdictions, requires new models such as Hardware-as-a-Service. The

speed of AI infrastructure deployment consistently outpaces permitting, reporting and grid integration

systems, and the environmental externalities of compute-intensive AI systems are not yet internalised

through financing mechanisms based on a polluter pays approach.

Recommendation:

Member States should advance the green digital transition by integrating sustainability into digital policies, investments and governance frameworks, by:

(i) strengthening coordination between national digital, energy and environmental authorities, integrating, where relevant, sustainability criteria into digital strategies policies and investments

(ii) supporting the development and uptake of harmonised environmental impact metrics for digital solutions and infrastructures, including energy consumptions and net carbon impact, building on established rules, methodologies and practices (Digital Coalition, Climate Neutral Data Centre Pact, Energy Efficiency Directive, EU Code of Conduct for the sustainability of telecommunications networks);

(iii) align EU research and innovation funding streams with Cohesion Policy and the European Competitiveness Fund to deploy environmentally beneficial digital solutions in transport, industrial processes, agriculture and climate action;

(iv) promoting circularity instruments and solutions such as the Digital Product Passport and Hardware-as-a-Service;

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(v) ensuring national data centre expansion policies remain compatible with energy system constraints and environmental commitments and exploring incentive mechanisms for sustainable AI systems.

4. Funding the Digital Decade

Achieving the Digital Decade requires not only stronger policies and governance but also sustained and

better targeted investment at both EU and national level. This section looks at how current funding

instruments are supporting the digital transition, what implementation lessons can already be drawn from

major programmes such as the Recovery and Resilience Facility (RRF), how cross-border investment

mechanisms are evolving, and where the main financing gaps remain for the next programming period.

The digital transition is a core element of the Commission’s investment strategy for competitiveness.

The 2026 stocktaking exercise revealed that nearly all EU budget programmes contribute to the digital

transition, channelling EUR 229 billion to that purpose between 2021 and 2025, representing almost

14.5% of the total EU budget for that period98. A significant share of the EU budget supporting the digital

transition comes from the Recovery and Resilience Facility (RRF), which as of April 2026 accounts for EUR

133.1 billion in public digital investments.

Recovery and Resilience Facility (RRF) contribution to the Digital Decade targets

The recent Joint Research Centre (JRC) report shows that of this EUR 133 billion, EUR 120.4 billion is

considered to be contributing directly to Digital Decade targets and objectives. Among the Digital Decade

cardinal points, the largest estimated expenditure is dedicated to digitalisation of businesses (36%) and

digitalisation of public services (31%), followed by digital skills (18%) and digital infrastructure (15%).

RRF budget (EUR million)

Other DD objectives 12 733

Basic digital skills 13 110

ICT specialists 8 713

Gigabit network coverage 10 195

5G coverage 1 654

Semiconductors 4 917

Edge nodes 0

Quantum computing 985

Cloud computing services 5 453

Data analytics 4 665

98 The 2026 stocktaking exercise to estimate EU spending on the digital transition was conducted for the implementation of the

2021-2027 EU budget over the 2021-2025 period: European Commission, Digital tracking.

85

Artificial Intelligence 5 219

SMEs digital intensity 13 994

Unicorns 13 997

e-ID 445

Digital public services 23 593

Electronic health records 13 455

Total DD-relevant budget 120 396

Source: JRC Calculations

In addition, a total of 25% of the RRF reforms are aimed at strengthening public institutions, the

digitalisation of public services, education and cybersecurity, while 13% improve skills and labour market

outcomes99. Over 55% of RRF funds have been disbursed100, with significant implementation progress

during the last reporting period101, although the Commission stressed that implementation needs to

accelerate in most Member States.

By 2030, digital RRF investments are estimated to generate a cumulative economic impact of EUR 219

billion within the EU and EUR 302 billion globally (corresponding to a multiplier of 1.5 within the EU and

2.0 globally, significantly higher than the overall impact of RRF spending)102. Of the total EU impact, around

EUR 51 billion arises from cross-border spillover effects, confirming the Single Market as a key

transmission channel and reinforcing the case for coordinated EU action.

Lessons learned from implementation of digital measures under the RRF, as shared in the Digital Decade

Board, reflecting the views from Spain, Croatia, Hungary, Ireland, Italy, Lithuania, Luxembourg, Malta and

Portugal, point to a common set of delivery constraints and design improvements for the future

programming period. First, administrative burden and reporting requirements often proved

disproportionate, particularly for smaller projects for which complex compliance obligations can

undermine accessibility and effectiveness unless proportionality is built into control and audit

expectations. Secondly, in large-scale initiatives, implementation delays were frequently driven by

complex public procurement procedures, demanding data integration and interoperability requirements,

and an underestimation of the digital maturity of existing (often legacy) systems. Progress also became

highly dependent on suppliers, meaning that even minor setbacks could stall entire programmes. Thirdly,

digital policy and especially innovative and advanced technologies require greater design flexibility:

projects involving fast-evolving solutions need space for testing, pilots and iterative development,

alongside more adaptable milestones, targets and implementation pathways. These challenges are

compounded by limited specialised expertise within Member States and by the inherent difficulty of

99 European Commission, Recovery and Resilience Facility Annual Report 2025 - Reforms and Investments, October 2025. 100 As of August 31, 2025. 101 Referred to the period between 1 September 2024 and 31 August 2025. 102 Michels, A., Ferreira, V., Annoni, P., Burton, J., Pedauga, L., Rueda-Cantuche, J. M. & Kušen, M., European Economy.

Discussion Paper 249: Digital Measures under the Recovery and Resilience Facility: Economic Impacts at Macro, Sectoral and

Country Levels, European Commission, Directorate-General for Economic and Financial Affairs, 2026.

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forecasting demand and uptake for novel digital technologies. Finally, implementation would benefit from

stronger multi-level coordination that better reflects the operational role of regional and local authorities,

with clearer allocation of responsibilities and decision-making across EU, national and regional levels to

reduce friction, improve sequencing and accelerate delivery.

Advancing cross-border collaboration for digital investments

Through multi-country projects (MCPs), Member States and the Commission are stepping up

cooperation to build strategic digital capacities that no single country could deliver alone. In 2025-2026,

this has led to tangible progress in setting up and advancing European Digital Infrastructure Consortia

(EDICs).

Two new EDICs have been established: the Digital Commons EDIC, which aims to support the

development and scaling of digital commons by improving access to funding and strengthening public

contributions; and the IMPACTS-EDIC, which focuses on enhancing public services through innovative

interoperability solutions.

In parallel, earlier initiatives have moved from planning to implementation. The Alliance for Language

Technologies (ALT-EDIC) has begun deploying newest Language Technologies in domains such as public

services, telecommunications, energy and science. The Local Digital Twins towards the CitiVERSE EDIC

(LDT EDIC) became fully operational following the appointment of its director in November 2025. In

addition, the EUROPEUM-EDIC completed the transfer of the European Blockchain Services Infrastructure

from the European Commission in the first quarter of 2026.

Moreover, formal applications for new EDICs have been submitted to the Commission in areas such as

cybersecurity skills and agri-food, with additional proposals - particularly in genomics and mobility -

expected in 2026 or early 2027. These developments open important opportunities to scale interoperable

infrastructures, pool investments and strengthen Europe’s digital sovereignty, but they also highlight

challenges related to governance complexity, long-term sustainability and effective uptake.

Overall, these developments show a shift from coordination to concrete delivery, with EDICs increasingly

operational, expanding their membership and starting to produce initial results. An updated overview of

the EDICs established is available at the Commission webpage of the European Digital Infrastructure

Consortia.

Member States are also advancing Important Projects of Common European Interest (IPCEIs). Existing

initiatives in microelectronics (IPCEI-ME/CT) and cloud (IPCEI-CIS) are now fully operational and mobilising

substantial public and private investments. The recently approved Tech4Cure IPCEI is expected to drive

innovation in AI-enabled healthcare. Meanwhile, new IPCEI candidates are under design in strategic areas

such as AI technologies, computing infrastructure and advanced semiconductor technologies.

Investment needs for the digital transition

87

Public funding also needs to ensure the right balance between budget predictability and flexibility. While

a stable and predictable trajectory needs to be the basis for budget planning, the fast-evolving nature of

technological development requires the ability to respond swiftly to emerging priorities and trends in

certain areas. Joint Undertakings (JUs), for instance, are well equipped in this regard, with agile

procedures that allow them to adapt work programmes swiftly when new urgencies arise. By pooling

public and private resources at scale, JUs have played a pivotal role in aligning strategic agendas, and

fostering robust ecosystems around key EU policy priorities, thereby strengthening Europe’s

competitiveness and technological sovereignty. However, Member States’ financial planning has not

always been sufficiently flexible to accommodate emerging needs and changing priorities, at the pace

required by the fast pace of technological development. Beyond public funding, mobilising private

investments plays a crucial role. The EU is increasingly using its budget to support private digital

investment through tools such as InvestEU, Joint Undertakings (JUs), and Public-Private Partnerships

(PPPs). As of March 2026, InvestEU has mobilised finance for investments for EUR 318 billion, out of which

more than EUR 200 billion from private sources. Out of those, EUR 23.34 billion is supporting digitisation

and EUR 13.44 billion are related to strategic investments on critical infrastructure, cybersecurity, space

and defence.

However, financial instruments are not yet fully taken advantage of in all programmes103 and often lack a

strong policy steer or the scale needed to address systemic investment gaps. Blending instruments and

budgetary guarantees (e.g. InvestEU) show promising results in this area. Depending on the level of

technology readiness, leveraging factors from financial instruments (i.e. the amount of private money that

is invested alongside every euro of public money) are currently around 3 for early-stage deep-tech

companies (European Innovation Council Fund equity) and around 5.62 from the InvestEU guarantee104.

Overall, the EU faces a substantial and urgent need to increase investment in digital technologies,

infrastructure, and innovation ecosystems, particularly in equity. A savings and investments union with a

fully integrated capital market is fundamental to providing European businesses with the equity capital

they need to innovate and grow. Strategic public support will remain essential in high-risk areas such as

AI, cybersecurity, and deep tech, while effective leveraging of private investment will be key to achieving

scale and impact. This is of particular importance, considering also the fact that it is expected that 58% of

the public budget of digital measures in Digital Decade National Roadmaps will phase out by the end of

2027. This poses a near-term risk of a significant investment shortfall, with a potential one to two years

gap notably between the expiry of RRF-funded measures and the operational deployment of the European

Competitiveness Fund and NRPPs under the next Multiannual Financial Framework.

103 As an example of needed flexibility, the EIC blended finance allows successful companies to decouple the timing of the grant

and equity finance, without the need to go through a new application process when the time is ripe (e.g., when co-investors

have been found). See also Mundell, The ecosystem: European Innovation Council uncouples grant and equity funding for

startups, 2024: European Commission, Digital Tracking. 104 European Commission, Interim Evaluation of the InvestEU Programme – Final Report, 1 October 2024.

88

Europe must urgently tackle its structural shortage of private risk capital, and in particular equity, for high-

growth and deep-tech companies as well as large infrastructural investments. There is indeed the need

for an urgent reflection on the means to boost European equity capacities at scale to finance Europe’s

tech sovereignty ambitions.

To bridge the gap between research and market, more actions and investments are required, particularly

at Technology Readiness Level (TRL) 6, to support the prototyping and commercialisation of digital

technologies. Additionally, there is a need for public and private investment in fostering the growth-stage

of companies, as evidenced by a significant drop in the number of scaleups compared to startups in the

EU.

Establishing and scaling regulatory and technical sandboxes is also a priority, as they enable companies,

especially SMEs and startups, to test innovative technologies in controlled, real-world environments

under regulatory supervision. Another essential area of investment is in enabling infrastructure, such as

secure and scalable cloud and edge computing services, as well as interoperable data infrastructures,

which underpin a wide range of advanced digital technologies, such as AI.

Digital transformation requires substantial upfront spending on infrastructure, software, and skills.

Firms' investments are constrained by uncertain or long-term returns on investment, combined with

limited access to finance. In its Multiannual Financial Framework proposal, which set out the approach for

the EU budget between 2028 and 2034, the Commission has proposed EUR 234.3 billion for a new

European Competitiveness Fund (ECF). Part of it will support the digital transition, invest in strategic

technologies and simplify EU funding. The Commission proposal for the ECF refers to the Digital Decade

Policy Programme 2030: “In particular, the ECF’s digital investments respond to the gaps and priorities

identified in the State of the Digital Decade 2025 report, notably in digital connectivity, advanced

computing, and digital skills, supporting the Union’s objective of digital sovereignty”.

The Commission proposal for the next Multiannual Financial Framework includes a significantly increased

budget for digital. The proposed budgetary envelope is EUR 68.3 billion, combining EUR 51.5 billion

funding from the ECF 105 and EUR 16.8 billion from the next Research and Innovation Framework

Programme (FP10)106 under a shared Digital Leadership window. The digital window brings together

major digital programmes such as the current Digital Europe Programme (DIGITAL), the Connecting

Europe Facility’s (CEF) Digital strand and the collaborative and applied research part of Horizon Europe’s

Pillar II. Horizon Europe will remain a standalone programme but with a structure that is closely aligned

105 EurLex, Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on establishing the European

Competitiveness Fund ('ECF’), including the specific programme for defence research and innovation activities, repealing

Regulations (EU) 2021/522, (EU) 2021/694, (EU) 2021/697, (EU) 2021/783, repealing provisions of Regulations (EU) 2021/696,

(EU) 2023/588, and amending Regulation (EU), July 2025. 106 EurLex, Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing Horizon Europe, the

Framework Programme for Research and Innovation, for the period 2028-2034 laying down its rules for participation and

dissemination, and repealing Regulation (EU) 2021/695, July 2025.

89

with the ECF, under a single policy steer, thus coherently covering all aspects of digital, from research to

advanced digital skills, digital infrastructures, critical digital technologies, their ecosystems and

applications.

The proposal also aims to leverage substantially more private and public investment, including through

equity and blended for start-up and scaling. The ECF InvestEU instrument will leverage public and private

funding towards EU priority sectors, with a minimum EU support of EUR 17 billion which can be further

topped up from the ECF policy windows.

Given the number of different funding streams supporting digital objectives, it will be important to ensure

proper triangulation between them. The use of large-scale project implementation mechanisms with

potential to pool resources from different funding streams, such as EDICs, would benefit from closer

cooperation between the Commission and the Member States.

Recommendation:

The EU and Member States should strengthen further their cooperation, acting not only as a de-risking

partner but also as a strategic market aggregator, mobilising demand and investment at European scale

to support the breakthrough technologies required to strengthen technological sovereignty and close

Europe's innovation gap.

Member States should align the implementation of the Digital Decade with the future architecture of

the next Multiannual Financial Framework, by:

(i) clearly outlining in their updated National Roadmaps how they intend to use their NRPP allocations, ensuring full alignment with DDPP priorities and the ECF's digital objectives, and minimising the risk of disruption to investment flows, while maintaining coherence, transparency and strategic targeting of investments;

(ii) assessing and reporting on expected and actual progress on these planned measures, using their own specified measures and, where appropriate, complementary data sources, to provide a robust and evidence-based estimation of implementation outcomes;

(iii) appointing National Contact Points for EDICs at national level, to capitalise on existing know- how and best practices and to streamline the process of setting up European Digital Infrastructure Consortia.

5. International

International cooperation on digital policy focuses on boosting European competitiveness, promoting the

security of Europe and its partners, and shaping global digital governance and standards. To that end, the

European Commission and the High Representative for Foreign Affairs and Security Policy adopted an

International Digital Strategy for the European Union in June 2025, with the following objectives: (i) to

expand international partnerships, for strengthening EU tech competitiveness and security as well as that

90

of its partners (ii) to deploy an EU Tech Business Offer, by combining EU private and public sector

investments to support the digital transition of partner countries (iii) to strengthen global digital

governance, by promoting a rules-based global digital order, in line with the EU’s fundamental values

The Commission has continued to develop and deepen its network of Trade and Technology Councils (TTC)

and Digital Partnerships with partners, including India, Japan, the Republic of Korea, Singapore and

Canada, developing cooperation on research and innovation collaboration, industry cooperation,

regulatory and policy exchanges as well as standardisation. To that end, in 2025, the Commission held

Digital Partnership Councils with Japan, the Republic of Korea, Singapore and Canada.

In the Latin America and Caribbean (LAC) region, bilateral digital dialogues have been established with

Brazil, Argentina and Mexico, complemented by bi-regional activities under the EU-LAC Digital Alliance.

The EU-LAC Digital Alliance Week was held in September 2025, in Guatemala. It aimed at stocktaking of

its achievements and paved the way to the IV EU-CELAC Summit in Colombia, in November 2025.

The Global Gateway initiative focuses on digital infrastructure investments to help bridge the global digital

divide and enhance secure digital connections, supporting the EU’s digital resilience and reducing

dependencies. Under the Global Gateway, the Digital for Development (D4D) Hub has provided a strategic

platform to strengthen digital cooperation between the European Union and its Member States (Team

Europe) and partners in Africa, Asia-Pacific, Latin America and the Caribbean, and the EU neighbouring

countries. The Tech Business Offer implementation was initiated with high-level events focused on

showcasing EU solutions to the Latin-American countries at the EU-LAC Digital Alliance, and country-

specific events in 2025 with Nigeria and Viet Nam. Next to this, several outreach events for companies in

EU Member States were held in 2025.

The Commission continued to support digital transformation efforts in enlargement countries and the EU

neighbourhood. Preparatory work was completed for Ukraine and Moldova to join the EU’s Roam Like At

Home area on 1st January 2026. The Commission supported the integrity of the presidential and

parliamentary elections in Moldova. The Reform Agendas of the Western Balkan countries adopted in

October 2024 provide timelines for legislative alignment with EU digital acquis from December 2024 to

December 2027.

The Commission has also engaged in multilateral fora, notably marking progress on the governance of

artificial intelligence (G7 Hiroshima AI Process, Council of Europe Convention, OECD). To improve its

economic resilience and protect sensitive technologies, the EU has implemented measures such as the EU

Economic Security Strategy, promoting cooperation with key partners in emerging technologies. These

measures aim to balance economic openness with strategic interests and to enhance the EU's resilience

in critical sectors.

Trade policy and agreementsalso play a vital role in this regard, by setting the global and bilateral rules

for digital trade in an open but assertive manner, based on European values. The Commission negotiated

91

ambitious commitments on digital trade with Singapore and the Republic of Korea and in recent trade

agreements with New Zealand, India, Chile and Japan.

The EU also sees increasing opportunities for cooperation with Gulf Cooperation Council (GCC) countries

in AI, submarine cables, digital identity and e-signatures, and secure connectivity. In December 2025, the

EU launched negotiations of Strategic Partnership Agreements (SPAs) with the Kingdom of Saudi Arabia,

United Arab Emirates and Qatar.

The EU faces critical geopolitical challenges centred on security, economic sovereignty, and internal

cohesion, driven by Russia’s ongoing aggression in Ukraine, instability in the Middle East, and intense

rivalry between the US and China. Key imperatives include fostering strategic autonomy, managing

industrial dependencies on China, navigating potential US security shifts, and accelerating enlargement

to secure the neighbourhood.

Recommendation:

Member States should:

(i) be involved in developing and implementing the EU’s Digital Partnerships, Dialogues and Trade and Technology Councils and their priorities, in full respect of the EU’s institutional framework. The close involvement of EU tech businesses and other relevant stakeholders, including civil society and the research community, will be indispensable for the collective advancement of shared goals.

(ii) actively promote the EU Tech Business Offer to ensure that European companies, including SMEs, start-ups, scale-ups and large companies, are informed and involved in the structuring of the Offer and can fully benefit from this initiative.

(iii) regularly update on their contribution to the implementation of the EU’s International Digital Strategy, in particular their international activities complementing it.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

SWD(2026) 154 final

COMMISSION STAFF WORKING DOCUMENT

DESI 2026 methodological note

Accompanying the document

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee, the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{COM(2026) 288 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

EN EN

State of the Digital

Decade 2026: DESI 2026methodological note

Table of Contents

1. The DESI 2026 dashboard ..................................................................................................... 1

2. People ................................................................................................................................... 4

3. Infrastructures ...................................................................................................................... 5

4. Business and Economy .......................................................................................................... 7

5. Public Services ..................................................................................................................... 11

6. The KPI table in the country reports executive summary .................................................. 13

7. New feature: the Interactive Country Profile ..................................................................... 13

8. Data sources........................................................................................................................ 16

9. Methodological considerations .......................................................................................... 16

Table of Figures

Figure 1 : The Interactive Country Profile: France example, KPIs only .............................................. 15

Table of Tables

Table 1: DESI 2026 DASHBOARD (newly added indicators are shaded in light blue) .......................... 2

Table 2: Digital skills and digital content trust & safety indicators ...................................................... 4

Table 3 : Fixed and mobile infrastructure indicators ........................................................................... 5

Table 4: Digital transformation of businesses, cybersecurity, ICT carbon footprint and ICT trade &

web sales indicators ............................................................................................................................. 7

Table 5 The composition of the 2025 Digital Intensity Index............................................................. 10

Table 6 Digitalisation of public services indicators ............................................................................ 11

1

2026 DESI Methodological note

1. THE DESI 2026 DASHBOARD

Since 2023, in line with Article 2(1) of the Digital Decade Policy Programme 2030 (the Decision),

adopted by the Council and the Parliament in December 20221 the Digital Economy and Society

Indicators (DESI) is based on a set of indicators providing a multi-dimensional, detailed picture of the

collective, annual progress made by the EU towards the 2030 goals. DESI consists of a dashboard of

indicators fully aligned with the digital targets established in the Decision. It includes all the key

performance indicators of the Digital Decade (DD KPIs) set out in the Commission Implementing

Decision2 for which national-level values are available or estimated.

The DESI 2026 dashboard features around 50 national-level indicators. Since the previous edition, it

has been updated with several new indicators designed to refine the monitoring system ahead of the

upcoming Digital Decade review (Table 1).

These additions, all sourced from Eurostat, include metrics assessing the use of generative AI, people's

perception of trust and safety towards online content, the environmental impact of the digital sector,

and indicators on ICT trade and web sales both within the EU and with non-EU countries. Crucially, a

new indicator tracking the percentage of enterprises adopting at least five ICT security measures has

also been introduced to provide a more robust evaluation of business cyber-resilience. Integrating

these dimensions helps make the Digital Decade monitoring framework more comprehensive, human-

centric, and sustainable, while providing an evidence-based assessment for the review process. The

review aims to ensure that the EU’s progress is measured not only by technical infrastructure and

technology adoption but also by the security, economic maturity, and environmental responsibility of

the digital landscape in the EU.

All the indicators included in the DESI dashboard and their detailed description (metadata) can be

accessed and analysed via the DESI visualisation tool3 for the 2026 edition as well as for all past,

available years (Table 1). A subset of this rich set of indicators has been used for the data-based

assessment of the country’s performance in the 2026 State of the Digital Decade Report (SDDR). The

ones that have been included in the reports are indicated in the last column of Table 1 (‘YES’) and are

described in detail in Tables 2 to 6.

Most of the indicators are collected by the relevant authorities of the Member States and by the

Commission, the European Statistical Office (Eurostat) and the Directorate-General for

Communications Networks, Content and Technology (DG CNECT), via ad hoc studies for which all the

details and links are provided.

The country and EU-level data analysis – state of play and level of progress - of a selection of the DESI

2026 dashboard indicators was in part generated using tested European generative AI models - Mistral

Large, Mistral Small and Pixtral Large - for the 2026 SDDR Country Reports. All responsible officers

have verified the accuracy and relevance of the initial drafts.

1 Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022 establishing

the Digital Decade Policy Programme 2030 (Text with EEA relevance), OJ L 323, 19.12.2022, p. 4–26. 2 Commission Implementing Decision (EU) 2023/1353 of 30 June 2023 setting out key performance indicators

to measure the progress towards the digital targets established by Article 4(1) of Decision (EU) 2022/2481 of

the European Parliament and of the Council. 3 DESI dashboard for the Digital Decade (2023 onwards) - Digital Decade DESI visualisation tool

2

2026 DESI Methodological note

TABLE 1: DESI 2026 DASHBOARD (NEWLY ADDED INDICATORS ARE SHADED IN LIGHT BLUE)

3

2026 DESI Methodological note

2. PEOPLE

TABLE 2 DIGITAL SKILLS AND DIGITAL CONTENT TRUST & SAFETY INDICATORS

Indicator Description Unit Source

Reference year (latest available year

with comparable values across the EU)

1.a At least basic digital skills (DD KPI) EU 2030 target = 80%

Individuals (aged 16-74) with ‘basic’ or ‘above basic’ digital skills in each of the following five dimensions: information, and data literacy, communication and collaboration, problem solving, digital content creation and safety

% of individuals + relevant breakdowns

Eurostat – European Union survey on the use of ICT in Households and by Individuals (ISOC_SK_DSKL_I21 [I_DSK2_BAB])

2025

1.a ICT specialists (DD KPI) EU 2030 target = 20 million equivalents to approximately 10% of total employment (assuming 200 m in employment in 2030)

Employed ICT specialists. Broad definition based on the ISCO-08 classification and including jobs like ICT service managers, ICT professionals, ICT technicians, ICT installers and servicers.

% of total employment + gender breakdown

Eurostat – Labour force survey (ISOC_SKS_ITSPT)

2025

1.a Use of generative AI Individuals (aged 16-74) that used generative AI tools (private/professional/educational purposes breakdown)

% of individuals + % of users for professional purposes

Eurostat – European Union survey on the use of ICT in Households and by individuals (isoc_ai_iaiu)

2025

1.b Online exposure to untrue or doubtful content

Percentage of individuals (aged 16-74) who have seen untrue or doubtful information or content on the internet news sites or social media (in the last 3 months).

Percentage of individuals

Eurostat - Evaluating data, information and digital content: Online exposure to untrue or doubtful content (isoc_sk_edic_i21 [I_UDI])

2025

1.b Online verification of information

Percentage of individuals (aged 16-74) who have checked the truthfulness of the information or content they found on the internet news sites or social media (in the last 3 months)

Percentage of individuals

Eurostat - Evaluating data, information and digital content: Online verification of information (isoc_sk_edic_i21 [I_TIC])

2025

1.b Online exposure to hostile or degrading messages (optional indicator, possibly not all the country values available)

Percentage of individuals (aged 16-74) who have encountered messages online that were considered to be hostile or degrading towards groups of people or individuals (in the last 3 months)

Percentage of individuals

Eurostat - Encountering hostile or degrading online messages (isoc_ci_hm [I_HM])

2025

The digital skills group of indicators assesses both the basic and advanced digital skills of citizens and the number of specialists with advanced digital skills. At least

basic digital skills and ICT specialists measure progress towards the targets of the Digital Decade Policy Programme.

4

2026 DESI Methodological note

3. INFRASTRUCTURES

TABLE 3 : FIXED AND MOBILE INFRASTRUCTURE INDICATORS4

Indicator Description Unit Source

Reference year (latest available year

with comparable values across the

EU)

2.a Share of fixed broadband subscriptions >= 1 Gbps

% of fixed broadband lines of at least 1 Gbps % of fixed broadband subscriptions

European Commission through the Communications Committee (COCOM)

2025

2.a Fixed Very High-Capacity Network (VHCN) coverage (DD KPI) EU 2030 target = 100%

% of households covered by fixed VHCN refers to the share of households located in premises passed5 by at least one fixed VHCN network. For 2017 and 2018, the indicator covers FTTH and FTTB networks, while from 2019 onwards it also includes cable networks based on DOCSIS 3.1 or higher. This change should be taken into account when interpreting the time series.

% of households + rural area breakdown

Connectivity Coverage in Europe 2025, Grant Thornton Advisory and LS telcom https://digital-strategy.ec.europa.eu/en/news-redirect/938555 Also available via EUROSTAT ISOC_CBT

2025

2.a Fibre to the Premises (FTTP) coverage (DD KPI) EU 2030 target = 100%

% of households covered by FTTP refers to the share of households located in premises passed by an FTTP network. For the purposes of this indicator, FTTP covers both FTTH and FTTB.

% of households + rural area breakdown

Connectivity Coverage in Europe 2025, Grant Thornton Advisory and LS telcom https://digital-strategy.ec.europa.eu/en/news-redirect/938555 Also available via EUROSTAT ISOC_CBT

2025

2.a Overall 5G coverage (DD KPI) EU 2030 target = 100%

% of populated areas covered by at least one 5G mobile network

% of households + rural area breakdown

Connectivity Coverage in Europe 2025, Grant Thornton Advisory and LS telcom https://digital-strategy.ec.europa.eu/en/news-redirect/938555 Also available via EUROSTAT ISOC_CBT

2025

4 Indicator’s values collected via Member States’ National Regulatory Authorities – NRAs - may be subject to slight retroactive revisions at the request of the NRAs themselves. For

this reason, time series included in previous versions of the indicator dashboard may not fully match with the ones reported in previous versions of the dashboard. 5 In this table, ‘premises passed’ means that an internet access service over the relevant network can be provided upon request either immediately or, within the timeframe normally

applicable for a standard customer order, using the existing network and requiring only the completion of the final physical link to the premises and service activation.

5

2026 DESI Methodological note

Indicator Description Unit Source

Reference year (latest available year

with comparable values across the

EU)

2.a 5G coverage in the 3.4-3.8 GHz band

% of populated areas with coverage by 5G using the 3.4-3.8 GHz spectrum band

% of households + rural area breakdown

Connectivity Coverage in Europe 2025, Grant Thornton Advisory and LS telcom https://digital-strategy.ec.europa.eu/en/news-redirect/938555 Also available via EUROSTAT ISOC_CBT

2025

2.a 5G SIM cards share of population 5G mobile subscriptions defined as SIM cards that generated any internet traffic on a domestic 5G network in the last 90 days.

% of total population

European Commission services, through the Communications Committee (COCOM)

2025

2.a Edge nodes

(DD KPI)

EU 2030 target = 10 000

Number of highly secure and climate-

neutral edge computing nodes providing

latencies below 20 milliseconds.

Number of

deployed

highly secure

and climate-

neutral edge

computing

nodes

providing

latencies

below 20

milliseconds

Edge Observatory:

Overall methodology: D3 – Edge Nodes Taxonomy and Monitoring

Methodology 2025

https://ec.europa.eu/newsroom/dae/redirection/document/122401

Data analysis on public edge nodes and international comparison:

D4 – Edge Nodes Deployment Progress Report

https://ec.europa.eu/newsroom/dae/redirection/document/127759

Data collection on edge node status (public/private) for 2025: D6 –

Edge Nodes Deployment Progress Report

https://ec.europa.eu/newsroom/dae/redirection/document/126886

2025

Under this group of indicators, both fixed and mobile broadband are analysed with indicators measuring the supply and the demand side. Fixed VHCN, FTTP, 5G coverage and estimated edge-nodes deployment all measure progress towards the targets of the Digital Decade Policy Programme.

4. BUSINESS AND ECONOMY

6

2026 DESI Methodological note

TABLE 4: DIGITAL TRANSFORMATION OF BUSINESSES, CYBERSECURITY, ICT CARBON FOOTPRINT AND ICT TRADE & WEB SALES INDICATORS

IndicatorDescription Unit Source

Reference year (latest available

year with comparable values

across the EU)

3.a SMEs with at least a basic level of digital intensity DII ver. III (DD KPI) EU 2030 target = 90%

The digital intensity score is based on counting how many out of 12 selected technologies are used by enterprises. A basic level requires usage of at least 4 out of 12 technologies (see Table 5)

% of SMEs Eurostat - European Union survey on ICT usage and e-commerce in Enterprises (ISOC_E_DII [E_DI3_GELO])

2025 [Ver. III]

3.a SMEs with very high level of digital intensity DII ver. III

The digital intensity score is based on counting how many out of 12 selected technologies are used by enterprises. A very high level requires usage of at least 10 out of 12 technologies (see Table 5)

% of SMEs Eurostat - European Union survey on ICT usage and e-commerce in Enterprises (ISOC_E_DII [E_DI3_VHI])

2025 [Ver. III]

3.a Data Analytics6 (DD KPI)

Enterprises performing data analytics (internally or externally)

% of enterprises Eurostat - European Union survey on ICT usage and e-commerce in Enterprises (ISOC_EB_DAS [E_DA])

2025

3.a Cloud (DD KPI)

Enterprises using sophisticated or intermediate cloud computing services

% of enterprises Eurostat - European Union survey on ICT usage and e-commerce in enterprises (ISOC_CICCE_USE [E_CC1_SI])

2025

3.a AI (DD KPI)

Enterprises using any AI technology % of enterprises Eurostat - European Union survey on ICT usage and e-commerce in enterprises (ISOC_EB_AI [E_AI_TANY])

2025

3.a AI or Cloud or Data Analytics (combined DD KPI) EU 2030 target = 75%

Enterprises using AI technologies or buying sophisticated or

intermediate cloud computing services or performing data

analytics

% of enterprises Eurostat - European Union survey on ICT usage and

e-commerce in enterprises (ISOC_EB_AI

[E_AI_CC1SI_DA_ANY])

2025

6 In 2023, Eurostat in cooperation with all the EU National Statistical Institutes replaced the Big Data indicator with the Data Analytics one. Data analytics refers to the use of technologies, techniques or

software tools for analysing data to extract patterns, trends and insights to make conclusions, predictions and better decision-making with the aim of improving performance (e.g. increasing production,

reducing costs). Data may be extracted from your own enterprise’s data source or from external sources (e.g. suppliers, customers, government) (source Eurostat). Data Analytics includes a broader set of

technologies than the former Big Data indicator.

7

2026 DESI Methodological note

IndicatorDescription Unit Source

Reference year (latest available

year with comparable values

across the EU)

3.a Unicorns7

(DD KPI)

EU 2030 target = doubling the number

Calculated as the sum of unicorns referred to in Article 2, point (11)(a), of Decision (EU) 2022/2481 and those referred to in Article 2, point (11)(b), of that Decision

Total number of unicorns

Dealroom.co: https://app.dealroom.co/dashboard

Download date 21/01/2026. Revisions/updates after this date are not taken into consideration in the 2026 visualisation tool

2025

3.a Enterprises using at least 5 ICT security measures

Enterprises applying at least 5 cybersecurity measures out from a list of 11 measures as measured in Eurostat’s

% of enterprises Eurostat - European Union survey on ICT usage and e-commerce in Enterprises (isoc_cisce_ra [E_SECMGE5])

2024

3.b Air emissions from the ICT sector

Different pollutants and greenhouse emissions produced by the ICT sector. Two breakdowns available: ICT manufacturing and ICT services.

Kilograms of CO₂ equivalent per capita

Eurostat – Air emissions from the ICT sector by NACE Rev. 2 activity (ISOC_ENV_ICT_AE [GHG])

2022

3.b Contribution of the ICT sector to the air emissions in the economy

Percentage of total ICT sector emissions in the emissions of total economy. Two breakdowns available: ICT manufacturing and ICT services.

Percentage of air emissions from total economy

Eurostat – Contribution of the ICT sector to the air emissions in the economy by NACE Rev. 2 activity (ISOC_ENV_ICT_AEC [GHG])

2022

3.b Distribution of air emissions from the ICT sector

Percentage of economic activities (ICT manufacturing and ICT services) in the total ICT sector emissions for which the ICT sector is responsible.

Percentage of air emissions from the ICT sector

Eurostat – Distribution of air emissions from the ICT sector by NACE Rev. 2 activity

(ISOC_ENV_ICT_AED [GHG])

2022

7 Unicorns’ classification and extraction methodology: The Commission extracts from the Dealroom platform companies that are classified as unicorns and have their headquarters in the EU27. This implies

that all and only unicorns with headquarters in one EU Member State at the time of the extraction are counted. Every company that is classified by Dealroom as ‘verified unicorn and USD 1 billion exits’

has a last reported private valuation or exit of US 1 billion or more. The term ‘exit’ refers to the process by which investors, such as venture capitalists or founders, sell their stake in a company, typically

to make a return on their investment. In some cases, a private unicorn may have fallen below USD 1 billion in paper value since its last disclosed funding round and valuation. In this case, they retain their

unicorn classification in Dealroom until an updated valuation is confirmed. Where a company had an exit above USD 1 billion and subsequently fell in value, it is still counted due to achieving a unicorn

exit. Where company valuations are reported in currencies other than USD, the exchange rate from reported currency at the time is used. In these scenarios, Dealroom’s analysists may decide to give the

benefit-of-the-doubt to a limited extent due to exchange rate fluctuation.

8

2026 DESI Methodological note

IndicatorDescription Unit Source

Reference year (latest available

year with comparable values

across the EU)

3.b ICT Recycling/Reusing Percentage of Waste of Electrical and Electronic Equipment (WEEE) from two defined equipment categories that undergoes recycling or preparation for reuse relative to the total WEEE collected for those categories. The two electronic equipment categories selected are: 1. Screens, monitors, and equipment containing screens having a surface greater than 100 cm2 [EE_SME]; 2. Small IT and telecommunication equipment (no external dimension more than 50 cm) [EE_SITTE].

Percentage of waste collected

Eurostat - Waste electrical and electronic equipment (WEEE) by waste management operations - open scope, 6 product categories (from 2018 onwards). CNECT’s own computations merging the 2 product categories: The indicator is computed by combining the two categories: [Sum of the two waste categories recycled or prepared for reuse (in tonnes)]/[Sum of the two waste categories collected (in tonnes)]

2023

3.c Balance of international trade in ICT services inside the EU

Balance of international trade in ICT services (credits minus debits) inside the EU. ICT services include telecommunication, computer and information services.

Million EUR Eurostat - International trade in ICT services (BOP_ITS6_DET [SI])

2024

3.c Balance of international trade in ICT goods inside the EU

Balance of international trade in ICT goods (credits minus debits) inside the EU. The most recent list of ICT goods consists of 93 goods defined at the 6-digit level of Harmonised System (HS) 2017

Million EUR Eurostat - International trade in ICT goods (ISOC_IT_ICT_GD [TOT_ICT_GD])

2024

3.c Enterprises with ICT web sales to other EU countries

Enterprises with ICT web sales to other EU countries Percentage of enterprises (with 10 or more employees)

Eurostat - E-commerce sales of enterprises by NACE Rev. 2 activity (isoc_ec_eseln2 [E_AWSEU])

2025

3.c Balance of international trade in ICT services outside the EU

Balance of international trade in ICT services (credits minus debits) outside the EU. ICT services include telecommunication, computer and information services.

Million EUR Eurostat - International trade in ICT services (BOP_ITS6_DET [SI])

2024

3.c Balance of international trade in ICT goods outside the EU

Balance of international trade in ICT goods (credits minus debits) outside the EU. The most recent list of ICT goods consists of 93 goods defined at the 6-digit level of Harmonised System (HS) 2017

Million EUR Eurostat - International trade in ICT goods (ISOC_IT_ICT_GD [TOT_ICT_GD])

2024

9

2026 DESI Methodological note

IndicatorDescription Unit Source

Reference year (latest available

year with comparable values

across the EU)

3.c Enterprises with ICT web sales to rest of the world

Enterprises with ICT web sales to the rest of the world Percentage of enterprises (with 10 or more employees)

Eurostat - E-commerce sales of enterprises by NACE Rev. 2 activity (isoc_ec_eseln2 [E_AWSWW])

2025

The Business and Economy group of indicators is made up of three sub-groups: (a) digital transformation of businesses, (b) ICT carbon footprint and (c) ICT trade and

web-sale intensity. SMEs with at least a basic level of digital intensity, take-up of Cloud or Data Analytics or AI, and unicorns measure progress towards the targets of

the Digital Decade Policy Programme.

TABLE 5 THE COMPOSITION OF THE 2025 DIGITAL INTENSITY INDEX8

Digital intensity is measured using the Digital Intensity Index (DII), which assesses the adoption of 12 selected technologies by enterprises. A basic level of digital intensity is defined as an enterprise utilising at least 4 of these 12 technologies. Each year, the index encompasses a wide array of technologies, ranging from basic to more sophisticated, with the aim of evaluating the digitalisation level of SMEs across the EU. The 2025 version of the index, DII version III, includes the following 12 technologies and/or criteria (source: Eurostat): 1.‘Enterprises where more than 50% of the persons employed used computers with access to the internet for business purposes (same as ver. IV); 2. The maximum contracted download speed of the fastest fixed line internet connection is at least 30 Mb/s (same as ver. IV); 3. Enterprises with e-commerce sales of at least 1% turnover (same as ver. IV); 4. Enterprises where web sales are more than 1% of the total turnover and Business to Consumer - B2C - web sales more than 10% of the web sales (same as ver. IV); 5. Enterprises buying cloud computing services used over the internet; 6. Enterprises buying sophisticated or intermediate cloud computing services; 7. Enterprises with a website; 8. Enterprises using any social media; 9. Enterprises where data analytics is performed either by the their own employees or by an external provider; 10. Enterprises using any AI technology; 11. Enterprises having ERP software package to share information between different functional areas; and 12. Enterprises using Customer Relationship Management (CRM).

5. PUBLIC SERVICES

TABLE 6 DIGITALISATION OF PUBLIC SERVICES INDICATORS

8 The composition of the different versions of the Digital Intensity Index from 2015 to 2025 can be found in this document published by EUROSTAT: Digital Intensity Index (DII)

composition overview 2015-2025.pdf

10

2026 DESI Methodological note

Indicator Description Unit Source9

Reference year (latest available year

with comparable values across the EU)

4.1 eGovernment users Individuals who used the Internet, in the last 12 months, to interact with public authorities on websites or on mobile applications

% internet users

Eurostat – European Union survey on the use of ICT in households and by individuals (ISOC_CIEGI_AC [I_IGOVANYS])

2025

4.1 Digital public services for citizens (DD KPI) EU 2030 target = 100/100

Online provision of key public services for citizens, measured as the share of administrative steps that can be done online for major life events for citizens. There are 7 life events simultaneously considered for citizens: 1. Family, 2. Career, 3. Studying, 4. Health, 5. Transport, 6. Moving, 7. Starting a Small Claims Procedure

Score (0 to 100) e-Government Benchmark 2026 https://digital- strategy.ec.europa.eu/en/news- redirect/938554

2025

4.1 Digital public services for businesses (DD KPI) EU 2030 target = 100/100

Online provision of key public services for entrepreneurs, measured as the share of administrative steps that can be completed fully online for major life events. There are 2 life events simultaneously considered for businesses: 1. Business Start-up, 2. Regular Business Operations

Score (0 to 100) e-Government Benchmark 2026 https://digital- strategy.ec.europa.eu/en/news- redirect/938554

2025

4.1 Citizens’ online access to electronic health records (short name = Access to e- Health records) (DD KPI) EU 2030 target = 100/100

Measured as: (i) the nationwide availability of online access services for citizens to their electronic health records data (via a patient portal, or a patient mobile app) with additional measures in place that enable certain categories of people (e.g. guardians for children, people with disabilities, elderly) to also access their data, and (ii) the percentage of individuals that have the ability to obtain or make use of their own minimum set of health-related data currently stored in public and private electronic health-record (EHR) systems

Score (0 to 100) ‘Digital Decade eHealth Indicator Study’ https://digital- strategy.ec.europa.eu/en/news- redirect/938556

2025

The digitalisation of public services group of indicators describes the demand and supply of e-government as well as e-health. Digital public services for citizens and

businesses and access to e-health records are indicators measuring progress towards the targets of the Digital Decade Policy Programme.

9 Eurostat dataset code in brackets with indicator filter in squared brackets.

11

2026 DESI Methodological note

6. THE KPI TABLE IN THE COUNTRY REPORTS EXECUTIVE SUMMARY

The executive summary of each Member State report contains (as Annex to the Communication on

the State of the Digital Decade 2026) a summary table of the Digital Decade KPIs. That table lists:

• Digital Decade KPIs: in the order of appearance in the Country Report Staff Working

Document.

• Last available data: for most indicators, the last available data are DESI2025 (reference year

2024) except for some indicators marked with a star (*) for which it is DESI2024 (reference

year 2023). Note that since the publication of the 2025 SDDR and the DESI 2025, some data

might have been retroactively revised.

• DESI 2026: current level of the KPIs as measured in 2025 for all the KPIs reported in the SDDR

2026.

• Annual progress: The compound annual growth rate (CAGR), calculated based on the two

most recent available data points. For some Member States and for specific KPIs,

methodological updates might make it impossible to calculate this growth rate.

• National trajectory: Value of the national trajectory for 2025, as committed by the Member

State in its (revised) Digital Decade national strategic roadmap. A ‘-’ denotes that there is no

national trajectory point for this year in the national roadmap, as set by the Member State.

• EU: the same comments apply for the EU data on DESI 2026 and annual progress.

• Digital Decade target by 2030 MS: the target for 2030 as defined explicitly by the Member

State in its national strategic roadmap. A ‘-’ denotes that no national target was explicitly set

by the Member State.

• Digital Decade target by 2030 EU: EU-level digital targets set out in Article 4 of the Digital

Decade Policy Programme 2030.

7. NEW FEATURE: THE INTERACTIVE COUNTRY PROFILE

The 2026 version of the DESI visualisation tool includes a new interactive dashboard providing a multi-

dimensional overview of the most recent national-level values and gaps towards the 2030 Digital

Decade targets. (Figure 1). The primary visualisation is a semi-circular radial chart where the indicators

are clustered into the four colour-coded pillars: People, Infrastructures, Business & Economy, and

Public Services10.

Each indicator uses a dual-layered bar system: the saturated inner bar represents the current, most

recent national performance, while the semi-transparent outer segment marks the EU 2030 target. All

indicators available at the country level that are on the scale 0-100 are shown in the radial chart with

their original value. No normalisation is applied.

10 The interactive dashboard is reachable in the viz tool at this link: https://digital-decade-desi.digital-

strategy.ec.europa.eu/datasets/desi/charts/country-profile?country=FR&period=desi_2026

12

2026 DESI Methodological note

The radar chart offers two viewing modes: a comprehensive view, which incorporates all indicators

detailed in the SDDR country reports, and a strategic view, which filters the data to display only the

DD KPIs, which are available and measured at the country level.

In both cases, a deeper insight can be obtained by hovering over a coloured slice of the chart. For each

indicator selected, this reveals the EU average (marked by a star icon) and highlights the corresponding

detailed entry in the integrated data table shown below the chart. This dual-view approach ensures

that even indicators not measured on a 0-100 range, and which cannot be rescaled, remain accessible

because they are included in the table below the chart for a comprehensive policy analysis.

13

2026 DESI Methodological note

FIGURE 1 : THE INTERACTIVE COUNTRY PROFILE: FRANCE EXAMPLE, KPIS ONLY

(THE TABLE BELOW THE RADIAL CHART IS ONLY PARTIALLY SHOWN)

14

2026 DESI Methodological note

8. DATA SOURCES

Most of the data in the DESI 2025 has been collected directly by national authorities, such as the

National Statistical Institutes coordinated by Eurostat or National Regulatory Authorities. Here below

the data sources and the role of national authorities in data collection and validation are ashown.

Data source Data collection process

Eurostat Data collected by National Statistical Institutes and verified by the National Statistical Institutes and Eurostat.

Communications Committee (COCOM) Data collected and verified by the National Regulatory Authorities (by data experts appointed by the members of the Communications Committee in every Member State).

Broadband coverage study

Data collected by Grant Thornton Advisory and LS telcom and verified by the National Regulatory Authorities experts who are appointed by the members of the Communications Committee in every Member State.

eGovernment benchmark Data collected by Capgemini and verified by relevant ministries in every Member State.

Study for Digital Decade e-Health Indicators Development

Data collected by Capgemini Invent by means of a specific questionnaire submitted to representatives appointed by the relevant ministries in every Member State.

9. METHODOLOGICAL CONSIDERATIONS

Criteria for the selection of the country-level indicators

To be included in the DESI dashboard, indicators must comply with the following requirements:

Policy relevance: Every indicator must serve as a validated and meaningful metric within its specific

policy area to ensure the dashboard remains a relevant and actionable decision-making tool.

EU-wide comparability: Methodology must be harmonised across all 27 EU Member States.

Standardised indicators are essential for monitoring collective progress toward Digital Decade targets,

identifying regional gaps and scaling best practices.

Regular data collection: Indicators must be updated on a consistent basis to fulfil their monitoring

function. Ideally, data should be collected annually, or according to a strictly predefined frequency at

least.

Data updates and retroactive revisions

Updates and corrections are part of the lifecycle and nature of statistical data, especially in the digital

sector, which is a rapidly evolving environment. This is the case for several DESI indicators. There can

be several reasons for such restatements. For example, it is typical that the values for one indicator

undergo small amendments and only stabilise completely even long after the indicator was originally

computed and published for the first time. Member States can also update their own methodology to

collect the data for the indicators on which they report, for example to Eurostat, and revise the figures

15

2026 DESI Methodological note

backward. Such revisions may impact the values of individual indicators for individual Member States

and the EU average.

The present report considers updates that were reported to the European Commission prior to 20

April 202611, which was the DESI 2026 cut-off date for all indicators that had updated data or were

new in respect of previous DESI editions. No changes made after this date were taken into account in

the 2026 version of the DESI dashboard.

11 The cut-off date for updating data and making retroactive revisions is set as 20 April 2026 for all the indicators

included in the 2026 DESI dashboard apart from the unicorns’ dataset, which was downloaded from the

Dealroom.co platform on 21.1.2026.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 10/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

France

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

France

Executive summary Overall, France has strong assets in digitalisation such as a good fibre coverage, a digitally skilled

population and a vibrant AI ecosystem. However, while the country has made strong progress in

expanding digital adoption across businesses, it is still not fully reaping the fruits of digital transition

when it comes to the general population of businesses, which lags behind in basic digitalisation and

adoption of key technologies. The number of ICT specialists is also sub-par and experiencing sluggish

growth, while the digitalisation of public services seems to have stagnated in recent years.

The weaknesses identified in the digitalisation of businesses are having an impact on France’s

competitiveness as low digitalised businesses cannot take advantage of productivity gains brought by

digital tools (basic and advanced), nor can they access new online markets. More ICT specialists in the

job market could relieve skills shortages in all sectors and help businesses access the expertise required

to digitalise. More widespread digital public services could also foster the digitalisation of businesses

while alleviating their administrative burden.

France can, however, count on several digital leadership assets. It is home to one of the most attractive

AI ecosystems for start-ups thanks to a pool of engineering and research talent and considerable public

support programmes. Public policies recently shifted heavily toward AI for the digitalisation of all

businesses, and for research and infrastructure with large-scale projects such as the AI Factory

France (AI2F). Massive investments in research and the production of semiconductors were committed

through the Digital Decade roadmap. In quantum technology, France is a frontrunner in the EU and at

the forefront of computing research with the inauguration of the Ruby quantum processor in 2025 as

part of the EuroHPC Joint Undertaking.

France in the Digital Decade

France shows a high level of ambition in its contribution to the Digital Decade having set 9 national

targets (out of 14 possible), 100% of which aligned with the EU 2030 targets. France also set a target

of 65% for the combined adoption of technologies by businesses, shy of the 75% EU level target. In its

national roadmap, France provided 10 trajectory points for 2025 (out of 14 analysed). The country is

following them moderately well with 50% considered on track. France addressed 67% of the 6

recommendations issued by the Commission in 2025, either by implementing significant policy

changes (33%) or making some changes (33%) through new measures. According to the national

roadmap, by the end of 2026, 27% of the measures will come to an end. The total public budget

associated to these measures is EUR 3.15 billion, representing 28% of the total public budget outlined

in the roadmap.

According to the special Eurobarometer on the Digital Decade 2026, 72% of French people consider

that digital policy should have a very high/high priority for the EU in shaping our future in Europe. They

also think that, in the next 10 years, the EU should cooperate with Member States to reinforce

cybersecurity and protection from online threats (95%), promote digital education and skills programs

(88%), and strengthen the regulation of online platforms (88%). In addition, 83% of French respondents

think that the EU should reduce its dependencies on digital from third countries, and 83% that the EU

should prioritise investments in digital infrastructure and services that are developed and controlled

in Europe. Meanwhile, 49% would be willing to switch to an EU-based digital service provider even if

it means slightly higher costs.

2

France

Funding for digital and multi-country projects

France allocates 22% of its total recovery and resilience plan to the digital transition (EUR 8.1 billion).

In addition, under the cohesion policy, EUR 2.0 billion, representing 12% of the country’s total cohesion

policy funding, is dedicated to advancing France’s digital transformation.

France is the host Member State for the Alliance for Language Technologies European Digital

Infrastructure Consortium (ALT-EDIC) and for the Digital Commons EDIC. France is also a member of

the Local Digital Twins towards CitiVERSE EDIC. France participates directly in the IPCEI on

Microelectronics and Communication Technologies (IPCEI-ME/CT), in the IPCEI on Next Generation

Cloud Infrastructure and Services (IPCEI-CIS), and in the IPCEI Tech4Cure. France is also a participating

state of the EuroHPC Joint Undertaking (JU) and of the Chips JU.

Digital Decade KPI (1)

France EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025) Annual

progress National

trajectory

2025 (3)

DESI

2026 Annual

progress

FR EU

Fixed Very High Capacity Network

(VHCN) coverage 87.5% 91.7% 4.9% 100.0% 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP)

coverage

87.5% 91.7% 4.9% - 74.1% 7.1% - -

Basic 5G coverage 94.3% 96.4% 2.2% 100.0% 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate, new

methodology) - 854 - - 7451 - - 10000

SMEs with at least a basic level of

digital intensity * 52.0% 69.4% 15.6% 62.9% 71.4% 11.0% 90.0% 90%

Cloud * 23.0% 36.5% 26.0% - 46.7% 9.5% - 75%

Artificial Intelligence 9.9% 18.2% 83.2% - 20.0% 48.0% - 75%

Data analytics * 33.9% 39.3% 7.6% - 39.9% 9.5% - 75%

AI or Cloud or Data analytics * 44.9% 57.9% 13.6% 50.6% 63.2% 7.5% 65.0% 75%

Unicorns 47 50 6.4% 57 324 10.2% 100 500

At least basic digital skills * 59.7% 65.7% 5.0% 65.5% 60.4% 4.3% 80.0% 80%

ICT specialists 4.8% 4.9% 2.1% 6.2% 5.0% 2.0% 10.0% ~10%

e-ID scheme notification Yes

Digital public services for citizens 71.2 72.0 1.1% 80.1 84.6 2.8% 100.0 100

Digital public services for businesses 76.9 74.6 -3.0% 85.2 88.6 2.7% 100.0 100

Access to electronic health records 84.2 88.4 4.9% 85.2 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological

leadership

France is performing well in connectivity, being above the EU average in fibre coverage and slightly

below for 5G. Coverage of fibre to the last non-covered premises, especially in very dense areas and

outermost regions, will be key to achieving full coverage by 2030. There is a high take-up of fibre in

France as it is leading in the EU in terms of the share of fixed broadband subscriptions >=1Gbps, but it

is in the group of the worst performing countries for 5G take-up although a recent acceleration has

been observed. The French quantum strategy is one of the most advanced in the EU but needs

3

France

updating with a view to consolidating the scale-up and industrial stages. Semiconductor research

facilities and production capacities are well developed, though smaller than global players.

On the business side, SMEs are still lagging in basic digitalisation, though catching up with the EU

average. Training and diagnostics under the France Num scheme proved to be efficient and popular in

terms of engaging smaller businesses in digitalising, despite bottlenecks related to skills availability

and concerns about cybersecurity risks. Businesses’ uptake of advanced technologies such as cloud

or AI is also sub-par. France decidedly embraced AI as the leading technology to digitalise its economy

and in 2025 launched the plan ‘Osez l’IA’ to foster AI adoption by businesses of all sizes. The start-up

and frontier AI ecosystem is very well developed and attracted record investments for AI infrastructure

in 2025, further supported by a national plan to facilitate the implementation of data centres.

However, as in other EU countries, French start-ups face issues in scaling up due to limited access to

venture capital and could benefit from increased international visibility.

Protecting and empowering EU people and society

The level of basic digital skills of the population is satisfactory, above the EU average. Conversely, the

share of ICT specialists remains below average and has been stagnating for several years, leading to

constraints in the ICT job market. While the ICT training offer seems to be sufficient, its take-up is weak.

Tackling this issue – linked to weak performance in STEM education – could boost the spread of

innovation and digitalisation across all business sectors.

France has engaged in many initiatives for digitalising public services, with strong priority given to

sovereignty. While many services are available online, indicators point to weak progress in

digitalisation efforts, including in justice. Cross-border availability in particular is low and many users

report difficulties with online administrative procedures. The digitalisation of healthcare continues to

improve, including by using AI technologies and strengthening data storage sovereignty.

4

France

Recommendations

- Digitalisation of SMEs: Improve SMEs’ basic digitalisation by designing dedicated public support

measures, including training, diagnostics and targeted financial support, to accompany

businesses in cybersecurity, digital business management, and digital business development.

- ICT specialists: Expand the supply of Information and Communication Technology (ICT)

specialists, in particular by improving the job market relevance of existing training pathways

(higher education, vocational training, and reskilling) and aligning them with industry needs,

paying particular attention to AI and cybersecurity specialists. Strengthen the ongoing national

effort in mathematics in secondary education, thereby addressing the weakness in math

foundations which hinders entry into the field of ICT studies. Deploy earlier-stage awareness-

raising measures and career guidance in the education system to raise take-up of existing training

pathways. Intensify efforts to increase women’s participation in ICT studies and careers.

- Uptake of AI: Accelerate the uptake of AI in businesses, especially SMEs, by ensuring that the

recently launched national plan on AI adoption delivers on its stated training and take-up targets,

with regular reporting on take-up broken down by business size. Invest in AI computing

infrastructure and accelerate permitting procedures, including for data centres. Ensure effective

access to the national AI factory infrastructure for SMEs and deploy sector-specific applications

through the sectoral flagships of the EU Apply AI Strategy. Intensify support for European Digital

Innovation Hubs (EDIHs) which are a key support tool helping businesses to adopt advanced

digital technologies, especially AI, and are embedded in the wider EU AI ecosystem.

- Digital Public Services: Accelerate the digitalisation of public services for citizens and businesses,

in particular by implementing cross-border public services capabilities and prioritising high-

volume cross-border procedures. Step up efforts to digitalise the justice system to allow citizens

to initiate and follow proceedings online. Continue the implementation of digital public services

with a focus on Family, Health, and Career life events for citizens, and Regular Business

Operations life events for businesses, and on regional-level services. Implement the once-only

technical system (OOTS) systematically.

- Semiconductor: Sustain and deepen domestic production capacities in the semiconductor sector,

in particular in back-end capacities and manufacturing of advanced chips for AI usage.

- Quantum: Consolidate France’s leadership in quantum technologies and translate it into

industrial deployment, in particular by building on the achievements of the National Quantum

Plan (2021-2025) and adopting a post-2025 roadmap with a clear multiannual budgetary

trajectory, in order to avoid a funding gap for emerging industrial players. Deepen integration

with the European supply chain and support cross-border cooperation.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 11/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Germany

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

Germany

Executive summary Overall, Germany has strong assets in digitalisation, including a leading position in high-tech sectors

such as semiconductors and quantum technology. However, persistent structural challenges –

particularly in connectivity and digital public services – have constrained more substantial progress

for many years. With the establishment of the new Ministry for Digital Transformation and

Government Modernisation, some momentum for change has been generated, and several promising

initiatives are being launched to address these challenges. However, it remains to be seen whether

these efforts will translate into lasting structural improvements.

The persistent structural weaknesses limit the potential leverage that digitalisation can provide for

competitiveness. Efficiency gains and reductions in administrative burden are often hindered by

complex systemic issues (e.g. linked to fragmented responsibilities and implementation modes), which

have been identified but not yet resolved. While gradual improvements are underway, they are so far

too slow and limited in scale to generate substantial impact. Given the challenging economic situation

overall, faster and more profound adjustments are needed to boost competitiveness and productivity.

At the same time, Germany remains among the leading EU Member States in several high-tech

domains. It is the largest data centre as well as microelectronics location in the EU and plays a major

role in semiconductor research and manufacturing. Germany also demonstrates a leading position in

quantum technologies, supported by advanced research capabilities, cutting-edge infrastructure (e.g.

exascale supercomputer JUPITER) and, to date, comparatively high levels of public funding.

Germany in the Digital Decade

Germany shows a substantial level of ambition in its contribution to the Digital Decade having set 9

national targets (out of a possible 14), 89% of which align with the EU 2030 targets. Germany has also

set a target of 75% for the combined adoption of technologies by businesses, in line with the target at

EU level. In its national roadmap, Germany provided 8 trajectory points for 2025 (out of 14 analysed).

The country is following them moderately well with 50% considered on track. Germany addressed 86%

of the 7 recommendations issued by the Commission in 2025, either by implementing significant policy

changes (14%) or making some changes (72%) through new measures. According to the national

roadmap, by the end of 2026, 66% of the measures will come to an end. The total public budget

associated to these measures is EUR 15.33 billion, representing 33% of the total public budget outlined

in the roadmap.

According to the special Eurobarometer on ‘the Digital Decade’ 2026, 84% of Germans consider that

digital policy should be a very high or high priority for the EU in shaping our future in Europe. They

also think that, in the next ten years, the EU should cooperate with Member States to reinforce

cybersecurity and protection from online threats (92%), promote digital education and skills

programmes (91%) and build an independent European digital infrastructure (broadband, 5G, cloud

computing, semiconductors (85%)). In addition, 87% of German respondents think that the EU should

reduce its dependence on digital technology from third countries, and 89% that the EU should

prioritise investments in digital infrastructure and services that are developed and controlled in

Europe. Meanwhile, 57% would be willing to switch to an EU-based digital service provider even if it

means slightly higher costs.

2

Germany

Funding for digital and multi-country projects

Germany allocates 46% of its total recovery and resilience plan to digital (EUR 12.8 billion). In addition,

under cohesion policy, EUR 2.4 billion, representing 12% of the country’s total cohesion policy funding,

is dedicated to advancing Germany’s digital transformation.

Germany is a member of the Local Digital Twins towards the CitiVERSE EDIC, and a member of the

Digital Commons EDIC. The country participates directly in the IPCEI on Microelectronics and

Communication Technologies (IPCEI-ME/CT) and in the IPCEI on Next Generation Cloud Infrastructure

and Services (IPCEI-CIS). Germany is also a participating state in the EuroHPC Joint Undertaking (JU)

and the Chips JU.

Digital Decade KPI (1)

Germany EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025) Annual

progress National

trajectory

2025 (3)

DESI

2026 Annual

progress DE EU

Fixed Very High Capacity Network

(VHCN) coverage 77.4% 79.9% 3.2% - 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP)

coverage

36.8% 44.0% 19.6% 50.0% 74.1% 7.1% 100.0% -

Basic 5G coverage 99.1% 99.5% 0.4% - 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate, new

methodology) - 1948 - - 7451 - - 10000

SMEs with at least a basic level of

digital intensity * 61.4% 73.6% 9.5% 82.0% 71.4% 11.0% 91.0% 90%

Cloud * 38.5% 46.0% 9.3% - 46.7% 9.5% - 75%

Artificial Intelligence 19.8% 26.0% 31.5% - 20.0% 48.0% - 75%

Data analytics * 37.1% 37.7% 0.8% - 39.9% 9.5% - 75%

AI or Cloud or Data analytics * 58.0% 63.2% 4.4% 24.0% 63.2% 7.5% 75.0% 75%

Unicorns 66 74 12.1% - 324 10.2% - 500

At least basic digital skills * 52.2% 59.6% 6.8% 60.0% 60.4% 4.3% 80.0% 80%

ICT specialists 5.1% 5.5% 7.8% 5.0% 5.0% 2.0% 5.3% ~10%

e-ID scheme notification Yes

Digital public services for citizens 78.9 78.1 -1.0% 80.0 84.6 2.8% 100.0 100

Digital public services for

businesses 77.5 77.8 0.3% 82.5 88.6 2.7% 100.0 100

Access to electronic health records 87.0 87.7 0.9% 100.0 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological leadership

In the area of connectivity, fibre rollout has accelerated in recent years and differences between urban

and rural rollout levels are narrowing, but regional disparities persist. Germany still scores second-to-

last on fibre coverage in the EU and has relatively low take-up rates, with a particular challenge in

establishing ‘last metre' connection, i.e. bringing fibre that is already available in close proximity to

additional households. Germany is working on improving the framework conditions limiting rollout,

including with adjustments to its national laws. It remains to be seen whether these measures will be

sufficient to overcome structural challenges, such as fragmented stakeholder interests and

deployment landscape. At the same time, preparatory work for copper switch-off is ongoing. In 5G,

3

Germany

Germany performs below the EU average in the mid-band spectrum (3.4-3.8 GHz), which is crucial for

delivering both broad coverage and high capacity.

At the business level,companies perceive gaps in their uptake of advanced technologies, such as

artificial intelligence (AI), and there especially within the manufacturing sector. The usage of digital

technologies is often focused on productivity gains, while applications related to innovation and

business model transformation remain less common. Moreover, implementation challenges such as

limited human and financial resources, shortcomings in data processing and regulatory complexity

persist. Against this background, Germany has continued to implement European Digital Innovation

Hubs (EDIHs) and the Mittelstand-Digital funding priority to support SMEs in their digital

transformation efforts. It also hosts two of the 19 European AI Factories, driving advancements in AI

application in different industrial sectors. In the area of start-ups, measures to reduce administrative

burden are being prepared, while efforts to improve access to funding for tech start-ups are ongoing.

Despite Germany's strong position in quantum research and infrastructure, its performance remains

relatively modest in more commercialisation-oriented quantum technology activities. This is reflected

in limited planned private investment, partly due to the technology's early stage of development.

Against the background of increasing cyber threats and gaps in companies’ preparedness, public

support measures for businesses continue, but have not been expanded accordingly.

Protecting and empowering EU people and society

The level of basic digital skills of the population is very close to the EU average, and the Digital Pact

2.0 will continue to support the digital transformation of the education system. Although Germany’s

share of ICT specialists exceeds the EU average, ICT specialist shortages remain a constraint for the

German economy. Demand is also rising for highly skilled professionals in areas such as AI, quantum

technologies and semiconductors. It remains to be seen whether the speed and scope of ongoing and

planned measures (e.g. National Skills Strategy, Skilled Labour Strategy, Work and Stay Agency) will be

sufficient to address these shortages, as well as structural issues such as complex administrative

procedures to attract and retain ICT talents.

Comparatively low availability and use of digital public services have been among the key challenges

in Germany over recent years. Decentralised rollout is hindered by technical, organisational and

political challenges, aggravated by fragmented responsibilities across different levels of government.

The new Ministry for Digital Transformation and Government Modernisation has created some

momentum to change dynamics, including moving from the ‘one for all’ (Einer für Alle, EfA) principle

towards more standardised solutions, and launching some pilot projects to deliver a few quick positive

signals and demonstrate the potential of cross-level collaboration. In this context, increasing

interoperability across the fragmented IT landscape will be key, as it is also a prerequisite for the

functionality of the EUDI Wallet. This is especially relevant given that eID uptake remains very low,

while the EUDI Wallet could help address some of the challenges currently associated with eID usage.

4

Germany

Recommendations

- Digital public services: Accelerate and expand the nationwide rollout of digital public

services and uptake of eID by enhancing interoperability and ensuring end-to-end

digitalisation, including through greater use of standardised digital building blocks and

improved connectivity between IT systems. Systematically address structural

implementation barriers, including by strengthening collaboration and ensuring a more

coherent allocation of resources and responsibilities across levels of government, as well as

intensifying cross-border collaboration. Improve the user-friendliness of digital public

services and simplify and promote eID usage, including by making it easier to (re)activate

eID cards.

- Connectivity: Accelerate the rollout of very high-capacity networks, especially fibre optic

infrastructure, with a focus on connecting end users and reducing regional disparities in

coverage. Improve framework conditions for fibre deployment, including by strengthening

efforts to streamline and standardise rollout procedures and fostering the copper networks

switch-off. Promote take-up, including by increasing awareness of the benefits of fibre

connectivity. Improve availability and coverage in the 5G mid-spectrum band (3.4-3.8 GHz)

and take advantage of the upcoming expiry of rights of use to implement pro-investment

conditions.

- Uptake of advanced technologies, especially AI: Accelerate the adoption of advanced

technologies, such as AI, across businesses, including by fostering deeper integration of

digital technologies to support innovation and business model transformation. In the field

of AI, support the deployment of innovation infrastructures for businesses, such as AI

Factories, AI Testing and Experimentation Facilities and European Digital Innovation Hubs

(EDIH). Promote AI uptake in strategic sectors, such as manufacturing, supporting the EU’s

Apply AI Strategy’s actions.

- ICT specialists: Increase the supply of ICT specialists by attracting more young people into

ICT-related studies and careers, including through further development of existing and

planned measures. Strengthen efforts to attract and retain ICT talent by streamlining

administrative procedures and enhancing collaboration. Ensure a sufficiently large pool of

highly skilled professionals in cutting-edge technologies to support innovation and their

continued development.

- Quantum technologies: Leverage the country’s strong position in quantum technologies

with adequate funding, including by ensuring continued public financial support and by

incentivising private investment, in particular into the German quantum startup landscape.

Accelerate commercial uptake by reinforcing technology transfer mechanisms between the

country's research base and industry. Intensify cross-border collaboration and contribute

to building a European quantum supply chain.

- Cybersecurity: Improve cybersecurity resilience for private and public entities, including by

raising awareness of existing support and complementing it with targeted measures to

improve preparedness for the evolving threat and technology development landscape.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 12/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Greece

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

Greece

Executive summary Overall, Greece has made significant progress in its digital transition, particularly in establishing a

framework for the safe and resilient use of digital technologies across the economy and society. Recent

key achievements include the adoption of a new national framework for data governance and a

cybersecurity strategy to strengthen the country’s digital resilience. However, these advancements

have yet to be translated into tangible benefits, notably for businesses, which continue to lag behind

in both basic digital adoption and the uptake of advanced technologies. Structural weaknesses in

digital skills also persist. While the vast majority of young people have at least basic digital skills, the

proportion of the entire population with at least basic digital skills has shown no progress since 2023.

The slow pace of business digitalisation risks undermining Greece’s competitiveness. Low levels of

digital adoption prevent businesses from capitalising on digital innovation and emerging

transformative technologies. Furthermore, the persistent gap in digital skills and the shortage of ICT

specialists limit access to a trained workforce, further hindering digital transformation.

Despite these challenges,Greece is rapidly developing assets that could drive future progress in digital

leadership. The AI Factory ‘Pharos’ was formally established as a legal entity in 2025; four additional

AI Factory Antennas have also been launched in countries of the region. In the area of quantum

communications, Greece is coordinating a project to develop a secure and scalable infrastructure

connecting the national quantum communication infrastructures of four EU countries. The initiative

will provide ultra-secure communication channels bolstering Europe’s cybersecurity resilience. Greece

is also investing in semiconductors, having recently established the Hellenic Chips Competence Centre.

Public and private stakeholders in the sector have started initial collaboration with the prospect of

developing an ecosystem in Greece. Additionally, a major European Investment Bank (EIB) investment

in a new gallium production facility in Greece marks a significant step toward strengthening Europe’s

strategic autonomy in critical raw materials.

Greece in the Digital Decade

Greece shows a moderate level of ambition in its contribution to the Digital Decade having set

14 national targets (out of 14 possible), 57% of which are aligned with the EU 2030 targets. In its

national roadmap, Greece provided 13 trajectories points for 2025 (out of 13 analysed). The country

is following them moderately well with 62% considered to be on track. Greece has addressed 83% of

the six recommendations issued by the Commission in 2025, either by implementing significant policy

changes (16%) or making some changes (67%) through new measures. According to the national

roadmap, by the end of 2026, 42% of the measures will come to an end. The total public budget

associated with these measures is EUR 3.69 billion, representing 60% of the total public budget

outlined in the roadmap.

According to the special Eurobarometer on ‘the Digital Decade 2026’, 76% of respondents in Greece

consider that digital policy should be a very high/high priority for the EU in shaping Europe’s future.

They also think that, in the next 10 years, the EU should cooperate with Member States to reinforce

cybersecurity and protection online (93%), promote digital education and skills programmes (90%) and

strengthen the regulation of online platforms - e.g. online social media networks, marketplaces, app

stores, etc) (84%). In addition, 82% of respondents think that the EU should reduce its dependence on

digital from third countries, and 85% that the EU should prioritise investments in digital infrastructure

and services that are developed and controlled in Europe. 56% would be willing to switch to an EU-

based digital service provider even if it meant slightly higher costs.

2

Greece

Funding for digital and multi-country projects

Greece allocates 22% of its total recovery and resilience plan to digital (EUR 7.8 billion). In addition,

under the cohesion policy, EUR 3.1 billion, representing 15% of the country’s total cohesion policy

funding, is dedicated to advancing Greece’s digital transformation.

Greece is the host Member State of the IMPACTS-EDIC, a European Digital Infrastructure Consortium

(EDIC) established in December 2025 to boost interoperable digital solutions and services for public

administrations across multiple countries. The country is also a member of the Alliance for Language

Technologies EDIC and of the EUROPEUM EDIC, which seeks to strengthen cooperation on blockchain.

Furthermore, Greece has been chosen by applicant Member States to host the CSC-EDIC on

cybersecurity skills. Greece is directly participating in the Important Project of Common European

Interest (IPCEI) on Microelectronics and Communication Technologies (IPCEI-ME/CT) and is a

participating Member State of two Joint Undertakings (JUs), the EuroHPC and the Chips JU.

Digital Decade KPI (1)

Greece EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025) Annual

progress National

trajectory

2025 (3)

DESI

2026 Annual

progress EL EU

Fixed Very High Capacity Network

coverage

46.1% 59.8% 29.7% 51.0% 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP) coverage 46.1% 59.8% 29.7% 51.0% 74.1% 7.1% 100.0% -

Overall 5G coverage 99.8% 99.5% -0.3% 90.0% 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate, new

methodology) - 89 - 5 7451 - 95 10 000

SMEs with at least a basic level of

digital intensity * 43.3% 56.0% 13.7% 55.6% 71.4% 11.0% 79.7% 90%

Cloud * 18.1% 21.3% 8.4% 23.2% 46.7% 9.5% 56.0% 75%

Artificial Intelligence 9.8% 8.9% -9.0% 12.0% 20.0% 48.0% 32.0% 75%

Data analytics * 25.0% 31.5% 12.2% 18.3% 39.9% 9.5% 40.0% 75%

AI or Cloud or Data analytics * 33.5% 40.8% 10.3% - 63.2% 7.5% - 75%

Unicorns 3 3 0.0% 6 324 10.2% 20 500

At least basic digital skills * 52.4% 51.0% -1.4% 61.4% 60.4% 4.3% 70.2% 80%

ICT specialists 2.5% 2.5% 0.0% 3.2% 5.0% 2.0% 4.5% ~10%

e-ID scheme notification No Digital public services for citizens 76.7 79.4 3.4% 76.2 84.6 2.8% 98.2 100

Digital public services for businesses 78.6 86.0 9.4% 84.4 88.6 2.7% 100.0 100

Access to electronic health records 73.8 93.8 27.0% 72.1 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological

leadership

On gigabit connectivity, Greece continues to make steady progress in fibre deployment, in line with its

national trajectory, though it remains below the EU average. In sparsely populated areas, a very low

level of coverage is observed across regions, with significant disparities between urban and rural areas.

On the other hand, 5G coverage is equally well deployed across the country. Leveraging its strategic

geographical position at the crossroads of three continents, Greece has also taken steps to enhance

connectivity across borders and strengthen the resilience and security of its digital infrastructure. This

3

Greece

includes the development of submarine cables and attracting investment for the deployment of data

centres, creating significant opportunities in a rapidly expanding sector. However, the digital

transformation of SMEs is progressing too slowly to meaningfully contribute to economic growth and

competitiveness. Persistent challenges remain, including a limited absorption capacity, particularly

among micro enterprises, a shortage of digital skills and remaining administrative bottlenecks, all of

which risk hindering progress towards the 2030 Digital Decade target. The uptake of AI by businesses

overall was also slow compared to the EU average in 2025. On a positive note, the emerging AI

ecosystem centred around the AI Factory, along with broader investments in high-tech sectors – such

as quantum communications and data centres – could generate a positive spillover effect for the wider

economy. Greece is rapidly developing its digital leadership capabilities, and in 2025, it further

strengthened the framework conditions for thriving digital economy by adopting a new framework for

data governance and a national cybersecurity strategy to enhance cyber resilience in the face of

evolving threats in line with EU regulations.

Protecting and empowering EU people and society

In 2025, only half of people aged 16 to 74 (50.96%) in Greece possessed at least basic digital skills, a

1.4% annual decline since 2023, broadening the gap with the EU average of 60.40%. This trend is

particularly alarming compared to the EU’s annual growth rate of 4.3% over the same period. Greece

has implemented several initiatives to integrate digital skills into the education system, and the key

performance indicator confirms that educational attainment significantly influences digital

proficiency. Individuals with no or low formal education face considerable challenge, 22.62% only

having at least a basic level of digital skills. This underlines the importance of educational initiatives to

address the digital skills gap. Additionally, the country has launched large-scale upskilling and reskilling

programmes across different population segments. Despite these efforts, however, in 2025 the KPI

overall performance showed a slight decrease while disparities between age groups remain. In

particular a drastic fall in the percentage of people having at least basic digital skills is observed in age

groups above 34 years old. Furthermore, the share of ICT specialists in employment is stagnating at

2.5% since the previous year. To address this issue, Greece has intensified efforts to expand its pipeline

of future digital talent and ICT specialists through multiple channels, including education reforms,

reskilling and upskilling programmes, monitoring of the situation and use of a labour market diagnostic

tool. Nevertheless, the shortage of ICT specialists in employment remains one of Greece’s most

pressing challenges in its digital transition.

Greece continues to progress in implementing its national strategy for digitalisation of public services

with significant milestones reached in 2025 in terms of enhancing the resilience and security of public

services and data. Extensive use of the new Governmental Cloud (G-Cloud) funded by the Recovery

and Resilience Facility (RRF), significantly improved efficiency and security. The new national data

governance framework also serves as the foundation for interoperability across government clouds

(G-Cloud); standardisation of health data formats; privacy safeguards and interoperability with the

health Cloud (H-Cloud). As regards the availability of digital public services online, the availability of

cross-border services for businesses improved considerably but remained below the EU average. In

terms of domestic online services for citizens by governance level, central government services scored

highest, followed by regional government, with local government services lagging behind. The justice

system is becoming more digital but there is room to further expand the use of digital communication

with courts.

4

Greece

Recommendations

- Building technological leadership: Strategically consolidate the emerging innovation-enabling

framework in Greece to foster and sustain public and private investments into a high-tech digital

infrastructure for the country (edge computing, quantum infrastructure, data centres). Leverage

available public funding to consolidate the recently established assets, such as ‘Pharos’ the

national AI Factory, the Hellenic Chips Competence Centre, the quantum communication

projects. A special attention should be given to emerging technologies (e.g. semiconductors), as

enablers for many other applications and sectors.

- Digital skills: Address the widening digital skills gap and reverse the declining trend in basic digital

skills. Strengthen targeted interventions, as a priority, for groups presenting the lowest

percentage of at least basic digital skills, such as (i) people without formal education or with a low

level of formal education, (ii) older people, (iii) rural population, to help ensure an inclusive

development of digital skills across all population groups.

- Uptake of AI: Reinforce measures to accelerate the uptake of AI by enterprises in their sectors to

optimise their growth capabilities and remain competitive. By taking advantage of the recent

national strategies in AI and data, shape and adapt the emerging AI ecosystem, in a timely way,

around the ‘Pharos’ AI Factory with other actors of the ecosystem (such as the Greek EDIHs, the

Testing and Experimentation Facilities (TEFs), the future AI regulatory sandboxes). Foster a culture

of innovation and digital literacy within enterprises to enable the adoption of AI and respond to

challenges and priorities in line with the EU Apply AI Strategy.

- Digitalisation of SMEs: Encourage SMEs to speed up their digitalisation path through the adoption

of innovative technological solutions to boost their productivity and competitiveness. Create

incentives in different sectors to strengthen the capacities of SMEs and enable them to benefit

from the spillover effect of public and private investments in innovative advanced digital

technology that are rapidly developing in the country, to include the SMEs in growth

opportunities and to create partnerships useful for their productivity and competitiveness.

- ICT specialists: Intensify effort, investment and incentives, to attract and retain ICT specialists in

Greece to close the persistent gap in the supply of ICT specialists and ensure that the human

capital matches the scale of the country’s ongoing digital transition, and the need for gender

balance. Monitor the labour market to strengthen the offer of training in high-in-demand digital

sectors. Acting in formal education path to increase the share of ICT graduates and in aligning

upskilling and reskilling programmes to the demand generated by the rapid deployment of digital

technologies in all sectors, for workers and the economy to rapidly benefit from the digital

transition.

- Connectivity: Pursue the redundancy of backbone networks including submarine cables.

Accelerate the rollout of fibre infrastructure, including through more coordinated approach to

regulation at national and regional level ensuring a balanced deployment in rural areas. Where

deemed necessary, in particular to reduce regional disparities, leverage available public funding

to accelerate the deployment and take-up of advanced electronic communication infrastructure.

In this context, foster the copper networks switch-off, as a key enabling factor to boost

investment and accelerate the greater availability of VHCN; use upcoming spectrum licence

renewals to introduce pro-investment conditions.

- Digital Public Services: Accelerate the availability of cross-border public services online for

businesses and people. Expand the implementation of the country’s national strategy for

digitalisation of the public services and sector, with a special attention to support local and

regional authorities in digitalising services. Further digitalise judicial proceedings—including

5

Greece

cross-border services—by deploying necessary IT solutions and increasing the uptake of digital

tools by courts to improve their electronic access for citizens and businesses.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 13/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Hungary

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

Hungary

Executive summary Hungary boasts a good fibre infrastructure and a strong position in digital public services for citizens,

especially in the area of access to e-Health records. However, the country continues to lag in business

digitalisation and the uptake of key technologies, especially in the case of small to medium size

enterprises (SMEs), as well as in basic digital skills of the population.

The weaknesses identified in business digitalisation undermine Hungary’s competitiveness, as

enterprises with low digital intensity are less able to achieve productivity gains from both basic and

advanced digital tools and to expand into new business opportunities. Moreover, limited digital literacy

constrains citizens’ effective use of technology and e-services, weakens labour productivity growth,

and reduces businesses’ capacity to reap the full benefits of digital adoption.

In order to improve its digital leadership assets, Hungary will host one of the European AI Factory

Antennas, under the AI Factory programme of the European High Performance Computing Joint

Undertaking (EuroHPC JU). This will give access to the computational capacity of the existing EU AI

Factory, without the need to build a stand-alone national infrastructure. There are currently no digital

unicorns in Hungary, which represents a serious gap in the development of the digital economy.

Hungary in the Digital Decade

Hungary shows a moderate level of ambition in its contribution to the Digital Decade having set 14

national targets (out of 14 possible), 71% of which are aligned with the EU 2030 targets. In its national

roadmap, Hungary provided 12 trajectory points for 2025 (out of 13 analysed). The country is

progressing towards them moderately well with 50% considered on track. Hungary addressed 33% of

the 9 recommendations issued by the Commission in 2025 by introducing new measures. According

to the national roadmap, by the end of 2026, 48% of the measures will come to an end. The total

public budget associated with these measures is EUR 575 million, representing 32% of the total public

budget provided for in the roadmap. According to the special 2026 Eurobarometer on ‘the Digital

Decade’, 85% of Hungarian respondents consider that digital policy should have a very high/high

priority for the EU in shaping our future in Europe. They are also of the opinion that, in the next ten

years, the EU should cooperate with Member States to reinforce cybersecurity and protection from

online threats (92%), promote digital education and skills programmes (90%) and strengthen the

regulation of online platforms (e.g. online social networks, marketplaces, app stores, etc.) (89%).

In addition, 81% of Hungarian respondents think that the EU should reduce its digital dependencies

on non-EU countries, and 89% are of the opinion that EU should prioritise investments in digital

infrastructure and services that are developed and controlled in Europe. Meanwhile, 56% would be

willing to switch to an EU-based digital service provider even if it means slightly higher costs.

Funding for digital and multi-country projects

Hungary allocates 29% of its total funding under the recovery and resilience plan (RRP) to digital (EUR

1.7 billion). In addition, under cohesion policy, EUR 2.8 billion, representing 13% of the country’s total

cohesion policy funding, is dedicated to advancing Hungary’s digital transformation.

Hungary is a member of the Alliance for Language Technologies, a European Digital Infrastructure

Consortium (EDIC) and of the IMPACTS EDIC. Hungary is directly participating in the Important Project

of Common European Interest (IPCEI) on Next Generation Cloud Infrastructure and Services (IPCEI-CIS)

2

Hungary

and in the Tech4Cure IPCEI. Hungarian entities are indirect and/or associated partners in the IPCEI on

Microelectronics and Communication Technologies (IPCEI-ME/CT). Hungary is a participating state of

the EuroHPC Joint Undertaking (JU) and of the Chips JU.

Digital Decade KPI (1) Hungary EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025) Annual

progress National

trajectory

2025 (3)

DESI

2026 Annual

progress HU EU

Fixed Very High-Capacity Network

coverage

86.0% 87.4% 1.7% 88.0% 85.5% 3.7% 97.0% 100%

Fibre to the Premises (FTTP)

coverage

79.9% 81.8% 2.4% 83.0% 74.1% 7.1% 95.0% -

Overall 5G coverage 85.6% 94.0% 9.9% 76.0% 96.8% 2.6% 99.0% 100%

Edge Nodes (estimate) - 152 - 28 7451 - 82 10000

SMEs with at least a basic level of

digital intensity * 53.2% 59.8% 6.1% 61.5% 71.4% 11.0% 89.0% 90%

Cloud * 37.1% 40.8% 4.9% 48.0% 46.7% 9.5% 75.0% 75%

Artificial Intelligence 7.4% 10.4% 39.9% 9.0% 20.0% 48.0% 24.0% 75%

Data analytics * 53.2% 40.6% -12.7% 59.5% 39.9% 9.5% 75.0% 75%

AI or Cloud or Data analytics * 65.6% 59.7% -4.7% - 63.2% 7.5% - 75%

Unicorns 0 0 - - 324 10.2% 2 500

At least basic digital skills * 58.9% 57.3% -1.3% 66.0% 60.4% 4.3% 70.0% 80%

ICT specialists 4.5% 4.6% 2.2% 5.3% 5.0% 2.0% 8.3% ~10%

e-ID scheme notification No

Digital public services for citizens 77.7 85.6 10.3% 77.3 84.6 2.8% 96.3 100

Digital public services for businesses 80.0 80.0 0.0% 84.7 88.6 2.7% 97.2 100

Access to electronic health records 86.0 88.1 2.4% 96.4 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological

leadership

Hungary is performing well in connectivity, being above the EU average in fibre coverage and slightly

below for 5G. Coverage of last premises, especially in rural areas, will be key to achieving full coverage

by 2030.

Hungary has achieved mixed progress in the digitalisation of businesses. While there have been

improvements in certain areas, such as the adoption of AI among SMEs and large enterprises,

Hungarian enterprises, particularly SMEs, continue to lag behind their EU counterparts in most areas

of technology adoption. The growth rates in most areas are also lower than the EU averages, indicating

that while Hungary is making strides, it is not keeping pace with the broader EU trends.

Protecting and empowering EU people and society

Hungary’s digital skills profile reveals several areas of concern. While performance in urban areas and

among young adults is good, the county’s overall digital skills rate has declined. The gender gap,

educational disparities, and the urban-rural divide are notable challenges. Targeted interventions are

necessary to address these disparities, especially in rural areas and among populations with lower

3

Hungary

education. Strengthening digital education and training programmes could help Hungary close the gap

with the EU average and ensure more inclusive digital participation.

Even though Hungary is performing well in terms of digital public services for citizens, especially in e-

Health, further improvement in cross-border services and the notification of an e-ID scheme would

further contribute to the improvement of these indicators.

Recommendations

- Digitalisation of SMEs: Improve SMEs basic digitalisation by designing dedicated public

support measures, including training programmes, diagnostics and targeted financial

support, to assist businesses in cybersecurity, digital business management, and AI.

- ICT specialists: Continue to improve the job market relevance of ICT specialist training

pathways (higher education, vocational training, and re- and upskilling), aligning them with

industry needs, with particular attention to AI and cybersecurity specialists. Encourage

people to pursue ICT training pathways including via raising awareness at earlier stages of

education, career guidance, validating prior learning, identifying and reducing barrier to

entry, and advertising campaigns. Intensify efforts to increase women’s participation in ICT

studies and careers.

- Uptake of AI: Continue to support the adoption of AI by businesses by ensuring the proper

implementation of current national measures. Strengthen access to AI infrastructures for

SMEs, including AI factories, and promote AI adoption by SMEs via the sectoral flagships

initiatives of the Apply AI strategy and skills development.

- Basic digital skills: Accelerate the country’s efforts to bridge the digital divide by developing

and investing in inclusion policies that focus on vulnerable groups, such as those with lower

levels of formal education and those living in rural areas.

- Cybersecurity: Accelerate efforts to implement cybersecurity legislation measures necessary

to strengthen the cybersecurity position of the country. Increase efforts in ICT security for

enterprises, particularly by raising employees’ awareness and improving their preparedness

amid the ever-changing cyber threat and technology landscape.

- Digital Public Services: Accelerate the implementation of cross-border capabilities of public

services, prioritising high-volume cross-border procedures.

- e-Health: Continue to cooperate and invest in digitalisation of its health systems to achieve

the 2030 eHealth target and advance the adoption and integration of AI in healthcare. A key

focus should be making the data type of medical images available to citizens through the

online access service.

- 5G coverage: Hungary should accelerate 5G rollout in the 3.4–3.8 GHz band. It should also

promote the deployment of 5G SA networks while enabling advanced use cases. In addition,

Hungary should take advantage of the upcoming expiry of rights of use to promote pro-

investment authorisation.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 14/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Ireland

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

Ireland

Executive summary Overall, Ireland has strong assets in digitalisation, such as strong fixed connectivity, high levels of basic

digital skills and a dynamic ICT ecosystem. However, it does not fully translate these strengths across

the whole of its economy and society. Parts of Ireland’s SME base still lag behind in digitalisation, while

growth in the number of ICT specialists remains too slow, and public-service digitalisation remains

uneven, with weak access to e-Health records and the and the justice system.

Ireland’s internationally competitive global tech business base is an important asset for productivity

and competitiveness. However, the uneven level of digitalisation of businesses across the wider

economy weighs on performance, as firms that remain less digitalised are less well placed to improve

productivity, adopt more efficient processes, and scale across markets. A stronger supply of ICT

specialists could help relieve skills shortages across the Irish economy and support digital

transformation, to better empower indigenous firms in benefiting from productivity gains that stem

from the strong multinational base.. Finally, the more widespread provision of digital public services,

in particular better access to e-Health records, could increase the efficiency gains from digitalisation

and widen benefits for the public, businesses and public administration.

Ireland has several digital leadership assets. It combines a vibrant start-up ecosystem with the

presence of major global technology players, and it remains one of the EU’s stronger performers on

the number of digital unicorns relative to its size. Public policy in Ireland has also shifted more clearly

in recent years towards promoting AI, with the updated National Digital & AI Strategy for 2030

positioning Ireland both as: (i) a location of choice for AI and digital start-ups; and (ii) a global hub for

applied AI innovation. At the same time, Ireland is strengthening its role in strategic technologies

through its 2025 semiconductor strategy ‘Silicon Island’ and the planned establishment of an Irish

quantum centre of excellence, while digital growth is also raising challenges for the green transition

and for infrastructure more broadly.

Ireland in the Digital Decade

Ireland shows a high level of ambition in its contribution to the Digital Decade, having set 11 national

targets (out of 14 possible), 91% of which are aligned with the EU’s 2030 targets. In its national

roadmap, Ireland provided 10 trajectory points for 2025 (out of 13 analysed). The country is following

these trajectory points moderately well, with 60% considered on track. Ireland has addressed 88% of

the eight recommendations issued by the Commission in 2025, either by implementing significant

policy changes (for 25% of recommendations) or making some changes (63% of recommendations)

through new measures. According to the national roadmap, by the end of 2026, 47% of Ireland’s

roadmap measures will come to an end. The total public budget associated to these measures is

EUR 535 million, representing 11% of the total public budget outlined in the roadmap.

According to the special 2026 Eurobarometer on the Digital Decade, 84% of Irish people consider that

digital policy should have a high/very high priority for the EU in shaping our future in Europe. They

also think that, in the next 10 years, the EU should cooperate with Member States to strengthen

cybersecurity and protection from online threats (97% agree), promote digital education and skills

programmes (92% agree) and strengthen the regulation of online platforms (e.g. online social

networks, marketplaces, app stores, etc.) (84% agree). In addition, 79% of Irish respondents think that

the EU should reduce its dependencies on digital from non-EU countries, and 86% that the EU should

2

Ireland

prioritise investments in digital infrastructure and services that are developed and controlled in

Europe. Meanwhile, 59% of Irish respondents to the Eurobarometer would be willing to switch to an

EU-based digital service provider even if it meant slightly higher costs.

Funding for digital and multi-country projects

Ireland is allocating 33% of its total recovery and resilience plan (RRP) to digital (EUR 0.3 billion). In

addition, under cohesion policy, EUR 0.04 billion, representing 4% of the country’s total cohesion

policy funding, is dedicated to advancing Ireland’s digital transformation.

Ireland is a member of both the Alliance for Language Technologies EDIC and the Local Digital Twins towards the CitiVERSE EDIC. Ireland is also directly participating in the important project of common European interest (IPCEI) on Microelectronics and Communication Technologies. In addition, Ireland is a participating state in both the EuroHPC Joint Undertaking (JU) and the Chips JU.

Digital Decade KPI (1)

Ireland EU Digital Decade target by

2030

Last available data (2)

DESI 2026 (year 2025)

Annual progress

National trajectory 2025 (3)

DESI 2026 Annual

progress IE EU

Fixed Very High Capacity Network (VHCN) coverage

87.2% 89.0% 2.1% 95.2% 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP) coverage

73.5% 84.5% 15.0% - 74.1% 7.1% - -

Basic 5G coverage 89.9% 96.3% 7.1% 89.3% 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate, new methodology)

- 114 - 23 7451 - - 10000

SMEs with at least a basic level of digital intensity *

66.1% 79.3% 9.5% 86.0% 71.4% 11.0% 90.0% 90%

Cloud * 53.1% 63.0% 9.0% 53.0% 46.7% 9.5% 75.0% 75%

Artificial Intelligence 14.9% 19.6% 31.8% 28.0% 20.0% 48.0% 75.0% 75%

Data analytics * 37.1% 40.8% 4.9% 37.0% 39.9% 9.5% 75.0% 75%

AI or Cloud or Data analytics * 64.1% 71.7% 5.8% - 63.2% 7.5% - 75%

Unicorns 17 18 5.9% - 324 10.2% - 500

At least basic digital skills * 72.9% 82.8% 6.6% 72.0% 60.4% 4.3% 80.0% 80%

ICT specialists 6.3% 6.2% -1.6% 7.9% 5.0% 2.0% 9.6% ~10%

e-ID scheme notification No

Digital public services for citizens 87.1 91.4 5.0% 82.0 84.6 2.8% 100.0 100

Digital public services for businesses

100.0 100.0 0.0% 100.0 88.6 2.7% 100.0 100

Access to electronic health records

24.5 44.0 79.5% - 86.5 4.6% 80.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological leadership

Ireland is performing well in connectivity, with rates of fixed infrastructure connectivity above the EU

average, and the national broadband plan continuing to extend gigabit-capable coverage. However,

the remaining challenge for connectivity in Ireland is increasingly the last phase of rollout and effective

take-up of fixed-infrastructure internet connectivity. Ireland has also largely achieved broad national

5G availability, but higher-capacity deployment remains weaker, with coverage in the 3.4-3.8 GHz

3

Ireland

band still below the EU average, including in sparsely populated areas, no demand for 26 GHz

connectivity, and no dedicated strategy as yet for 5G standalone or large-scale industrial use cases. As

an island economy and major data hub, Ireland also faces longer-term needs related to the

diversification and resilience of international connectivity infrastructure.

On the business side, Ireland ranks above the EU average in both SME digitalisation and in the uptake of advanced technologies by businesses, but its rate of growth in these areas is slower than at EU level, pointing to weak rates of diffusion across the broader domestic business base. Policy has shifted more clearly towards promoting AI in recent years, with new measures taken in 2025 to promote sectoral adoption, SME awareness, experimentation, and research infrastructure. Ireland is also strengthening its position in strategic technologies such as semiconductors, but the main challenge it faces now is to translate this into stronger domestic scale-up of its semiconductor sector. This is because access to specialised skills, commercialisation support and scale-up finance remains more limited for indigenous firms and start-ups. Cybersecurity preparedness across businesses and public services also remains uneven in Ireland, limiting both trusted digitalisation and resilience as the uptake of digital technologies increases. At the same time, better alignment between digital development and the green transition will be important to ensure that digital investment also supports decarbonisation and resource efficiency.

Protecting and empowering EU people and society

Ireland performs strongly on basic digital skills and remains well above the EU average on this

measure. By contrast, growth in ICT specialists as a percentage of Ireland’s workforce remains modest

and below the pace needed to meet the country’s 2030 target, while evidence points to persistent

shortages in advanced digital skills across the economy. These shortages constrain firms’ capacity to

adopt and scale digital technologies and may limit wider productivity gains, especially in domestic

sectors already facing skills and capability gaps.

Ireland also performs strongly in digital public services, especially for businesses, and citizen-facing

services are also comparatively well developed. Significant progress has also been made on digital

identity, with MyGovID expected to become the basis for Ireland’s EUDI Wallet. However, important

legal, interoperability and rollout steps must still be addressed before the country will have a fully

operational and cross-border digital identity framework in place. . The same can be said for

digitalisation of justice where some proceedings still rely on paper.. Access to e-Health records

remains low despite recent progress and ongoing implementation of the country’s ‘Digital for Care’

strategy.

4

Ireland

Recommendations

- Digital skills: Strengthen Ireland’s ICT specialist pipeline and broader digital skills base by

scaling up and better aligning ICT education, training, upskilling and reskilling with enterprise

demand, including in AI and cybersecurity; broadening participation in ICT careers, notably

through targeted measures to increase women’s participation and reduce bottlenecks in the

domestic talent pipeline; and improving the scale, accessibility and targeting of digital skills

provision for groups still at risk of exclusion, notably lower-skilled adults and older people.

- E-health: Accelerate the digital transformation of the health system by speeding up the

onboarding of healthcare providers to interoperable electronic health-record systems across

the public and private health system; expanding the availability and effective use of core digital

health services and data-sharing tools, including the Shared Care Record, ePrescribing and

patient access solutions; and ensuring full, secure and user-friendly access to electronic health

records for patients, including legal guardians and authorised persons, supported by stronger

interoperability, governance and implementation capacity.

- SME digitalisation: Strengthen the digitalisation of SMEs by directing existing and future

support more explicitly towards SMEs with lower digital maturity, including through tailored

outreach, advisory support and implementation pathways; ensuring continuity and visibility

of SME digitalisation support beyond the current RRF funding period; and accelerating the

practical uptake of more advanced digital tools, including artificial intelligence, through

accessible skills, experimentation and implementation support.

- Cybersecurity: Strengthen cybersecurity resilience across the economy and public

administration by expanding practical cybersecurity support, guidance and preparedness

tools for SMEs and other less digitally mature organisations; reinforcing incident response,

information-sharing and supply-chain risk management across critical sectors and public

services; ensuring that the rollout of AI, cloud and digital public infrastructure is underpinned

by secure-by-design procurement, updated risk assessment and strong operational cyber

capacity; and accelerating cybersecurity measures to strengthen the cyber posture of critical

infrastructure.

- Connectivity & Resilience: Support the effective use and resilience of advanced connectivity

infrastructure by facilitating stand-alone 5G, mid-band, edge and private-network use cases

in strategic sectors, including through stronger demand aggregation and coordination;

accelerating migration from legacy networks and addressing remaining final-phase rollout

bottlenecks; and strengthening the diversification, repair capacity and resilience of

international connectivity infrastructure.

- Semiconductors: Strengthen the scale-up of indigenous semiconductor firms and start-ups,

including by improving access to scale-up finance, commercialisation support, pilot-line access

and specialised skills, and by reinforcing links between research capacity, SMEs and EU

semiconductor instruments.

- Green & Digital: Strengthen the alignment between digital growth and the green transition,

in particular by improving the monitoring and deployment of digital solutions that support

decarbonisation, resource efficiency and regional smart-transition projects, including through

stronger coordination and scaling of successful local initiatives.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 15/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Italy

DIGITAL DECADE SHORT COUNTRY REPORT 2026

1

Italy

Executive summary Italy has made notable progress in digitalisation in recent years, particularly in rolling out fibre-to-the-

premises (FTTP), SME digitalisation, and the uptake of cloud and data analytics. On these metrics, Italy

outperforms the EU average. The country also benefits from strong industrial and research foundations

and has assets in strategic technologies, notably semiconductors, high-performance computing and

quantum. Its digital public services are well developed, including advanced digital identity and digital

health. Despite promising growth, structural weaknesses persist, including low FTTP coverage in rural

areas, below-EU-average basic digital skills, and uneven uptake and integration of advanced

technologies in business operations. These challenges risk delaying the full roll-out of fibre, widening

inequalities and fragmenting the national digital ecosystem. At the same time, too few SMEs have

reached very high level of digital intensity and challenges of weak technology transfer and persistent

ICT skills shortages may hamper their ability to achieve innovation and productivity gains.

Such shortcomings undermine Italy’s competitiveness, especially in high-value sectors where scaling

and innovation are critical. Limited level of AI adoption, combined with weak strategic integration of

AI in businesses, reduces the productivity and competitiveness of enterprises, particularly SMEs, which

make up most of Italy’s business landscape. The limited progress on scaling start-ups also reflects a

broader challenge in commercialising research and achieving global market reach.

Italy has the tools needed to consolidate its digital leadership. The country has a large and diversified

semiconductor ecosystem, combining strong industrial players with a network of specialised SMEs

active in equipment, materials and design. It benefits from strong academic and industrial capabilities

in quantum technologies, guided by the Italian Strategy for Quantum Technologies (2025). The

governance framework for AI and the Italian Strategy for Artificial Intelligence (2024-2026) signal

ambition in this area. More broadly, Italy has mobilised national public funding for targeted investment

in strategic digital infrastructure, including high-performance computing (HPC) and Important Projects

of Common European Interest (IPCEI). This demonstrates strong policy alignment with the EU

industrial strategy. The investments are designed to attract private capital, boost domestic industrial

capacity and position Italy in key European value chains.

Italy in the Digital Decade

Italy shows a substantial level of ambition in its contribution to the Digital Decade. It has set 14 (out of

14) national targets, 79% of which are aligned with the EU 2030 targets. In its national roadmap, Italy

provided 13 trajectory points for 2025 (out of 13 analysed). The country is monitoring progress very

well with 92% of the targets considered on track. Italy addressed 13% of the eight recommendations

issued by the Commission in 2025 by making some changes through new measures. According to the

national roadmap, by the end of 2026, 88% of the measures will come to an end. The total public

budget allocated to these measures is EUR 33.95 billion, or 54% of the total public budget outlined in

the roadmap.

According to the special Eurobarometer on ‘the Digital Decade’ 2026, 81% of Italian people thought

that digital policy should have a very high/high priority in shaping our future in Europe. They also

think that, in the next 10 years, the EU should cooperate with Member States to reinforce

cybersecurity and protection from online threats (91%), promote digital education and skills

programmes (91%) and strengthen the regulation of online platforms (90%).

2

Italy

In addition, 85% of Italian respondents thought that the EU should reduce its dependency on non-

EU countries to provide digital services, and 86% thought that EU should prioritise investments in

digital infrastructure and services that are developed and controlled in Europe. Meanwhile, 66% would

be willing to switch to an EU-based digital service provider even if it means slightly higher costs.

Funding for digital and multi-country projects

Italy allocates 26.5% of the funding under its total recovery and resilience plan to digital policies (EUR

49.8 billion). In addition, it allocates EUR 6.1 billion of cohesion policy funding, representing 14% of

the country’s total cohesion policy funding, to action to advance Italy’s digital transformation.

Italy is a member of the Alliance for Language Technologies European Digital Infrastructure Consortium

(EDIC), the Local Digital Twins towards the CitiVERSE EDIC, the EUROPEUM EDIC and the Digital

Commons EDIC. Italy directly participates in the IPCEI on Microelectronics and Communication

Technologies (IPCEI-ME/CT), in the IPCEI on Next Generation Cloud Infrastructure and Services (IPCEI-

CIS) and the Tech4Cure IPCEI. It also participates in the EuroHPC Joint Undertaking and of the Chips

Joint Undertaking.

Digital

Decade KPI (1)

Italy

EU

EU Digital Decade

target by 2030

Last

available

data (2)

DESI 2026

(year 2025) Annual

progress

National

trajectory

2025 (3) DESI 2026 Annual

progress IT EU

Fixed Very High-

Capacity Network

(VHCN) coverage

70.7% 77.6% 9.6% 79.0% 85.5% 3.7% 100.0% 100%

Fibre to the Premises

(FTTP) coverage 70.7% 77.6% 9.6% 79.0% 74.1% 7.1% 100.0% -

Basic 5G coverage 99.5% 99.8% 0.3% 99.7% 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate,

new methodology) - 674 - 269 7451 - 946 10000

SMEs with at least a

basic level of digital

intensity *

60.7% 79.5% 14.4% 78.0% 71.4% 11.0% 90.0% 90%

Cloud * 55.1% 68.1% 11.1% 60.0% 46.7% 9.5% 74.0% 75%

Artificial Intelligence 8.2% 16.4% 100.0% 10.0% 20.0% 48.0% 60.0% 75%

Data analytics * 26.6% 42.7% 26.7% 12.0% 39.9% 9.5% 60.0% 75%

AI or Cloud or Data

analytics * 63.1% 77.9% 11.1% - 63.2% 7.5% - 75%

Unicorns 11 13 18.2% 3 324 10.2% 16 500

At least basic digital

skills * 45.8% 54.3% 8.9% 51.7% 60.4% 4.3% 80.1% 80%

ICT specialists 4.0% 3.8% -5.0% 5.3% 5.0% 2.0% 8.4% ~10%

e-ID scheme notification Yes Digital public services

for citizens

83.6 86.1 3.0% 75.0 84.6 2.8% 100.0 100

Digital public services

for businesses 80.9 80.7 -0.2% 82.0 88.6 2.7% 100.0 100

Access to electronic

health records 84.1 89.9 6.9% 77.0 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI 2025 (reference year 2024) expect for indicators marked with a star * for which it is DESI 2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap"

3

Italy

A competitive, sovereign and resilient EU based on technological leadership

Italy has made strong progress on connectivity and it is above the EU average on both fibre-to-the-

premises (FTTP) rollout and 5G coverage. However, persisting rural coverage gaps in VHCN/FTTP and

low fibre take-up, also due to the persistence of consumers on the copper networks, could delay the

transition to a full fibre environment. Italy also plays an important role in advancing EU capabilities in

strategic technologies, with a large semiconductor ecosystem, strong high-performance computing

infrastructure and a growing quantum sector, supported by national strategies, EU initiatives, and a

solid research environment. In the future, it will be important to continue strengthening these

capabilities to achieve long-term competitiveness and translate Italy’s strengths in research into

industrial leadership.

Italian SMEs perform well on basic digitalisation and on rate of adoption of technologies such as cloud

and data analytics, but they lag behind on high digital intensity rates. Although the uptake of advanced

digital technologies is improving across the business population, a key gap remains in their full and

strategic integration into business models, with take-up varying by technology, region, sector and size

of business. In 2025, Italy drew up its AI governance framework (Law n. 132/2025), in line with the

EU's AI Act, establishing a comprehensive legal structure for safe, human-centric AI deployment. The

framework also includes rules to bolster cybersecurity and enhance public digital literacy and is backed

with EUR 1 billion to support AI start-ups and SMEs. Although the uptake of AI is growing rapidly, it

remains below potential, particularly for SMEs. At the same time, Italy’s strong computing resources

and HPC capacity provide a solid basis for AI development, with the main challenge being to

consolidate the ecosystem, while attracting capital and talent.

Although in 2026, Italy counts 13 unicorns, signalling a degree of progress, this figure remains low

compared with leading European innovation ecosystems, indicating structural weaknesses in

industrial scaling. The growth trajectory of start-ups is constrained by limited venture capital

availability, especially in terms of access to late-stage financing, along with weak technology transfer

from universities and research centres.

Protecting and empowering EU people and society

Italy’s digital skills landscape shows a mixed picture. On the one hand, the country has recorded solid

growth in the share of citizens with at least basic digital skills; on the other, it still has a structural gap

compared with the EU average. Domestic inequalities remain a challenge, especially by education

level, with a wide gap in digital skills for people with low levels of education, alongside persistent gaps

by gender, age and the urban-rural divide. The positive trend in digital skills acquisition suggests that

public policies (such as the Digital Facilitation Service Network), with substantial support from the

recovery and resilience plan (RRP), have had a positive impact. However, continued action will be

needed to consolidate this progress.

The shortage of ICT specialists represents a structural weakness. Although ICT-related programmes

and measures to strengthen skills, attract talent and improve alignment between higher education and

labour market needs have expanded, the education and training system still does not fully meet

demand, and women remain under-represented in ICT fields.

On digital public services, Italy has achieved a solid performance on public services for citizens by

creating well-developed online services for national citizens and businesses, but it has room for

improvement on cross-border availability of digital public services, especially for businesses. The

4

Italy

country has continued to improve its digital identity systems, for example by further developing the IT

Wallet. It has also made progress on data interoperability and on migrating public services to qualified

cloud infrastructure. On digital health, Italy has advanced significantly, with the Electronic Health

Record and the Health Data Ecosystem reaching significant levels of maturity. The focus on AI in

healthcare and life sciences is growing, supported by the Italian Strategy for Artificial Intelligence 2024-

2026.

Recommendations

- Connectivity: Sustain the roll-out of fibre-to-the-premises infrastructure across the entire

country and combine infrastructure support with take-up and spectrum measures to

progress towards a full fibre network. Notably, close the persistent gap in rural FTTP

coverage, and ensure continuity of public investment in both fixed and mobile network

development. Effectively support fibre adoption, including via measures to address the

connection to the last meter infrastructure gap, and facilitate the switch-off of copper

networks. Promote the deployment of 5G SA (standalone) networks while enabling

advanced use cases. In addition, take advantage of the upcoming expiry of rights of use to

negotiate pro-investment conditions. Continue to improve high-capacity links with the

islands.

- ICT specialists and basic digital skills: Strengthen the supply of ICT specialists and close the

basic digital skills gap, with particular attention to people with no or low levels of formal

education, by combining actions across initial education, continuing education, and digital

inclusion infrastructure (e.g. consolidating the Digital Facilitation Service Network as a

permanent component of the national digital inclusion infrastructure). Intensify efforts to

upskill and reskill in both the private and the public sector, especially in strategic sectors

(e.g. quantum, semiconductors, AI), and to increase women’s participation in ICT studies

and careers.

- AI: Accelerate action to operationalise the national AI governance framework, especially by

supporting AI adoption by businesses, in particular SMEs, while ensuring close coordination

among relevant initiatives and stakeholders. Promote AI use cases in strategic sectors (e.g.

manufacturing and robotics), in line with broader EU priorities and initiatives. Reinforce

centres of excellence in AI, research and development activities, and related enabling

technologies, while maintaining strong links with industry.

- Quantum: Strengthen the Italian quantum ecosystem by supporting the development and

industrial uptake of quantum technologies and strengthening connections between

industrial players, while leveraging emerging regional strengths to support pilot activities.

Foster collaboration between academia and industry and integrate national infrastructure

into the EU’s quantum ecosystem (e.g. through sustained participation in the EuroHPC Joint

Undertaking and alignment with the forthcoming Quantum Act).

- Semiconductors: Consolidate Italy's position in the semiconductor value chain, by finalising

its strategic framework and improving ecosystem coordination, while ensuring

complementarity with EU-level capacities and initiatives. Strengthen coordination among

research centres, universities, and industry, and provide support, especially for SMEs (e.g.

through shared infrastructure, pilot lines, and technology transfer services). Moreover,

continue to advance the development and use of the pilot line on wide bandgap

semiconductors through effective cross-border collaboration.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 16/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Latvia

DIGITAL DECADE COUNTRY REPORT 2026

s

1

Latvia

Executive summary Overall, Latvia continues to rely on strong digitalisation of public services and e-Health. It has made

notable progress in emerging technologies, in 5G coverage (where it now surpasses the EU average)

and quantum and semiconductor initiatives. However, persistent disparities and uneven progress

hold back broader transformation.

Persistent rural connectivity gaps in very high capacity networks (VHCNs) and fibre to the premises

(FTTP) risk marginalising communities from the digital economy, entrenching regional disparities and

restricting access to critical services. Meanwhile, uneven SME digitalisation, marked by lagging

adoption of cloud and AI technologies (despite impressive year-on-year growth on these measures)

threatens to undermine long-term productivity, particularly as demand for advanced digital tools

intensifies. The worsening ICT skills shortage further erodes Latvia’s ability to make the most of its

emerging strengths in AI, quantum, and e-Health, sectors where early progress could otherwise drive

future growth. Without intervention, these interlinked challenges (in the area of infrastructure

deficits, patchy business digitalisation, and skill gaps) could stifle competitiveness. This could in turn

prevent Latvia from fully capitalising on its leadership in public digital services or realising the broader

economic and social benefits of its technological progress. Left unaddressed, these challenges risk

leaving businesses and citizens behind in an increasingly digital-dependent world.

Latvia has several digital leadership assets. To fully capitalise on its strengths (cross-Baltic

collaborations, quantum and AI leadership initiatives, and a dynamic start-up scene) Latvia must

accelerate SME digitalisation, bridge skill and infrastructure gaps, and scale up its cybersecurity

defences. Finally, deeper regional cooperation in semiconductors and quantum – building on projects

like the quantum communication infrastructure (QCI) network – could solidify Latvia’s role as a digital

frontrunner in the Baltic region, provided the country addresses challenges in funding, adoption, and

resilience.

Latvia in the Digital Decade

Latvia shows a substantial level of ambition in its contribution to the Digital Decade having set 14

national targets (out of 14 possible), 86% of which are aligned with the EU 2030 targets. In its national

roadmap, Latvia provided 12 trajectory points for 2025 (out of 13 analysed). The country is following

them not well with 42% considered on track. Latvia addressed 40% of the 5 recommendations issued

by the Commission in 2025 by making some changes through new measures. According to the national

roadmap, by the end of 2026, 52% of the measures will come to an end. The total public budget

associated to these measures is EUR 414 million, representing 21% of the total public budget outlined

in the roadmap.

According to the special Eurobarometer on ‘the Digital Decade’ 2026, 80% of Latvian people consider

that digital policy should have a very high/high priority for the EU in shaping our future in Europe.

They also think that the EU should cooperate with Member States in the next 10 years to ‘reinforce

cybersecurity and protection from online threats’ (94% of Latvians agreed), ‘promote digital education

and skills programmes’ (90% agreed), ‘strengthen the regulation of online platforms’ (84%) as well as

to ‘develop shared digital public services’ (84% agreed). In addition, 75% of Latvian respondents think

that the EU should reduce its dependencies on digital products and services from non-EU countries,

and 80% agree that the EU should prioritise investments in digital infrastructure and services that are

s

2

Latvia

developed and controlled in Europe. Meanwhile, 47% of Latvians said that they would be willing to

switch to an EU-based digital service provider even if it means slightly higher costs.

Funding for digital and multi-country projects

Latvia allocates 23% of its total recovery and resilience plan to digital (EUR 416 million). In addition,

under cohesion policy, EUR 4 million, representing 10% of the country’s total cohesion policy funding,

is dedicated to advancing Latvia’s digital transformation.

Latvia is a member of the Alliance for Language Technologies EDIC and of the Local Digital Twins

towards the CitiVERSE EDIC. Latvian entities are indirect and/or associated partners in the IPCEI on

Next Generation Cloud Infrastructure and Services (IPCEI-CIS) and in the Tech4Cure IPCEI. Latvia is a

participating state in the EuroHPC Joint Undertaking (JU) and of the Chips JU.

Digital Decade KPI (1)

Latvia EU Digital Decade

target by 2030

Last

available

data (2)

DESI 2026

(year 2025)

Annual

progress

National

trajectory

2025 (3)

DESI 2026 Annual

progress LV EU

Fixed Very High Capacity

Network (VHCN) coverage 68.1% 66.7% -2.2% 77.0% 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP)

coverage 61.1% 62.1% 1.7% 77.0% 74.1% 7.1% 100.0% -

Basic 5G coverage 71.1% 98.2% 38.2% 58.0% 96.8% 2.6% 70.0% 100% Edge Nodes (estimate, new

methodology) - 40 - 0 7451 - 51 10000

SMEs with at least a basic level

of digital intensity * 48.2% 58.5% 10.2% 63.0% 71.4% 11.0% 90.0% 90%

Cloud * 29.0% 37.8% 14.1% 40.0% 46.7% 9.5% 75.0% 75%

Artificial Intelligence 8.8% 12.2% 38.3% 22.0% 20.0% 48.0% 75.0% 75%

Data analytics * 36.9% 36.4% -0.7% 29.0% 39.9% 9.5% 75.0% 75%

AI or Cloud or Data analytics * 48.2% 52.2% 4.1% - 63.2% 7.5% - 75%

Unicorns 1 1 0.0% - 324 10.2% 2 500

At least basic digital skills * 45.3% 48.4% 3.4% 58.0% 60.4% 4.3% 70.0% 80%

ICT specialists 4.9% 4.5% -8.2% 6.4% 5.0% 2.0% 10.0% ~10%

e-ID scheme notification Yes

Digital public services for

citizens 93.5 95.1 1.7% 89.0 84.6 2.8% 100.0 100

Digital public services for

businesses 96.3 97.5 1.3% 88.0 88.6 2.7% 100.0 100

Access to electronic health

records 85.9 94.2 9.7% 83.0 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year

2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

s

3

Latvia

A competitive, sovereign and resilient EU based on technological

leadership

In 2025, Latvia showed progress in digital connectivity and emerging technologies, but still faced

persistent disparities and evolving challenges. While 5G coverage surged in 2025 to exceed the EU

average, adoption of VHCN and FTTP lagged significantly behind, particularly in rural areas, reflecting

limited market incentives and high deployment costs. SME digitalisation in Latvia showed mixed results

in 2025: although AI adoption grew, the use of cloud and data analytics trailed EU averages.

Government support programmes, like the EUR 18.5 million digitalisation fund (exhausted ahead of

schedule), highlight strong demand but insufficient scaling. In quantum and semiconductors, Latvia

made progress in 2025 through: (i) education initiatives (the Latvian Quantum Initiative, the Chip

Competence Centre); (ii) cross-Baltic collaborations (Memoranda of Understanding with

Estonia/Lithuania); and (iii) infrastructure milestones (first Baltic quantum communication network,

QCI project). However, both the disinterest of Latvian SMEs in quantum (due to skills gaps and AI

prioritisation) and stagnant unicorn growth (Latvia had only 1 unicorn in 2026, with a target of 2 by

2030) signal untapped potential. Since Russia’s invasion against Ukraine in 2022, the number of cyber

incidents has increased sixfold, targeting citizens and critical infrastructure. Public-sector AI

integration (e.g. Hugo.lv, multiple chatbots, election security tools) and growth in the start-up

ecosystem show promise: there are now 569 start-up firms in Latvia, and these start-ups raised EUR

78 million in funding in 2025.

Protecting and empowering EU people and society

In 2025, Latvia continues performing well in digitalisation of public services for citizens and

businesses and e-Health. However, the country lags behind EU averages in key areas, such as digital

skills and ICT specialists. Although Latvian women slightly outperform men in digital skills, and

Latvians’ adoption of generative AI exceeds the EU average, critical gaps persist. For example, Latvia

trails EU benchmarks in both: (i) the number of older adults and low-educated individuals with digital

skills; (ii) the digital safety skills of its population. Latvia continues to score highly on the provision of

public digital services. For e-Health there is ongoing work on a new Citizen Portal for the country

(launching in 2026). ICT specialist shortages remain, and Latvia reports a declining interest among its

people in ICT training. Latvia’s work to develop an EUDI Wallet is well underway.

s

4

Latvia

Recommendations

- Connectivity: (i) Promote the rollout of fibre infrastructure by supporting the expansion of fibre through coordinated funding programmes and regulatory measures at both national and regional levels, ensuring a balanced deployment, including in rural areas. (ii) Strengthen fibre take-up by supporting, through targeted funding and appropriate regulation, the deployment of fibre connections to end users. Foster the switch-off of copper networks. (iii) Accelerate 5G rollout in the 3.4–3.8 GHz band in rural areas. Promote the deployment of 5G SA networks to enable advanced use cases and enhance network performance. In addition, take advantage of upcoming spectrum licence renewals to put in place pro-investment conditions.

- ICT specialists: Develop and implement measures to increase the number of ICT specialists in

employment while intensifying efforts to increase women’s participation in ICT studies and

careers.

- Digital skills: Strengthen and continue to implement measures to increase digital skills across

all ages with a special emphasis on people living in rural areas and those with lower

educational background.

- Digitalisations of SMEs: (i) Accelerate SME digitalisation in Latvia, increase funding for high-

demand programmes like AI and digital maturity support, (ii) expand rural outreach to

demonstrate tangible benefits, (iii) and ensure long-term, scalable co-financing mechanisms

to meet the demand.

- Unicorns: Sustain Latvia’s start-up sector growth and address stagnation in new ventures,

including expanding access to early-stage funding, and strengthen incubation programmes.

- Cybersecurity: (i) Bolster Latvia’s resilient cybersecurity framework, and sustain proactive

measures against escalating threats, particularly fraud. (ii) Continue efforts to implement

cybersecurity measures, in particular for supply chain security, in companies, especially SMEs

and those operating the critical infrastructures.

- E-health: Continue to cooperate and invest in digitalisation of healthcare to: (i) Offer a mobile

application for citizens to access their electronic health records (ii). Connect more private

rehabilitation centres to the online access service.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 17/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Lithuania

DIGITAL DECADE COUNTRY REPORT 2026

2

Lithuania

Executive summary Overall, Lithuania has strong assets in digitalisation: near-universal 5G coverage, rapidly growing SME

digital intensity that now exceeds the EU average, a world-class cybersecurity framework and a globally

recognised laser and photonics industry that provides a natural entry point into quantum technologies.

However, Lithuania is not yet fully reaping the benefits of this transformation. Basic digital skills remain

significantly below the EU average, with especially wide gaps among older adults and rural

populations. In rural areas, rollout of very high capacity networks (VHCN) is falling behind the national

trajectory due to a lack of public financing for last-mile connections. Female participation in ICT fell

sharply in 2024, dropping below the EU average, but recovered strongly in 2025, returning above the

EU average; this progress has not yet been underpinned by dedicated policy measures. On the green-

digital dimension, no integrated strategy or monitoring framework has been established, despite the

twin transition being a core EU strategic priority.

The weaknesses identified have direct implications for Lithuania's digital competitiveness. As a small,

open economy, Lithuania’s future productivity growth will depend on how widely digital technologies

spread beyond the ICT-intensive core. Weak digital skills – particularly among older and rural

populations – are constraining labour market participation and limiting returns on Lithuania's digital

infrastructure investment.

Lithuania can also count on several digital leadership assets. Its laser and photonics industry remains

a globally recognised strength and offers a natural entry point into quantum photonics, with the

country already embedded in European quantum communication networks. The start-up ecosystem is

the fastest-growing in Central and Eastern Europe, supported by the newly launched Baltic Innovation

Fund 3 and a planned EUR 250 million Scale-Up Fund. Looking ahead, the LitAI AI Factory is set to

provide sovereign AI infrastructure from 2027, with full sectoral services expected by late 2027 to early

2028. Lithuania's leadership of the EU Permanent Structured Cooperation (PESCO) Cyber Rapid

Response Teams – coordinating multinational teams that respond to cyber incidents, assess

vulnerabilities and support affected states – makes it a key contributor to European digital security.

Lithuania significantly scaled up its cyber awareness efforts in 2025, including targeted training for

seniors and small and medium-sized enterprises, but sustaining and extending this outreach to

vulnerable groups and smaller enterprises remains crucial.

Lithuania in the Digital Decade

Lithuania shows a high level of ambition in its contribution to the Digital Decade, having set 12 national

targets (out of 14 possible), 92% of which are aligned with the EU 2030 targets. In its national roadmap,

Lithuania provided 12 trajectory points for 2025 (out of 13 analysed). The country is following them

well, with 75% considered on track. Lithuania addressed 83% of the 6 recommendations issued by the

Commission in 2025, by implementing significant policy changes (50%) or making some changes (33%)

through new measures. According to the national roadmap, by the end of 2026, 42% of the measures

will come to an end. The total public budget for these measures is EUR 468 million, representing 32%

of the total public budget outlined in the roadmap.

According to the special Eurobarometer on the Digital Decade 2026, 80% of Lithuanian people consider

that digital policy should be a very high/high priority for the EU in shaping Europe’s future. They also

think that, in the next 10 years, the EU should cooperate with EU countries to protect privacy and

security online (94%), make digital tools more accessible for everyone, especially vulnerable groups,

3

Lithuania

older ones, and people with disabilities (91%), and use digital tools and technologies to make life

simpler for people and businesses (89%).

In addition, 74% of Lithuanian respondents think that the EU should reduce its dependencies on digital

from non-EU countries, while 80% think that the EU should prioritise investments in digital

infrastructure and services developed and controlled in Europe. Meanwhile, 53% would be willing to

switch to an EU-based digital service provider even if it means slightly higher costs.

Funding for digital and multi-country projects

Lithuania allocates 23% of its total recovery and resilience plan to digital (EUR 0.7 billion). Under

cohesion policy, EUR 0.3 billion, representing 5% of the country’s total cohesion policy funding, is also

dedicated to advancing Lithuania’s digital transformation.

Lithuania is a member of the Alliance for Language Technologies European Digital Infrastructure

Consortium (EDIC). It is also a participating state of the Euro High-Performance Computing (HPC) Joint

Undertaking (JU) and of the Chips JU.

Digital Decade KPI (1)

Lithuania EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025) Annual

progress National

trajectory

2025 (3)

DESI 2026 Annual

progress LT EU

Fixed Very High Capacity

Network coverage 78.3% 79.0% 0.9% 86.0% 85.5% 3.7% 98.0% 100%

Fibre to the Premises (FTTP)

coverage 78.3% 79.0% 0.9% - 74.1% 7.1% - -

Basic 5G coverage 99.7% 99.7% 0.0% 95.0% 96.8% 2.6% 100.0% 100%

Edge Nodes (estimate, new

methodology) - 75 - - 7451 - - 10000

SMEs with at least a basic level

of digital intensity * 60.0% 73.5% 10.7% 71.0% 71.4% 11.0% 90.0% 90%

Cloud * 33.6% 54.9% 27.8% 46.0% 46.7% 9.5% 75.0% 75%

Artificial Intelligence 8.8% 21.3% 143.2% 19.0% 20.0% 48.0% 75.0% 75%

Data analytics * 40.5% 54.1% 15.5% 24.0% 39.9% 9.5% 75.0% 75%

AI or Cloud or Data analytics * 53.5% 71.4% 15.5% - 63.2% 7.5% - 75%

Unicorns 3 3 0.0% 4 324 10.2% 6 500

At least basic digital skills * 52.9% 53.8% 0.8% 67.0% 60.4% 4.3% 80.0% 80%

ICT specialists 5.3% 5.7% 7.5% 5.7% 5.0% 2.0% 6.9% ~10%

e-ID scheme notification Yes

Digital public services for

citizens 87.9 86.0 -2.1% 88.0 84.6 2.8% 100.0 100

Digital public services for

businesses 92.5 96.7 4.6% 96.0 88.6 2.7% 100.0 100

Access to electronic health

records 95.4 97.9 2.6% 100.0 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

A competitive, sovereign and resilient EU based on technological

leadership

A competitive, sovereign and resilient EU based on technological

leadership

4

Lithuania

Lithuania performs above the EU average in 5G coverage but below it on VHCN, and lags behind its

national trajectory on VHCN coverage, with rural areas particularly underserved. VHCN and FTTP

coverage figures are virtually identical in Lithuania, reflecting a network that is almost entirely fibre-

based, meaning the rural coverage gap is the same for both indicators and arises out of the same

structural cause. The absence of broad-scale public support for last-mile fibre deployment to ordinary

households leaves commercially unattractive areas at risk of being permanently excluded from gigabit

coverage. The remaining 5G gaps concern mid-band deployment in rural areas and the transition to

standalone networks, needed to enable advanced industrial use cases. Lithuania's semiconductor

ecosystem remains at an early stage, but the country's world-leading laser and photonics industry

provides a natural entry point into semiconductor-adjacent technologies, particularly for back-end

applications and quantum photonics. Building on this strength to develop back-end production

capacities and specialised skills would enable Lithuania to carve out a strategic niche in the EU

semiconductor value chain. The country does not participate in the EU Chips Act’s front-end pilot lines,

and its semiconductor ecosystem remains concentrated in niche and back-end activities, with a need

to develop both production capacities and specialised skills in these segments. On the business side,

SMEs have largely caught up with the EU basic digital intensity average, supported by a well-structured

portfolio of co-funded instruments further expanded and simplified in 2025. The adoption of advanced

digital technologies is above the EU average across all three indicators, but this masks significant

sectoral concentration: adoption remains low outside the ICT-intensive core, and large enterprises lag

behind the EU average on AI adoption. Lithuania has invested a lot in AI infrastructure through the

LitAI AI Factory, expected to be operational by early 2027, and has established GovAI, an AI

Competence Centre for the Public Sector that has been providing services to public institutions since

February 2026. The start-up ecosystem is the fastest-growing in Central and Eastern Europe, with

record levels of venture capital raised in 2025, though structural gaps in late-stage financing and exit

pathways limit unicorn emergence.

Protecting and empowering EU people and society

Basic digital skills remain significantly below the EU average and are increasing well below the EU

trend, with Lithuania lagging far behind its national 2030 trajectory. The gap is widest among older

adults – whose proficiency rate is nearly 20 percentage points below the EU average for the same age

group – and among rural and suburban populations. The Prisijungusi Lietuva (Connected Lithuania)

proximity-based training model has demonstrated measurable effectiveness at reaching these

excluded groups, but operates at a scale that remains insufficient relative to the gap and relies on

Recovery and Resilience Facility (RRF) funding whose continuation beyond 2026 is not guaranteed. The

share of ICT specialists is among the highest in Europe, but the sector contracted in 2024 due to

economic stagnation, with a particularly sharp decline in ICT specialists who are women, putting

Lithuania below the EU average. The share of ICT specialists who are women recovered strongly in

2025, putting the country back above the EU average, but this progress has not yet been underpinned

by dedicated policy measures. Digital public services perform well, with Lithuania among the best

performing EU countries when it comes to open data maturity and delivering significant e-health

infrastructure improvements in 2025, including new subsystems for maternal health, laboratory data,

as well as a new mental health data set. The EU Digital Identity (EUDI) Wallet is in active preparation.

On the link between the green and digital transitions, no integrated strategy or monitoring framework

has been adopted, and the dual transition remains largely unrealised in policy terms. The LitAI AI

Factory, which will operate on green energy and include smart industry among its priority sectors from

2026 onwards, is an emerging but not yet operational contribution to this agenda.

5

Lithuania

Recommendations

- Basic Digital Skills: Strengthen Lithuania’s digital skills base, in particular by: (i) scaling

up proximity-based delivery by extending the Prisijungusi Lietuva model beyond its

current scope to establish a sustainable national network of trained digital mediators

systematically integrated into social and employment services, (ii) introducing

demand-side incentives, such as targeted training vouchers for low-skilled adults and

older citizens; (iii) developing tailored awareness campaigns to reach the most

excluded groups.

- AI: : Accelerate the adoption of AI across the business sector, in particular by: (i)

promoting AI uptake in sectors outside the ICT-intensive core, such as manufacturing,

construction and traditional services, through targeted awareness-raising and

advisory support; (ii) participating in the sectoral Apply AI flagships to develop sector-

specific AI applications; (iii) ensuring the timely operationalisation of the LitAI AI

Factory to provide broad-based access to AI infrastructure for businesses of all sizes.

- Connectivity: Accelerate the deployment of high-capacity digital infrastructure, in

particular by: (i) introducing targeted public support for last-mile fibre deployment in

commercially unattractive rural areas to close the FTTP coverage gap; (ii) sustaining

5G rollout in the 3.4-3.8 GHz mid-band in rural areas and promoting the deployment

of 5G Standalone networks to enable advanced use cases; (iii) taking advantage of

upcoming spectrum licence renewals to put in place pro-investment conditions.

- Cybersecurity: Build on the country’s strong cyber resilience by further enhancing

public cyber awareness and institutional coordination. In particular: (i) continue

scaling cyber awareness efforts across all population groups and sectors, with

particular attention to vulnerable groups such as seniors and SMEs; (ii) consolidate the

organisational framework for cybersecurity by strengthening measurable

implementation targets and structured cross-sector cooperation mechanisms.

- ICT specialists: Strengthen the ICT talent pipeline and improve gender balance in the

sector. In particular, (i) scale up retraining programmes to support career transitions

into ICT; (ii) introduce targeted measures to increase and structurally embed female

participation in ICT specialist roles, including dedicated programme design, clear

targets and funding beyond the general instruments currently available.

- Green: Adopt an integrated green-digital strategy with measurable sector-specific

targets and establish a national monitoring framework to track ICT-enabled emission

reductions across the economy. Build on the LitAI AI Factory's green energy and smart

industry pipeline to scale up digital solutions supporting climate goals among

businesses and public sector entities.

- Semiconductors: Invest in the development of semiconductor back-end technologies,

and support the development of specialised semiconductor skills in advanced

semiconductor technologies.

EN EN

EUROPEAN COMMISSION

Brussels, 17.6.2026

COM(2026) 288 final

ANNEX 2 – PART 18/27

ANNEX

to the

Communication from the Commission to the European Parliament, the Council, the

European Economic and Social Committee and the Committee of the Regions

State of the Digital Decade 2026: Closing structural gaps and mobilising investments for

2030 and beyond

{SWD(2026) 154 final} - {SWD(2026) 155 final} - {SWD(2026) 156 final} -

{SWD(2026) 157 final}

Luxembourg

DIGITAL DECADE SHORT COUNTRY REPORT 2026

2

Luxembourg

Executive summary Overall, Luxembourg combines near-universal connectivity with a sovereign digital infrastructure strategy anchored in quantum technologies, AI Factory investment and world-class cybersecurity. However, cloud and data analytics adoption among companies trails the EU average despite strong AI performance, and basic digital skills are growing too slowly, with persistent gaps among those with a low level of education and older citizens. The weaknesses identified in business digitalisation have direct implications for Luxembourg’s competitiveness and economic resilience. An economy as specialised and internationally exposed as Luxembourg’s depends critically on the ability of its enterprise base to adopt productivity-enhancing digital tools. Cloud and data analytics gaps in particular limit businesses’ ability to scale operations, access cross-border markets and leverage the data infrastructure Luxembourg is building at national level. The drop observed in 2024 in the share of women ICT specialists has only been partially corrected in 2025, signalling a structural vulnerability in a labour market already reliant on attracting international talent. Luxembourg can, however, count on several digital leadership assets that position it well for the decade ahead. In 2025, the Government of Luxembourg launched the national strategic initiative “Accelerating Digital Sovereignty 2030”, comprising three complementary strategies on data, artificial intelligence, and quantum technologies, supported by strategic actions and flagship projects in priority domains, aimed at benefiting public authorities, citizens and businesses. Selected in December 2024 as one of the first seven countries to host an EuroHPC AI Factory, Luxembourg is deploying MeluXina-AI, a new AI-optimised supercomputer operated by LuxProvide alongside the existing MeluXina infrastructure, providing sovereign high-performance computing to businesses, researchers and public administrations from the second half of 2026. The landmark cross- border quantum key distribution link achieved in June 2025, and the forthcoming MeluXina- Q quantum computer confirm Luxembourg’s ambition to be a strategically significant node in Europe’s emerging quantum infrastructure. The Mistral AI partnership and the AI4LUX campaign signal a new model of sovereign AI deployment in public services. Luxembourg’s dual positioning as a financial centre and a data-sovereign digital hub offers a distinctive basis for developing integrated public- private financing vehicles for the next generation of digital ventures.

Luxembourg in the Digital DecadeLuxembourg shows a high level of ambition in its contribution to the Digital Decade having set 12

national targets (out of 14 possible), 100% of which aligned with the EU 2030 targets In its national

roadmap, Luxembourg provided 12 trajectory points for 2025 (out of 13 analysed). The country is

following them moderately well with 67% considered to be on track. Luxembourg addressed 100% of

the 6 recommendations issued by the Commission in 2025, either by implementing significant policy

changes (17%) or making some changes (83%) through new measures. According to the national

roadmap, by the end of 2026, 18% of the measures will come to an end. The total public budget

associated to these measures is EUR 40 million, representing 8% of the total public budget outlined in

the roadmap.

According to the special Eurobarometer on the Digital Decade 2026, 79% of Luxembourg people

consider that digital policy should have a high or very high priority for the EU in shaping our future in

Europe. They also think that, in the next 10 years, the EU should cooperate with Member States to

reinforce cybersecurity and protection from online threats (100%), build an independent European

3

Luxembourg

digital infrastructure including broadband, 5G, cloud and semiconductors (90%), and promote digital

education and skills programs (86%).

In addition, 87% of Luxembourg respondents think that the EU should reduce its dependencies on

digital from third countries, and 89% that the EU should prioritise investments in digital infrastructure

and services that are developed and controlled in Europe. Meanwhile, 69% would be willing to switch

to an EU-based digital service provider even if it means slightly higher costs.

Funding for digital and multi-country projects Luxembourg allocates 27% of its total recovery and resilience plan to digital (EUR 17 million). In

addition, under cohesion policy, EUR 0.01 billion, representing 17% of the country’s total cohesion

policy funding, is dedicated to advancing Luxembourg’s digital transformation.

Luxembourg is a member of the Alliance for Language Technologies European Digital Infrastructure

Consortium (EDIC), of the Local Digital Twins towards the CitiVERSE EDIC, of the EUROPEUM EDIC, of

the IMPACTS EDIC and of the Digital Commons EDIC. Luxembourgish entities are indirect partners in

the IPCEI on Next Generation Cloud Infrastructure and Services (IPCEI-CIS). Luxembourg

also participates in the design of a new, upcoming candidate IPCEI on Artificial Intelligence.

Luxembourg is also a participating state of the EuroHPC Joint Undertaking (JU) and of the Chips JU.

Digital Decade KPI (1) Luxembourg EU Digital Decade

target by 2030 Last

available

data (2)

DESI 2026

(year 2025)

Annual

progress

National

trajectory

2025 (3)

DESI

2026

Annual

progress LU EU

Fixed Very High Capacity Network

coverage

95.2% 95.5% 0.3% 98.5% 85.5% 3.7% 100.0% 100%

Fibre to the Premises (FTTP)

coverage

81.8% 85.2% 4.2% 92.9% 74.1% 7.1% 100.0% -

Basic 5G coverage 99.6% 99.9% 0.3% 98.4% 96.79% 2.6% 100.0% 100%

Edge Nodes (estimate, new

methodology)

- 28 - - 7451 - - 10000

SMEs with at least a basic level of

digital intensity *

57.9% 76.7% 15.1% 75.1% 71.4% 11.0% 90.0% 90%

Cloud * 32.6% 43.7% 15.7% 37.8% 46.7% 9.5% 75.0% 75%

Artificial Intelligence 23.7% 33.6% 41.6% 52.1% 20.0% 48.0% 75.0% 75%

Data analytics * 32.4% 38.2% 8.6% 68.6% 39.9% 9.5% 75.0% 75%

AI or Cloud or Data analytics * 52.0% 64.4% 11.2% - 63.2% 7.5% - 75%

Unicorns 2 2 0.0% - 324 10.2% - 500

At least basic digital skills * 60.1% 62.4% 1.9% 71.0% 60.4% 4.3% 80.0% 80%

ICT specialists 8.0% 8.7% 8.7% 8.6% 5.0% 2.0% 10.0% ~10%

e-ID scheme notification Yes

Digital public services for citizens 97.7 94.7 -3.1% 97.4 84.6 2.8% 100.0 100

Digital public services for

businesses

100.0 100.0 0.0% 98.3 88.6 2.7% 100.0 100

Access to electronic health

records

76.1 77.1 1.4% 79.2 86.5 4.6% 100.0 100

(1) Indicators full description, metadata and sources in the DESI 2026 methodological note (2) Last available data is DESI2025 (reference year 2024) except for indicators marked with a star * for which it is DESI2024 (reference year 2023) (3) National trajectory value for 2025, if set by the country in its Digital Decade national roadmap

4

Luxembourg

A competitive, sovereign and resilient EU based on technological

leadership

Luxembourg performs well above the EU average on connectivity, with near-universal Very High

Capacity Network (VHCN) and 5G coverage and a mature fibre deployment model driven primarily by

a single national operator. The remaining challenge for fibre to the premises (FTTP) is concentrated in

hard-to-reach premises in ‘WhiteSpot’ areas, where a new legal framework is still undergoing analysis

without concrete deployment results, and in stimulating take-up among cost-sensitive households

despite an expanding voucher scheme. On 5G, mid-band rural coverage and standalone deployment

remain the key gaps that need to be addressed. On the business side, SMEs have made rapid progress

in basic digital intensity, but cloud and data analytics adoption among enterprises continues to trail

the EU average, with no dedicated instrument targeting enterprises introduced in 2025. Luxembourg

has invested decisively in AI infrastructure and sovereign digital capabilities through the MeluXina-AI

AI Factory and the Mistral AI partnership, positioning itself as a trusted AI hub in Europe. The start-up

ecosystem benefits from Luxembourg’s unique positioning as a financial centre and data-sovereign

hub, though scaling ventures beyond the early stages remains a structural challenge.

Protecting and empowering EU people and society

Luxembourg’s basic digital skills level is above the EU average but below the national trajectory point

set by Luxembourg in its national roadmap in 2025. It is also growing more slowly than the EU overall,

with persistent gaps among those with a low level of education, older citizens and women. The second

National Action Plan for Digital Inclusion, adopted in January 2026, represents a meaningful

governance upgrade but further efforts are needed to reach the most excluded groups. The share of

ICT specialists in the total workforce is the second highest in Europe and recovered significantly in

2025, though the volatility in the number of women ICT specialists signals a structural vulnerability

that warrants continued attention. On digital public services, Luxembourg achieves a perfect score for

businesses, but citizen-facing services have declined slightly, and the country ranks among the lowest

in the EU for digitalisation of judicial proceedings, with citizens and businesses still unable to fully

initiate and follow court proceedings digitally. Access to electronic health records remains below the

EU average.

On green digital technologies, Luxembourg’s ICT sector emits almost three times the EU average per

capita, and while the ‘sustainable by design’ principle is embedded in the Digital Government Strategy

2026-2030, no national monitoring framework exists to quantify ICT-enabled emission reductions

across sectors.

5

Luxembourg

Recommendations

- Skills: Strengthen targeted digital skills interventions for the groups most at risk of

exclusion, in particular older citizens, women and low-educated populations, by (i)

scaling up proximity-based delivery and personalised support mechanisms, and (ii)

ensuring programme continuity beyond current funding cycles.

- Advanced technologies take-up: Develop targeted policy measures to accelerate the

adoption of advanced digital technologies among enterprises, in particular by: (i)

accelerating cloud and data analytics adoption among private enterprises, notably by

extending the existing SME support architecture beyond basic digitalisation toward

advanced technology deployment and by scaling up sovereign cloud offerings adapted

to private sector needs; (ii) continuing to support AI uptake by identifying and scaling

AI use cases in strategic sectors of the Luxembourg economy, in line with the Apply AI

Strategy.

- Green: Develop a national monitoring framework to systematically track and report

ICT-enabled emission reductions across key sectors, with sector-specific indicators

aligned with EU guidance, to give measurable substance to the "sustainable by design"

commitment embedded in the Digital Government Strategy 2026–2030.

- Connectivity: Accelerate the deployment of high-capacity digital infrastructure.

Improve voucher activation rates among eligible low-income households through

enhanced outreach and integration into social support services. Accelerate 5G rollout

in the 3.4-3.8 GHz mid-band in rural areas, promote the deployment of 5G Standalone

networks to enable advanced use cases.

- Cybersecurity: Continue efforts in cybersecurity to address the evolving and