The European Union could reap €628 billion ($681 billion) a year by bringing digitally lagging businesses up to speed, according to a research paper by software publisher Sage.
At the core of this untapped opportunity are small and medium-sized companies, which are currently struggling to catch up with modern technology and are below the European average. Increasing their use of artificial intelligence and other digital tools would improve productivity, according to the study’s model calculations across 15 countries.
Such a move would be a much-needed boost for the region, which is battling economic headwinds from weak global demand and monetary tightening. Yet progress appears to be slow: The EU’s State of the Digital Decade report shows that it’s off track to meet its own 2030 digitalization goals, which include having at least 75% of European enterprises using AI, cloud computing or big data by then.
Rather than a lack of willingness to adopt new technologies, it’s the lack of skills and financial support that are creating barriers. To combat the sluggish improvement, Sage recommends the introduction of a digital ID to reduce administration, the uptake of e-invoicing to tackle late payments and the promotion of AI to increase productivity.
