Why would a company want to increase its digital density?

The uptake of digital technologies by businesses has the potential to improve services and products, and to increase competitiveness. The crisis caused by COVID-19 has also shown that digitalisation is crucial for improving the economic resilience of businesses. In 2021, 56% of EU enterprises reached a basic level of digital intensity. A basic level entails the use of at least four of twelve selected digital technologies. A basic level includes businesses with a low, high and very high level of the Digital Intensity Index (DII), excluding the very low level. Of small and medium-sized enterprises (SMEs), 55% reached a basic level of digital intensity compared with 88% of large enterprises.

According to one of the targets of the Digital Compass – the EU’s vision for the decade of the digital transformation – more than 90% of EU SMEs should reach at least a basic level of digital intensity by 2030. In 2021, EU SMEs were 35 percentage points (pp) shy of the ambition set in the Digital Compass. Only 3% of EU SMEs reached a very high level of digital intensity while 18% reached a high level. Most of the SMEs recorded low (34%) or very low (45%) digital intensity levels. The biggest proportion of enterprises reaching a very high level of the DII was in Finland, Denmark and Malta (all 10%) and Sweden (9%). Meanwhile, Romania and Bulgaria were lagging behind with around three quarters of enterprises characterised by a very low digital intensity (77% and 74%, respectively).

Why would a company want to increase its digital density? Digital density refers to the number of people, organizations and things that are connected. Tapping into the myriad of connections that currently exist can help shift business models. Increasingly today, and especially in a post-COVID-19 world, a company’s performance is not just based on the object of its business, but also on how it runs its business. Adopting key digital technologies to make manufacturing processes and services more efficient has provided extra support to companies during the pandemic, pushing the European economy onto the digitalisation path. Big data, artificial intelligence, cloud computing, the Internet of Things are all part of a growing ecosystem of technologies that help companies become more agile and adaptable in an ever-changing socio-economic landscape. Competitiveness at a global scale requires digitalisation, and digitalisation calls for reliable, experienced support. Currently, although most EU states are advancing with digitalisation, not enough businesses are adopting essential digital technologies, according to the EU’s 2021 Digital Intensity Index(DII). Research shows that just 56% of EU enterprises reached a basic level of digital intensity last year, where basic refers to using at least four out of twelve digital technologies . Most SMEs have low or very low digital intensity, while the EU aims to have more than 90% of them reaching basic digital intensity by 2030.