This research digest illustrates the nature of the adoption of digitalisation in Europe and gives examples of where and how digital technology is used in the economy. However, it does not aim to give a comprehensive overview of the scale and scope of the adoption of digitalisation.
A full list of references used to compile this research digest can be found at the end of the page.
Author: Irene Mandl
Digitalisation
Digitalisation: General and comparative perspectives
However, digitalisation is not happening at the same pace across countries, regions, sectors or types of organisations. An analysis of the European Company Survey (ECS) 2019, which covers establishments with at least 10 employees, reveals four types of establishments based on their use of different technologies:
- Highly digitalised (28% of establishments in the EU): a high share of employees use computers daily, and the establishments are likely to have purchased customised software. Almost all highly digitalised establishments use data analytics for process improvement, the use of robots is slightly above average, and e-commerce is relatively widespread.
- High computer use, limited use of other digital technology (26%): in these establishments, a high share of staff also use computers daily, but customised software, e-commerce and the use of robots are less common. The use of data analytics is marginal.
- High use of robots and other digital technology, limited computer use (19%): in these establishments, a rather low share of employees use computers daily, but customised software and the use of robots and data analytics are common.
- Limited digitalisation (27%): in these establishments, the use of all of the technologies covered by the survey is below average.
Highly digitalised establishments are three times more prevalent in Malta (39%) and Denmark (37%) than in Latvia and Lithuania (both 12%) (Figure 1). Conversely, Latvia is the country with the highest share of establishments with limited digitalisation (49%), while in Malta this type is least common (11%).
Figure 1: Digitalisation intensity of establishments by country, EU27 and the UK, 2019 (%)
The degree of intensity of digitalisation also differs markedly between sectors. Financial services has the highest share of highly digitalised establishments, while this type is least common in construction (Figure 2). The reverse is true of establishments with limited digitalisation.
Figure 2: Digitalisation intensity of establishments by sector, EU27 and the UK, 2019 (%)
There is a tendency for digitalisation intensity to increase with establishment size (Figure 3). While it might be assumed that younger establishments would be more inclined towards digitalisation, the available data do not show significant differences in digitalisation intensity by establishment age.
Figure 3: Digitalisation intensity of establishments by size, EU27 and the UK, 2019 (%)
While Eurofound differentiates between automation, digitisation and coordination through platforms, in practice these technologies tend to be deployed in combination, often involving interaction with artificial intelligence.
Automation
Automation
Advanced robotics
Robots have been used in manufacturing for a long time. Improvements in technology, however, have enabled the deployment of a new generation of robots – advanced robots – that are able to perform tasks that go beyond repetitive, discrete motions. This feature has resulted in robotics gaining more prominence in services sectors.
The use of advanced robots is a common feature in business logistics (such as warehousing and picking operations) and automotive manufacturing (for example, pre-programmed robots performing well-defined tasks on assembly lines), and it is rapidly advancing.
Other manufacturing sectors also increasingly use advanced industrial robotics. An example is the food preparation industry (for instance, manual labour may be replaced in fast-turnaround tasks or in tasks where controlled conditions are needed for hygiene purposes). In other manufacturing sectors, however, and particularly in certain regions, the deployment of advanced robotics remains low (in the textile industry in northern France, for example), hampered mainly by financial and skills bottlenecks.
In most services sectors advanced robotics is less common, mainly owing to a less structured work environment, which makes automation of tasks more challenging. In sectors such as emergency rescue services, healthcare and retail, the technology is at an early stage of adoption. Use cases refer to robots replacing humans in physically hazardous or demanding situations (such as entering dangerous physical environments or lifting heavy loads) or in carrying out tasks that do not require situational adaptations in terms of how they are carried out, owing to homogeneous customer demands (for example, robot pets for therapeutic care). That said, growth in service robot deployment is expected, particularly in the medical, logistics, defence and public relations sectors.
Advanced robotics is used in combination with digitisation, for example in the form of teleoperated, or remotely controlled robots. Robotics and artificial intelligence are also jointly deployed, for instance in ‘cobots’ – that is, smaller robots co-working with humans, often with the aim of managing labour shortages.
Autonomous vehicles
In mid-2021 autonomous vehicles, such as self-driving transport devices, drones and automated guided vehicles, were still at the testing stage as regards their deployment for economic purposes. The main reasons for this are limited technical maturity (for example, insufficient reach of remote control or – when electric engines are used – range per charge) and legal concerns (for example, liability issues in the event of accidents).
Digitisation
Digitisation
The three technologies are not yet mainstream in terms of adoption in the economy, mainly because of the investments and staff skills required for adoption and implementation.
Nevertheless, they have good potential for future use across many sectors, owing to their versatility. Furthermore, their use in combination is promising in terms of creating added value for companies. For example, companies could deploy systems in which IoT devices or sensors collect data that are visualised through AR and automatically sent to a 3D printer, which could result in more efficient production processes.
In this context, data from Eurostat show that, in 2020, 36% of EU27 companies with at least 10 employees had purchased cloud computing services and one-quarter had used sophisticated cloud computing solutions. The prevalence of cloud computing is highest in the Nordic countries and lowest in eastern Europe (Figure 4).
Figure 4: Shares of enterprises purchasing cloud computing services by country, EU27, 2020 (%)
Note: No data for Greece. Sophisticated cloud computing includes hosting of the enterprise’s database, accounting software applications and customer relationship management.
Source: Eurostat, Cloud computing services [isoc_cicce_use]
All the digitisation technologies tend to be more prevalent in larger enterprises than in smaller ones. This can be attributed mainly to the investments required, which are more affordable for larger businesses.
3D printing
By mid-2021, 3D printing had not yet reached full operational maturity and was being used to complement rather than replace traditional production methods.
According to Eurostat data on information and communications technology (ICT) usage in enterprises (2020), 3D printing is used by 5% of enterprises with at least 10 employees in the EU27. It is most prevalent in manufacturing (12%), for example for rapid prototyping, followed by information and communication, and professional, scientific and technical services (both 7%) (Figure 5). While 3D printing is not yet very widespread, its increased use in the construction sector is expected in the future, for example for 3D construction models or construction site planning. Similarly, start-ups in particular are exploring deployment opportunities for 3D printing to print food, clothes and lifestyle products.
By country, 3D printing is used most in Denmark (9%) and least in Romania (2%).
Figure 5: Shares of enterprises using 3D printing and IoT by sector, EU27, 2020 (%)
3D printing offers particular advantages for sectors with high scrap rates (that is, where subtractive production processes result in a lot of waste), where there is a need for lightweight items, or where frequent and flexible product adaptation and customisation are required (such as in the medical sector for custom-made implants and orthopaedic and prosthetic devices).
The technology has gained attention during the COVID-19 crisis, with companies engaging in the production of 3D-printed replacement respiratory valves and protective equipment such as shields.
3D printing that uses plastic is at a more advanced stage of technological maturity than that using ceramics and particularly metal (owing to the high cost of metal powder). It is, for example, used for prototyping and visual design in the automotive and aerospace industries.
Augmented and virtual reality
While adoption rates of AR/VR are higher, for example, in Asia than in Europe, stable growth in the use of these technologies is expected in Europe in the coming years. In the EU, high growth is particularly expected in France, Germany, the Netherlands, Sweden, Czechia, Denmark, Estonia, Finland, Greece, Italy and Poland.
In mid-2021, the use of AR/VR tended to be more prevalent among private individuals/consumers (for entertainment purposes) than in enterprises. That said, in a 2018 global survey by the World Economic Forum of large multinational companies and more localised companies of significance because of their number of employees or revenue size, 58% of respondents reported being likely to adopt AR/VR between 2018 and 2022. The sectors in which companies were most likely to adopt these technologies were the ICT (72%), automotive, aerospace, supply chain and transport (71%), and aviation, travel and tourism (68%) sectors.
As of 2021, the most prevalent use of AR/VR in businesses seems to be for training purposes, and further growth is expected in this area. Furthermore, it is applied in logistics, for example to optimise routes and picking processes in warehouses. AR is expected to gain importance in facilitating remote collaboration by professionals and teams in different locations.
Internet of things
According to Eurostat data on ICT usage in enterprises (2020), IoT is used by 18% of enterprises with at least 10 employees in the EU27. IoT has reached operational maturity in sectors that are highly capitalised and technology rich. Accordingly, it is most prevalent in utilities (38%), where it is used, for example, for smart metering for monitoring energy, gas and water production and consumption; in information and communication (22%); and in transport and storage (27%), where it is used, for example, for fleet or asset monitoring and optimisation, or predictive maintenance (Figure 5). That said, it is also increasingly used in very traditional sectors such as agriculture, for example for monitoring crop quality and yields, ensuring product traceability and quality control, and planning distribution. By country, IoT is used most in Czechia (44%) and least in Romania (7%). It seems likely that there will be significant uptake of IoT in western Europe by 2025, notably in Germany.
IoT is increasingly used to monitor production processes, for predictive maintenance of machines, for shop floor and supply chain management, for inventory management and control, and, in combination with automation technologies, to optimise processes in factories. In the workplace, IoT is also used for employee monitoring, for instance to monitor performance or track the length of breaks or spatial movement within and beyond the workplace.
As regards its use in combination with other technologies, IoT – often producing big data – is inherently linked to artificial intelligence (which needs large data volumes to function at its best). In production processes, objects equipped with IoT sensors can not only interact with each other but also be algorithmically controlled. However, in mid-2021, it was observed that most data collected through IoT were not yet being used at all or not being fully/optimally used, often because of the challenging amount of data that had to be dealt with.
Platforms
Platforms
In mid-2021, there were no pan-European data on the scale of platform work. There is evidence that during the past decade it has become more prevalent in the EU. While in 2013–2014 platform work was identified as new or emerging in about two-fifths of EU countries, in 2020 it was prevalent in almost all of them (Figure 6).
Figure 6: Platform work in the EU27, Norway and the UK, 2013–2014 and 2020
Most research finds that 1–2% of the workforce are engaged in platform work as a main job and around 10% do it occasionally. There are substantial differences between countries. The level of ICT usage in a country and the national labour market and employment situations seem to be decisive factors for the spread of platform work. Accordingly, there are some early indications that a prolonged economic crisis resulting from the COVID-19 pandemic could lead to increased engagement in platform work.
In terms of the number of labour platforms active in the EU, in mid-2021 estimates varied between 500 and 800. While in France, Belgium, Germany and Spain a large number of (small) platforms are active, in eastern Europe there are relatively few.
As regards the scope of platform work, Eurofound found that in 2017 there were 10 distinctive types of platform work with active platforms and workers in Europe, which differed when it came to the combination of:
- the scale of tasks (ranging from ‘microtasks’ to larger projects)
- the format of service provision (whether the tasks are delivered on location or online)
- the level of skills required for particular tasks (routine tasks requiring little skill or background knowledge or specialist work requiring a higher level of skill and presumably experience or training)
- the party that determines the work allocation (client, worker or platform)
- the matching process (how the client and worker find each other, for example by means of an offer or a contest structure)
‘On-location platform-determined routine work’ (which includes ride hailing and food delivery) seems to be the most prevalent type of platform work, followed by ‘on-location client-determined moderately skilled work’ (for example, household services such as cleaning, gardening or maintenance work). However, a wide variety of tasks are mediated through platforms and delivered online. These range from low-skilled, small-scale routine tasks (microtasks, such as validating or tagging photos) to high-skilled large projects (such as in the creative industries or professional business services).
Related material
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References
References
Eurofound sources
Eurofound (2018), Additive manufacturing: A layered revolution, Eurofound working paper, Dublin.
Eurofound (2018), Advanced industrial robotics: Taking human-robot collaboration to the next level, Eurofound working paper, Dublin.
Eurofound (2018), Employment and working conditions of selected types of platform work, Publications Office of the European Union, Luxembourg.
Eurofound (2018), Game changing technologies: Exploring the impact on production processes and work, Publications Office of the European Union, Luxembourg.
Eurofound (2018), Industrial internet of things: Digitisation, value networks and changes in work, Eurofound working paper, Dublin.
Eurofound (2019), Advanced robotics: Implications of game-changing technologies in the services sector in Europe, Eurofound working paper, Dublin.
Eurofound (2019), Autonomous transport devices: Implications of game-changing technologies in the services sector in Europe, Eurofound working paper, Dublin.
Eurofound (2019), Virtual and augmented reality: Implications of game-changing technologies in the services sector in Europe, Eurofound working paper, Dublin.
Eurofound (2020), Employee monitoring and surveillance: The challenges of digitalisation, Publications Office of the European Union, Luxembourg.
Eurofound (2020), Game-changing technologies: Transforming production and employment in Europe, Publications Office of the European Union, Luxembourg.
Eurofound (2020), New forms of employment: 2020 update, New forms of employment series, Publications Office of the European Union, Luxembourg.
Eurofound (forthcoming), Digitisation in the workplace: Uptake, drivers and impact on work organisation and job quality, Publications Office of the European Union, Luxembourg.
Eurofound and Cedefop (European Centre for the Development of Vocational Training) (2020), European Company Survey 2019 – Workplace practices unlocking employee potential, European Company Survey 2019 series, Publications Office of the European Union, Luxembourg.
Other sources
Acatech and Forschungsunion (2013), Securing the future of German manufacturing industry: Recommendations for implementing the strategic initiative INDUSTRIE 4.0, Plattform Industrie 4.0, Frankfurt.
Bezegová, E., Ledgard, M. A., Molemaker, R.-J., Oberč, B. P. and Vigkos, A. (2017), Virtual reality and its potential for Europe, Ecorys, Brussels.
Deloitte (2017), Robots uncaged: How a new generation of sophisticated robots is changing business
European Commission/CEPS (Centre for European Policy Studies) (2021), Digital labour platforms in the EU: Mapping and business models, Publications Office of the European Union, Luxembourg.
International Data Corporation (2019), Worldwide internet of things spending guide, web page, accessed 9 August 2021.
International Federation of Robotics (2018), Executive summary World Robotics 2018 service robots, Frankfurt.
Kaisler, S., Armour, F., Espinosa, J. A., and Money, W. (2013), ‘Big data: Issues and challenges moving forward’, Proceedings of the AnnualHawaii International Conference on System Sciences, pp. 995–1004.
McKinsey Global Institute (2013), Disruptive technologies: Advances that will transform life, business, and the global economy, Toronto.
McKinsey Global Institute (2015), The internet of things: Mapping the value beyond the hype, Toronto.
MIT News (2019), ‘A new era in 3-D printing’, blog post, 16 May.
Nordic Co-operation (2020), ‘The crisis could be a new dawn for platform-based working in the Nordic region’, blog post, 3 July.
Roland Berger (2013), Additive manufacturing: A game changer for the manufacturing industry? (PDF), Munich.
Sculpteo (2018), ‘IoT and 3D printing: How to combine these two technologies to build better products’, blog post, 25 July.
World Economic Forum (2018), The future of jobs report 2018, Geneva.
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