Digital economy
Digital transformation: Importance, benefits and EU policy
Learn how the EU is helping to shape a digital transformation in Europe to benefit people, companies and the environment. The digital transformation is one of the EU's priorities. The European Parliament is helping to shape the policies that will strengthen Europe's capacities in new digital technologies, open new opportunities for businesses and consumers, support the EU's green transition and help it to reach climate neutrality by 2050, support people's digital skills and training for workers, and help digitalize public services, while ensuring the respect of basic rights and values, Society .
MEPs are preparing to vote on a report on shaping the digital future of Europe, calling on the Europea Commission to further tackle challenges posed by the digital transition, especially to take advantage of the opportunities of the digital single market and to improve the use of artificial intelligence. What is digital transformation?
- Digital transformation is the integration of digital technologies by companies and the impact of the technologies on society.
- Digital platforms, the Internet of Things, cloud computing and artificial intelligence are among the technologies affecting ...
- ... sectors from transport to energy, agri-food, telecommunications, financial services, factory production and health care, and transforming people's lives.
- Technologies could help to optimise production, reduce emissions and waste, boost companies' competitive advantages and bring new services and products to consumers.
Funding of the EU's digital priorities
Digital plays an essential role in all EU policies. The Covid crisis accentuated the need for a response that will benefit society and competitiveness in the long run. Digital solutions present important opportunities and are essential to ensuring Europe's recovery and competitive position in the global economy.
The EU's plan for economic recovery demands that member states allocate at least 20% of the €672.5 billion Recovery and Resilience Facility to digital transition. Investment programmes such as the research and innovation-centred Horizon Europe and infrastructure-centred Connecting Europe Facility allocate substantial amounts for digital advancements as well.
While the general EU policy is to endorse digital goals through all programmes, some investment programmes and new rules specifically aim to achieve them.
Digital Europe programme
In April 2021, Parliament adopted the Digital Europe programme, the EU’s first financial instrument focused specifically on bringing technology to businesses and people. It aims to invest in digital infrastructure so that strategic technologies can help boost Europe’s competitiveness and green transition, as well as ensure technological sovereignty. It will invest €7.6bn in five areas: supercomputing (€2.2bn), arfitifical intelligence (€2.1bn), cybersecurity (€1.6bn), advanced digital skills (€0.6bn), and ensuring a wide use of digital technologies across the economy and society (€1.1bn).
Online safety and platform economy
Online platforms are an important part of the economy and people's lives. They present significant opportunities as marketplaces and are important communication channels. However, there also pose significant challenges.
The EU is working on new digital services legislation, aiming to foster competitiveness, innovation and growth, while boosting online security, tackling illegal content, and ensuring the protection of free speech, press freedom and democracy.
Read more on why and how the EU wants to regulate the platform economy.
Among measures to ensure safety online, the Parliament adopted new rules to prevent the dissemination of terrorist content online in April 2021. MEPs are also considering rules on a new European cybersecurity centre.
Artificial intelligence and data strategy
Artificial intelligence (AI) could benefit people by imroving health care, making cars safer and enabling tailored services. It can improve production processes and bring a competitive advantage to European businesses, including in sectors where EU companies already enjoy strong positions, such as the green and circular economy, machinery, farming and tourism.
To ensure Europe makes the most of AI's potential, MEPs have accentuated the need for human-centric AI legislation, aimed at establishing a framework that will be trustworthy, can implement ethical standards, support jobs, help build competitive “AI made in Europe” and influence global standards. The Commission presented its proposal for AI regulation on 21 April 2021.
Read more on how MEPs want to regulate artificial intelligence.
The success of AI development in Europe ilargely depends on a successful European data strategy. Parliament has stressed the potential of industrial and public data for EU companies and researchers and called for European data spaces, big data infrastructure and legislation that will contribute to trustworthiness.
More on what Parliament wants for the European data strategy.
Digital skills and education
The Covid-19 pandemic has demonstrated how important digital skills are for work and interactions, but has also accentuated the digital skills gap and the need to increase digital education. The Parliament wants the European skills agenda to ensure people and businesses can take full advantage of technological advancements.
42% of EU citizens lack basic digital skil
Fair taxation of the digital economy
Most tax rules were established well before the digital economy existed. To reduce tax avoidance and make taxes fairer, MEPs are calling for a global minimum tax rate and new taxation rights that would allow more taxes to be paid where value is created and not where tax rates are lowest.
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More on Europe's digital policies
- A Europe fit for the digital age (European Commission)
- Europe's Digital Compass (Commission proposal)
- At a glance: Digital Europe programme
- EU's long-term budget
- Parliament approves seven-year EU budget 2021-2027
- The EU’s long-term budget explained
- Covid-19: the EU plan for the economic recovery
- Rule of law: new mechanism aims to protect EU budget and values
- MEPs clear another hurdle for the COVID-19 recovery plan
- Rule of Law mechanism applies without further delay as of 1 January, MEPs stress
- Why has Parliament called for new EU revenue-raising powers?
- Vote on Own Resources: MEPs clear way for COVID-19 recovery plan
- Covid-19 recovery: how the main EU instrument will work
- President Sassoli to EU leaders: help get the budget negotiations moving again
- Debate on EU budget and recovery: “A deal in the Council is not the final deal”
- Video: what is the multiannual financial framework?
- Long-term EU budget deal: a “win-win” result to face the challenges ahead
- Sassoli on budget negotiations: Parliament is not obstructing anything
- Budget and recovery: no more excuses for delays, says budgets committee chair
- EU budget: Parliament pushes for new revenue sources
- MEPs debate recovery fund, condemn major cuts to long-term EU budget
- MEPs debate EU summit results on long-term budget, rule of law, climate
- InvestEU: EU programme to encourage investment
- Health threats: boosting EU readiness and crisis management
- Horizon Europe: how the EU invests in science (infographics)
- MEPs adopt landmark research programme Horizon Europe
- LIFE programme: more EU support for climate action
- Digital transformation: importance, benefits and EU policy
- Covid-19: boosting EU’s response capacity for emergencies
- EU long-term budget deal must be improved for Parliament to accept it
- Sassoli calls for action on recovery: "Our citizens expect bold action"
- Budget and recovery: MEPs push for clarity on EU own resources
- Sassoli: The decisions we will take will reshape the Union for decades
- Covid-19 recovery fund must be added to EU long-term budget
- Parliament: EU27 need €2 trillion recovery package to tackle COVID-19 fallout
- The EU’s Covid-19 recovery plan should prioritise climate
- COVID-19: MEPs call for massive recovery package and Coronavirus Solidarity Fund
- Sassoli: Parliament won’t accept just any long-term budget agreement
- Rebuilding Europe after Covid-19: MEPs call for decisive action
- MEPs want ambitious, future-oriented budget with the recovery fund as part of it
- EU future at stake: MEPs broadly welcome Commission’s recovery package proposals
- Europe must emerge stronger from this crisis
- Quiz: test your knowledge of the EU’s long-term budget
- Long-term EU budget: Parliament wants safety net for beneficiaries
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- Long-term budget: EU needs proper funding to tackle crises, say MEPs
- More than money: the long-term EU budget is a tool for Europe’s future
- Show us the money for new policy proposals, MEPs tell budget commissioner
- MEPs have modest expectations for crucial EU budget summit
- Parliament’s case for an ambitious EU long-term budget (infographics)
- MEPs demand Council starts talks on the EU's long-term budget
- Long-term budget: MEPs want EU to have more own resources
- Post-2020 EU budget plans show purpose, but lack ambition, say MEPs
- “InvestEU”: MEPs support new programme to boost financing for jobs and growth
- Lamassoure: Changing how EU is funded won't shift power to Brussels
- EU's long-term budget: Parliament sets out its priorities
- EU's long-term budget: more flexibility to help tackle crises
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