Digitalisation and innovation in Europe

To these two significant questions, and especially considering the current EU framework and the digital decade, a recent article published in Telecommunications Policy, a leading global journal with a very high scientific impact in the sector, attempts to answer: Assessing the European association between digitalisation and innovation.

I am one of its proud authors (written as part of my doctoral studies at the UPM, in the ETSIT) and I do so here in a sincere eagerness to disseminate its conclusions.

Digital transformation, a truly complex process

And let’s say that digital transformation is a really complex process: it emanates from the development and adoption of a series of exponential technologies (AI, Cloud, 5G, among others), and where data is an increasingly relevant factor, and which are contaminating with impetus, like a tornado vortex, the whole of our economy and society. On the other hand, innovation is a process intrinsically enhanced by the digital transformation that implies a change of process and/or product with a final market impact.
Certainly both elements are being studied in detail although there are few approaches that jointly consider the relationship between both phenomena and fewer that incorporate structural aspects of European countries and their regions: and we have seen that, in the case of our European societies, our values and regulations, our own legal stability, the sophistication of societies (in terms of purchasing power of both the public and private sectors), Ecodesign factors, in-house innovation of products that bring strong market novelties and a high rate of employment in knowledge-intensive services are the elements that together define us.
Our digitization and innovation are thus supported by skilled human capital and a collaborative ecosystem where companies, public institutions and research centers interact to take advantage of the opportunities of digitization, leveraged by a regulatory framework that facilitates innovation and the availability of adequate technological infrastructures.
However, there are important shadows: small and medium-sized companies do not get enough traction, in terms of innovation and digitization, and newly created companies, entrepreneurs/startups.

The same happens in the field of a weak internal digital training of companies seeking to transform their job profiles, as well as the generation of new graduates in the ICT field that seems not to have enough impact in a context where rapid technological innovation and its adoption requires a constant updating of digital skills to keep companies competitive, as well as the employability of people.
Here we believe that one of the EU’s objectives, to have more than 20 million specialists by the end of this decade, could be jeopardized.

The same is true in the area of weak internal digital training of companies seeking to transform their job profiles, as well as the generation of new graduates in the ICT field that seems to have insufficient impact on innovation and digitisation. Here we believe that one of the EU’s objectives, to have more than 20 million specialists by the end of this decade, could be jeopardised.

Europe’s regions

And what about the regions in Europe? Apart from the direct relationship between GDP and digitisation between countries, meaning that the richer you are, the more digitised and innovative you are, we have seen that the capital regions, which are therefore the most urbanised, concentrate the main digitisation and innovation effort. This is where most of the specialists are located, where the headquarters of the main companies and the most significant research centres are located. This would mean that it is highly urgent to build alternative clusters, regional innovation hubs that consolidate the main companies outside the capital and that, by attracting specialist talent, accelerate their digital transformation and innovation processes. And the study presents two examples of two dynamics in Spain: Catalonia and Andalusia, and shows how, starting from common points (an important communication infrastructure and a public administration that accelerates the region with its digitalisation process), Catalonia stands out in its capacity to incorporate the new knowledge generated in local companies and thus have an impact on digitalisation. This means that, within the same country, even the other non-capital regions would exhibit very different behaviours, with greater or lesser success, and that government policies should know how to incorporate sufficient flexibility for this.