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February 9, 2021updated 02 Mar 2021 11:08am

Businesses are eager to digitise after Covid-19 but barriers remain

A survey of 13,000 businesses in the EU, UK and US reveals that just under half expect a long-term increase in their use of digital technology.

By Katharine Swindells

Just under half of businesses in Europe, the UK, and the US expect a long-term increase in their use of digital technology as a result of Covid-19, according to a new survey of moran than 13,000 companies. But uncertainty about the future, a lack of skilled workers and, to a lesser degree, weak digital infrastructure are hampering their ability to invest in the future, suggesting this increased willingness to digitise may not be enough to catalyse long-lasting digital transformation.

The long-term impact of Covid-19 on digitisation

The 2020 European Investment Bank Investment Survey surveyed more than 13,000 businesses – from SMEs to large corporations – across the EU, UK and US about their investment plans. 

Just under half (45%) said that their use of digital technology will increase in the long term as a result of Covid-19. The proportion was especially high in some countries that are digital adoption leaders, such as Finland (63%) and Sweden (61%), as well as some that are laggards, including Germany (64%).

Fewer than one in five Estonian respondents (19%) said their use of digital technology would increase in the long term, which is likely due to the extremely high level of adoption the country has already achieved. 

The pandemic removed one of the key barriers to digitisation, says Matthew Evans, director of markets at technology industry trade body techUK. “Digital adoption generally tends to come down to ability – everything from skills to cost – and willingness,” he says. “What Covid-19 has done is really remove that second challenge because if you weren’t able to move online, your options are far more reduced.”

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In doing so, however, the pandemic has made the other barrier – a lack of ability – all the more apparent. “Whilst that willingness factor is there for most companies, the ability to do it is still questionable for some of them,” says Evans. “We need to lower those barriers as much as we can.”

For businesses in Europe, the leading obstacle to their overall long-term investment is uncertainty about the future, followed by the availability of staff with the right skills. Averaged across the EU, three-quarters (73.5%) of businesses see availability of staff as an obstacle to long-term investment, and almost half (45%) see it as a major obstacle.

The countries leading the digital skills race include the Netherlands and the Nordic EU members (Denmark, Sweden and Finland), where only around a fifth of businesses see lack of skilled staff as a major obstacle.

Marjo Ilmari, head of IT and industry accounts at Business Finland, says that the country’s strong technology skills base made the country’s transition to remote working relatively easy. “The digital skills of Finland’s population are really top-notch, so it was really smooth and easy to transform to remote working mode,” she says. 

In the UK, more needs to be done by government, employers and the technology sector to ensure the country has the digital skills it needs to rebuild the economy, argues Evans. “There’s definitely a lot more that the UK will need to do to continue to make sure that we’ve got the right skills,” he says. “Not just in the tech sector but in every company and every business in all parts of the economy, to be able to take advantage of technology products in a viable way.”

Another key obstacle is a lack of digital infrastructure, the survey reveals. Just under one in ten (9%) respondents to the EIB survey globally described digital infrastructure as “major obstacle” to their long-term investment plans, and 30% said it is a “minor obstacle”. Businesses in Spain, Italy and Germany are especially hampered by their country’s digital infrastructure, with more than a quarter in each describing it as a “major” hindrance.

Interestingly, large businesses in the UK are substantially more likely to describe the country’s digital infrastructure as a “major” or “minor” obstacle to their long-term investments than smaller companies. By comparison, attitudes among EU respondents did not differ greatly by company size.

Evans says that although the UK’s digital infrastructure mostly held up under increased demand in 2020, the widespread shift to remote working revealed gaps in coverage. This makes the rapid roll-out of full-fibre broadband and 5G all the more urgent, he argues.

Businesses in countries with better broadband and mobile connectivity, as indexed by the European Commission, are far less likely to see digital infrastructure as an obstacle.

Evans says the partnership of infrastructure and skills is key to a digital-led recovery. “Frankly, we also need to make sure that the rest of the economy has skills to make use of those tools and services, and that’s going to require us to continue to upskill people throughout their career.”

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